“Ever since 2010, the year after the civil war ended, the country has been recording a steady growth rate of 8 percent or more every year,” Shivan de Silva, executive director of the Board of Investment of Sri Lanka, told The Korea Herald.
Boosted by this sustainable growth, the Sri Lankan government is now all out to attract foreign direct investment and to take another leap, he said.
“We are aware that we are a late-mover in the Southeast Asian development market, and this is why we offer a wider range of incentives to potential investors,” Silva said.
“For example, Sri Lanka is one of the few developing countries in which foreign units are allowed total business ownership and tax exemption for up to 12 years.”
Also, the investment board, as a special state-affiliated organization, holds the authority to grant investors extra exemption from customs duty and other local regulations, he noted.
|Shivan de Silva, executive director of the Board of Investment of Sri Lanka|
The key reason which differentiates Sri Lanka from other neighboring countries is, however, not just these sets of business benefits.
“Sri Lanka is the only country which has duty-free access to the second-largest market next to China, which is India and Pakistan combined,” the BOI official said.
Having concluded a free trade pact with both countries, Sri Lanka can trade some 4,000 items with absolutely no import tax involved.
“Considering India’s complicated tax system and Korea’s limited access to the market, the best solution for Korean exporters is to transship their goods through Sri Lanka,” he said.”
Also, located off the southern coast of the Indian subcontinent, it has direct shipping access to the entire coastal region of India.
“In fact, more than half of the cargo in Colombo Port is transshipment to India,” he said.
The port, gifted with its naturally deep ocean floor, may incorporate large-sized bulk carriers, even those that may not enter the shallow ports of the Indian shores.
“To maximize this advantage, the government set to expanding the port by building 12 new berths there, the country will increase the port’s capacity by 11.7 million 20-foot equivalent units,” he explained.
The upgraded port will be of great use to global companies which trade in bulk units, especially in terms of logistics costs, he explained.
“A good example will be the Korean steel product exporters targeting the Indian and Southeast Asian market,” Silva said.
Also, there is a tangible chance that a special industrial park will be established exclusively for Korean companies, he added.
“Korea is very much a key target investor for us, with its high level of technology and job-creating potential,” the Sri Lankan official said.
“We, on the other hand, have logistics incentives to offer, in addition to the natural resources which are now waiting to be developed.”
The government has recently called for proposals of natural resource development, searching for oil and gas in some 13 offshore sectors.
“Sri Lanka has been sending out strong invitations for Korean companies to participate in the open bid,” the BOI official said.
Sri Lanka possesses one of largest Korean-speaking populations in the world, thanks to the workers who have been dispatched to Korea over the past years. The Korean language is even included in the middle and high school curriculum.
“By boosting the Korean companies’ business access in Sri Lanka, we may make the best use of this human resource pool, for the sake of both countries,” Silva said.
By Bae Hyun-jung (email@example.com)