COLOMBO (EconomyNext) – Sri Lanka would get more foreign and local investments by expanding economic freedoms and the investment environment, deputy investments promotions minister Eran Wickramaratne said.
Sri Lanka’s growth in the recent past had come more from debt than investments, which was not the most optimum way of economic advancement, Wickramaratne said after assuming duties Friday.
"You all know that whether it is a country or business, investment is more important," Wickramaratne, a former banker who ran a bank with which had among the highest capital adequacy ratios in the country, said.
"We can take more debt that equity, but equity is vital. So we have to prioritize the getting of investments."
Wickramaratne said progress in the investment front would be measured by the volume of investments but in order to gain investments the business environment had to be improved.
The Heritage Foundation for example had ranked Sri Lanka on the 90th place in terms of economic freedom.
Thailand was in the 90s and Malaysia in the 30s.
"How can we go quickly in the short term from 90 to 70 and then in the long term from 70 to 30s?" Wickramaratne said.
"That is the challenge facing us."
The country with the most economic freedom was Hong Kong followed by Singapore and Australia.
Hong Kong has consistently out-performed Singapore until the handover to China under a policy of ‘positive non-intervention’ where the rulers did not intervene in the economy (Lessons for Sri Lanka from Hong Kong’s positive non-intervention-Bellwether).
The rulers also lost the most powerful tool of state intervention and mass impoverishment – that of inflation and currency depreciation – as the territory does not have a central bank, but operates currency board with a fixed exchange rate.
Singapore has a modified currency board. Freedom from currency depreciation protects the property and lifetime savings of both the poor and rich.
Wickramaratne told employees of Sri Lanka’s Board of Investment that he had been a director of the Board of Investment before and it was no a strange place to him.