ECONOMYNEXT – Sri Lanka’s Colombo Port City Economic Commission, which will administer a dollarized special economic zone reclaimed from the sea by China will have three billion US dollar annual investment target, State Minister of Money and Capital Markets Ajith Cabraal said.
Sri Lanka’s parliament passed the law with 148 members of the 225 assembly voting in favour, after the original law was changed to conform to the constitution.
“We expect from them (members of the commission) to bring investments to this country very soon,” Cabraal told reporters.
“We have given them targets which are tough. They need to bring investments worth 3000 million dollars annually.”
He said the commission will be ‘single window’ which will fast-track investments.
“No one likes to wait for days in corridors of government offices,” Minister Cabraal said. “You know how difficult it is to get an approval to pass a plan (for a house).”
“So here also in order bring such investments there should be a talented team, a talented commission.”
There are about 5000 special economic and trade zones in the world with similar Acts and frameworks giving similar kinds of facilities and encouragement.
“But not all of them have become successful, only about 100 out of them have been successful,” he said.
A majority of the members and the Chair of the commission would be Sri Lankans, the government said though there is no such requirement in the law that was passed.
“We are not competing only in Sri Lanka, but we are competing with Dubai, Shenzhen, Singapore because the inventors can take their money and go to any country and invest that money,” Cabraal said.
“That’s why we hope to give the necessary atmosphere for the commission through the Act for a single-window mechanism.”
“That 100 have become successful because their management was successful, so we need good management here,” he said.
“So that’s why this team for the management is appointed by the President and they have been given a qualification framework for them to be selected.”
However critics have pointed to the direct presidential appointments as a key flaw of the commission as the general breakdown of the public service and undermining of judicial independence was also a result of direct presidential appointments from 1978 constitution.
With a highly qualified civil service headed by permanent secretaries, high levels of literacy and health indicators ahead of most East Asian nations and fixed ministries Sri Lanka was watched by outsiders as one of the countries that would progress fastest after independence.
However the country became laggard in Asia and became mired in nationalism and monetary instability.
A Latin America style central bank set up in 1950, abolishing a Singapore and Hong Kong style currency board has been blamed for creating forex shortages from money printing that resulted in draconina exchange and trade controls, import substitution, high inflation, strikes and political unrest.
The Port City special economic zone will be protected from the policy errors of the Monetary Board of the Central Bank through dollarization with multiple currencies.
All transactions will be done and salaries paid in designated foreign currencies issued by better central banks in the world.
Protection from the central bank money printing is expected to halt brain drain and keep people who are now migrating abroad to countries with monetary stability. (Colombo/May21/2021)