Frightening off investors
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The attack on a foreign investor, an Omani businessman, on March 30, reveals the fragility of foreign investments in the country.It was only after the media reported the incident that the government sprang into action after weeks of dilly-dallying. While government ministers scrambled (most probably prompted by President Ranil Wickremesinghe) to reassure the affected investor, safety for himself and his staff, no action has so far been taken against the perpetrators of this violent act. It appears that the goons were connected to a politician in the area, an obvious reason for the delay in making any arrests.
In recent times, tourists have also been subject to attacks and robbery. Is Sri Lanka entering an era where there is no security for investors and tourists? Maybe special units need to be set up in police stations particularly in areas where there are many investors (like Katunayake and Biyagama) and those frequented by tourists to ensure that law and order prevails.
The attack on the Omani businessman and subsequent inaction also reflect badly on the police and their response. Would the police have delayed action if it was a western investor (from the US or Europe) under attack? No way… and inquiries would have been swifter and speedier.
Apart from the media blitz on the incident, there hasn’t been any formal statement from the government acknowledging the incident and what action would be taken against the perpetrators.
The trio was also discussing this incident under the margosa tree. “Mage nadayek eh karmantha shalawe weda karanawa. Egollo kanassallata path wela inney rassawal nethi wei kiyala (One of my relatives works in this factory. They are worried that they would lose their jobs),” said Mabel Rasthiyadu.
“Mae marayanta dedi danduwam denna avashyayi (These thugs should be severely punished),” noted Serapina.
“Aanduwa katha karanawa vitharai, eka matha katayuthu karanne nae. Den sumana gananawak pahu wunta, kava-wath ath adanguwata aran nae (The government just talks but no action is taken. Even though several weeks have passed, no arrests have been made),” added Kussi Amma Sera.
As I listened to the tale of woes, the home phone rang. It was Karapincha Perera, the tea-kade gossip who loves to read the newspapers. He was calling about the same incident involving the attack on the foreign investor.
“Why are these incidents happening? Is there no law and order in the country?” he asked, after we exchanged pleasantries.
“The police as usual seem to be selective and maybe because a local politician was involved, they are dragging their feet over the incident,” I said.
“These incidents would jeopardise Sri Lanka’s efforts to increase foreign investments in the country,” he said, adding that tourists also need adequate protection for tourism to grow.
“Affording protection to foreign investors and tourists should be ingrained in every Sri Lankan as these are two vital sectors that bring in enormous employment benefits to local communities,” I said, adding that special units should be set up in police stations to ensure that first responses to such incidents are fast and comprehensive.
The worst incident of an attack on a foreigner came when on Christmas Day in 2011 a Briton, Khuram Shaikh Zaman was murdered and his Russian girlfriend gang raped in a resort in Tangalle. They were staying at a resort in Tangalle, owned by a local politician. The trial of the guilty was delayed for over two years amid allegations of interference and was intensified only after diplomatic pressure by the UK government. The accused were jailed for 20 years for the gruesome crime.
The March 30 attack, a black mark in the efforts to attract investments, comes at a time when the government is presenting a set of new incentives to woo foreign investors. The government’s primary role in drawing foreign investments should be ensuring there is law and order in the country, political stability, limited foreign exchange risks, consistent tax policies, a trained labour force and smoothening of investment procedures and rules. These are the basic fundamentals requested by potential investors.
Governments in the past have also offered concessions and benefits to foreign investors but have they worked without tackling the fundamental issues in this sector? Some investors say there are 30-40 cumbersome steps to formalise an investment and set up a factory and the process is not transparent with, at some point, bribes being allegedly demanded.
This week Cabinet spokesperson Bandula Gunawardena said the Government will soon unveil a comprehensive package to boost foreign direct investments (FDIs) and develop key industries.
“President Ranil Wickremesinghe told the Cabinet that steps were being taken to introduce a fully-fledged package to boost FDIs — essentially, creating new business models to thrive,” he told reporters.
Sri Lanka is hoping to garner US$2 billion worth of investments this year from $1 billion in 2022, a bad year with the collapse of the economy and a declaration of bankruptcy.
Gunawardena also said that “political instability, policy inconsistency, red tape and bureaucracy as well as the complex rule of law have discouraged investors”.
Sri Lanka’s meagre efforts to attract investments is nowhere near that of other countries in Asia in particular Singapore, Vietnam or Bangladesh which are attracting billions of dollars in investments.
It was also reported in local media “that the Government aims to brand Sri Lanka as an investment destination, by improving investor care, accessing new markets for products and services, communicating better with the world and growing the market via new trade arrangements”.
Initially, the Omani investor wanted to close his apparel factory at Katana and shift his investment overseas. Government ministers in fact offered him a location elsewhere with better security. Now, however, the investor has agreed to stay and continue his operations at the same location, saying he didn’t want his 300-odd workers to lose their jobs.
The Omani investor was on a short visit to Sri Lanka when he was attacked. He was initially disappointed at the delay in the investigation which prompted plans to shut his factory, later reversing the move.
“As the apex body of the apparel industry, we condemn such acts of violence. We call on law enforcement authorities to act swiftly and take prompt action to uphold the rule of law and bring the instigators of this attack to book. We empathise with those affected by the incident and request that the matter is allowed to reach a peaceful resolution in accordance with the laws of the land,” the Joint Apparel Association Forum said in a statement.
As I wound up my column, sipping a second mug of tea brought by Kussi Amma Sera, my reflections were on whether Sri Lanka would ever get its law and order situation on track to ensure justice for investors, tourists and also ordinary citizens.
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