Muscat: With Sri Lanka's economy on a high growth trajectory, the picturesque Island nation offers a canvas of opportunities for investors seeking to invest in the country, said Ajith Nivard Cabraal, the governor of the Central Bank of Sri Lanka.
Speaking at an event to explore Sri Lanka's emerging investment opportunities organised here yesterday, Ajith Nivard Cabraal said: "We have substantial investments from Oman, but this needs to further improve."
Hamood Sangour Al Zadjali, executive president of Central Bank of Oman also attended the event. Ajith Nivard Cabraal said: "Sri Lanka's export earnings have continued to grow with the share of earnings from industrial exports accounting for around 75 per cent of total export earnings. Investment goods imports have increased in recent times mainly due to the implementation of large scale infrastructure development projects."
Workers' remittances rise
Speaking about trade and current account balance, the governor asserted, "The deficit in the trade account has increased due to expansion in the economy, movements in international commodity prices and higher incomes. Current account deficit has been cushioned by higher receipts from service exports and current transfers."
"Workers' remittances have increased from $2.5 billion in 2007 to $6billion in 2012. Tourist earnings have increased from $385 million in 2007 to $1billion in 2012. Trade in services has improved with Business Process Outsourcing (BPO) and KPO sectors gathering momentum," he further added.
Continuing to dole out figures with an impressive presentation, he averred, "Foreign exchange inflows on account of emerging services such as export of software and Information Technology Enabled Services (ITES), helped to support the current account substantially."
On tourism front, Ajith Nivard Cabraal said: "Tourist arrivals increased by over 17 per cent to 1,005,000 in 2012. During 2012, earnings from tourism have increased by 24 per cent to $1,029 million."
On banking growth in the country, he said: "Banking sector assets surpassed five trillion Sri Lankan rupees and maintained annual growth at 20 per cent. Excessive credit expansion that prevailed at end 2011 (32 per cent) moderated due to the ceiling on credit expansion declining to 21 per cent at end 2012."
Making a pitch for investments in Sri Lanka, he said: "Large-scale infrastructure projects are raising the potential output of the economy.
Five major hubs, which include maritime, ports, energy, knowledge and commercial, plus tourism will be the key drivers of economic growth moving Sri Lanka to the next stage of growth."
On equity market, the governor said: "The corporate bond market and the equity market will be encouraged to play a greater role in supporting the financing needs of the economy, thereby reducing reliance on bank credit. Colombo Stock Exchange was one of the best performing stock markets in the world in 2010.
Slowdown in the share market in 2012 was in line with global investor sentiments. Foreign investments at the CSE in 2012 resulted in a net inflow of $305 million compared to a net outflow of $171 million in 2011."
On government securities market, he said: "Foreign investors are permitted to invest in rupee-denominated treasury bills and treasury bonds up to 12.5 per cent of the outstanding T-bill and T-bond stock. Net inflows to the government securities market amounted to $843 million in 2012 and $496 million so far in 2013.
"A pro-investor environment has been created. Foreign ownership has been permitted across almost all sectors of the economy. No restrictions on repatriation of earnings, fees and capital.
There is relaxation of exchange control regulations. Advanced legal and regulatory framework covering intellectual property, dispute settlement, electronic trading, etc; favourable tax environment; capital gains exempted from income tax; safety of foreign investment guaranteed by the Constitution; and bilateral investment protection agreements with 27 countries and double tax relief agreements with 38 countries are key attractions," he added.
The 15-member delegation included officials from the Central Bank of Sri Lanka as well as the chief executive officers and senior officers from the six largest banks in Sri Lanka namely, Bank of Ceylon, People's Bank, Hatton National Bank, Commercial Bank, Sampath Bank, and National Savings Bank.
Addressing the gathering earlier, Dr Mohamed Abdulaziz Kalmoor, chief executive of Bank Sohar, reiterated the banking community's continued support to Sri Lanka.
The delegation expressed hope that the business community in Oman would continue to strengthen its ties with Sri Lanka given the vast investment potential that exists by identifying new investment opportunities and partnerships and thereby expanding the economic relations between the two countries.