The European Union was studying Sri Lanka's current budget since it reflected some of the country's political and economic objectives, which met some of the recommendations of the World Bank and of the International Monetary Fund.
This was stated by Ambassador of the European Union to Sri Lanka Tun Lai Margue at the EU-Sri Lanka dialogue at the Ministry of Development Strategies and International Trade.
The Ambassador stated that this budget would lead to the creation of a more favorable business environment and several progressive outcomes would arise from such efforts. This include devaluating the possibility of foreign investors owning land in Sri Lanka, as well as economic packages that would promote the development of small and medium enterprises, notably in the Northern Province.
“The new budget also encourages investment in new sectors such as the IT industry as well as the Agricultural sector.”
The Ambassador also added that it was positive that under the budget, environmental issues were to be addressed by the Government of Sri Lanka. Promotion of electric cars in the country was also a significant new move on the part of Sri Lanka. He stated that the EU felicitated the Government of Sri Lanka in its efforts, particularly in the area of seeking to boost investments in the country.
Minister of Development Strategies and International Trade, Malik Samarawickrama who led the Sri Lankan side with other relevant officials in line Ministries said that the current budget of the Government of Sri Lanka was the most outward orientated budget that the country had adopted since the era of the late President J R Jayewardene. One of its strength was the development of a very comprehensive Inland Revenue Act.
However, a vital area that needed to be addressed was improvement on the "Ease of Doing Business" since success in this area this would impact very positively on investment and trade.
The Minister stated that the objective of the government was to make every industrialist an exporter. At the same time there is a commitment on the part of Sri Lanka to develop the Northern Province and many concessions have already be given to promote economic activity in the former conflict affected areas.
A number of subjects were discussed by the Sri Lankan side and the EU delegation. These included the need for a definition of what constitutes "used cars" in Sri Lanka. In addition to this the EU delegation spoke of a need for Sri Lanka to formulate environmental standards that are consistent and of a very high level.
The Minister also spoke of Sri Lanka's objective to develop container terminals located on both the Eastern and western coasts in the Island. The European Union Chamber of Commerce discussed their need for addressing issues of noise pollution at certain tourism locations as well as the Island's objective to develop a strong dairy sector.
Discussions also covered the future development of a dry port in the area of Bloemendhal area.
In the period 2005 - 2016, EU enterprises operating under BOI invested an estimated US$ 2.5 billion in Sri Lanka. The bulk sectors for investment were manufacturing (other than textile and apparel) US$ 557 million; textile and apparel manufacture (US$ 327 million); telecommunications (US$ 617 million): Airline services (US$ 325 million); and power generation (US$ 255 million).
The leading European Union countries in terms of FDI to Sri Lanka are the United Kingdom with 90 projects under BOI (of which 54 exporters), Germany (42 projects, 31 exporters), the Netherlands (29 projects, 14 exporters), Sweden (20 projects, 13 exporters) Italy (18 projects, 14 exporters, France (13 projects, 10 exporters) and Belgium (10 projects of which 6 exporters).
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