Sri Lanka to embark on new economic zone projects
Prime Minister Ranil Wickremesinghe said that in order to ensure economic development in the country’s rural districts, the Government of Sri Lanka (GoSL) intends to set up 8-9 economic (free trade) zones.
The Premier has made this comment at the 40thanniversary of the Board of Investment (BOI) Sri Lanka held at the Katunayake Investment Promotion Zone.
Plans have been made to establish an investment passage from Kandy to Wellawaya with other economic zones being set up elsewhere right up to Paranthan in the Northern Province.
Amidst a deceleration of the country’s economy and fears regarding balance of payment issues and rising debt, the PM stated that the GoSL now had to find more innovative measures to ensure the country’s economic stability that extended beyond President J. R. Jayewardene’s introducing of the open economic system in 1978.
“Today, after 40 years of a free market economy we need to guide the country’s economic transition towards a more high-level growth model, so we want to do more in the service sector, do more research and development, and more exchange and improvement of talent. Sri Lanka has to take a giant leap towards economic prosperity than what the then government did in 1978 by opening the economy. The country has lost many foreign investment and other development opportunities due to three decades of war and other economic issues,” he said.
Forty years ago, the Katunayake Free Trade Zone was established to address the youth unemployment crisis and pursuant to President Jayewardene‘s main economic goal of creating employment. Sri Lanka’s move towards an open economy was highly anticipated after nearly a decade of restrictions under a closed economy.
When it was set up, the Katunayake Export Processing Zone was the first of its kind in South Asia; which provided the path for countries like India, China, Bangladesh and Vietnam to set up similar zones.
When it was established in 1978 many foreign investors established apparel ventures and took advantage of the quotas available to Sri Lanka for the US market.
The BOI’s latest business model is the collaborative establishment of export processing zones, where the investor is a zone management specialist, who not only develops the zone and its internal infrastructure but is also tasked to attract new investors to the zone.¹
The setting up of more economic zones may revive foreign investments into business ventures in Sri Lanka. Coupled with the country’s many free trade and bilateral agreements with other nations, investors will be able to conduct successful export ventures.
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