MarketWatch’s William Spain has filed some pretty comprehensive reports from Sri Lanka, including this one on the general business climate. This month has been the yearly war-acid flashback in the international media, but the overall reality is that the war is over. He’s travelled around and got some damn good quotes/stories. I’m including a few here:
A Batticaloa Businessman: He welcomes the reassertion of central control, he said, and, while he has the small businessman’s typical skepticism of government motives, he is enthusiastic about the improved roads and security situation, along with the opportunities they bring.
“A lot is happening here,” he said.
Krishan Balendra (Keell’s head of corporate finance and strategy): “I certainly can’t complain” about business levels, said Krishan Balendra. “Generally, the government is pro-private-sector, and the private sector is the main engine of growth as it always has been. The biggest difference now is that we have got an environment of no war.”
Nahil Wijayasuriya (chairman of East-West Properties): Wijayasuriya, who has or has had diverse interests around Asia including real estate and broadcasting, was holding a lot of his assets in cash.
But devaluation “threatened to turn it into toilet paper, so I decided to put some more money on the ground. And I have found that I can make more here now than I could in Singapore or the Philippines.”
Koshy Mathai (the IMF representative for Sri Lanka): Sri Lanka, he said, “is blessed in that if you look at the debt-to-GDP-growth ratio … they should be able to bring the debt down quite nicely in the next few years.”
So this is all the typical war over stuff is going better. Which is true. There are, however, caveats that the article notes:
‘Western Diplomat’: “The politicization of many institutions has undermined public confidence,” said one Western diplomat. And many of the appointees “lack the cosmopolitan experience or skills needed” to perform their duties.
I also thought the closer on corruption was a good one:
‘Local Economist’: “If it is predictable and consistent in its application, we can cope with it,” commented one local economist, perhaps paraphrasing the old American definition of an honest politician as one who stays bought.
While the general outlook seems good for foreign investors (the readers of this article, I think), the article also highlights Sri Lanka’s energy problems, trade deficits, and dodgy governance. Still, compared to say, Europe, Sri Lanka still looks pretty good for business.
The article is interesting, worth a read: Market Watch.