The country has
vastly improved the ease of doing business, according to a recent World Bank
survey that ranks it higher on that measure than any other South Asian country.
By Pradeep
Seneviratne for Khabar South Asia in Colombo
December 03, 2012
S.P. Samy, a leading importer of essential commodities
to Sri Lanka, always wanted to diversify his businesses. A Tamil from Jaffna, he wanted to
invest in the hospital industry, but the war was an impediment.
Six months ago he opened a 39-room hospital in Jaffna
through a Rs. 600m ($4.6m) project facilitated by the Board of Investment of
Sri Lanka.
"Peace is the most important prerequisite for
business. After the war ended, we have a stable situation in Sri Lanka. I am
happy to start this business. In my hospital, there are two operating theatres
and two labour rooms. Also, there are 60 beds. Sri Lanka is a good country to
do business. I feel it as a Tamil businessman," Samy told Khabar South
Asia.
Sri Lanka's improved business climate is reflected in
a recent global survey by the World Bank. "Doing Business
2013" names Sri Lanka as one of ten countries that have improved the
ease of doing business over the last year, by computerising processes for
starting a business, getting credit, registering property and trading across
borders.
In the review of business regulations in 185
countries, Sri Lanka bettered its ranking to 81st from 89th for ease of doing
business. "It marks the first time since 2005 that a South Asian economy
has ranked so high," the report noted, according to Lanka Business Online.
World Bank managing director lauds progress
After a November 15th-19th visit to Sri Lanka, World
Bank Managing Director Sri Mulyani Indrawati said the Bank was satisfied with
Sri Lanka's progress.
According to a November 21st World Bank press release,
Indrawati emphasised the importance of growing the private sector in order to
make Sri Lanka the "Wonder of Asia". She also highlighted the
significance of bridging regional and income disparities to build a sustainable
economy.
Indrawati met with President Mahinda Rajapaksa and
other top officials, as well as representatives of the private sector, the
opposition and the media. She also visited villagers in Jaffna to learn about
their experiences as beneficiaries of projects financed by the World Bank
Group.
"The sustainability of the recent economic
success will depend on the capacity of the government to establish the adequate
environment that attracts the private sector. I am convinced that, learning
from experiences of other Middle Income Countries, the country will succeed.
The Bank Group stands ready to partner with Sri Lanka in this endeavour,"
she said.
She congratulated Rajapaksa on Sri Lanka's emergence
from conflict and for the growth achieved in 2010 and 2011, but stressed the
need to ensure lasting peace through shared and inclusive growth, the press
release said.
Some roadblocks remain
Despite the improvements, however, the outlook is not
always rosy for local industrialists based in the north. Chairman of the
Chamber of Commerce and Industry of Jaffna K. Poornachandran said high bank
interest rates remain discouraging, even though wartime hurdles have been
removed.
"There are high interest rates offered by local
banks. It has affected profit margins of business operators. It has to change.
Also, we encounter some obstacles in getting clearance for industrial
work," Poornachandran told Khabar.
V. Sivagnanasothy, Secretary of the Ministry of
Traditional Industries and Small Enterprise Development, said the Central Bank
had introduced refinancing schemes for doing business in the north and east
after the war was over.
"At my ministry, I receive a large number of
applications from prospective investors. There are soft loans. The interest
rates are minimal. Recently, we had an exhibition in Jaffna. People's
participation was encouraging. I think business will flourish under the
improved situation," Sivagnanasothy told Khabar.
