Adani saga appears to have raised its head again

THE Adani saga appears to have raised its head again. A recent headline news claimed that Sri Lanka has lost $ 1,00,000,000 for FDI-direct investment. This immediately raises the question, to what extent Sri Lanka is prepared to demean its sovereignty and national pride, for the so-called benefits of Foreign Direct Investment.

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No doubt FDI is a recognised means of attracting capital for development and is touted as a way forward to achieve projects and grow categories. But is it as simple as that? What are the sectors for which such FDI should be promoted and on what terms? Are we to accept any so-called project, simply because some investors to bring FDI? Who has the responsibility with such proposals, before various ministers and state agencies, throw their weight behind such proposals?

The FDIs and expectations thereof

We are expect that the BOI and its predecessors, bent over backwards, to grant concessions to foreign investors, including tax holidays. There was nothing of the sort to assist the local entrepreneurs, who were faced with crippling direct and indirect taxes, customs duties, and a plethora of other disincentives.

The expectation was that such FDI would result in increased export income to set off the bludgeoning import costs. No doubt there are a number of such projects in operation to justify the concessions granted. FDIs that start businesses in Sri Lanka to sell goods and services to our population will only increase the forex drain and do very little to the economy, and this project is one such. What forex did they bring in? Hopefully, the BOI has now revised their approval criteria and there are no more tax holidays.

But has anyone done any audit done on the cost benefit of these projects which have been granted many concessions? If not too late for such an audit to help make the correct decisions for the future when FDIs have once more become the buzz word, perhaps being pushed along by the IMF strictures.

Attempts to camouflage dubious projects in the guise of FDI