OSL-THE Investment Magazine interviews Tourism and Aviation, and Industrial Export Development and Investment Promotion Minister Prasanna Ranatunga, about the task of Herculean proportions facing him, in developing production and attracting investment and tourists to the country.
Minister, you have a very complicated responsibility, reflected in the length of your ministry’s name.
This Ministry is actually divided into two ministries, with two state ministers connected to them accordingly. Keheliya Rambukwella is State Minister of Investment Promotion, and Arundhika Fernando is State Minister of Tourism Promotion. Therefore, this Ministry has four secretaries and three ministers. That in itself shows the gravity of this ministry. This is not a ministry which can be handled by one person, and receiving the assistance of these ministers is a great encouragement. This ministry is that which affects economic growth the most. A challenging ministry.
We have been given the challenge of increasing foreign exchange earnings, by developing both tourism and exports. Although this government will be dissolved following the General Election expected in March, we are not limiting ourselves, but will work to strengthen the foundation on which our next government will invariably have to build. We will introduce some short-term programmes to win the confidence of our customers.
How do you intend to promote investment?
As we said in the election manifesto, it is a difficult task, because in the past four years, the economy has gone down, and investment didn’t come up. The BOI is also a challenge. It did not create a friendly environment for investors. In the recent past, investors have come and been forced to kick their heels, wasting their valuable time and money, which caused a decrease in numbers of investors.
So we find it very difficult, with all the terrorist attacks in Sri Lanka. Investors stopped coming amid the security concerns following the April bombing incidents. So it is a challenge for the new government.
However, after the election of President Gotabaya Rajapaksa, the share market has gone up, indicating a certain amount of stability, which was lacking previously. Based on that new-found enthusiasm, we take it as an imperative to develop the BOI as an investor-friendly institution.
I have told the officials that, when the investors come, we have to give them a particular time frame, once they submit their documents, within the period, we have to finalise matters and get the business going. After the investors apply, we on the government’s side must do all that they require in the shortest possible time. We intend to discuss these matters with the officials concerned and implement the necessary changes as a matter of priority. Only then will the investors come. We are going to work out how to promote more investment in Sri Lanka.
How are we going to increase industrial exports?
It is a challenge, but we have to do it. In order to build up our foreign exchange reserves, we must create a market for our goods in the world. To do so, we must carry out promotional programmes, and also, in conjunction with the Finance Ministry, pay more attention to the standards of manufactured goods.
We have to make quality goods and we want to export it to the relevant countries, where we get the foreign exchange, so we will give more benefits to exporters. We want to give them tax-free benefits and we want to make them confident about what they are doing. At the first cabinet meeting we have given good tax concessions, and as such we want to give the manufacturers the benefits so the country will get more foreign exchange through manufacturing.
We will need all possible help from the media as well as the investment promotion agencies to help us get more investors. We will definitely help the investors who want to come to Sri Lanka, to make their investments in the country. The BOI will be there for the investors.
Tourism is an important sector of the economy, and you are the minister in charge.
Actually, tourism is the third highest earner of foreign exchange that comes to Sri Lanka. During the war time before 2009, it was below 400,000 tourists was here. This a country endowed with abundant natural resources, but was unable to reap the benefits due to the 30-year civil conflict. However, with the end of the conflict in 2009, we were able to boost the number of visitors from less than 400,000 to over 1.2 million by 2015, and our expectation is to go up to 10 million. That is what our manifesto says.
So we had discussions with officials of the Tourism ministry. It seems that after the Easter attacks, the hoteliers and people who are involved in this sector were not happy, visitors did not turn up – the number of visitors decreased by 60 or 70% – all the hotel bookings had been cancelled, and they had financial difficulties. This affected badly the people involved in tourism. We intend to give them some concessions, to provide them with a package of relief and a programme of infrastructure development, so that they are strong enough for the next tourist season.
Many countries, such as Thailand and Vietnam, which are coming up in the world, and others which have already come up, like Japan and Taiwan, have many Buddhists. Is there any to bring more religious tourists from those countries?
Religious wise, it is in the system, we have to promote that.
When tourists come to Sri Lanka, there should be more entertainment, so that they don’t just come and go for nothing. Once the people come, they should be encouraged to go and promote the country. They should be happy.
Likewise, we have natural resources. When you go to Kandy or Nuwara Eliya you get the cold climate, there are sites to see around the country, we have eco-friendly resources. We want to identify and develop more places in Sri Lanka as tourist zones.
In the recent past they have identified the Ella area and have developed it for tourism. We want to have more tourist zones, and give them whatever benefits the government can give, and have entertainment centres as well.
One of the problems that foreign investors have is that, when they come to build hotels, there is not enough land for them.
We have to identify land for them. Under the previous Mahinda Rajapaksa administration, the Tourist Board identified Ella and that area as a zone.
Meanwhile, the Tourism Promotion Bureau, wants to go, especially, to India and China, and also Europe, which provides the highest number of tourists coming to Sri Lanka. We also need a programme to sell our tourism brand in a broadened band of target markets. While promoting areas such as India, China and Europe, we want to go up to the USA as well. The Tourist Promotion Bureau has been working on it, and we want to get more tourists coming to Sri Lanka.
Don’t we need more airlines coming to Sri Lanka?
SriLankan Airlines is the talk of the town, loss-making and so on. But if we have more airlines coming into Sri Lanka, there will be more tourists coming with the airlines. Colombo airport was developed for 600,000 passengers per annum. Now it gets almost 10.1 million passengers per year. The enlargement of Colombo airport has commenced, and it will have to be finished speedily. We also built Mattala airport as an alternative airport to Colombo. Before independence, they built about eight airports in Sri Lanka. After that, Mattala is the only one built by our people. Mattala was conceived as an airport for goods rather than for passengers, being part of a holistic vision which included the Expressway to Hambantota and the Hambantota Port. The highway is up and will be opened soon. Once Mattala is developed, we can transport goods and so on. There are a lot of plans for that.
We have to do it [develop Mattala]. If we are trying to increase the number of airlines and the trips, it is not possible to accommodate them all at Colombo airport. So to develop Mattala we have to give concessions to the airlines and some incentives, so that airlines will come more to Hambantota. If this is happening in time to come, Hambantota will develop like Colombo, so there will be two alternative airports like Colombo. We have to take a policy decision [regarding restarting Sri Lankan flights from Mattala]. I want to have a discussion with the Treasury, as well as the people who are involved in this trade. We have to take and implement the best possible decision. So it is too early to comment on that.
But the previous government stocked paddy there and they have ruined Mattala Airport. A considerable amount of public funds must be expended to rehabilitate it. Despite this, the former government went ahead and developed Jaffna, without even an environmental impact assessment (EIA) report.
However, unlike the previous government, we do not intend to store chillies [extensively cultivated in the Jaffna area] in the airport! We intend to carry out swiftly the development of the three airports: Mattala, Jaffna and Batticaloa. We want to increase the number of internal flights, as a method of encouraging tourists to come here. So we want to develop all the airports and increase the domestic airlines. That is a challenge.