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Sri Lanka and Saudi Arabia to boost direct investments help economy back on track

June 22, Colombo (LNW): Sri Lanka is working on attracting more direct investment from Saudi Arabia as Saudi support is seen as important to help put the Sri Lankan economy back on track.

Investment from Saudi Arabia has been identified as a key part of ongoing recovery efforts in Sri Lanka, said Falah Alhabshi Mowlana, Sri Lanka’s consul general in Jeddah.

The Board of Investment of Sri Lanka has been working with the country’s foreign missions to attract more foreign investors, Mowlana said, adding that the tourism and energy sectors are likely the most potential for Saudi investment.

“(The) tourism sector is one of the best sectors that can attract Saudi investment … If the opportunities in Sri Lanka in this sector can be presented in a proper way to Saudi nationals that will immensely impact Foreign Direct Investment to Sri Lanka.”

Sri Lanka and the Kingdom of Saudi Arabia will enter into a Memorandum of Understanding (MoU) aimed at attracting direct investment and enhancing the investment environment in both countries. 

The agreement seeks to promote policy and legal reforms, provide advanced and integrated infrastructure facilities and streamline processes to foster a more investor-friendly climate.

“Both sides reached an agreement during the special meeting of the World Economic Forum, held in Riyadh, Saudi Arabia attended by Foreign Affairs Minister Ali Sabry in April,” Cabinet Co-Spokesman and Minister Bandula Gunawardena said yesterday.

Speaking at the weekly post-Cabinet meeting media briefing he disclosed that the agreement was reached when the Minister attended the World Economic Forum in Riyadh from 28-29 April.

“The agreement is part of a broader strategy to increase foreign direct investment in Sri Lanka by improving the overall investment landscape. This includes implementing key policy and legal reforms, upgrading infrastructure and redesigning processes to make investment more attractive and efficient,” he added.

The MoU is expected to open new avenues for economic collaboration between Sri Lanka and Saudi Arabia, benefiting both nations by creating a more conducive environment for business and investment. 

Gunawardena explained that Sri Lanka lags behind regional countries in attracting foreign direct investments. “In 2023, Singapore attracted FDIs worth of $ 140 billion, India $ 70 billion, Vietnam $ 28 billion and Thailand $ 20 billion, while Sri Lanka only attracted $ 1 billion,” he said.

“This initiative aligns with Sri Lanka’s ongoing efforts to stabilise and grow its economy by leveraging international partnerships and attracting foreign capital. 

With this MoU in place, both countries look forward to a strengthened economic relationship and the mutual benefits that come from increased direct investment and improved investment conditions,” he added.

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