In the wake of a high regulatory powered investment promotion agency (authority) to attract more foreign direct investment (FDI), the Board of Investment of Sri Lanka (BOI) will be granted more powers.

Investment Promotion State Minister Dilum Amunugama stated that BOI will be given more powers in future to further facilitate investors through speedy approvals for investment projects, thereby easing the ease of doing business.

He stressed that the new powers would see investors being given more efficient clearance processes for relevant projects, offering investors additional certainty and clarity.

The State Minister made these remarks during a discussion held with the BOI trade union representatives recently.

However his statement has no reference to ongoing process of rehauling of BOI operations under separate agency in accordance with proposal made by President Ranil Wickremasinghe in his capacity as the finance minister of the country,

Special committee appointed by President Ranil Wickremasinghe has already made a recommendation to set up this new agency by bringing the Board of Investment (BOI), the Export Development Board (EDB) and the Sri Lanka Export Credit Insurance Corporation (SLECIC) together into one platform.

National Enterprise Development Authority (NEDA) and other entities that support exports and investments will also come under the purview of the new agency.

The budget 2023 has allocated Rs 100 million to implement the investment and export sector reforms expeditiously.

These institutions connected to investment and exports will function under the proposed new agency following the re-enacting of 1978 Greater Colombo Economic Commission (GCEC) laws making it compatible with modern day needs.

The government has taken this decision after evaluating the performance of the these institutions during the recent past.

On average, it takes around 170 days to approve an investment project in Sri Lanka as these processes involve over 40 line agencies, it has been observed.

At present there are 73 project proposals that are still to get approval at around 10 different agencies. The delay in approving the projects is not auger well for investors.

“It is evident that the modus operandi in obtaining necessary approvals for investment projects causes significant hindrances to investors, which has a considerable bearing on the willingness and confidence of the investors to continue their business. In fact, some projects require approvals from 70 institutions,” Amunugama highlighted.

“In this context, attention has been drawn to leveraging a business model called the plug-and-play model where all clearances and other prerequisites will be in place before the project is awarded to any investor.

Here, the business firms are not required to focus on the basic requirements for setting up a business as everything is arranged by the relevant authority, which would be the BOI,” he explained.

“With the new powers in place, the BOI will be equipped to act more independently and effectively and thus, upbeat about wooing more investors to Sri Lana,” Amunugama added.

Sri Lankan government construction contractors numbering around 3000 are in an urgent need of funding for their survival have been relieved as they have received Rs. 191 billion outstanding payment for the work completed in public construction projects including buildings and infrastructure facilities.

The government has settled the majority of the arrears to the tune of Rs.191 billion to contractors and suppliers, after assuming power on August 31, last year, despite an 8 percent contraction in the economy during the year, Finance State Minister Ranjith Siyambalapitiya said.

As of August 31, last year, the government owed Rs.360 billion to various contractors and suppliers. As of January 31, 2023, the government has been able to settle 53 percent of these bills, amounting to Rs.191 billion.

The non payment of dues to contractors of public projects has resulted in widespread unemployment at present due to closing down of small and medium scale construction companies and if the delay in outstanding payments continues, it could affect the livelihoods of about 1.2 million people in the sector, Ministry of Housing and Development sources said.

Siyambalapitiya emphasized that it should be viewed as a positive development that the government was able to settle the majority of the arrears, despite the estimated 8 percent economic contraction in 2022.

According to Siyambalapitiya, the government still needs to settle Rs.169 billion in arrears. Rs.100 billion worth of outstanding bills are categorized as recurrent expenditure, while Rs.69 billion is categorized as capital expenditure.

He noted that several of these outstanding bills would be settled on a prioritized basis and it include Rs.18.9 billion worth of outstanding bills for health and medicine, Rs.19.3 billion for pensions and gratuity and Rs.12 billion for fertilizer and chemical supplies.

Upon the recommendation of a committee appointed by the Treasury secretary, the Cabinet of Ministers approved a proposal to settle the outstanding payments owed to various parties by issuing Treasury bonds.

The Ministry has already suspended the development project work and the repayment of dues to contractors but it is making arrangements to pay a sizable sum of the total amount to them by the in accordance with cash availability, a senior Treasury official disclosed.

It is also considering releasing at least Rs. 500 million from the outstanding payments to the Provincial and District level projects, to provide some relief to small- and medium-scale construction companies.

The Ministry is to formally request for funding from the Central Bank by raising the relevant cash through Treasury bills and Treasury bonds to meet any urgent financial requirements, he said.

Some of these contractors have obtained loans by mortgaging their house and property to carry out the construction work and they are now in danger of losing their homes and assets to banks, several contractors complained.

In addition, the fuel shortages and power outages have affected the efficient production process of the industry, affecting all the stakeholders, from small and medium enterprises to the self-employed.

The government is working to ramp up public spending on health care in order to ensure continued provision of high-quality care throughout the state-run system, to implement new technologies across the sector and to prepare for a potential influx of medical tourists.

In an unprecedented move towards Sri Lanka Health sector revolution the Government is to re introduce non-paying wards in private hospitals, President Ranil Wickremesinghe disclosed

He said that the Government is looking at the possibility of introducing paying wards in Government hospitals and non-paying wards in private hospitals.

It will take the tab for the treatment made in non-paying wards in private hospitals The President also said that a separate unit would be established to send military personnel overseas to help in times of health disasters.

He made these observations while addressing the inauguration ceremony of the 6th annual academic sessions of the Sri Lanka College of Military Medicine (SLCOMM) held under the theme ‘Resilience of Military Medicine In the Times of Crisis’ at the Eagles Lagoon in Katunayake.

“I’m looking at the possibility of using our military medical personnel to send abroad when the people are faced with health disasters.

Health disasters take place more often than natural disasters and I would discuss this matter with the military to establish a unit in this regard. So that’s a new chapter for military medicine,” the President said.

The President also said that under the Indian credit line the Government is to get more medicine to address the shortage during the crisis.

He added that the Government is working on making more foreign exchange available to the medical sector.

The President further said that discussions are ongoing with the Ministry of Health to upgrade the Medical Research Institute (MRI) into one of the best medical research laboratories in the region.

Sri Lanka’s Constitution. Its health care system delivers what is widely recognized as some of the highest-quality care in South Asia, despite spending considerably less than most other countries.

The state-run public health system provides efficient, comprehensive and free medical services of all kinds.

Currently, around 95% of inpatient care and 50% of outpatient care is provided by the public system, while the private sector accounts for the remaining 5% and 50%, respectively, according to official data.

“Sri Lanka’s health system is unusual, in that it is a mixed market, like Hong Kong or Malaysia,” the Colombo-based Institute for Health Policy (IHP) revealed, adding that the system is extremely efficient, truly low cost and widely used by almost all segments of society.”

Nonetheless, Sri Lanka faces several challenges when it comes to maintaining cheap, high-quality health care.

Like many other countries around the world, the medical system has seen a shift in focus from infectious diseases, which have been all but eradicated, to non-communicable diseases (NCDs), such as cancer and heart disease.

“The burden of keeping the population healthy falls to the health sector,” the World Health Organisation (WHO) said. “But NCDs are the result of much larger cultural issues, which require behavioural and societal change across the country.”

The International Monetary Fund (IMF) on Saturday called for ‘timely and orderly processes’ under a common framework with regards to Sri Lanka’s debt resolution. The island nation faced a severe economic crisis which resulted in high debt.

During 2020, in order to strengthen debt architecture, the G20 initiated Debt Service Suspension Initiative (DSSI) and established the Common Framework (CF) for debt resolution.

“It is now critical to complete Zambia’s debt restructuring, establish a Creditor Committee for Ghana and advance work with Ethiopia.

Nonetheless, more predictable, timely and orderly processes are needed both for countries under the CF and for those not covered by it, including Sri Lanka and Suriname,”

This was disclosed by IMF Managing Director Kristalina Georgieva in a statement issued after conclusion of G20 Finance Ministers and Central Bank Governors (FMCBG) meeting in Bengaluru, under India’s presidency,

Sri Lanka has already fulfilled filled around 15 commitments made to IMF and put forward a debt treatment from work with proposal of immediately restructuring bilateral debt of US, India ,China ,Japan,and Paris club member and non member countries amounting to US$10.81 billion to gain $2.9 billion IMF bail out loan soon.

The G20 Finance Ministers and Central Bank Governors who met in Bengaluru, India from February 24-25, 2023 said that they look forward to a swift resolution to Sri Lanka’s debt situation.

India’s Minister of Finance Nirmala Sitharaman, reading the Chair Summary and Outcome Document of the G20 Finance Ministers and Central Bank Governors (FMCBG) meeting, said that they recognize the urgency to address debt vulnerabilities in low and middle-income countries.

World Bank President David Malpass said that Sri Lanka and other middle-income countries were in need of quick debt restructuring.

“We should work together to achieve solutions – Zambia MoU, Ghana official creditors’ committee, Ethiopia rescheduling, and Sri Lanka financial assurances.

All of which can be done in the next few months if there is agreement at the table,” he said adding that “they look forward to a swift resolution to Sri Lanka’s debt situation.

Meanwhile the United States fears China may use loans to Sri Lanka and Pakistan as leverage for coercion.

US Assistant Secretary for South and Central Asian Affairs Donald Lu said that the US is extremely worried about the possibility that Chinese loans to nations in India’s near neighbourhood will be used as leverage for coercion.

President Ranil Wickremesinghe had this week revealed China’s refusal to agree to the same conditions placed by India and the Paris Club when restructuring Sri Lanka’s debt.

Wickremesinghe said that while the Paris Club agreed to India’s conditions, China refused to do so. Instead China wanted to place its own conditions.

During 2020, in order to strengthen debt architecture, the G20 initiated Debt Service Suspension Initiative (DSSI) and established the Common Framework (CF) for debt resolution.

It is now critical to complete Zambia’s debt restructuring, establish a Creditor Committee for Ghana and advance work with Ethiopia.

Nonetheless, more predictable, timely and orderly processes are needed both for countries under the CF and for those not covered by it, including Sri Lanka and Suriname.