The Vice President of the International Executive Service Corps stated that the “biggest issue” in providing loans for US enterprises to carry out projects in Sri Lanka, is the much berated expropriation bill.
The bill, which allows the government to acquire enterprises and assets deemed to be underperforming, has been criticised by numerous organisations, including Moody’s credit rating agency and the Economist Intelligence Unit.
Whilst the International Executive Service Corps (IESC) signed an agreement with the American Chamber of Commerce in Sri Lanka (AmCham SL), Conconi spoke out against the bill, saying that affected the premium on Political Risk Insurance.
Overseas Private Investment Corporation (OPIC), a US government institution, provides the financial backing for Political Risk Insurance, which includes political violence and expropriation. Conconi said that such projects in Sri Lanka now faced an insurance premium between 2-5%, noting that Pakistan premium is currently at 3.5%.
See our earlier posts:
Moody's slams government's expropriation bill (14 Nov 2011)