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Sri Lanka FDI falls in 2011

Foreign direct investment (FDI) in Sri Lanka has fallen in 2011, with approximately US$ 300 million invested into the country, according to a report by UNCTAD (United Nations Conference on Trade and Development).

Although the Ministry of Economic Development tasked the Board of Investment (BOI) with attracting $1 billion, FDI fell short of this target.

Inexplicably, the BOI claimed earlier this year that Sri Lanka had exceeded its target for 2011 and set a new target of $1.75 billion for 2012.

Sri Lanka had high hopes of huge foreign investments after the end of the armed conflict in 2009 and was rated in the latest UNCTAD report as 68th out of 182 countries for FDI potential.

However restrictions on free markets placed by the government, coupled with political uncertainty are thought to be behind the decline in FDI, which saw Sri Lanka rated 159th for FDI attraction, behind countries such as Bangladesh, Pakistan and the Maldives.

What constrains foreign direct investment? - Sunday Times (24 Jun 2012)

Sri Lanka’s FDI surprise - Tamil Guardian (03 Jan 2011)