IFC highlights need to transform challenges into opportunities

Acknowledging a shift in the direction of the economy since the unity government came into power, the International Finance Corporation (IFC), the private sector arm of the World Bank Group, this week expressed confidence in the ability of transforming Sri Lanka’s challenges into opportunities.

Pointing out Sri Lanka is moving from a public sector investment agenda to a private sector agenda, a shift acknowledged to be ‘not easy’ given the reforms involved, IFC Country Manager Amena Arif said: “The opportunities and challenges stem from this shift, and given the current context, there is a greater chance for local and foreign investors to translate the existing challenges into opportunities.”

Arif made these observations at the ‘Sri Lanka Investment and Business Conclave 2017’ held in Colombo, on Wednesday.

According to Arif, the first challenge that could be transformed into an opportunity would be the country’s inadequate infrastructure.

Being a middle income country, she pointed out that Sri Lanka does not have the level and quality of infrastructure that is required, which provides ample opportunity for investors to build the physical infrastructure the country needs.

The second being the productivity challenge due to an ageing demographic. MORE ON P4

As Sri Lanka does not have the productivity dividend, this challenge, Arif stressed, is an ‘immense’ opportunity for investing in bringing in technical knowhow, which will be a game changer.

Thirdly, the opportunities in the area of social inclusion. Although Sri Lanka has been emphasizing on financial inclusion, according to Arif, greater emphasis is required in the social inclusion front.

“Sri Lanka does not necessarily need to increase the number of bank accounts. Not the very basic anymore. Needed is wealth management and not wealth creation,” she asserted.

It was highlighted that what is required is a financial spectrum of products that is suited for a middle Income country.

Meanwhile, Arif said, although the Sri Lankan economy grew even during turbulent times, the country is yet to crack the Foreign Direct Investment (FDI) code.

FDIS amount to only 1.3 percent of Sri Lanka’s gross domestic product, whereas the world average stands at 3 percent. The country attracted little over US $ 450 million in FDIS in 2016.