The formation of a new Sri Lankan cabinet following Mathripala Sirisena’s victory in January’s presidential election is being welcomed by some foreign investors, in spite of controversial statements made by Mr Sirisena, according to investment experts in the country.
In the January elections, Mr Sirisena received 51.28% of votes to narrowly beat incumbent Mahinda Rajapaksa, who had held office since 2005. The election result came as a surprise, as Mr Rajapaksa, certain of winning, called the elections two years ahead of schedule.
After winning the elections, Mr Sirisena announced new parliamentary elections at the end of his 100-day programme which pledges political and economic reforms. In terms of foreign policy, Mr Sirisena plans to establish equal relations with India, China, Pakistan and Japan while building a stronger relationship with other emerging Asian countries such as Thailand and Indonesia.
Yet, in a widely circulated manifesto published during the presidential campaign, Mr Sirisena stated that “the land that the white man took over by means of military strength is now being obtained by foreigners by paying ransom to a handful of persons”. Mr Sirisena also added in his manifesto that “if this trend continues for another six years, our country will become a colony and we would become slaves”. Although no countries or investors are named directly, Mr Sirisena previously had been highly critical of the Rajapaksa administration’s heavy reliance on Chinese investment and financing.
However, despite these statements, investment experts are predicting an increase in FDI inflows for Sri Lanka in the aftermath of the election. “The combination of Mr Sirisena, prime minister Ranil Wickremesinghe and deputy minister for planning and finance Harsa de Silva will have a good impact on the country’s FDI as these people are pro-business,” said Tharaka Deshapriya, a director at Sri Lanka-based consultancy Silk Road.
Meanwhile, Neil Bridgen, head of investment at PA Consulting Group, said: “Mr Sirisena seems committed to fighting corruption, improving government standards and working on the reconciliation agenda, according to his manifesto. These issues are important to the business community.”
Aditya Bhandari, regional director of south Asia at microfinance advisory Inconfin, added that the appointment of Arjuna Mahendran as central bank governor is useful as he is a former banker and has good relations with the Sri Lankan business community.