Not the time for confusion

If indeed the priority of the Government is, as stated, to attract foreign direct investment instead of borrowing to escape its economic woes, then it must immediately embrace a more transparent and firm stance in facilitating such investment. The events of the past week are hardly an encouragement for the few investors willing to direct their investments to Sri Lanka over competing nations in the region.

Both India and Japan have rightfully taken umbrage at the unilateral decision by the Government to withdraw from the 2019 tripartite agreement pertaining to the East Container Terminal. While it is the prerogative of the new Government to renegotiate terms or exit such an agreement for the right reasons, the eventual submission of this Government to the demands of trade unions and extreme elements within itself is far from an encouragement to those strategic investments that are both necessary and scarce.

The mixed signals and bungling that has of late been the trend in economic management must be arrested forthwith. Two of the more recent examples of this were the gazette extraordinary (rescinded one day later) lifting import restrictions on tiles, and a flawed circular issued by the stock market regulators, corrected shortly thereafter. Such events give rise to negative publicity and confusion in a market that can ill afford either.

Some of these hasty announcements and equally hasty retreats smack of a lack of engagement of stakeholders and an absence of two-way communication. Conversations between those making policy and those impacted by such policy are imperative, and should be seen as non-negotiable. Consulting the right stakeholders at the right time would save time, money, and face.

Someone needs to take charge. Heads must roll if they must. But things must be put right before we reach a point of no return. Businesses cannot function within a milieu of mixed signals and confusion; the economy needs to plan its way forward post-pandemic, and the only way is through the facilitation of increased investment. A conducive environment is a salient requirement and clarity of strategic direction is critical.

Protecting state assets merely for ideological reasons won’t save us from the economic quagmire we are in. Our state-owned enterprises include plenty that are far from productive and have been serial loss making institutions for years. We must remain pragmatic in managing their futures; private investment cannot be considered only in the light of inward-looking, nationalistic opinion if it results in progress being held hostage.

Sri Lanka has enough problems on its hands – there is a pandemic to manage, a debt crisis amid ratings downgrades, and looming human rights sessions at the UNHRC amid diplomatic strains. This is not the time for clumsy decision making and confusion over mixed messages. It is time the President took charge, and insisted that those in positions of authority prioritised prudence and spoke with consonance. Every little misstep erodes investor confidence, and Sri Lanka must repair its image and its offering to attract the right investments.