Sri Lanka receives $1.42 billion as foreign direct investment in 2013
Sri Lanka receives $1.42 billion as foreign direct investment in 2013
In an interview with Arab News, Suresh Perera, tax and regulatory principal of the KPMG Sri Lanka, said Islamic Finance was first introduced to Sri Lanka as early as 1997. However, the landmark evolution was the amendment made to the banking act (No. 30) of 1988 in the year 2005 where it allowed both commercial banks and specialized banks to operate on a Shariah-compliant basis. Amana Bank is a full-fledged Islamic Finance Bank in Sri Lanka. Islamic Finance windows have been established in state banks such as Bank of Ceylon and in large private banks. Instruments such as mudaraba, murabaha, ijara, and diminishing musharaka are common in Sri Lanka.
Perera, who will be presenting a paper at the forthcoming KPMG Middle Eastern and South Asian Conference (MESA), being held in Dubai from Dec. 9-10, said Sri Lanka remains an attractive destination for foreign investors.
The MESA conference would attract many clients from across the MESA region and also key KPMG regional partners. The conference would provide valuable inputs in relation to structuring Middle Eastern investment, outbound investments and strategies, trade and customs, tax and regulatory developments in Saudi Arabia and other middles eastern countries, tax updates, and investment opportunities in South Asia, including Sri Lanka .
“Sri Lanka has a fascinating web of taxes and laws restricting foreigners acquiring land, but any foreign investment that would obtain the status of strategic development project (SDP) could enjoy sweeping tax benefits as well as exemptions from laws that restrict foreigners acquiring land to carry out the project.
All the projects that have received SDP status so far such as oil exploration projects carried out by Cairn, hotel projects by Shangri La, Sheraton, Hyatt and mixed development projects by TATA group, waterfront properties and Avic International, coal power plant, and UCLAN (UK based University) in the education sector have received various tax exemptions.”
He said preferred areas of investment include education, tourism, infrastructure, utilities, knowledge and Agriculture.
“It must be pointed out that even under the normal tax regime field of agriculture enjoys special tax incentives. Projects entailing cultivation of vegetables and fruits for export market using modern technology could be an area of investment for the Middle Eastern market.”
Sri Lanka earned $1.42 billion as foreign direct investment (FDI) in 2013 while in 2012 it earned $1.38 billion as FDI. The highest FDI source in 2013 was 24 percent from Chinese investors. The FDI target for 2014 is $ 2.5 billion.
Sri Lanka recorded an exhilarating gross domestic product (GDP) growth rate of 8 percent in the years 2009-2010 and 2010-2011, exhibiting the powers of its new found freedom, soon after the end of the three-decade long cold war, which ended in 2009.
Sri Lanka’s GDP growth rate in 2013 was 7.3 percent and 6.3 percent in 2012. Sri Lanka’s aim is to achieve economic growth of 8 percent in the year 2014 and this rate of growth is the highest in Asia.
“One of Sri Lanka’s main advantages is the high quality of workers. The literacy rate in Sri Lanka is 92 percent, the highest literacy rate in south Asia and overall one of the highest in Asia,” he said, adding that the island state is one of the safest countries in the world for investment due to a number of mechanisms in place to protect investors.
Sri Lanka has signed bilateral investment protection agreements (IPA) with 28 countries. Sri Lanka also has bilateral double tax avoidance agreements (DTA) with over 40 countries. Out of the Gulf countries, Sri Lanka has entered into DTA with Kuwait, Oman and the UAE, and a limited DTA covering air transport with Saudi Arabia. Sri Lanka is party to many free trade agreements such APTA, SAPTA, ISFTA and IPFTA.
US says conserving oil is no longer an economic imperative
- Fears of oil scarcity no longer driver of US energy policy
- Surging shale production brings energy abundance
WASHINGTON: Conserving oil is no longer an economic imperative for the US, the Trump administration declares in a major new policy statement that threatens to undermine decades of government campaigns for gas-thrifty cars and other conservation programs.
The position was outlined in a memo released last month in support of the administration’s proposal to relax fuel mileage standards. The government released the memo online this month without fanfare.
Growth of natural gas and other alternatives to petroleum has reduced the need for imported oil, which “in turn affects the need of the nation to conserve energy,” the Energy Department said. It also cites the now decade-old fracking revolution that has unlocked US shale oil reserves, giving “the United States more flexibility than in the past to use our oil resources with less concern.”
With the memo, the administration is formally challenging old justifications for conservation — even congressionally prescribed ones, as with the mileage standards. The memo made no mention of climate change. Transportation is the single largest source of climate-changing emissions.
President Donald Trump has questioned the existence of climate change, embraced the notion of “energy dominance” as a national goal, and called for easing what he calls burdensome regulation of oil, gas and coal, including repealing the Obama Clean Power Plan.
Despite the increased oil supplies, the administration continues to believe in the need to “use energy wisely,” the Energy Department said, without elaboration. Department spokesmen did not respond Friday to questions about that statement.
Reaction was quick.
“It’s like saying, ‘I’m a big old fat guy, and food prices have dropped — it’s time to start eating again,’” said Tom Kloza, longtime oil analyst with the Maryland-based Oil Price Information Service.
“If you look at it from the other end, if you do believe that fossil fuels do some sort of damage to the atmosphere ... you come up with a different viewpoint,” Kloza said. “There’s a downside to living large.”
Climate change is a “clear and present and increasing danger,” said Sean Donahue, a lawyer for the Environmental Defense Fund.
In a big way, the Energy Department statement just acknowledges the world’s vastly changed reality when it comes to oil.
Just 10 years ago, in summer 2008, oil prices were peaking at $147 a barrel and pummeling the global economy. OPEC was enjoying a massive transfer of wealth, from countries dependent on imported oil. Prices now are about $65.
Today, the US is vying with Russia for the title of top world oil producer. US oil production hit an all-time high this summer, aided by the technological leaps of horizontal drilling and hydraulic fracturing.
How much the US economy is hooked up to the gas pump, and vice versa, plays into any number of policy considerations, not just economic or environmental ones, but military and geopolitical ones, said John Graham, a former official in the George W. Bush administration, now dean of the School of Public and Environmental Affairs at Indiana University.
“Our ability to play that role as a leader in the world is stronger when we are the strongest producer of oil and gas,” Graham said. “But there are still reasons to want to reduce the amount we consume.”
Current administration proposals include one that would freeze mileage standards for cars and light trucks after 2020, instead of continuing to make them tougher.
The proposal eventually would increase US oil consumption by 500,000 barrels a day, the administration says. While Trump officials say the freeze would improve highway safety, documents released this month showed senior Environmental Protection Agency staffers calculate the administration’s move would actually increase highway deaths.
“American businesses, consumers and our environment are all the losers under his plan,” said Sen. Tom Carper, a Delaware Democrat. “The only clear winner is the oil industry. It’s not hard to see whose side President Trump is on.”
Administration support has been tepid to null on some other long-running government programs for alternatives to gas-powered cars.
Bill Wehrum, assistant administration of the EPA’s Office of Air and Radiation, spoke dismissively of electric cars — a young industry supported financially by the federal government and many states — this month in a call with reporters announcing the mileage freeze proposal.
“People just don’t want to buy them,” the EPA official said.
Oil and gas interests are campaigning for changes in government conservation efforts on mileage standards, biofuels and electric cars.
In June, for instance, the American Petroleum Institute and other industries wrote eight governors, promoting the dominance of the internal-combustion engine and questioning their states’ incentives to consumers for electric cars.
Surging US and gas production has brought on “energy security and abundance,” Frank Macchiarola, a group director of the American Petroleum Institute trade association, told reporters this week, in a telephone call dedicated to urging scrapping or overhauling of one US program for biofuels.
Fears of oil scarcity used to be a driver of US energy policy, Macchiarola said.
Thanks partly to increased production, “that pillar has really been rendered essentially moot,” he said.