Sri Lanka bans land sales to foreigners

Updated 22 February 2013
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Sri Lanka bans land sales to foreigners

COLOMBO: Sri Lanka has decided to ban land sales to foreigners after finding that some offshore investors did not use land and property purchases to benefit the nation's economy, the government spokesman said.
The decision comes as the $ 59 billion economy is struggling to boost foreign direct investment despite gradually stabilizing macroeconomic economic conditions since the end of a three-decade war.
The cabinet has decided to prohibit foreigners from purchasing absolute ownership of state and private lands in Sri Lanka, government spokesman Keheliya Rambukwella said.
"Wealthy foreigners buy lands and do not utilize them fully. They just keep it for their private consumption and don't contribute to the national economy such as by boosting tourism," he said.
However, Rambukwella said long-term leases of land will still be allowed, and law will not apply to diplomatic missions.
Foreign direct investment (FDI) last year totalled $1 billion, only half of the government's target and the same figure as for 2011.
Government officials say the slowdown in advanced economies hit FDI in 2012, while economists say inconsistent economic policies in Sri Lanka have contributed to the below-target result.
On Thursday, Sri Lanka's Central Bank Governor said in Mumbai that he expects $1.8 billion FDI in 2013.
Sri Lankan President Mahinda Rajapaksa last November proposed banning state land purchases by foreigners. The sale of a prime hotel construction site in Colombo to a Chinese firm had previously been cancelled after the opposition said the price was too low.
Sri Lankaís parliament passed legislation in November 2011 allowing the government to acquire enterprises or assets it deems underperforming or underutilized.


Wealthy Gulf individuals feel more confident about regional prospects

Updated 52 min 25 sec ago
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Wealthy Gulf individuals feel more confident about regional prospects

  • “Factors like the region’s stability, attractive investment opportunities and low-tax environment are seen as the main drivers behind the growing confidence in the region’s economy.”
  • Among the most optimistic were respondents in the UAE, with 57 percent of those surveyed saying they thought the overall outlook was improving.

DUBAI: Survey finds growing optimism on region’s economies, but Saudi investors remain wary.

Wealthy individuals in the Gulf are more optimistic over the future of the region and the global economy compared with last year, and are increasing likely to invest in their own countries and other emerging markets in Asia than in western economies. These are among the main findings of an annual survey by Dubai-based Emirates Investment Bank (EIB), released on Tuesday, of the sentiment among high net worth individuals (HNWIs) in the region. 

After two years of falling confidence, some 60 percent of regional HNWIs now believe things will improve or stay the same. Fewer are pessimistic about both regional and global economic prospects than last year, while nearly 80 percent of respondents said they would prefer to invest in Gulf assets, rather than looking abroad.

The recovering oil price was a big reason for the increasing feel-good factor in the Gulf, according to Khalid Sifri, EIB’s chief executive officer, who added: “Factors like the region’s stability, attractive investment opportunities and low-tax environment are seen as the main drivers behind the growing confidence in the region’s economy.”

After falling below $30 per barrel in early 2016, oil has subsequently recovered to a three-and-a-half-year high, breaching the $75 a barrel mark yesterday for the first time since November 2014.

However, the overall optimism of the survey masks some concerns among regional HNWIs; in Saudi Arabia, 48 percent of respondents said that they saw the regional economic situation improving or staying the same, against 52 percent who felt it was likely to worsen in 2018.The survey was conducted last November and December, when investor sentiment in the Kingdom was affected by the high-profile anti-corruption campaign undertaken against some prominent business people accused of financial wrong-doing. “It may have been affected by that. We shall see what the situation is at the end of this year,” Sifri said. 

Respondents from Kuwait were even more pessimistic. None of the respondents from the country felt that things were going to improve on the investment front this year, while 54 percent said they would worsen. Among the most optimistic were respondents in the UAE, with 57 percent of those surveyed saying they thought the overall outlook was improving. On the long-term global outlook, a total of 78 percent of those surveyed across the region were optimistic about prospects over the next five years, with most citing positive economic and political stability as the reason, along with a smaller number who said oil price stabilization would benefit the world economy. The oil price recovery was the biggest reason for regional optimism. 

The geopolitics of the region was claimed as a big factor in deciding investment decisions, but Saudis were less concerned than others. Only 29 percent in the Kingdom said they were influenced by geo-political events, compared with 83 percent in Qatar and 85 percent in the UAE. 

Oil prices, economic reforms and the introduction of VAT were also factors influencing investment, as was the election of Donald Trump as president of the USA. There has been a big shift in global investor orientation outside the GCC. Nearly half of regional wealthy investors (47 percent) are now looking to Asia, 38 percent to the wider Middle East and North Africa, some 34 percent to Europe and only 17 percent to North America. The survey was conducted among 100 HNWIs with $2 million or more in investable assets.