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Sri Lanka: New Investment Law Planned

(Mar. 7, 2011) Sri Lanka's Senior Minister of International Monetary Co-Operation, Dr. Sarath Amunugama, stated that the country's government plans to introduce a new investment law to encourage foreign investment. He argued that change was needed in the investment climate in order to improve the country's economic status and achieve a growth rate of over eight percent. The new legislation would replace existing rules protecting the environment and archaeological sites, if needed, to attract foreign business. (Mario Andree, New Investment Law to Override Legislation Protecting Environment,Archaeological Sites, THE ISLAND (Mar. 2, 2011).)

Amunugama stated that Sri Lanka needed public sector investment of 7% of Gross Domestic Product (GDP) and private sector investment of 28% of GDP to reach its target economic growth rate. While public sector investments were approaching that goal, private sector investment is currently only about 11% of GDP. Amunugama blamed the low rate of private investment in part on barriers posed by existing requirements related to protection of the environment and archaeological sites. (Id.)