Declining Foreign Direct Investment Could Have Adverse Effects on Sri Lanka, Says Sajith Premadasa

Opposition Leader Sajith Premadasa said that foreign direct investment (FDI) is extremely important for Sri Lanka to maintain a high rate of economic growth as the country recovers from its economic crisis. However, he said that Sri Lanka remained in a weak position when considering its FDI performance in 2025.

Premadasa said the U.S. Department of State’s report on Sri Lanka’s economic environment had also highlighted several issues relating to the country’s investment climate. The U.S. State Department has previously identified policy inconsistency, bureaucratic delays, governance and regulatory issues among challenges affecting Sri Lanka’s ability to attract investment.

He said that when Sri Lanka’s FDI was projected at 1.044 in 2025, Bangladesh had received approximately 1.7 times that amount, Pakistan 1.8 times, Malaysia 14.7 times, Thailand 18.3 times, Vietnam 19.5 times, Indonesia 20.5 times and India 37.3 times.

According to Premadasa, these comparisons demonstrate that Sri Lanka’s level of FDI remains weak.

Premadasa made these remarks while issuing a special statement today.

He said investors were leaving the country due to several issues, including legal uncertainty, the lack of adequate responses from relevant officials when implementing projects, accountability concerns arising from a lack of transparent mechanisms, and the absence of regulatory stability.

“The BOI Is Also Discouraging Foreign Direct Investment”

Premadasa said that although the Board of Investment (BOI) is described as an institution that provides a “one-stop shop” for obtaining investment approvals, he claimed that the actual situation was more like a “one-block shop.”

Instead of facilitating investments through a single window, he alleged that a system was being implemented that was obstructing investments, resulting in Sri Lanka becoming less attractive to foreign investors.

The U.S. State Department’s investment-climate assessment similarly notes that although the BOI is intended to provide one-stop services, coordination among multiple government agencies can create delays and difficulties for investors.

“Study How Ranasinghe Premadasa Attracted Investors”

Premadasa said that bureaucracy should be removed, unnecessary regulations eliminated, and an investor-friendly environment created in every respect to make Sri Lanka one of the world’s most attractive destinations for foreign direct investment.

He pointed to the manner in which former President Ranasinghe Premadasa attracted investment during a period when Sri Lanka was facing two internal conflicts as well as a conflict in the Middle East.

Premadasa said the 200 Garment Factories Programme implemented during that period, despite the challenges, was an example that should be studied, noting that it created employment opportunities for hundreds of thousands of young people.

“Solutions Must Be Found for the Decline in FDI”

Premadasa further alleged that even the BOI had now reached a situation where investors were leaving the country, describing this as a regressive investment policy.

He called for the obstacles faced by foreign investors to be removed and for immediate action to address the factors contributing to the decline in FDI.

He also called for a task force led by the President to be appointed to undertake the necessary measures to attract foreign investment to Sri Lanka.