BoI Needs Support of Pvt Sector Talent and Int’l Agencies – Chairman

By Rajiesh Seetharam | Published: 2:00 AM Nov 27 2021
FT BoI Needs Support of Pvt Sector Talent and Int’l Agencies – Chairman

By Rajiesh Seetharam

Denying allegations levelled against him and Sri Lanka Board of Investment (BoI) top management, BoI Chairman Sanjaya Mohottala stated that false information has been spread against BoI management. He said such fabrications will only serve to negatively impact the image of both the BoI and Sri Lanka in the eyes of the international investor community, in a situation where attracting FDI is of crucial importance for the country. In his exclusive interview to Ceylon FT, Mohottala noted that there was no misuse of funds by the BoI. He further said that there was a need to attract the best talent to work in a globally competitive environment and that various other allegations, like the Rs 80 million allocated for refurbishment of the BoI WTC office, were false. 

Excerpts of the interview: 

What is the current FDI situation in Sri Lanka? 

A:- In 2020, we approved projects worth of US$ 2.3 billion, we received investments worth of US$ 1.4 billion, of which US$ 687 million was FDI. In 2021, we are happy to say that we have approved nearly US$ 2 billion worth of projects. We have received US$ 760 million worth of investments for the first six months, which includes US$ 390 million worth FDI. 

Q:- There is an allegation against BoI top management that 29 individuals were recruited on high salaries? 

A:- Since its inception in 1978 (then the GCEC), the BoI has only been able to bring in just over US$18 billion worth of FDI (eliminating the double counting of investment on the Hambantota Port sale). In the late 1970s and ‘80s, Sri Lanka was the only country to open its economy in this region, and despite that, the FDI inflows are low when compared globally. Even during the post war period, our FDI remains low. As it now stands, we compete with over 1,000 International Promotion Agencies (IPA). 

Agencies like Invest Vietnam and Invest India, have understood what is required and evolve in structure and form. In this background, a Cabinet decision was announced to enhance capabilities of key regulatory and State enterprises, in which it is also stated that attractive remuneration could be paid to attract the right talent. A Committee therefore headed by the Secretary to the Treasury was appointed by the Cabinet to review and recommend proposals to meet the objectives of entities such as BoI and ICTA. A recruitment process was thereafter triggered, which included a print-based mass media vacancy advertisement for interested applicants, where even employees within the BoI were eligible to apply. 

We need lawyers with international experience. We wanted some people with special technology skills. We need to liaise with the embassies globally. This does not mean that the BoI does not recognise the skills and capabilities of its current employees. While we appreciate the efforts they take to discharge their duties, the BoI needed to consider the requirement at hand, especially to achieve its broader strategic agenda. So we planned to recruit 29 individuals with qualifications, experience and talents in different fields from the private sector on a contract basis. 

Their performance was supposed to be evaluated every six months, and if they were found to be underperforming they would be terminated. And, of course they would expect high remuneration, with their experience in the private sector. The interviews are tough. So far, we have only recruited nine. Even, at the recently concluded COPE hearing, several members of the committee recognised and acknowledged the need for the infusion of employees of such calibre. However, we have paused recruitments, we will make further decision on this matter after discussions with COPE. 

BoI is a facilitator for foreign investors to be a one stop shop for foreign investments. One allegation levelled against you is that you are trying to allocate more for promotional activities. What have you to say?

 A:- The Board of the BoI recognises that we cannot work in isolation. We need to work in a global eco-system, where we need to work with multiple stakeholders including Embassies and High Commissions, Trade Chambers and Industry Bodies and Financial Institutions. I must also mention here that it is also pertinent to study what others have achieved so far like Invest India or even Malaysia for that matter. 

Let us compare FDI’s of Sri Lanka with Malaysia. During the period of 2016 - 2018, in the Asian region, Malaysia attracted a 7% FDI share in the transportation sector whereas Sri Lanka’s share was only 0.3%. In Communications, Malaysia’s FDI share was 7% while Sri Lanka’s is 0.3%. Food processing (Malaysia 6%, Sri Lanka 0.3%), IT & Software (Malaysia 2%, Sri Lanka 0.1%), Textiles (Malaysia 4%, Sri Lanka 0.1%). Thus, Malaysia, which has a similar population to Sri Lanka, has a far better percentage of FDI. When you notice the IT and Software sector, which is a sector that brings huge value addition, Singapore with a lower population than Sri Lanka has attracted 32% of FDI during that period in Asia. BoI has done well as a facilitator. 

However, we need to do more to chase the global FDI which is quiet lacking and that is also the reason for low FDI’s. BoI’s role is both facilitating foreign investors and also promoting Sri Lanka globally as an ideal investment destination. As a facilitator we have done well. One example is the mega drive we triggered across all our 14 zones to administer both doses of vaccinations to their respective populations, to ensure the safety of the people and continuity of operations in the zones. 

Sri Lanka should move towards a knowledge driven economy, where we target FDI’s in the ICT sector or high end manufacturing which has high value addition. There are thousands of investor promotion agencies fighting to get Foreign Direct Investments. We need to focus more on investment promotions. We need more talented vibrant individuals from the Private Sector at BoI to compete globally and attract investments to Sri Lanka. 

Since of late, you have been targeted by many groups and many are threatening to go on strike over misuse of funds at the BoI. What’s your view on this? 

A:- The allegation is with regards to the period 2017-19, when the current board or the management was not in charge. Also, the COPE concern was not about misuse, but rather whether the Government funds were used effectively, as all of the funds were paid to other Government entities. Though I was not in charge during that period, let me explain the issue. Consequent to the 2017 Budget Proposals, the then Ministry of Development Strategies and International Trade (MODSIT) established two export processing zones in Millaniya and Bingiriya, under the guidance of the Cabinet Committee for Economic Management (CCEM).

 The MODSIT Ministry submitted relevant Cabinet Papers in this regard on 15 December 2017 and 10 October 2018 respectively. Approvals had been granted for the government to provide essential infrastructure facilities for the selected zones and budgetary allocation has been provided to the MODSIT in 2017, 2018 and 2019.

 These activities were undertaken and coordinated by the Ministry (MODSIT) as those activities involved infrastructure development and land acquisition outside the land parcels identified for the establishment of the zones. Such developments were to be carried out by other government agencies; Electricity – CEB; Water supply – NWS&DB; Roads – RDA. The role of the BoI was to facilitate such engagements and report progress to the ministry and to develop the infrastructure within the land parcels identified for the zones. Allegations with regard to BoI transactions, amounting to Rs 3,352.92 million to various institutions without a formal project proposal and repayment plan, are false. 

All fund allocations for such external infrastructure were made through the 2017-19 budget proposals by the then Government to the relevant Ministry (MODSIT). The financial disbursement planning was done by the MODSIT directly in consultation with the relevant infrastructure development agencies such as RDA, NWS&DB, CEB etc., while the BoI played only a facilitator’s role on the directives of MODSIT. 

One of the most controversial appointments, which the BoI unions have against you is the appointment of the Deputy Director General (Marketing, Research and Talent Management). They claim despite appointing such a representative, the authorities were attempting to award a contract to Boston Consulting Services (BCS), where you were once a senior executive? 

A:-After a rigorous recruitment process, we have recruited a professional with requisite experience and exposure to Brand building, Marketing and communications. With regard to seeking an outside agency service, you might have noticed multinational companies and other corporates dealing with an advertisement agency, Public Relations agency or a creative agency despite having a marketing department or a communications department. Why can’t these companies do everything by themselves? 

On what basis did you select BCS?

 A:- We have floated Requests for Proposals for PR, Creative, Website and Digital and other agencies. We haven’t awarded any contract to any agency yet. Also, one of the allegations was that I am part of this named organisation, which is not true. I resigned from it before assuming duties at BoI and other SOEs. Having said that, let me also emphasis that to date, I have not been a part of the selection process of any of such agencies or organisations while at the BoI. That being said, the selection and awarding of all contracts for such services or engagements is done strictly in compliance with Government procurement guidelines. 

Have you spent nearly Rs 80 million to renovate two floors of BoI at WTC. Is this refurbishment necessary at present? 

A:- The need for refurbishment was identified in 2019, at a time when I wasn’t in charge. However, with the escalation of the pandemic, the BoI management made an internal call to re-assess the timing. When the time is right, it would go through the government procurement procedure to the letter. The figure of Rs 80 million is wrong; we haven’t finalised anything yet. However, I can say that we definitely need refurbishment work to be done at the BoI WTC office, as the floors are in a state of dilapidation. 

There is an allegation that you were attempting to portray some of the profitable departments as loss making entities and that you wanted to outsource their work to outside agencies. What have to say about this?

 A:- There is an allegation that zones are going to be privatised. There is no truth in it. However, we need to streamline certain areas and change certain ways we work to be more efficient and deliver efficient results. 

Your Final comments? 

A:- BoI is an investment promotion agency for Sri Lanka. Our aim is to attract FDI and drive towards transforming Sri Lanka into an ideal investment destination. However, false rumours against us hinder our efforts to carry out our work. Also, false allegations against BoI only serves to damage the image of our country. 

I hope that with my answers, people get to know the truth and the false allegations levelled against us would stop, so that we can concentrate on what is important – which is, working to usher in significant opportunity for the country, so that all Sri Lankans can live, work and thrive. Our battle and focus ought to be outside the country and not within.

By Rajiesh Seetharam | Published: 2:00 AM Nov 27 2021

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