Norway’s embassy in Colombo sees increasing business enquiries about investment opportunities in agriculture, fisheries, small resorts and renewable energy here.
“Investment facilitation is crucial,” says Norway’s Envoy Thorbjorn Gaustadsaether. Norway is encouraging its small and medium businesses to venture into value-added exports and invest overseas. Sri Lanka can attract their investments by improving and streamlining procedures. “I am optimistic that there is political will to improve systems to welcome foreign investors,” he says. Investors are also concerned about finding suitable business partners here and policy predictability.
Excerpts from the interview are as follows:
In which sectors are Norwegian companies investing here?
ICT, agriculture, renewable energy like solar and fisheries—fishing gear and fish farming—are a few sectors Norwegian companies have invested in. There is interest in the maritime sector and boutique hotels in tourism, wind power, and low-pollution energy source LNG.
Norway’s industries are largely SMEs. This is why working with Sri Lanka, which has a similar structure, is so interesting. For example, the ICT sectors of both countries are cooperating quite well and I sincerely hope more Norwegian investors will come in.
What are Norwegians concerned about when they make enquiries about investing in Sri Lanka?
There is an increase in enquiries about investment opportunities here. Investors have confidence in Sri Lanka’s market potential, but they have questions about the options, finding a suitable business partner, predictability, and too many procedures to investing and setting up operations here. Some companies ask us about the level of corruption here. I’ve not heard anyone complain about actual corruption, but they do ask that question. They also have questions about what the investment climate is going to be like in the future.
How do you see Sri Lanka’s business climate going forward?
Sri Lanka is moving forward and the government is committed to improving the business climate. I am optimistic that there is political will to improve systems to welcome foreign investors.
Investment facilitation is crucial. Norwegian companies are not looking for tax concessions. Sri Lanka needs to attract companies that can pay taxes. This can be done by improving and streamlining procedures. I am confident Sri Lanka will improve.
[pullquote]Sri Lanka needs to create its competitive advantage or edge. It can never compete on volume in terms of markets or investments. The opportunity for Sri Lanka is in adding value to global supply chains[/pullquote]
What can Sri Lanka learn from Norway’s SME sector?
Except for petroleum and fisheries, most industries are a couple of hundred people. Our industrial structure is medium sized.
We have an export promotion institution called Innovation Norway that helps companies export and provides seed money to encourage investments. There is merit for such an institution, but generally Norwegians are entrepreneurial and many businesses develop themselves.
We have a predictable tax regime and a positive attitude towards investors. The discussion now is about investing in R&D because we can no longer compete on labour costs. We need to be competitive by deploying technology to add value.
Sri Lanka can take any of these lessons. Being a small country, it needs to create its competitive advantage or edge. It can never compete on volume in terms of markets or investments. The opportunity for Sri Lanka is in adding value to global supply chains.
I think your ICT sector has this. Norwegian companies that have looked at outsourcing to India and Sri Lanka have found it easier to find competent partners here who can help them go beyond outsourcing into developing new things together.
Sri Lanka wants to be a maritime hub, but can it compete with Singapore or emerging ports in India? It’s not just the price competitiveness, but effective delivery. Sri Lanka has a lot of potential, but it needs to find its niche.
There is a need for marketing Sri Lanka abroad. Trade missions must be energised and capacity improved.
Are the two governments talking about trade or investment?
We are trying to assist Sri Lanka in developing its fisheries sector. We are finalising a partnership to develop a national policy, map resources and promote fish farming.
There is opportunity to assist in developing a national energy policy. There are discussions on transforming the energy sector from coal and perishable resources, and moving into more renewables like solar and wind.