Government urgently needs to replace existing inefficient land allocation mechanisms, which have been identified as a major obstacle to industrial development and export growth National initiative to be launched
Due to land fragmentation, underutilization and a complex regulatory framework, industries are struggling to acquire land for new initiatives as well as expansions.
“Even now, there are some things that are becoming clear in the sector that we would like to focus on. We have set a very ambitious target of about US$ 46 billion for exports within five years, and together we believe that we can achieve it. Land allocation, one of the biggest challenges for industries, will be resolved very soon,” said Deputy Minister of Industries and Entrepreneurship Development Chaturanga Abeysinghe.
He made these comments at the Annual General Meeting of the National Board of Sri Lanka held in Colombo last week.
He revealed that the government is working to launch a national initiative to ensure efficient land allocation for industries.
“Land acquisition has been a difficult task in this country, whether to start or expand a business or even to select a suitable piece of land for a foreign investor. Business owners often have to navigate several institutional and political paths to acquire land. With this new initiative, you will see a formal national-level approach,” he said.
According to the Harvard Center for International Development, land-related issues have been identified as a major obstacle to industrial development in Sri Lanka. The report highlighted that since more than 75 percent of the country’s land is owned by the government, even existing industries suffer from land shortages.
In addition, the report pointed out that the occupancy rate in the Board of Investment zones is very high and not enough new zones are being developed, which is forcing investors to obtain multiple approvals and delay their investment plans.
Abeysinghe also revealed that the government, in collaboration with the chambers of industry and commerce, will prepare a common roadmap in the coming months. With a focus on achieving targets with greater transparency for the public, each stakeholder will have defined responsibilities.
He stressed the government’s commitment to maintaining consistency and clarity in its policies, especially with regard to industrial development.
“That is something we have not had for many years. Policies were changing, taxes were fluctuating. Sri Lanka does not have a consistent industrial policy or a clear vision of the industries that will guide industrial growth and take the country to the next level. The government, in collaboration with the business community, will provide that clarity very soon,” he added.
He expressed optimism that under this integrated approach, the currently fragmented structures of multiple institutions will begin to work together more collaboratively.
He further assured that the government will work with stakeholders to reduce high production costs, including by addressing inefficiencies in current tariff policies, to create a level playing field for businesses.
“It is clear that Sri Lanka needs to adopt a different approach to its legal frameworks to emerge from the current debt crisis and ensure fair competition for businesses, especially manufacturers. We acknowledge that the playing field is not yet level. Production costs have continued to rise and tariff policies have been disadvantageous to local manufacturers and businesses. This must change,” he said.
