During a country update held today, World Bank representatives stressed the urgent need for structural reforms to attract more foreign investment and stimulate economic growth.
Speaking at the event, Richard Walker, Senior Economist for the Maldives and Sri Lanka, said the government’s target of securing US$36 billion in FDI by 2030 will require a “series of major changes.” He noted that Sri Lanka’s FDI rate, which previously hovered around 1%, has now dropped further, while countries such as Malaysia and Vietnam maintain rates closer to 3%.
Walker identified limited land accessibility as a key obstacle to investment, with 80% of land owned by the government and managed through complex bureaucratic processes across multiple ministries. This situation, he said, particularly hampers potential investors in the agricultural sector.
He also pointed out that outdated labor laws — some more than six decades old — restrict business flexibility and limit employment opportunities for women in several sectors.
“Unless these structural issues are addressed, Sri Lanka will find it difficult to compete for foreign investment,” Walker cautioned.
The World Bank emphasized that improving land governance, updating labor regulations, and fostering a more investor-friendly environment are critical for Sri Lanka to meet its economic ambitions and attract the level of FDI required for sustainable growth.
