Sri Lanka must go “export-driven and green” to compete globally, says IFC
Sri Lanka must reposition itself as an outward-looking, export-driven and green brand to attract global investors, International Finance Corporation (IFC) Regional Director for South Asia Imad N. Fakhoury said, warning that policy consistency and a stronger business environment would be crucial. “We have had setbacks in the past and Sri Lanka is an incredible paradox. On the one hand, it’s a great development success story in terms of social indicators. Sri Lanka had one of the lowest poverty rates and now it has one of the highest per capita income rates in South Asia,” Fakhoury said at the Sri Lanka Economic and Investment Summit in Colombo.“But then it had many economic crises to deal with, the last one being the 2022 crisis. Moving forward, Sri Lanka should really pivot and focus on exports, green economy and sustainability. These are also important for the transshipment positioning of Sri Lanka,” he added. Fakhoury said scaling up digital services, agri-business and specialised manufacturing should form part of the country’s diversification push. He noted opportunities in high-value tourism segments and urged expanding destinations in the Northern and Eastern provinces. He said the IFC would prioritise responsible tourism, export-linked investments, decarbonisation in manufacturing, value-added production and healthcare and pharmaceuticals.The IFC, part of the World Bank Group, is among Sri Lanka’s largest private-sector investors and one of the world’s biggest development finance institutions. Fakhoury said its long-term finance portfolio in Sri Lanka is “close to around US $ 270 million”, spanning long and short-term financing, advisory, debt, equity and guarantees. From 2021 through June 2026, IFC commitments will total about US $ 1.6 billion in funded and unfunded instruments, he said, adding the institution is “bullish” on further investments.“We see great opportunities in financial inclusion to help scale up financing for MSMEs, especially women-owned or women-led ones,” he said.He added that the IFC would continue to back sustainability and trade finance, capital market development and innovative instruments for real-sector growth. “In terms of infrastructure, we are very bullish on renewable energy, energy efficiency, mobility, ports and logistics and have full engagements under the World Bank group. Private-public partnerships will be critical, given the financing needs and the limitations of fiscal space,” Fakhoury said, noting interest in new opportunities in telecommunications and logistics.He said the IFC is also stepping up advisory work for the start-up ecosystem and is assessing investments in disruptive technology ventures.
