Political uncertainty drives investors to adopt a cautious approach

Economic downturnSri Lanka’s Ceylon Chamber of commerce says, prevailing political uncertainty impacts negatively on the economic and business environment in the Island and restore confidence and attract investment parliamentary elections must be held expeditiously. The chamber says even though it appreciates the diverse positions taken on the forthcoming general election by parties currently forming the coalition government, it is necessary to form a stable government to continue policy measures that were put on hold.

“Pending a general election and a stable government being elected, the formulation and implementation of medium and long term economic policies have been put on hold,” The Ceylon Chamber of Commerce said in a statement. As a result, a period of uncertainty prevails over the current business climate and investors both local and foreign are adopting a cautious approach towards investing in Sri Lanka.”

“This is unfortunate since there has been much renewed interest in the Country’s economic potential post the Presidential election in January of this year. Such interest has only been tempered by the prevailing sense of uncertainty.” The business chamber says in the event of an investment slow down, the Country’s growth targets for the year are likely to be affected as are government revenue collections.

Sri Lanka held its Presidential election in January this year which brought a regime change in the Island.

The new rulers had promised, in its 100 day programme to dissolve parliament on April 23rd to call for an election. They also said, that the election will have a new electoral system. However, the 19th amendment which will tabled at parliament this week will not contain reforms for the current electoral system.

“We also note that the 100 day program which formed an integral part of the election manifesto of President Maithripala Sirisena – to which the coalition partners pledged support -clearly stipulates that Parliament will be dissolved on23rd April 2015 and a General Election called thereafter,” Chamber said.

“Whilst a few days delay to accommodate urgent constitutional reforms will not be viewed negatively, an attempt to postpone the General Elections on fragile grounds will be seen as being contrary to the promise of good governance,”

“Considering the above and with special emphasis on the impact of uncertainty on the Country’s economic & business environment, The Ceylon Chamber of Commerce urges the President and Government to call a General Election at the earliest possible opportunity preferably keeping to the dates announced in the “100 day program.”

The Ceylon Chamber of Commerce, a confederation of 3,500 Sri Lankan business entities – from small and medium to large conglomerates – 21 Business Councils, 21 Trade Associations, 22 Regional, Sectoral and Other Chambers and with affiliations to over 120 international chambers across the globe, is recognized as the Country’s premier business chamber.(LBO)

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