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Opposition’s lack of transparency on amendments to Sri Lanka IMF deal questioned
ECONOMYNEXT – Global fund managers have approached Colombo’s Port City regulators proposing to set up a fund that will finances its real estate and businesses, Saliya Wickramasuriya, a member of its regulatory commission said.
The Colombo Port City to be renamed, International Financial and Technological City, is awaiting the construction of buildings (vertical development) for businesses to operate.
The first half a dozen land blocks reclaimed from the sea has already been transferred to developers.In the meantime several businesses have been allowed to start operations by locating themsevelse outside the zone.
A fund dedicated to investing in the zone, does not require any specific approval from the Colombo Port City Economic Commssion.
“This a vision of somebody else, but we like it,” Wickramasuriya said. “They are interested because they see the potential, and see what is required to unlock the potential.”
The fund could take stakes in either property or other businesses that are approved to set up in the Port City.
Other than buying land, no businesses set up in the dollarized special economic zone could raise capital from the Sri Lankan banking system, even if they were set up by residents. All funds have to come from abroad.
The Port City faced several challenges due to Coronavirus pandemic and regulatory and tax incentive delays.
At the moment only those designated as businesses of strategic importance will get tax incentives.
All other businesses will operate under normal tax rules of the country. Sri Lanka has living conditions that was held in high regard by foreigners.
The special economic zone has currency competition and is protected from domestic macro-economic policy (inflationary rate cuts) and depreciation.
Its residents could choose to save and firms to pay salaries in the product of the central bank which they believe to be the most stable, whether the Fed or the ECB or any of several designated currencies.
(Colombo/Mar15/2024)
