The need for foreign direct investment was long recognised, given the lack of capital and expertise, the need to create employment and generate income.
Big foreign companies investing in the country was construed to be the harbinger of unprecedented economic development endeavours. Therefore, lofty goals were set, as policy makers thought of opening up the country for FDI in fields ranging from water supply and waste management facilities to building multi-dwelling residential buildings and schools, to specialised medical services, roads and bridges, to airports and runways and high-end resorts, to industrial estates.
But not much has happened. Those interested in investing in a foreign country have so many things to consider. From security to ease of doing business to simple, but important, things like access to information play an important role in attracting businesses in the country. While there are reservations on opening up the country to FDI, we have seen a few companies well settled here, although restricted to the hospitality industry.
Efforts are being made and policies relaxed to attract investors. For instance, FDI firms can now repatriate dividends in convertible currencies like US dollar, euro or pound. They can also purchase convertible currency up to USD 5M per annum. FDI companies can also own or lease land in accordance with the Land Act.
The launch of the iGuide yesterday is an important step in our efforts to attract investors. A common complaint among investors was that there was lack of information on everything in the country. With the iGuide, foreign investors are expected to get information at the click of a mouse. This is an important development. Information is key to making decisions. Information on government’s policies, wages, taxes, nearest sea or dry port, etc. is crucial for a promoter before deciding to invest. The iGuide is expected to provide this.
While the iGuide is already dubbed as a milestone in the country’s effort to attract FDI, it will achieve its purpose only if it is useful. We have a habit of not updating information. Perhaps not important for FDI, but our websites, the source of information, are usually outdated and the enthusiasm is lost after the launch. This is a different service with an important focus. We will be back to square one if crucial information is missing, or a promoter finds out a different scenario in the country after deciding, based on information available on the worldwide web.
FDI may not be the magic wand to solve our problems, but there is scope. The few companies that are here are already creating jobs. And if real economic growth should translate in creating jobs, it is already absorbing a good number of the unemployed youth.
The UN resident coordinator, meanwhile, has pointed out an important aspect at the launch yesterday. The effectiveness of the iGuide would depend on its ability to create jobs, particularly among the youth. Creating jobs for the thousands of young people finishing education at different levels is the biggest challenge the economy is facing. If such an initiative can lead to more creation of jobs, we are already on the right track.