Investment
Despite the rapid recovery of East Asian countries and intensive promotional activities, the number of projects approved by the Board of Investment of Sri Lanka (BOI) and their investment commitment declined during the first half 2000. The number of projects approved by the BOI under the Section 17 of the BOI law during the first half of 2000 declined slightly to 150 projects from 156 approved in the same period of the previous year. The investment commitments of these projects also declined by 39 per cent, from Rs. 40,334 million in the first half of 1999 to Rs. 24,448 million during the period under review. The foreign investment component in the approved projects declined substantially from Rs. 26,042 million in the first half of 1999 to Rs. 9,907 million in the first half of 2000. The domestic investment component of these projects increased slightly from Rs. 14,292 million to Rs. 14,542 million in the first half of 2000. The employment potential of the approved projects is estimated at 28,629 persons in the first half of 2000 compared to 65,714 in the first half of 1999.

The number of projects contracted with the BOI and their investment also declined during the first half of 2000. The BOI signed agreements in respect of 82 projects in the first half of 2000 with a total investment commitment of Rs. 26,710 million, compared to 95 projects with a total investment commitment of Rs.37,595 million in the first half of 1999, thus bringing the total number of agreements to 1,969 by end June 2000. The foreign investment components of the contracted investments declined from Rs. 22,567 million in 1999 to Rs. 8,779 million in the first half of 2000. However, the domestic component of this investment increased to Rs.17,931 million in the first half of 2000 from Rs.15,027 million in the same period of the previous year. The employment generation by contracted projects in the first half of 2000 was estimated at 17,559 persons. The major industrial categories that would absorb these investments are textile, wearing apparel and leather products and service sector industries including software development industries. Of the 1,969 contracted projects, 1,111 projects were in commercial operation as at end June 2000. There were 96 enterprises located in the Katunayake Export Processing Zone (EPZ), 60 in the Biyagama EPZ, 11 in Koggala EPZ, 4 in the Malwatta Export Processing Park, 5 in the Mirigama EPZ, 4 in the Kandy Industrial Park, 7 in the Seethawaka Industrial Park, 6 in the Wathupitiwala EPZ, and 918 outside the export processing zones. The employment in the BOI industries was estimated at 334,651 persons as at end June 2000 compared to 314,099 persons employed as at end June 1999.

Under Section 16 of the BOI Law (normal Law), the BOI approved 73 projects during the first half of 2000, compared to 64 projects approved in the corresponding period of the previous year. The total investment commitment of these projects amounted to Rs.1,163 million compared to Rs.1,684 million in the first half of 1999. The employment potential of these projects is estimated at 3,553 persons compared to 2,801 persons in the projects approved in the corresponding period last year. As at end June 2000, 507 projects approved under Section 16 of the BOI Law were in commercial operation with an investment commitment of Rs.22,418 million.

Foreign Investment
Sri Lanka continued to attract a substantial amount of foreign investment in 1999. The amount of foreign direct investment, defined as net foreign equity inflow into new projects and advances by foreign shareholders, increased by 68 per cent from Rs-9,689 million in 1998 to Rs. 16,261 million in 1999, the highest amount recorded in a single year. The Board of Investment of Sri Lanka (BOI), the key government organisation responsible for promotion of investment, has been successful in attracting considerable investment from Australia, the UK, Japan, India, Indonesia, and the USA in 1999. The BOI organised several investment promotion missions to the Republic of Korea, India, Sweden, Norway, Singapore, Australia, the USA, Taiwan, Italy and Switzerland in 1999. These missions were successful in promoting investment in a number of large scale projects including new projects such as Sun Micro Systems of the USA with an envisaged investment of Rs. 1,408 million, three mini hydro projects at Maduruoya with an envisaged investment of Rs.70 million and Mast Iustries expansion project with an envisaged investment of Rs.2,816 million. The realised investment of BOI industries Increased by 17.2 per cent in 1999 from Rs.l76,020 million in 1998 to Rs.l51,206 million in 1999. 

The BOI approved 342 new investment projects in 1999 with an investment commitment of Rs. l03,915 million under Section 17 of the BOI Law, compared to 405 projects with an investment commitment of Rs. 104,024 million approved in the previous year. The total number of projects approved was 3,003 at end 1999. The foreign component of approved investment in 1999 was Rs. 57,142 million or 55 per cent of the total approved Investment. Of the approved investments in 1999, 82 enterprises were entirely foreign owned, 100 were joint venture collaborations and 160 were entirely domestic owned ventures. The employment generation capacity of these approved projects was estimated at 60,950 persons. The number of projects approved in the textiles, wearing apparel and leather products category declined from 132 in 1998 to 51 in 1999. The number of projects approved in the services sector was 185, a majority of them being software development projects. The software development industry was given special incentives by the government in 1999. A significant portion of  Investments were approved in chemical, petroleum, rubber and plastic products: food, beverage and tobacco products and non-metallic mineral products industries. 

Investments in projects contracted with BOI increased by 45 per cent in 1999. During the year, the BOI signed agreements in respect of 207 projects with a total investment commitment of Rs. 67,998 million compared to the 230 projects with total investment commitments of Rs. 46,772 million in 1998 bringing the total number of agreements to 1,887 by end of 1999. The average contracted investment per project increased from Rs. 203 million in 1998 to Rs. 328 million in 1999. The foreign components of contracted investments was Rs. 42,350 million or 62 per cent of the total investment in the contracted projects. The potential employment generation of these contracted projects was estimated at 42,838 persons. The major industrial categories that would absorb these investments are textiles, wearing apparel and leather products: chemical, petroleum, rubber and plastic products; food, beverage and tobacco products and the service sector including 34 projects in- software development. There were 11 projects with total investment commitments of over Rs.1,000  million. These projects include South Asia Gateway Terminal Pvt. Ltd. (Rs. l5,363 million), Colombo Power Pvt Ltd. (Rs- 4,863 million), and Sithma Development Pvt Ltd. (Rs- 3,949 million). Of the total contracted projects up to end 1999, 1,070 enterprises with investment commitments of Rs. 145,795 million were in commercial operation. The employment potential of these enterprises has been estimated at 294,957 persons. There were 96 enterprises located in the Katunayake Export Processing Zone (EPZ), 60 in the Biyagama EPZ, 11 in the Koggala EPZ, 4 in the Malwatte Export Processing Park, 4 in the Mirigama EPZ. 4 in the Kandy Industrial Park, 6 in the Seethawaka Industrial Park, 5 in the Watupitiwala EPZ and 880 outside export processing zones. 

Under Section 16 of the BOI Law (normal law), the BOI approved 136 projects in 1999 with an investment commitment of Rs. 3,391 million compared to 93 projects with an investment commitment of Rs. 5,856 million in the previous year. Of the approved total investment in 1999, Rs. 2,481 million or 73 per cent will come from foreign sources. Of these. 72 enterprises were entirely foreign owned and 64 are joint venture collaborations. The number of enterprises that were in commercial operation as at end 1999 was 471. The total estimated investment of these enterprises was Rs. 19,668 million, of which Rs. 10,561 million or 54 per cent was from foreign sources. The estimated employment generation capacity of these projects is 38.889 persons. The areas of investment were mainly in textiles, wearing apparel and leather products; food, beverage and tobacco products; chemical, petroleum, rubber and plastic products and fabricated metal products.

(a) Cumulative as at end year
(b) Projects approved under Section 17 of the Board of Investment Law
(c) Revised
(d) Provisional