Orissa advised to look beyond steel

Orissa should lay more emphasis on development of tourism and information technology (IT) sectors in addition to investments in the metals and minerals sector, George N Sibley, the outgoing US consul general in eastern India, said here.

Sibley, here on the last leg of his tour as US consul general in India before taking up his new assignment as the deputy chief of mission in Madagascar shortly, told newsmen that Orissa's huge reserves of natural resources looked ideal for metal-based industry.

"But, what will happen to all the steel plants when steel prices fall?" he asked.

"Most of these proposals will vanish", he cautioned.

Hence, to hedge against cycles in the metal sector, Orissa look at other sectors.

Referring to signing of memorandum for 37 steel plants in Orissa, Sibley pointed out that Orissa had witnessed a similar phenomenon in the past.

At that point in time, very few of the agreements got converted into projects.

"This time, however, there seems to be more activity, raising hopes of a better conversion rate", he added.

The US consul general said the Posco steel plant plan would lead to higher FDI flow into Orissa.

He admitted that the on going tussle between US utility company AES and the Orissa government could send out wrong signals to prospective US investors.

He cautioned, "These incidents increase the risk for investors though we are constantly persuading them to discard the legacy and look at things afresh".

Orissa should look at developing its tourism infrastructure to attract a large number of American tourists, he advised.

"Similarly, if Orissa markets itself properly in the IT sectors, US firms may come in", he added.

He said FDI was required to build infrastructure where the projected investment requirement was far larger than the funds in hand.

Only FDI could bridge this gap.

China had become the favoured destination of US investors because of the "red carpet" welcome it extended to investors, and the way it had eliminated bureaucratic and dispute resolution delays, Sibley pointed out.