Sri Lanka, Oct. 2 -- A new report from the US State Department paints a sobering picture of Sri Lanka's investment climate. The report asserts that ideological conflicts, sudden policy reversals, and pervasive regulatory uncertainty are actively deterring large-scale foreign investment, despite the country's recent economic recovery.

The findings suggest the new National People's Power (NPP) government's mixed messaging and reluctance to pursue key structural reforms are stalling efforts to attract the capital needed for sustained growth.

The report highlights the NPP leadership's historically Marxist-influenced ideology as a key concern for investors. It points to a conflict between the government's public promotion of inward investmen...