Marketers must practise anti -terrorism compliancy

Rohantha N.A. Athukorala’s -Director Economic Affairs of the Government Peace secretariat Rohantha N.A. Athukorala’s guest speech at the Rotary Club of Centennial “With the recent attacks by LTTE the Central Bank is getting tough with the Financial Investigation Unit(FIU) having the powers to fine upto Rs. one million from anyone having information of anyone involved in such acts to terrorism directly or indirectly. Marketers must audit all suppliers and other service providers in an organization for Anti-Terrorism compliancy”

Terrorist activities in the world, has changed the rules of the game on international trade in a significant way. Since 9/11, there has been an effort globally to monitor and regulate the policies on international trade, investment and finance related areas to counter terrorism.

Even though South Asia is in a most remarkable period of time with outstanding Economic growth and sustained development with a GDP closing on 7-8 percent, becoming the most watched region for launching of new products, new acquisitions and joint ventures for all global companies the threat of terrorism keeps looming across the region threatening the opportunity that the region can exploit globally.

Latest estimates has emerged that almost 10 billion dollars of trade has been lost due to terrorism in the South Asian region with Sri Lanka accounting for thirty five percent of this potential business. It estimated that the war has costed Sri Lanka 4.5 billion dollars todate.

The Sri Lankan economy has experienced accelerated growth over the past two years despite adverse shocks such as oil price hikes, the tsunamis and the escalation of terrorism. Growth has averaged at 6.5% during the last 2 year and 4-5 Per cent historically.
 

Rohantha N.A. Athukorala

The Per capita income rising above US $ 1355 has made it a middle income country. The higher economic growth has been accompanied by a declining unemployment to 6.4 per cent which has come about through successful structural and economic reforms implemented.

The private sector accounts for 85% of GDP and some blue chip companies listed on the stock exchange are highly competitive, profitable and financially strong and beginning to invest overseas.

Sri Lanka growth has outperformed countries in the region and has been rated as single B and BB. On the key poverty ratios of those earning a $1 and below coming down to just 2 percent and those earning $2 and below to 32.8 percent augurs well for the country.

The inflation observed through 2005 and early 2006 reversed, due to the passing down impact to consumers the high oil prices.

The high interest rate that has come into effect has become a drag to the economy. However, the growth momentum has been sustained. The GDP growth as at 3rd quarter 2007 has been 7.0%. But it is how we manage to keep our fiscal deficit to seven percent and below and inflation will be the challenge.

Private Sector

It is time that the private sector that understands that political and economic measures alone cannot counter Terrorism.

The private sector that contributes 85% to the overall GDP of the country needs to get involved in the national efforts. We need to tactfully scrutinize every partnership nationally or internationally that we get in to, so that objectively we can weed out terrorism in a similar way to driving business and trade.

The private sector must assist the government in the ‘War against terror’. Finance institution, Industries, the fast expanding service sector as well as trade departments and associations must help prevent the flow of goods and services and technology and funding the terrorist organizations.

The 1st air attack on the military base of Katunayake by the LTTE shocked the business community to the extent that market capitalization lost Rs. 11.8 billion the next day.

The Telegraph’s South Asia correspondent Peter Foster has estimated that the recent attack on the Anuradhapura Air Force Base will cost the country several million doallrs which is sure going to add pressure to the countries exchange rate and thereby have a negative impact on Sri Lanka’s trade balance.

Marketers Role

Even with all the damage control done in the last 3 air attacks by the LTTE, we have to keep in mind that we are dealing with one of the most lethal terrorist organizations in the world and as the Anti Terrorism expert Dr. Gerard Chaliand said at the recently concluded anti terrorism conference ‘unless there is a collective effort by every Sri Lankan it is a threat to whole of Sri Lanka and they cannot be militarily defeated’.

This statement left ripples in the board rooms of Corporate Sri Lanka as the media has reported has been bombarded with statements where the Sri Lankan public has been made to believe that the LTTE can be defeated.

Given the recent developments like the Anuradhapura attack by the LTTE the marketing community must also play apart in the national agenda of fighting terrorism.

We have to understand that terrorism by nature in a covert activity organized by groups or movements working underground to achieve certain extreme objectives.

We must also keep in mind that being vigilant and by carefully gathering intelligence we can protect ourself and the organizations that we work in from such acts of terrorism.

We call this being Anti Terrorism Compliant. It is a new term in the corporate world but it is time we understand its elements and practise it.

The government on the other hand has set up a Financial Investigation Unit(FIU) which have powers to fine upto Rs. One million from anyone having information of anyone involved in such acts to terrorism directly or indirectly.

The key actions that marketers can take locally;

1) Background check on all suppliers of the links locally and internationally.

2) All suppliers make money. Try to find out what these moneys are used for.

3)Identify any banking loopholes which can be used for funding terrorism.

4)Who owns our company’s shares and if large parcels of shares are bought, the funding source.

5)Investigate sudden trading of shares in large quantities just before an LTTE attack.

6)Who the silent directors are on Supplier organizations.

Given the turbulent local environment organizations are spreading their risk by developing overseas markets.

If we analyze Sri Lanka’s economy we are very strongly reliant on the global economy for our trade. Our imports annually cross a value of over 8 billion dollars and exports is estimated to pass the seven billion dollar mark. This makes our economy very vulnerable to terrorist attacks with Sri Lanka boasting only one international airport and sea port.

The development of the South Port and the Weeravila airport is strategically a prudent one.

However, it will take some time to making this a reality. The challenge is how we link our International Marketing strategies to be in line with this global trend of being Anti terrorism compliant.

(To be continued)