Comment

Private sector role in post-conflict phase

Sri Lanka is emerging after 30 years of conflict, with the total elimination of Liberation Tigers of Tamil Eelam (LTTE) which terrorized the entire nation. The Government has already expressed its commitment to a political solution that fulfils the aspirations of all citizens and leads to lasting peace.

The protracted conflict adversely affected the country’s growth and development as the terrorists took aim at economic targets. It also affected tourism and investment. A significant quantum of funds had to be utilized by the State to fight terrorism. These funds could otherwise have been channeled towards development.

It is remarkable that the Sri Lankan economy managed to perform well despite the conflict, recording at least 5-6 percent growth. This is indicative of the growth potential of the economy sans the conflict. In fact, the resilience of the economy helped the country to weather the current economic storm sweeping the world to a great extent.

Some have argued that Sri Lanka is now facing an ‘economic war’. This is an appropriate term, given the magnitude of the task before us. President Mahinda Rajapaksa, in his victory speeches in Parliament and later at the Parliament Grounds, called on all segments of society and the business community to join hands to rebuild the nation. This sentiment has been echoed by many business leaders as well.

The current dream run of the Colombo Stock Exchange gives us a glimpse of the economy’s potential in peacetime. The Bourse marked the country’s victory over terrorism and the dawn of peace with record breaking indices. More foreign investors are already coming into the Stock Exchange and it will not be too long before they venture out to other fields of investment.

The business community should respond positively to this call. There will be plenty of opportunities for the corporate sector to participate in rebuilding the North, battered by years of conflict. The infrastructure in the North has to be reconstructed from scratch in view of the resettlement of the civilian population. The Government has already sought international and local partnerships for this effort.

We believe that priority should be given to local contractors and companies when these projects get off the ground.

Local and foreign investors should also be encouraged to set up operations in the North. It is important that ample employment opportunities are generated for the Northern youth so that they would have a significant role to play in the region’s economic revival. Small and Medium scale enterprises in the North should be given all concessions and incentives to reach the local and export markets.

It is expected that the defence expenditure would be gradually pruned and funds diverted to development. Sri Lanka is yet to complete several mega development projects for which private sector participation will be essential.

The peaceful environment will be conducive to the commencement of these projects, some of which are slated for the North and the East. Tourism is one of the most important sectors that will benefit immensely in the post-conflict era.

We reported yesterday that some airlines are already contemplating increasing the number of flights they operate to Colombo in the light of recent positive developments. This is a harbinger of good news for the tourism sector which saw a decline at the height of LTTE terror.

Travel operators and hotels should actively promote Sri Lanka as a ‘land like no other’ together with the Sri Lanka Tourism Board. The message that peace has returned to Sri Lanka should be disseminated worldwide, not only in our traditional tourism markets. The authorities should provide incentives for hoteliers who wish to upgrade existing hotels or build new ones in the North and the East.

The Government has also appealed to expatriate Lankans to contribute to the national development drive following the victory over terrorism. There are several companies headed by Sri Lankans living overseas, who could help their Motherland at this juncture through trade and investment.

The business chambers should lose no time in forwarding their plans for post-war Sri Lanka to the authorities.

There is a chance that some of these plans may be reflected in Budget 2010 due to be presented in November. Incidentally, this will be the first post-conflict budget and is likely to include many proposals for rebuilding the economy. The private sector, as the engine of growth, has an obligation to participate actively in this process of economic revival and national development.