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| Sunday, 11 January 2004 |
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| News Business Features Editorial
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Business Forum alerts political leaders to consequences of inaction Numerous attempts made by the Joint business forum and many others to persuade President Chandrika Kumaratunga and Prime Minister Ranil Wickremesinghe to arrive at a consensus in resolving the prevailing political impasse, appears to have not met with success to date. Whilst urging the leadership of the UNF and the PA to continue the dialogue and to achieve a compromise in the interests of the nation, we wish to draw the attention of the political leadership of the serious consequences of the delay in resolving the deadlock. * The cessation of hostilities as a result of the ceasefire and consequent improvement of the investment climate have driven Sri Lanka's economic recovery in 2002 and 2003. * Due to the political crisis, the negotiations with the LTTE have been suspended with no indication of when they would be resumed and who will be responsible for driving them forward, Consequently all rehabilitation and reconstruction projects in the North and East and other parts of the country have been suspended. * It is reported that many prospective foreign and local investors have placed on hold their proposals for investment. * The market capitalization of the Colombo Stock Market has declined by over Rs. 80 billion since 4th November 2003. Although the Stock Market may not be an overall indicator of the economic health of the country it is the reflection of the perception of the investment community both local and foreign. * The World Bank, IMF ADB and other donors who had committed around US$ 4.5 Billion over a period of 4 years as assistance in the form of loans and grants have categorically stated that the disbursement of such funds will be dependent on the resolution of the crisis and resumption of the peace process. * The Joint Apparel Association Forum (JAAF) has reliable information, that the preliminary negotiations regarding a Free Trade Agreement with the USA has been put on hold. In the absence of such an agreement prior to 2005, the survival of a large number of garment factories is in jeopardy with the consequent large-scale unemployment resulting in entire villages which are dependent on the garment industry being adversely affected. * The Small & Medium Industries (SMI's) which constitute a majority of the entrepreneurs in the private sector who also provide considerable employment opportunities will be the most adversely affected by the anticipated economic down turn as they do not possess the financial resources to survive such an eventuality. * Further delay in settlement of this conflict will make it difficult to achieve a consensus as the Provincial Council Elections scheduled from February onwards will add to the bitter rivalry between the two main political parties, making a political settlement almost impossible. The negative factors highlighted above will definitely result in the slowing down of the economic growth and consequent loss of employment in existing industries and the lack of new employment opportunities to cater to the ever increasing labour force. Un-employment specially among the graduates will be further aggravated causing social tension. Furthermore the uncertainty if allowed to continue can result in social disharmony and disruption in the country. The Joint Business Forum once again appeals to both leaders to compromise on the respective positions they have taken to date and to overcome political and personal differences to be more flexible in the interests of this country and its people. Further delay in resolving the outstanding issues will have serious consequences on the future of the country. On the other hand, making use of this opportunity to achieve a consensus and thereby working together for the future welfare of the country will be a historic achievement to the credit of both the President and the Prime Minister. Holding General Elections should be the last resort and furthermore, there is no certainty that such elections will result in a situation that will promote the resolution of the existing political dilemma. It should also be emphasised that unless a consensus is reached within a short period of time, it will become constitutionally necessary to hold Provincial Council Elections from February 2004 onwards. In such an event, we strongly recommend that all parties agree to hold these elections on a single day, so that the inevitable disruption caused, as a result of holding such elections will have the least negative impact on the country and the people at large. It is also necessary to ensure that the constitution of an Elections Commission as determined in the 17th Amendment to the Constitution is effectively implemented before any elections are held in order to ensure just and fair elections. Successive governments in recent times have declared that 'the Private Sector is the Engine of Growth' implying that the private sector is primarily responsible for the economic growth and development in Sri Lanka thereby raising the expectations in the minds of the general public of the role of the private sector. However, when the socio-economic environment is disrupted, by political actions and the main political parties are unable to resolve their differences, it is not possible for the private sector to fulfil their obligations by vigorously implementing a programme of sustainable growth and development and creating wealth and employment opportunities for the people at large. The JBIZ after much deliberation has decided that it can no longer remain a passive observe of an emerging political scenario which will have a disastrous impact on the future of the country. In the event that our appeal, does not result in a political solution very early in the new year, we intend to utilise all resources available to mobilise the entire business community in the country and civil society to pressurise the political leadership to achieve a consensus as the consequences of inaction in arriving at an acceptable solution will be of such a serious nature as to completely disrupt the economy of the country, its social fabric and the future welfare of its people. |
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