Myriads of economic opportunities in N and E

Gamini WARUSHAMANA

With the liberation of the North and the East new opportunities have been opened for rapid development if the government correctly identified the real challenges created during the three decade war, said Professor Jagath Wickramasinghe in an exclusive interview with the Sunday Observer. Following are the excerpts.

Prof. Jagath Wickramasinghe

Crushing the LTTE terrorism within three years is a great victory. The most important development we can see after the war victory is enthusiasm shown by the people irrespective of ethnic or religious differences. Our people have shown a great degree of unity and so the government can now develop this trend to the level of forming social capital.

Historically Sri Lankans have inherited this formation of social capital from their ancestors and ancient kings. This is a golden opportunity to resurrect this phenomenon in keeping with the development of internal economic structure.

He said that the government will have to face challenges in the post war regime.

Eradication of terrorism is a prerequisite for long term socio-economic development. No genuine investor would like to dump his capital in a hostile environment where explosions and killing are the order of the day.

“Now the risk has been eradicated and as a result we can expect both foreign and domestic investors to invest in any part of the country. This risk was the biggest obstacle for long term investment.

On the other hand prior to 1980s the economic data and information covered the whole island. With the conflict that was reduced to 2/3rd of the country. From now onwards again the Central Bank (CB) can consider the entire country as one economy.

“However, the time series data over this nearly 30 years can create some problems when long term trends are calculated. So I believe that the CB will make out a mechanism to capture the time series data not withstanding the disturbance created by the terrorists nearly 1/3 of the country.

“Also prior to the terrorist dominance the North and the East provinces provided substantial percentage of the day to day requirements and as a result the price inflation was very moderate.

“For example, fish came from Mannar, Jaffna, Trincomalee and Batticlao to Colombo and supplemented the local produce in the South. So were the commodities such as chilies, potatoes and onion.

“Enormous benefits are arising out of crushing terrorism. Free flow of such commodities to the South will mitigate the inflationary tendencies generated by external factors to some extent.

“The Tourism sector is another sector that will be benefited. Before the hostilities, tourism accounted for nearly 5 percent of the economy and over 200,000 direct and indirect employment opportunities were provided. However, the sector’s contribution is very insignificant today. We can’t expect an immediate boost in tourism industry because of global recession. Hopefully by mid next year tourism industry will start booming.

“Domestic tourism is also an important sector where people are travelling for sightseeing on pilgrimage. It will recommence and will improve various economic activities.

“Access to natural raw material deposits such as mineral sand, clinker in the North and the East is another important opportunity. Now again they are open for investors to be used in value added industries.

“With the cessation of hostilities Trincomalee harbour can be developed to the level of an international harbour catering to the needs in the area. Defeating terrorism has opened very many opportunities in the economy to prospective investors.

“However, to achieve the benefits the government has to adopt dual strategies. Addressing issues of IDPs and developing the North and the East while paying attention on imaginary or real grievances of Tamil people are important. If you look at recent PC elections in the Central and Western provinces, the minoriting dominate electorates show a result which is different to other areas.

“This shows that the minority ethnic groups still feel some grievances, may be either imaginary or real. They are also citizens of this country and their contribution to economic development is crucial and therefore we have to consider this seriously.

I think they are imaginary because most of the grievances faced by them were rectified by law as in the case of the Tamil national language. However, we have to consider whether these solutions meet the expectation of the Tamil people when it comes to the implementation as a result of lethargy of the bureaucracy.

“While attending to rapid economic development in the North and the East the government must look at these aspects as well. Otherwise this will be a nursery for another terrorism.

“Quick resettlement of IDPs, providing means of livelihoods and economic benefits to these people are crucial. If the legitimate grievances are looked into while offering economic benefits they will feel the difference between the illegal regime of the LTTE and the legitimate government of Sri Lanka. Tamil people may think the socio political problems faced by all the people as a discrimination against them because the LTTE has brain washed them. Therefore a program has to be initiated using the service of physiologist to irradiate lopsided perception.”