Winning economic war within reach

Many knowledgeable people, including leading economists and business tycoons, have predicted an impressive growth rate for Sri Lanka after terrorism was eradicated. Billions of rupees spent to fund the battle against terrorism would gradually be reduced in the coming years and those huge funds could be utilized for development.

The brave acts of the Security Forces which completely defeated and destroyed the LTTE terrorists, would now pave the way for a new era in Sri Lanka’s economy. Despite the global recession and adverse economic trends in the Asian region, the eradication of terrorism has given Sri Lanka a distinct advantage to record a better growth rate.

A leading international bank last week predicted that Sri Lanka’s economy can bounce back from its weakest growth in six years and become the ‘Hong Kong of India’ with the end of the 30-year-old terrorist problem boosting business opportunities.

The chief investment strategist for Asia at HSBC - a global private bank, Arjuna Mahendran, has predicted the rebound to be “spectacular”, adding that the location of the Colombo port “is a natural advantage”. He said that Sri Lanka could benefit from its proximity to India, similar to Hong Kong reaping profits from being a trade hub to China.

India, which has the world’s second-fastest-growing major economy, could play a key role in Sri Lanka’s economic development. With the new positive economic trends in the North and East and booming economy in the subcontinent, Sri Lanka could become a trade hub to India.

Moreover, the Colombo Port could emerge as one of the busiest ports in the region, especially with the fast growing Indian economy. The veteran investment strategist has said that 70 percent of the volume of cargo handled by the Colombo port is trans-shipment of goods imported by India.

This could be increased because Indian ports do not have adequate depth. Sri Lanka has embarked upon a plan to quadruple capacity at the Colombo port in three years so that it will be geared to meet the growing demands.

On the other hand, people in the Eastern Province have now begun to contribute to the national economy. The fishing and dairy industries in the region are growing fast.

Thanks to the speedy infrastructure development work implemented under the Eastern Reawakening (Nagenahira Navodaya) program, people in the East could now send their produce faster to other parts of the country.

Fish and dairy products from the East are now available in markets in the South, opening new markets for the people who have been rescued from the jaws of LTTE terror during the humanitarian operations in the East.

Consequently, money has started flowing in to the Eastern Province, making the Easterners richer and this has increased their purchasing power significantly.

The Government would implement a similar plan in the North as well, once those displaced persons are fully resettled. The resettlement process in the North is taking place at a rapid pace with projects being already launched in Mannar and Vavuniya.

Infrastructure development in the Northern Province would be completed under the Northern Summer (Uthuru Wasanthaya) program and this would lead to massive development. The aim of the Government is to develop the Northern Province and bring it on par with the Western Province.

Farmers in the North, who had made a significant contribution to the national economy in the past cultivating red onions, chillies and potato harvests, could again look forward to better times.

The positive contribution of farmers in the North and East would increase gross domestic production, leading to upward trends in the national economy.

If infrastructure facilities in the region could be improved, the farmers in the North too could play a vital role.

Many businessmen and leading entrepreneurs now see a lot of potential for growth.

The tourism industry, which was a money-spinner and a major source of foreign income at one time, is also set to bounce back after three decades of LTTE terror. Sri Lanka can catch up quickly as it is a small economy and many businessmen in the travel trade are exploring ways and means to expand in the hotel and tourism business.

The terror acts of the LTTE had discouraged tourists from the United States and the European Union for years although Sri Lanka was once considered the most sought after tourist destination in the world.

Sri Lanka, which attracts around half a million tourists each year, aims to double it within the next five years through a global campaign. There will be a definite change in a few months as global confidence returns to Sri Lanka’s leisure market.

Many entrepreneurs see ample opportunities to grow in all business sectors - from transport to farming, property development to banking and insurance to telecommunications.

On the other hand, there will be better and competitive investment opportunities. The Board of Investment of Sri Lanka expects foreign direct investments to quadruple to US$ four billion within the next three years, led by investments in ports, tourism, telecommunication and textiles.

There have been many positive economic trends during the past few weeks. Sri Lanka’s benchmark stock index, the Colombo All-Share Index, has climbed 20 percent since the LTTE was defeated. Sri Lanka is now keen on top fund managers to invest here and help the Colombo Stock Exchange double its capitalization to US$ 14 billion in a year.

Sri Lanka has a golden opportunity to rebuild its economy and record a better growth rate. The global recession will not be a barrier to Sri Lanka’s economy to blossom and achieve a growth rate of around nine percent.

The advantage Sri Lanka gained following the victory over terrorism is much greater than the impact on our economy due to the global economic recession.

Hence, Sri Lanka has the ability to beat all odds. President Mahinda Rajapaksa and his Government will undoubtedly win the economic war as well, with a vision for the future.