Good times ahead for North

By Shanika SRIYANANDA

The AN-32B of the Air Force plane with a high profile US investor delegation landed at the Palali Airport after a 50 minutes journey from Colombo’s Ratmalana Airport.

Still with doubtful eyes, as they were yet to explore the real ground situation of the once ‘dangerous zone’ which was badly hit by LTTE terrorism, had mixed feeling about the real picture of Jaffna.

“Is it safe there ?”, the young female investor murmured while on board.

Warmly welcomed by Emelda Sukumar, the Government Agent Jaffna, the delegation was escorted by a Police car.

“If you were here before two years, you would be escorted by convoys of armed military troops. You have to travel in armour-plated vehicles as there was no guarantee that you would be caught in a sudden suicide blast”, I heard a local officer explaining one investor about the pathetic situation in Jaffna before ending the war.

“Oh.. How do you travel from here to the rest of the country? It could be a very risky journey”, he queried.

The officer explained to the US top investor, who is looking forward to invest in the hotel industry, that the land route - A-9 was closed for years due to frequent LTTE attacks and later LTTE capturing the land, and the visitors to Jaffna had to travel by air or ship paying a high price.

The scorching sun was not a hindrance for the Jaffna people to be lazy.

Under the sun or rain they are at their work, with more courage with the newly found peace to make the lives of their next generation better to avoid another deadly conflict to drag them to the ‘stone age’.

Apart from a few damaged buildings with bullet riddled walls, there were nothing for a visitor to sight as ‘war remnants’.

The red fertile soil emerged in most of the land to say how fertile this land is.

“I read an article about Jaffna and it said this soil is ideal to grow grapes and grapes from Jaffna are the tastiest. And it is also good for red onion cultivation”, an officer of the US Commerce Department said.

While the convoy of vehicles snaked through the tarred roads passing paddy fields and vegetable and grapes cultivations in fertile red soil with people engaged in some sort of construction - be it a new State building, a school or a house - the US investors were amazed how fast life has returned to Jaffna.

The impact of ‘explosive negative images’ about Sri Lanka they read in articles were now coming to zero.

“It is amazing how they are trying to stand on their own feet. I think we have to give them a chance after decades of sufferings”, he said.

Dancers clad in very colourful costumes welcomed the delegation by performing a traditional dance and welcomed with Minister Douglas Devananda, Governor Northern Province G.A. Chandrasiri and Jaffna Mayor Yogeswari Patgunarajah garlanding each participant to the main event held at the Jaffna Public Library.

This special US delegation, which was brought to Sri Lanka by Sri Lankan Ambassador to the US Jaliya Wickramasuriya, visited Jaffna to gain first hand experience about the real situation in the peninsula.

The US delegation was led by Assistant US Trade Representative (USTR) for Central and South Asia Michael Delaney, and included top US investors and officials of the US Department of Commerce and the US state Department.

Among the private sector delegations were business executives from several leading US companies and their regional offices based in India representing the American Chamber of Commerce (AMCHAM), New Delhi.

The delegates having listened to a series of speeches by the Lankan officials who explained about the prevailing peaceful situation in Jaffna, and the business opportunities in the Northern region had a better understanding about the emerging investment opportunities in the North.

Ambassador Wickramasuriya giving the keynote address said that he never thought that he would be able to visit Jaffna with a foreign delegation this fast. “ This is my third visit here and first I came to Jaffna as a small boy and this time I came by air and I am sure next time I will come to Jaffna by train” he said.

He said they all thank President Mahinda Rajapaksa for defeating LTTE terrorism and bringing permanent peace to the country. “Otherwise coming to Jaffna was impossible and this is the sign of Sri Lanka’s progress. Jaffna has always been an important place for Sri Lanka”, he said.

He said he always believed the President’s remarks that “neither peace without development nor development without peace is sustainable”.

“Today we are here because of peace and it is high time to lend a helping hand to our Northern people to uplift their lives after decades of sufferings”, he said.

Ambassador Wickramasuriya said that the IMF had also upgraded Sri Lanka from a developing to middle-income country and Lanka has almost achieved the UN Millennium Development Goals before the set target 2015. “We are getting good reviews from outside economic forecasters. The international Monetary Fund has given our economy good marks and predicts a steady future growth. So do the World Bank and the private banks. Our tourism arrivals are up by 50 percent compared to last year. The New York Times and National Geographic have ranked Sri Lanka as top tourist destinations for 2010. The inflation rate and unemployment rates have now come down”, he said.

He said some Tamils in the US who had visited Sri Lanka after ending the conflict was amazed to witness the development after decades and wrote to me saying that ‘they never thought this peaceful situation would come back in their lifetime.

“This is not a getting-rich-quick scheme. This is a nation that has a promising workforce with a 92 percent literacy rate. It is a nation that works hard for a living. Developing the North is important for the country’s future. Through economic development we can create employment opportunities and that will naturally lead to reconciliation. These are the essential ingredients for peace”, he said.

The Assistant Secretary of the US Trade Representative (USTR) for Central and South Asia Michael Delaney said that Sri Lanka had an entirely different situation now than the last year and the end of the conflict gave the US investors a positive image about the country. “It was a very difficult task to make a strong case for any significant investment in Sri Lanka due to the conflict. It had a tremendous risk premium but with the end of the war, the US investors really want to take a very different view of Sri Lanka”, he said.

Delaney said that the USTR was trying its best to assist Sri Lanka to get more US investors as a large part of the island was now available for investment.

“The existing peaceful situation is very encouraging”, he said.

He said the USTR first had discussions with Ambassador Wickramasuriya and also with the former Minister of External Trade and now the External Affairs Minister G. L. Peiris and we found that the security situation in the North including Jaffna was very much improved and decided to visit the peninsula.

Delaney, recalling his days in Jaffna as a young University student said people of Jaffna were very family-oriented and this would ensure that they would always strive for a better future for their children.

“I still have very vivid memories of Jaffna”, he said.

Delaney said the US investors who visited Jaffna, who had experienced the peaceful situation, would take a positive message to the US.

He said things have changed a lot in Jaffna and he was impressed by the development work taking place in Jaffna. “Wherever you look, some construction is being done here. But the North needs more infrastructure development projects”, he said.

According to this top official of the USTR Jaffna has lots of knowledge based resources and there is a huge potential in investment in this field. “It is amazing the potential of the Jaffna University which has a very strong knowledge-based wealth. I personally feel that the best investment for Jaffna is BPO type businesses, he said.

Delaney said that due to the present situation in the country, it was easy to influence the US investors and more US investors would look for Sri Lanka for their future investment venture.

The Chief of the Economic and Commerce Affairs of the US Embassy in Sri Lanka Edward P. Heartney said that Lanka’s economic and political stability, which were getting back on track, would bring more US investors to the country.

“The US is sending a business delegation once a year to see the business opportunities in Sri Lanka and with the present situation the US has decided to expand this opportunity”, he said.

Heartney said that Sri Lanka did lots of trade with the US and it would strengthen the relationship between the two countries.

The Governor Northern Province G.A. Chandrasiri said the security situation in Jaffna was fully conducive for new investments. He said the Northern Province is heading to a new era with the development and rehabilitation initiatives undertaken by the Government under “Vadakkin Vasantham” (Northern Spring) program.

The Task Force appointed by President Rajapaksa to restore normalcy in the Northern Province with a rapid re-settlement and development drive is nearing the completion of its task.

“The IDPs in welfare camps dwindled to less than 25,000 today. Out of remaining five camps two have already closed and the remaining camps would be closed down within the next two months reducing the IDP population to zero. Education sector is getting back to normal with much improved facilities and out of 1,015 schools in the North over 845 schools are functioning. In Jaffna there are over 492 and 418 of them are functioning”, he said.

The Governor said the North which lack modern healthcare facilities for decades were now given improved facilities and all the government hospitals were functioning. Over 100 additional doctors have been appointed to Jaffna. Housing projects have been completed.

The mines buried by the LTTE in their former dominations were the main hindrance to accelerate the development activities. “ Over 3800 sqkm of Northern land have been reported as highly contaminated with over 1.5 million landmines but the challenge was overcome with rapid de-mining process carried out with the assistance of the Army which deployed over 1,000 troops to de-mine the contaminated areas”, he said.

The former Security Forces Commander of the Northern Province Maj.

Gen. Chandrasiri said security was fully strengthened.

Talking about investment opportunities in the North including Jaffna Dr. V. Sivagnanasothy, Secretary of the Traditional Industries and Small Enterprise Development Ministry said the North, which has a huge resource base, could be one major hub that contributes the President Mahinda Rajapaksa’s goal - making Sri Lanka the ‘Emerging Wonder of Asia’.

He said the entire government machinery is geared to transform the country, which survived the global financial crisis, the devastating tsunami and the three-decade old terrorism, to an excellent place to live and work with diverse community who respect and care for one another. Dr. Sivagnanasothy said a five hub concept has been identified covering sea; aviation; commercial; energy and knowledge - to make our motherland a strategically important Economic Centre in the World. “Mahinda Randora, the ‘Ten Year Development Framework’ has given high importance to infrastructure development initiatives which includes heavy public investment flagship projects in the area of roads, electricity, water supply and sanitation, ports and aviation, transport and rural infrastructure”, he said.

He said the country transformed to a middle income economic status with per capita income rising from US$1062 in 2004 to US$ 2053 in 2009. “The accelerated implementation of the 10-year MC - National Development Framework will raise the per capita income of SL to US$ 4000 and elevate its position as a middle income country”, he said.

According to the Ministry Secretary, the annual average economic growth rate in the past five years has increased to 6 percent as against the preceding 5 years growth rate of 4 percent and the government targets to achieve economic growth of 8-10 percent soon.

He said that the growing economic prosperity had to filter down to all people but it was clear that in the past the economic growth had largely bypassed the rural areas and concentrated in the Western Province. The Western Province got 45.4 percent, Northern 2.9 percent, North Central 4.7 percent and Uva 4.6 percent. There was a high level of regional disparities but under the fast track regional development initiatives like two-year development program ‘Uthuru Vasanthaya’ - Northern Springs for the North - has provided much needed development in the long neglected areas of the North.

He said the industrial sector in the North was the most affected by the past conflict but with the improvements in trade and transportation facilities, fish and vegetables grown in the peninsular, were now transported to the South and fetching good prices. The improvements in roads, electricity, transportation, water and telecommunication infrastructure were fast improving.

“Fishing industry has been a major economic activity and source of livelihood in the North and more than 78,000 population are depending on this sector. With lifting of fishing restriction fishermen’s livelihood has improved in addition by setting-up shops by private enterprises the prices of goods, which were sky rocketed earlier are coming down.

There is a rapid increase in the banking sector and more bank branches have come up. The Central Bank facilitated a credit scheme to small businesses in the north, up to Rs. 200,000 per loan”, he explained.

With normalcy returned to the Northern Province after three decades with improved facilities, it has a high potential for investment in the areas of fishing, human resources, and garment, tourism and healthcare services.

He also explained about the improved infrastructure facilities such as electricity, water, road, airports and harbours in the province.

Executive Director (Investment Promotion) of the Board of Investment of Sri Lanka Duminda Ariyasinghe said the BOI role in assisting to develop the Northern province would be through promoting new enterprises, encouraging re-location of enterprises from Western province, setting up export or industrial zones and improving infrastructure facilities, identifying investment opportunities in the key sectors, marketing of investment opportunities to foreign and local investors and facilitating investments through approval, incentives and liaison with other State agencies.

According to Ariyasinghe there are investment opportunities in the North for agriculture and agro processing, dairy farms and fisheries, tourism, housing, healthcare, IT/BPO, education and training for skill development, tourist hotels, expansion or refurbishment of existing hotels, leisure activities connected to tourist (water sports), modern cultural and entertainment and cinema complexes, amusement parks, new Multi-specialty hospitals and high end diagnostic centers.

“Already details are being finalized to set up IT/BPO investments by several companies. The MediGain, a successful medical transcription company has set up a high end BPO in Jaffna starting with 150 expanding to 1000. The PC House is to set up a 100 seat financial accounting KPO in Jaffna. The Orion City, is working with BOI to establish IT/BPO park in Jaffna to encourage startup & established companies to expand”, he said.

Ariyasinghe said that the BOI approved projects -Hospital in Vauniya Town, Hotel at Jaffna Town, Manufacturing Pre-cast Concrete Products in Jaffna, Processed Food and water bottling plant in Jaffna Town, Manufacturing of wire mesh and roofing sheets, Manufacturing of Dairy processing machinery in Jaffna Town - will come up soon.

He said that four new apparel projects creating 2,500 to 3,000 employment opportunities will also come up in the Achchuveli industrial Zone which is to be re-established.

As Ambassador Wickramasuriya said: “Now it is time to invest in Sri Lanka. It is a nation moving forward. There is no reverse gear”.

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[Industrial Estate in Atchchuveli]

The US investor delegation visited the former Atchchuveli industrial zone, which is just a green bare land. It was set up in 1971 in a 65-acre land in Kopay, Jaffna and belongs to the Industrial Development Board.

The 25-acre land developed as industrial estate had 36 factories and the IDP facilitated the entrepreneurs to start industries and they were given the required land, infrastructure and readymade factory building mainly to solve the unemployment among school leavers, young widows and rehabilitated youths. But the zone with all buildings and infrastructure were totally destroyed by the LTTE in 1989.

The industrial zone is located at a strategic point:

- To Palali Airport 6.7Km

- To Kankesanthurai Harbour and Railway Station (non-functional) - 12.6 Km

- To Point Pedro Habour - 16 Km

- To Tellipallai Railway Station (non-functional) - 10 Km

- To Chunnakam Railway Station (non-functional) - 9.3km

- Two access points to industrial estate - (i) Chankanai - Atchchuvely Road - 9th Mile Post, (ii) Atchchuvely - Navakkiri Road - 1st Mile Post

According to the BoI, there are proposals to put up BoI approved garment factories by MAS Holdings, Brandix, TimeX, Omega Line in a 25-acre land.

Under phase I: 22-acre land will be developed with infrastructure facilities and 40 factory buildings with the assistance of the Indian government. Common facilities for the entire industrial estate, play area for volleyball, cricket and basketball, rest area with washrooms and toilets and staff quarters and a medical centre will come up under the second phase and over 80 factory buildings will be constructed in a 43-acre land under the third phase.

Of the 4 garment industries, it is expected that each investor will bring US$ 3 mn and each project will generate employment to 1,000. Accordingly the four enterprises will generate employment opportunities for 4000. Land will be leased to the enterprises on a long-term lease (50 years).