Financial Times

An escalation in the fighting in the northeast region where reports are surfacing of also shortages of essentials and brazen attacks in Colombo with the Pakistani High Commissioner being a target has once again triggered a round of fear and trepidation amongst Sri Lankan businesses.

The Sunday Times FT which polled a string of corporate heads and young executives to ascertain their views on the unfolding crisis found unanimity in the view that the fighting would have an adverse impact on business sentiment. (See Page 1 for the results of the poll).

But there were also a large majority who said the government and the country shouldn’t give into terrorism. “While a political solution is the only way to solve the problem, we also need assertive and consistent action to end terrorism. One cannot negotiate with those who would indulge in terrorist acts, no matter who they are, Negotiations are only possible if there is a genuine desire for peace,” one young corporate executive wrote in comments for the survey.

Another said: “the impact will be terrible if the war continues for several months. The need is to get back into the peace negotiation process after weakening the terrorists, without weakening the desire of the Sinhalese, Tamil and Muslim people for peace.”

There were others who said the business community should have the courage to move forward even if there is a conflict. Many companies, particularly big groups, have factored in violence into budgeting, policy planning and profits.

It may be time other companies also prepare similar risk-management initiatives because the conflict during a peace process, that has now escalated to bloody battles from being shaky, could be a short haul or a long haul. There is no doubt that the impact on business and sensitive sectors like tourism would be adverse but these could be short term impacts and as repeatedly pointed out in the past there is a need for good risk-management practices and trouble-shooting techniques which must come into place when the conflict escalates.

Tensions have risen in the capital and roadblocks and increased security reminds one of the pre-ceasefire period. In a crisis situation these are necessary for the people’s security and no one should grumble about the inconvenience except that much of it would have been unnecessary if not for politicians hogging the road with their security squads and their “get off the road – or we’ll shoot” mentality towards other users.

Tourism as usual takes a big hit but it also provides lessons to the industry in ensuring that the mass market visitor is not ignored in an era where there are growing investments in boutique hotels and ‘exclusive’ guesthouses. It was the mass market that Sri Lanka relied on during the troubled 1983-2002 period and that’s still a reliable market unlike upmarket guests who are reluctant to travel to trouble spots.

This week when a discussion initiated by the Business for Peace Alliance and Sri Lanka First, along with International Alert, on peace building and the private sector gets underway on Tuesday, it would be appropriate to also discuss how the corporate sector survives in a conflict-ridden situation.

While no one should stand in the way of initiatives that are meant to firm the peace process, the larger business community including small and medium scale companies need some guidance on how to sustain their business in crisis-situations that could go on for years – or end tomorrow.