The first blow will be to our tea market, with tea exports poised to take a big drop in view of the fact that West Asia is our largest regional market, next to the CIS countries. Remittances from migrant workers and of course tourist arrivals are also bound to take a dip. There will be still other rollover repercussions, such as repercussions to the garment industry as a result of the United States and European Union economies slowing down due to the probable effects of the war.

There can also be other jolts to the Richter. A Gulf War could lead to the downward revision of corporate earnings, even though most companies quoted on the markets are reporting good results these days. These residual fears have in fact already affected the stock market, and brought down share prices in Colombo as of last week.

Projections will go awry, and a good example is Asia Securities. The estimated earnings of Asia Securities would be cut by around 25 per cent for financial year 2004, wiping out the 18 per cent forecasted profit growth. This setback is as a result of weaker domestic and export markets, to which should also be added higher costs of electricity. The scenario is not rosy, to put it by way of understatement, and stockbrokers said that if war does break out in the Persian Gulf 'it would not be unreasonable to expect the All Share Price index to hit the 650 levels.'' Which to the uninitiated layman would mean: "Not too good."

But the impact is going to be multiple, as different aspects of the economy are bound to get knocked about. For instance, the global oil market had soared, and further increases in the price of petroleum would be a kidney punch to a public already reeling from high prices on all consumer items. Spiralling inflation, if not shortages, complete the doomsday picture.

The knock-on effects will see pressure on interest rates, negating the efforts of government to keep interest rates down so that businessmen will be able to borrow more for investment. With borrowing costs climbing, they will have to cut back on investment. Consumers and of course, industry will be more directly hit - due to the possible escalation of costs of transport and electricity which would cause across-the-board price increases. Not that President George Bush Jnr., would care. He has asked our new Ambassador to Washington DC, Devinda Subasinghe for our support in the days ahead. But who's there to support us in this New World Order?

The news is already in, that low grown teas are affected due to uncertainty in the Gulf, as these teas which are produced by small-holders in the South are in heavy demand in Arabia. The Southern village economy which provides much of the teas to the Arabian states is already in a tail-spin with plummeting prices and resultant cash-flow problems. If this happens, the tea industry would also face labour unrest, and the industry is already aware of this fact.

In a sense, a war in West Asia is even deadlier for Sri Lanka's fragile outback economy - than a war at home. While some matters will be well beyond our control, some element of damage-control will be the most we can ask for. While there is, no doubt, an awareness about the domestic impact, we still see no galvanising of minds at the higher political levels to cushion that impact. It’s not too much to ask the Prime Minister to chair some meetings with those who matter in the coming weeks.

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