Financial Times

SLFP-JVP front to meet private sector?
By Suren Gnanaraj
The SLFP-JVP alliance launched last week as a new political front aimed at ousting the United National Front (UNP) wants to meet the business community in a bid to clear uncertainty over its vision, objectives and economic policy.

The move was welcomed by J-Biz Chairman Mahendra Amarasuriya who said that even though the alliance has spelled out its economic vision, it is unclear how it would be implemented. "You can never predict what will happen in politics," he said.

Amarasuriya said the business community had reason to be concerned about the alliance when judging the previous track record of the JVP. " They are a revolutionary party and their trade unions are extremely militant," he said.

News of the alliance raised mixed feelings from a cross section of the private sector, with some seeing it as a ray of hope for a possible consensus between the major political parties in a bid to end the current political dead-lock. Whilst many remained sceptical about the alliance's hybrid economic policy, its decision to prop local industries and entrepreneurs were well received.

In a telephone interview with The Sunday Times FT, JVP Parliamentary Leader Wimal Weerawansa said that there was a lot of negative speculation and misinformation about the alliance, which has unduly alarmed the country's private sector business community. "My advice to the private sector is to refrain from being misled by such wrong information. You have nothing to fear," he said.

Weerawansa said the alliance would primarily focus on maintaining law and order, eliminating bribery and corruption, encouraging indigenous entrepreneurs and industries, improving the agricultural sector and strengthening the public sector. (See page two for full interview)

He said the alliance would adopt a selective policy in terms of imports. "Micro chips yes, potato chips no," he said, adding that the country, which presently imports a large amount of food items should hide its face in shame, having boasted of a historical civilisation which was agriculturally self sufficient.

The business community was cautious. Prema Cooray, Secretary-General of the Ceylon Chamber of Commerce said the MoU was only a political affiliation and there was no reason to be unduly alarmed. He was however unable to give a conclusive opinion on behalf of the chamber since its members were split on the issue. "From a private sector viewpoint, if the alliance can instil good governance, maintain law and order and rid all forms of bribery and corruption, we would be satisfied," he said.

"It is only the JVP that has spoken about the alliance's economic policy so far, and it would be noteworthy if the PA, as the larger party can make its stand known," he said.

Azmi Thasim, Director-General of the Hambantota Regional Chamber said southern businessmen were not jittery over the new grouping. "The truth is, no one in the south is even talking about it," he said, adding that southern businessmen were well accustomed to the presence of the JVP in the region.

The tourism sector had no undue concerns with Hiran Cooray, Vice President of the Tourist Hotels Association of Sri Lanka, saying that tourism was completely unaffected by this latest political development. "Foreign tourists (probably) don't even know who the JVP is," he said.

Some sections viewed the alliance as a positive step towards achieving a consensus between all major political parties, which would help salvage the country from a deep-rooted constitutional crisis. Gratien Gunewardena, President of the Exporters Association of Sri Lanka said that it was important that the (Mano-Malik) talks succeeded which would end the political bickering and achieve a broad consensus by all parties on the ethnic conflict, electoral reform and economic policy. "We need the three main parties to work together for at least a minimum of two years in order to take important decisions with regard to policy, so that regardless of who comes to power next, the core policies would remain unchanged," he said.

He viewed the JVP economic policies as extremely positive and saw the present JVP as much different to that of the JVP in 2001. "The last 12 months has brought a lot understanding between the SLFP and JVP, and they have accepted, to a certain degree, the need for an open economy," he said.

Ranjith Hettiarachchi, President of the Ceylon Chamber of National Industries said the alliance's decision to provide relief and revive local industries was extremely heartening. Local industry has been badly affected by a government decision to raise the duty from zero in 2001 to 3 percent in 2003 on all imported raw materials.

Sarath Uyanhewa, Vice President of the Colombo District Small and Medium Scale Entrepreneurs Association, said SME's had been badly affected following the UNF government's decision to reduce the surcharge on imports from 40 percent to 10 percent and were further crippled with the introduction of the Indian Line of Credit.

He said that the 5000-strong member association had lobbied with opposition parties and its results had borne fruit as it was evident that the new alliance was in favour of providing relief to local industrialists. "After all, SME's provide for nearly 65 percent of our country's GDP and provide nearly 60 percent of the country's total employment, so why have we been neglected for so long?" he asked.

He said that the people at the grass roots were supportive of a JVP alliance since it had faith that views of the masses would be heard and corruption eradicated on a large scale.

However Markandu Ramdasan, President of the Yarlpanam (Jaffna) Chamber of Commerce said the people in Jaffna did not foresee a positive solution from the alliance to the problems of the Tamil people. "Public perception about the JVP is negative in the region because of its past track record and its lack of activity in the region.

The SLFP is not a party which is accepted by the Tamils, so the entire MoU is looked at with a lot of suspicion," he said. The stock market plunged last week at the announcement of the signing of the MoU but rebounded shortly after the official ceremony, which brokers attributed to news that a general election in the near future was a remote possibility.

Asanga Seneviratne, Chief Executive Officer of Asia Capital Securities Ltd said that the general investor perception was that the SLFP is now in a more commanding position to negotiate with the ruling UNF government, which could help to end the political dead-lock between the Premier and the President.

However, Seneviratne was of the view that a possible SLFP-JVP government would certainly alarm investors in the stock market, since there was very little confidence that the market bestowed in the JVP's economic policies.

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