Financial Times

Breaking hearts and promises
Driving through the Jaffna peninsula one is stuck by a mix of vegetable fields ready for harvesting, tips of coconut trees sliced off by bombing over the years and miles of undeveloped land. The stark reality - after two years of a ceasefire - is that there is little or no development activity in the north. No jobs have been created … no income generating activity has been developed.

Where then is the so-called peace dividend? A few months after the cease fire came into force in 2002, hordes of Colombo businessmen and chamber chiefs made a beeline to Jaffna eager to trade and provide hopes of peace and prosperity to the people of Jaffna. Many promises were made but two years later - few have been kept. In fact Jaffna's business community now find themselves cheated by Colombo's profit-motivated, glory-seeking private sector.

In the words of the chamber of commerce there, Jaffna has become a dumping ground. "The private sector in Colombo has benefited from the peace process. Not the Jaffna trader," says a spokesman (see interview below). In fact the flood of goods from the south has all but ruined the little industry that existed in Jaffna. Brooms from the south have replaced the brooms made in Jaffna and driven small industry to despair. These were small industries that operated during the war years and amid many other constraints.

Is our Colombo-based business community so brutal and insincere? Where is the so-called social responsibility and the pledge of winning the hearts and minds of the northerner? Our business leaders are trying to patch up differences between President Chandrika Kumaratunga and Prime Minister Ranil Wickremesinghe to save their businesses but choose to ignore the ground realities in Jaffna.

The private sector and industry in Jaffna is struggling to compete with Colombo's business elite with its money power and the economies of scale that helps to lower production costs. Invariably products made in Colombo are cheaper than that made in Jaffna.

While the peace process has snowballed into a political crisis, workers in small industries or self-employment projects are either losing out to the Colombo trader or struggling to survive. There is nothing but despair across the peninsula - the man on the street, the trader, teacher, social worker or priest.

There is no peace dividend in the north. Colombo's business community has certainly gained finding new markets in the north and the east and ousting what little business activity, small industrialists had in the peninsula.

Thus two years into a ceasefire and we are yet to see any tangible income generating activity in the north. The only investment that is coming into the peninsula - generated by residents - are from Tamil expatriates. That too is grabbed by the wave of consumerism spreading across the peninsula. The investment by residents in consumer durables dumped by multinationals and Colombo's mega firms is similar to the haphazard buying spree by our migrant workers when they return on holiday or at the end of a contract.

Jaffna is desperately short of funds and one of the sources - expatriate money - is sucked up by an unproductive sector with the profits going out of the region. It is time the high priests of business in Colombo re-assess this situation and take up the challenge of working together with the Jaffna business community to build a prosperous future for all.

The government and donor community have been caught up in the political crisis, leaving the people in the region to an uncertain future or to fend for themselves. This is where the business community can help by guiding the region through to recover with steady access to funds and relaxing the tight lending conditions. Industry should be helped to prosper and while making money, Colombo's business elite should also plough back some of the profits into health, education and other basic needs of the people.

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