Financial Times

From gloom to hope
After weeks of despondency, the corporate sector – particularly the stockmarket – had a lot to cheer about last week when the government and the LTTE agreed to restart peace talks in Geneva.

The breakthrough in the negotiations towards moving forward the peace process saw some positive vibes in the market, driving stocks up and brokers discussing some good times ahead.

Chambers praised the initiative with Sri Lanka First, the pro-peace business lobby group, joining in the kudos for President Mahinda Rajapakse and his team. The President deserves to be congratulated having battled against all odds including deadly attacks on military convoys and opposition from his own allies against Norway’s involvement in the process.

That negotiations should resume after a near 3-year old stalemate since April 2003 and that too under a President who was labelled as hawkish and anti-Tiger proves to a large extent the desire of the government to resume discussions as quickly as possible.

How Rajapakse would convince his anti-LTTE allies like the JHU and the JVP that this is in the best way forward for the country remains to be seen. Even though the JVP is not a member of the government, the President meets Weerawansa and Co. almost every week to keep them regularly briefed on developments. The JHU has publicly criticised the government for accepting Norway as the peace facilitator and noted that it goes against the “Mahinda Chinthanaya”.

The Federation of Chambers of Commerce and Industry (FCCISL) and the Ceylon Chamber of Commerce have been in the forefront in urging the government to resort to confidence building measures and put the peace talks on track. They were the first to welcome the resumption of talks.

There were also other positive developments this week with the FCCISL announcing that it has opened a new Kilinochchi Chamber of Commerce in an area that is controlled by the Tigers. The chamber has also been discussing with partner groups in the north the need to open a district chamber also in Mullaitivu, again in an area run by the Tigers. These efforts should be encouraged because formal and informal links between business and industry in those areas and Colombo are confidence building measures that can eventually speed up the search for that elusive solution to the ethnic conflict.

Business can play a big role because more business and industrial activity would show residents in those underserved areas that this improves lifestyles and raises one’s economic status.

News of the resumption of peace talks was refreshing and provided some relief to a broader section of the business community which has been on tenterhooks ever since December. Yet one must also take a cue from the “big” boys of business like JKH, Hayleys or Aitken Spence who pursued their development strategies and growth path irrespective of whether there was peace or not.

Their policy is one of continuation and progressing ahead instead of watching and waiting and being focussed on what they are doing. Undoubtedly a peaceful environment would help but there is a need to adjust to situations given that uncertainty prevails in most countries.

Treasury Secretary Dr P.B. Jayasundera referred to this in a recent speech at an HSBC breakfast meeting where he said terrorism and security threats should not deter economic growth as it happens in most countries.
The recent crossovers of two UNP heavyweights to government ranks will strengthen Rajapakse’s hand in pushing the peace process forward while weakening the ranks of the opposition.

However a strong opposition is absolutely essential for good governance and the sooner the UNP gets over its internal crisis, the better it is for the country. In the meantime, the hopes of the country lie with a successful conclusion of the first round of peace talks in February.

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