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Vital role of the business community

The political instability the country is experiencing at present, no doubt has caused serious repercussions in the economy.

The LTTE attack on the Katunayake airbase and the Bandaranaike International Airport has made matters worse.

Not only did it cause losses amounting to several billion dollars, it hit the tourist industry hard. The adverse travel advisory issued by Western governments and the insurance premium surcharges imposed by the underwriters has made prospects of recovery dim.

Economically the country is in a situation similar to that faced by the East Asian nations due to the sudden flight of investment capital a few years ago.

Countries, especially those in the Third World do face serious crisis situations periodically. It is to the credit of most of them that they could always rebound, thanks to patriotic forces in the countries concerned and assistance from genuine friends abroad.

True, Sri Lanka is facing a crisis of unparalleled proportions. Yet, there is no need to panic. It is necessary to dispassionately take stock of the situation and work out recovery strategies.

This is no task that the government could handle single handedly. All patriotic forces should join hands to get the country out of the present predicament.

The media too have a responsibility in this hour of need. Indeed, it is sad to reflect on some media that take delight in painting gloom and doom scenarios instead of giving an objective picture to the readers.

Let us recall how this political instability was brought about. Two factors have contributed to it. The first is our inability to arrive at a peaceful solution to the war. The escalating costs of the war are having a disastrous effect on the economy. While this was a situation that did not arise overnight, what caused the sudden exacerbation of political instability is the attempt by the UNP to overthrow the government through manipulation of parliamentary numbers while not being in a position to form an alternative government.

The political instability was thus in a way of our own making. The principal reason for the continuation of the war is the reluctance of the UNP to arrive at a consensus on finding a peaceful solution to the war. Further, it has shirked its responsibility to the people by continued procrastination and failure to decide on principal issues of devolution that are vitally important for such a solution.

Taken together with the UNP's attempt at destabilizing the government, one could place a major share of the blame for the present predicament on the UNP.

While the political crisis is thus largely a result of local political developments, the crisis in the economy is not all due to the subjective actions of politicians or anybody else in Sri Lanka.

In other words, objective developments in the world economy are responsible for many adverse effects on our economy. These developments now affect more sharply on Third World economies in the context of rapidly spreading globalization.

To be exact, the beginning of a general recession in the world economy following the slowing down of the US economy is felt here. The USA is our principal trade partner and the slowing down of the US economy is affecting our economy through curtailment of import orders by US firms etc.

The escalating prices of crude oil in the global market coupled with the appreciation of the US dollar relative to the Sri Lankan Rupee are also significant developments contributing to our present predicament.

In this hour of trial the business community too has a vital role to play. We are glad that certain sections of the business community, especially those related to the travel industry that were hitherto silent, have now awoken from their slumber and called upon the government to negotiate with the LTTE to arrive at a solution to the war. They have rightly underlined the urgent need for peace.

In our opinion, the business community could do more. They should not only demand that the government revitalize the peace process they should also compel the UNP to arrive at a consensus with the government rather than dreaming of coming to power immediately through parliamentary coups.

• Editorial of  The Observer - 20.8.2001 - War Risks

• Voice of the Sinhala and Tamil Media
  Editorials from Sinhala and Tamil Newspapers
  of 20-8-2001

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