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Meeting future economic challenges

Increasing investor confidence in Sri Lanka seems to be one of the biggest positive outcomes of the ceasefire agreement which has held now for one year. Yesterday's 'Sunday Observer' quoted a BoI spokesman as saying that the commitment by the Government and the LTTE to the peace process is "luring foreign investors to the island", in increasing numbers. Elaborating on this happy trend the report said that Foreign Direct Investment in Sri Lanka this year is expected to reach the half a billion US dollar mark, double the corresponding FDI for 2002 of US $ 240 million, which came in through the BoI.

The progress achieved in the foreign investment sphere could be gauged from the fact that prior to the launching of the current peace process, FDI in Sri Lanka was a mere $ 83 million. This has Sri Lanka gained significantly through her ability and readiness to give peace a chance. If the country had persisted in the "peace through war" strategy, the populace would today be living amid the shambles of a completely collapsed economy. So, the citizenry is likely to be relieved at this turn of economic developments for no country could march into the future on an empty stomach.

Besides, of course, strengthening the ceasefire and forging on courageously to a final solution, a task, for the State as well as the LTTE is to ensure that the incoming foreign assistance and investment is fully and effectively utilized. While we fully agree with the GoSL-LTTE decision to give priority to the humanitarian dimension in the peace process, at the moment, it is upto the main parties to ensure that human resources in the conflict-affected areas in particular, are sufficiently developed to enable the effective use of incoming development assistance and capital investment.

We are touching here on the rehabilitation aspect of the GoSL-LTTE humanitarian effort in the North-East. While it is true that Internally Displaced Persons have to be resettled in their original habitats and enabled to get onto their feet, so to speak, it is also important to ensure that they engage in sustainable livelihood and economic activities. To enable this process to get under way, the IDPs need to be provided the essential education, training and skills to render themselves employable. Accordingly, this aspect of the rehabilitation effort should be managed effectively by the joint sub committee overseeing the humanitarian effort.

However, these concerns do not apply only to the North-East. If the current, satisfactory investment climate is to be fully utilised, our human resources need to be developed uniformly in all regions of the country. The influx of FDI would be determined to a great extent on the continuation and acceleration of the peace process and on continued investor confidence in Sri Lanka's natural and human assets.

While comparatively cheap labour is being seen as a pull factor in the influx of foreign capital, this attraction wouldn't last for long if local human resources are found to be ill-equipped to meet future economic challenges. Accordingly, education and skills development need to be continuously upgraded.

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