Duplicity of the world
Many of us may have been privy to the global backlash on the downing of the MH17 by Ukrainian rebels. It was a lead story in every single news channel. All world leaders were expressing their outcry.
When I was watching the share of media, my mind went to the time that Sri Lanka had so many MH17s, be it the CTB bus that was exploded near the Moratuwa University, the buildings that were on fire when the Central Bank was attacked by LTTE rebels which took away 86 lives and injured 1,338 people, the attack on Dalada Maligawa that killed 12 people and injured 13, the attack on Anuradhapura town that killed 120 people and wounded 85, the Dollar and Kent Farm attack which led to 62 people being massacred by LTTE terrorists, in Aranthalawa 33 young Buddhist monks were brutally killed whilst in 1990 in Kattankudy around 300 people were killed, which tells us the many Malaysian MH17s we have experienced but there was not even a call from a global leader or for that matter a press release condemning the attacks by the terrorists, which highlights the duplicity of the world.
Does the world know?
Even if the world is unaware, if we take a look at the cost of the war on the Sri Lankan economy, it exceeds $ 20,000 billion in my view. On tourism, in 1983 Sri Lanka enjoyed 337,530 visitor arrivals whilst a country like Cambodia had around 200,000 tourists at that time. By 2009, Cambodia has over two million tourist arrivals whilst Sri Lanka was around 0.5 million with a revenue of Rs. 43 billion whilst actually Sri Lanka should have had around 1.8 million tourists by 2009 and earnings touching 200 billion rupees. On a GDP contribution basis it would have contributed almost 8% to the country.
On the area of FDIs, Sri Lanka could have attracted around Rs. 3,000 billion which stacks up to the cost of the war due to terrorism. If we hypothetically take the 400 billion rupees that has been spent on the war in the last three to four years and divert it to the investment that can be made on Research and Development (R&D), it will be almost 7% of GDP which will be way above the 4% spend by industrialised countries like South Korea which have produced power brands like Samsung to the world beating brands like Sony of yesteryear. This gives us an idea of the opportunity cost of economic terrorism that the world has not so far acknowledged.
6 ceasefires: Case study for the world
Let’s also examine the many times the peace agenda was pursued. If I may take you back, the first ceasefire was the famous ‘Thimphu talks’ where the LTTE came in solidarity with five Tamil Groups – the TULF, PLOTE, EROS, EPRLF and TELO. It ended with the LTTE unilaterally walking out but during this time the LTTE strengthened itself and secured total control of the Jaffna peninsula which was called ‘Operation Liberation’.
The second ceasefire was championed by Lalith Athulathmudali from 11 to 17 April 1987, for the Sinhala/Tamil New Year. The LTTE reciprocated by ambushing three buses at Kithuluttuwa in the Polonnaruwa District, separating the Sinhalese passengers from the others and murdering every one of them and in total 127. Sri Lanka never saw a Condoleezza Rice or for that any global leader wanting to stop the funding operations globally.
The third ceasefire came into effect with the so-called Indo Lanka Accord. The LTTE, which pretended to surrender arms (while surrendering only their defective and unusable arms) used the confinement of the Sri Lankan troops to the barracks in terms of that ceasefire to engage in an anti-Sinhalese/Muslim pogrom by murdering about 200 Sinhalese and Muslim civilians along the eastern seaboard between 1 and 7 October 1987. Once again the world just watched.
The fourth ceasefire was orchestrated by the then President Premadasa from 1 June 1989 and ‘peace talks’ commenced. The LTTE once again used that ceasefire to strengthen itself and then abrogated the ceasefire by attacking all Police stations in the east on 11 June 1990 and murdering about 678 unarmed Police officers who had laid down arms and surrendered to them.
The fifth ceasefire came into effect under the leadership of President Kumaratunga in January 1995, which once again resulted in the LTTE sinking two naval gunboats anchored at Trincomalee, murdering 12 sailors and thereafter murdering 264 members of the security forces and 57 civilians in 27 separate attacks over the next 39 days. Subsequently the LTTE with surface to air missiles brought down two Avro aircraft on 28 and 29 April 1994, murdering 99 persons including two journalists, which once again the world watched with the Sri Lankan economy reeling.
The sixth and last ceasefire that Sri Lanka saw was in 2002 under Prime Minister Ranil Wickremesinghe. Once again the LTTE violated that ceasefire, murdering Sri Lanka security force personnel, informants and political opponents and led to the act that the LTTE will never forget – the shutting off of water at the Mavil Aru anicut in August 2006. This was the turning point when LTTE atrocities in Sri Lanka came to a grinding halt with Sri Lanka becoming one to fight the LTTE whilst the world once again watched.
Terrorism cost: $ 200 b
If one were track back on the causes of terrorism in Sri Lanka, I am in the middle on the two thoughts: Was it the change to ‘Sinhala’ being the national language that started this cancer or was it one man’s ideology that propagated this world force?
Be that it may, the fact is that in 1983 Prabhakaran apparently had only 12 cadres and just 20 shot but by 2006 the LTTE had amassed aircrafts, tanks, submarines, missiles and a brigade of more than 20,000 that has wiped out a minimum 200 billion dollars of development work from the Sri Lankan economy in my view.
Economic terrorism – GDP
If do a deep dive on the 3.5 billion dollars that was required to rebuild the Northern Province post the war, if we compute the taxes that had been levied on the A9 road by the LTTE when the private sector transported goods from the south to the north during the years of LTTE was in control of the Wanni, it will sure run in to millions of dollars.
Another key area not captured was that during the peace dividend between the periods of 2002-2004, the GDP in the Northern Province quadrupled to 12.6% while in the Eastern Province it doubled to 10.1%, which is the pent-up demand that existed in this part of the country for over 20 years. If this is costed, it will once again be billions of dollars that Sri Lanka would have lost due to the war.
I guess the economy growing at 7.5% plus from 2010-2102 is a testimony of the strong growth agenda that Sri Lanka missed out due to the war. If we did not have the war, may be Shangri-La, ITC, Movenpick and Hyatt may have been a reality.
Economic terrorism – Quality of life
A point many have missed is that in 2003/2004, the Socio Economic indicators reported that the access to pipe-borne water in the Northern Province was only 3.1% whilst in the east it registers 17.4%. The national average stands at a high 30.8%. The non-accessibility to toilets which is a stronger indicator of the quality of life stands in the north at 14.4% and in the east a staggering 29.2% whilst the national average stood at a respectable 5.6%, which again is a result of economic terrorism that has been at play in the last 24 years.
As per the labour force survey of 2002, the labour force participation is at 50.3% nationally, whilst in the north it had dropped to 33.8% and in the east to 40.3%, which can directly be reflective of the LTTE’s ideology of ensuring a low quality of life for the northern people and hence the drive to aggressive behaviour, which is also the cost of the war that the world must mourn.
Economic terrorism – R&D
For argument’s sake, if we take the Rs. 400 billion that has been spent on the war in the period 2007-2009 and divert it to the investment that could have been made on Research and Development (R&D), the numbers will stack up to almost 7% of GDP.
This would beat the 4% GDP spend that economic tigers like South Korea have invested to build power brands like Samsung. This gives us an idea of the opportunity cost of economic terrorism in making Sri Lanka an innovation hub for South Asia.
Economic terrorism – Apparel and tea
A point that can contribute to the concept of economic terrorism which the world must also note and condemn is the development agenda of strategic sectors like apparel and tea. If we analyse the Revealed Comparative Advantage (RCA) score for Sri Lanka, we see that Sri Lanka scores a high of 16.7 on being a supplier of clothes but scores a low 1.05 on being a textile supplier as at 2010.
On the tea front the key issues in the Regional Plantation Companies is that on the leased-out land of the State, 90% of the tea stock is above 60 years in age and senility has set in. But if replanting is to be to be done, it will cost 4.5 billion. Given the profitability issue where ROI is at single digit, replanting is not possible. If we could have directed the monies spent on the war towards the strategic direction of developing the apparel industry and tea industry on the attributes mentioned, just imagine the competitiveness of the industry and Sri Lanka as a nation. This also accounts for economic terrorism that the world has never understood.
Hence, whilst the world mourns the ramifications of the MH17 debacle, if only they were cognisant that what Sri Lanka was up against in the 30-year war sure exceeds the loss of the MH17 from an economic and social point of view. But I am sure many Sri Lankans feel the pain of the families of those 298 people onboard MH17 as we have been in and out of this for 30 years in Sri Lanka.
(The author is actively involved in the growth agenda of the country and serves the country in the areas of business/economic development. He is a Board Director in many leading private and Public sector organisations in Sri Lanka and overseas.)