As the world decides to vote

As the world decides vote on Sri Lanka on the methods used on the eradication of terrorism in the country, my mind goes back to the December 2008 when three of us were organising the staging of the first Industrial Exhibition in Jaffna so that the north gets connected to south on an economic front.

The objective was to mitigate the business support of the north to the LTTE. Over 150 companies decided to be part of the exhibition that led to strong ties forming between the north and south and today we have more than 250 new companies setting up in the Jaffna Peninsula.

The cost could have been that many of us could have lost our lives, given that twice we were attacked by the LTTE when flying over Pooneryn. I guess it was country before self at that time on and off the field.



What the world does not know about the LTTE

Whilst I was going through the news over the weekend, the initial thought that went through my mind was many have forgotten the horrifying facts on the 24 years of life of the LTTE – killing 120 devotees in the Buddhist sacred city in 1985, 110 people in the bomb blast in Pettah, 70 Muslims in the Kattankudy Mosque, the Central Bank attack killing 86 people and injuring 1,338, which in fact far exceeded the Mumbai casualties of 26/11, which was only a 193.

The Sri Lankan number exceeds 70,000, but I guess Mumbai 26/11 may be stronger in one’s mind due to the sensation coverage that NDTV relayed to the world, which Sri Lanka could not command in the 30-year-old war that we were up against.

SL tried six times for peace

The fact of the matter is that Sri Lanka tried six times to come to peace with the LTTE. 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 it 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 killing 127 people.

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 barracks in terms of that ceasefire and went on to murder almost 200 Sinhalese and Muslim civilians along the eastern seaboard between 1 and 7 October 1987.

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 resulted in the LTTE sinking two naval gun-boats 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, killing 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, which once again the LTTE violated, murdering Sri Lankan security force personnel, informants and political opponents and led to the act that the LTTE and its sympathisers will never forget– shutting off water at the Mavil Aru anicut in August 2006, which led to the final battle and the subsequent wiping out of terrorism in our land. As we look back at the last 25 years, let me track the cost of terrorism to Sri Lanka, which can be called economic terrorism.

Economic terrorism – GDP

The LTTE as a movement fits into this definition given their behaviour in the north east. The levying of taxes on the A9 Road by the LTTE when the private sector transported goods from the south to the north is in fact against the governing structure of a country, leaving aside the perspective of economic terrorism.

The stifling of the agricultural and dairy industries in the north east economy was very evident as, in the time of peace dividends 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%.

As per the World Bank statistics, even though this growth did not have a major impact on the national economy, the fact remains that this is the opportunity cost can be termed economic terrorism.

Economic terrorism – Quality of life

The 2003/2004 Socio Economic Indicators report that the access to pipe-borne water in the Northern Province is 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 the east, a staggering at 29.2% whilst the national average stands at a respectable 5.6% which again is a result of economic terrorism from a quality of life perspective 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 drops to 33.8% and in the east to 40.3%, which can directly be reflective to the health gaps in these regions that helps foster the ideology of terrorism, is what research reveals. Some say that this was the ethos of the LTTE Leader so that the ideology of terrorism can be diffused quicker in the community.

If we examine the key health indicators as per the 2003/2004 Socio Economic survey data, we see that almost 46% of the children below five years of age in the north east were underweight compared to 29% of the rest of the country. The percentage of babies born underweight in the country is around 18%, but the reality is that in the north east it is as high as 26%.

On the area of access to electricity and communication, the north and east emerge as a clear underdeveloped region due to the fear that the LTTE had created for businesses to operate. The connectivity through mobile and land phones are at a low ebb of 10% in the north and 15% in the east as per the 2003/4 census.

Even though the penetration of electricity is at a high 64% of the households in the north east, in-depth research reveals that in remote areas of Kilinochchi, Mannar and Mullaitivu, the non-availability of power can reach a figures as high as 90% as infrastructure development was next to impossible at that time, which can give us an idea of the deprivation and isolation that existed during that time which was ideal to foster a terrorism culture in a country.

Real economic terrorism – Over $ 200 bill

However, if we analyse the real cost of waging war on the LTTE that really amplifies economic terrorism is that the number exceeds Rs. 20,000 billion in the last 24 years, according to my estimate.

On tourism in 1983 Sri Lanka enjoyed 337,530 visitor arrivals whilst a country like Cambodia had around 200,000 tourists at that time. Today Cambodia have over two million tourist arrivals whilst Sri Lanka is at around 0.5 million with a revenue of Rs. 43 billion whilst actually Sri Lanka should have had around 1.8 million tourists by now (at a conservative estimate) and earnings touching Rs. 200 billion. On a GDP contribution basis it would have contributed almost eight per cent to the country.

The Strategic Foresight Group which has researched this topic on the theme cost of the war in Sri Lanka has estimated through a simple extrapolation that the loss of revenue due to the curtailment of FDIs into the country is around Rs. 3,000 billion, which stacks up to the economic terrorism number that I have highlighted above.

Economic terrorism – R&D

If we hypothetically take the Rs. 400 billion that that has been spent on the war in the periods 2006-2009 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% spent by developed countries like South Korea on innovation that has produced power brands like Samsung. This gives us an idea of the opportunity cost that economic terrorism has done to Sri Lanka.

International perspective

There are many theories globally on the cause of terrorism. Russel Ackoff, an emeritus professor at Wharton School of Business, designed to promote private businesses role in combating terrorism, says: “The basic problem that spurs terrorism is misdistribution of wealth within a country. The challenge is that we don’t understand how to close that gap that makes matters worse. Post the 9/11 terror attack in the US, strangely western politicians and policy experts have begun to drive in a correlation between terrorism and poverty. Much of the information points out to academic literature stating that poverty drives conflicts and this can lead terrorism with the administrative system in play.”

Next steps

1.Let’s use the 2012 national census to identify the geographical areas where poverty really exists and address them with a private-public partnership approach.

2.Fast track the setting up of the Atchuchuveli Industrial Estate in Jaffna and thereafter set the stage for similar estates in Kilinochchi and Mullaitivu so that we make sure economic terrorism do not ever happen in Sri Lanka.

3.The Divi Neguma programme can be linked to the Samurdhi recipients of the country so that we open up a new employment base that was not accessible to Sri Lanka and also spruces up the overall SME GDP growth.

4.Monitor the ground situation closely given that in 1983 Prabhakaran is supposed to have had only 12 cadres and eight shotguns but he went to build an army of 45,000 highly-trained fighters and sea and air fleet, which was termed the most ruthless terrorist organisation in the world.

(The author whilst studying for his doctoral degree was the Director – Economic Affairs of the Government Peace Secretariat in the President’s Office from 2007-2009. He was responsible for business development and economic growth in the north east during that tenure. The thoughts are strictly his personal views and not the views of the organisations he serves today in Sri Lanka or globally.)