Luring Investors to Sri Lanka’s Former War Zones

by Anuradha K. Herath, AllVoices.com, April 20, 2010

After military operations in Sri Lanka’s three-decade long war came to an end last May, one of the primary barriers to development in the former war zones in the north and east was movement. Travel restrictions and a continued military presence kept investors away and skeptical that their businesses could thrive in the seemingly unstable regions.

The first four months of 2010, however, have seen measurable improvement. Checkpoints are being removed, roads are being repaired and security is being relaxed. The focus now is on jump-starting the economy by introducing programs targeted specifically at attracting investors to the war-affected regions.

The U.S. Agency for International Development (USAID) announced Tuesday a new program partnering with the private sector. Through collaborations with five local businesses in the north and east, the program is hoping to create 5,000 new full time jobs in former conflict areas.

USAID will be investing $5 million in the project while the private sector will invest an additional $12 million in sectors such as aquaculture, apparel manufacturing, logistics and horticulture.

“USAID strongly believes that the private sector is the most important engine for economic growth in Sri Lanka,” said Mission Director Rebecca Cohn in a statement issued by the U.S. embassy in Colombo.

Many of the country’s banking institutions are also showing interest in taking their services to these new customers. In February, HSBC became the first foreign bank to open a branch in Jaffna, in northern Sri Lanka.

In a message on the company web site, HSBC CEO for Sri Lanka and Maldives Nick Nicolaou said, "This will bring a truly global banking experience to the people of Jaffna, and we are very much looking forward to participating in the vibrant post-conflict economy that is developing there.”

At the opening ceremony of the new HSBC branch, Central Bank Governor Ajith Nivard Cabraal said, “HSBC’s global reach and connectivity will facilitate financial transactions of the Sri Lankan Diaspora, while HSBC’s presence in the Jaffna Peninsula could also assist the international investors to invest in Jaffna.”

According to the Central Bank, it has recently granted approval to a number of other banks to open new branches in areas in the north and east, most of which were formerly controlled by the Liberation Tigers of Tamil Eelam (LTTE), an armed group that fought for a separate state.

Another move to strengthen trade relations was the Jaffna International Trade Fair that was held April 18-20, giving an opportunity for the business communities in the north and south to build better trade links. The trade fair, titled "Your Gateway to Yarlpanam (Tamil word for Jaffna)" was the first exhibition of its kind in the region and attracted approximately 200 manufacturers, including several from India.

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Indian aid to assist Jaffna's development

by Sunday Observer, Colombo, April 25, 2010

India is looking forward to revive the air transportation between Jaffna and destinations in India, along with beginning a passenger ferry service, Indian envoy Ashok K. Kantha said.

Speaking at the opening of the Jaffna International Trade Fair last week he said that Jaffna was traditionally rich in fisheries, livestock, agriculture and agro business and most importantly in human recourses.

"These opportunities have once again opened up, creating numerous openings not only for Sri Lankans but also for Indian companies," he said.

He said that the recently concluded Jaffna International Trade Fair was a golden opportunity towards the revival of the Jaffna business sector.

He also said that a proposal to redevelop Atchuveli Economic Zone has been forwarded to New Delhi. "I am following up on this".

He said that the government, private sector as well as Indian government would have a major role to play towards rebuilding the infrastructure and help bring back prosperity to the North and the East.

The Indian Prime Minister Manmohan Singh has already pledged Rs. 12.5 billion to meet this objective. India also provided a mobile hospital which treated over 50,000 patients while over 250,000 family packs too were distributed.

In addition 40,000 families were provided roofing material and over 400,000 bags of cement were provided to over 40,000 families under this program.

He said the Indian government has now shifted gear and is assisting in the reconstruction and resettlement process.

"Assisting in the housing sector especially in Kilinochchi and Mullaitivu area too is a priority of the Indian government while vocational training is another aspect we would look at.

"We would also consider developing the cultural aspect and is planning to redevelop the Alfred Duraiyappa stadium in Jaffna," he said.

"Infrastructure too is one of the Indian government's priorities. We are assisting in rebuilding the railway line to Jaffna. Extension of railway line from Jaffna to Talaimannar and also to Omanthai and Palali are also other priorities.

The Indian government has already provided US $ 25,000 million for this and in addition two Indian companies are directly involved in the rebuilding process. "We will provide more assistance as and when needed," he added.

The building of the railway will also create much opportunity for the local contractors.

Kantha said that they are also happy with the developments taking place in the Kankasnthurai harbour and Palali airport."

We hope very soon there would be a ferry service starting from KKS to India and flights taking off from Palali to South Indian destinations," he said.

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Govt asked to tackle unemployment in Jaffna

by Zacki Jabbar in Jaffna, The Island, April 23, 2010

Around 200,000 young persons in Jaffna are unemployed and the government needs to take urgent remedial action to resolve the problem, President of the Chamber of Commerce and Industries Yarlpanam K. Poornachandran said.

He told The Island on the sidelines of the inaugural Jaffna International Trade Fair, which concluded on Tuesday at the Jaffna Central College, that unemployment and issues such as the high cost of living, have to be speedily addressed, if the end of the war was to be meaningful.

Poornachandran said that they have sought Indian assistance to establish an Industrial Estate in Achuveli. "Sri Lanka has enough resources stretching from Point Pedro to Dondra. Our aim is to bring in as many foreign and local investors into Jaffna. They will be encouraged to establish Joint Ventures that can spur economic development."

Asked about his impressions of the inaugural JITF, Poornachandran said that the response of the business community and the Jaffna public was tremendous and exceeded all expectations.

"Over 50,000 people visited the fair over three days. It is undoubtedly the biggest trade exhibition to be held in Jaffna. With over 200 foreign and local industrialists, entrepreneurs and manufacturers participating in JITF, it has given us hope and encouragement for the future," he said. "A wide range of items including construction material, food processing equipment, industrial plant and machinery, agricultural and consumer goods and apparel and accessories were snapped up in no time."

Infrastructure was very poor in Jaffna, but despite all the constraints Lanka Exhibition and Conference Services the Federation of Chambers of Commerce and Industry of Sri Lanka helped us to host JITF, he said.

Jaffna Government Agent K. Ganesh said that the peninsula had moved to a post conflict situation and it was the duty of all concerned to work hard, so that the people can regain their normal lives after decades of misery.

"Industrial production has to reach levels that were witnessed in the pre war days, if Jaffna is to develop rapidly. The organizers of JITF ,have to be congratulated for making it possible to host the event, after about six months of preparation."

President of the FCCISL, Kosala Wijetillaka said that JITF had opened up avenues for the development of Jaffna.

"FCCISL, as the apex organization of the private sector gave all assistance and encouragement possible for JITF," he said. "The message is now very clear. Jaffna is open for business and it is for investors to make the best of the opportunities available."

The three day event was jointly organised by Lanka Exhibition and Conference Services, the Chamber of Commerce and Industries Yarlpanam and Lanka Exhibition and Conference Services.