Ilankai Tamil Sangam

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Association of Tamils of Sri Lanka in the USA

Purchasing Power

by Peter Ratnadurai, August 24, 2009

The EU and US, which make up around 70% of Sri Lanka's foreign currency income, are at the heart of the MNCs flocking to Sri Lanka.

Unlike, for example, Zimbabwe, Sri Lanka has no commodities that have large markets in India or China. The Sinhala state depends primarily on exports of garments to EU and US, as well as gems, tea and rubber exports, and tourists from the same countries. It is also hoping to win over Business Process Outsourcing (BPO) contracts from small niche markets in the same. In addition, EU and US also pump in a large amount of money in aid and direct cash investments.

India and China are two stalls at a market. Sri Lanka is looking to spend. Both the Asian giants are doing their bit to court the customer. Before we blame the stalls for selling goods to Sri Lanka, let's ask how the little Sinhala state got hold of so much cash.

This week, TamilNet featured an article on the role of Indian and Chinese Multi National Corporations (MNCs) in “reconstruction” efforts across the island. It was based on an in-depth analysis by Forbes India, a business magazine, on investment opportunities in Sri Lanka.

I feel that TamilNet's critique may well be misleading for many in the diaspora. MNCs have to be seen for what they are: vultures that scavenge on carcasses, but seldom kill. On the scorched earth in Vanni, and elsewhere in the island, these vultures see a hideous accumulation of carcasses, which, however revolting to us, is food for them.

Forbes India mentions that Indian Telecom giant Bharti Airtel is the first major investor in Sri Lanka. Airtel is looking to make money; there are a lot of people in Sri Lanka willing to spend. As a favour for doing business in Colombo, it will have to heed to government requests to make the service available elsewhere in the island. The company makes no bones about ethical standards; therefore, it is unlikely to pay attention to the concentration camps.

I've made a habit of writing on Sri Lanka's garment industry. For that, I have sound reasons: exports of garments to EU and US accounts for more than 25% of Sri Lanka's foreign currency income. Even the traditional tea, gems and tourism combined do not account for such a large chunk.

The EU and US, which make up around 70% of Sri Lanka's foreign currency income, are at the heart of the MNCs flocking to Sri Lanka.

Unlike, for example, Zimbabwe, Sri Lanka has no commodities that have large markets in India or China. The Sinhala state depends primarily on exports of garments to the EU and US, as well as gems, tea and rubber exports, and tourists from the same countries. It is also hoping to win over Business Process Outsourcing (BPO) contracts from small niche markets in the same. In addition, the EU and US pump in a large amount of money in aid and direct cash investments.

Back to Airtel; why is the company in Colombo? Because there are lots of people who can and will pay for new telephone subscriptions and spend cash on calls. They can do it, because they are employed and paid by exports or services sectors supported by the West.

There really is one simple way to stop MNCs from running to Sri Lanka, and encroaching on the Tamil homeland: deplete Sri Lanka of cash. If Sri Lanka has no money to spend, the MNCs will stay well away.

That means, starting at the source of the cash supply. They are the GAP, C&A, M&S, La Sanza and Victoria's Secret stores dotted across Europe and North America. With the exception of a few Tamils in the US, many in the Diaspora are still oblivious to the role played by these retail giants in allowing Sri Lanka to maintain its offensive posture against Tamils, and in attracting Indian and Chinese MNCs to exploit the Tamil homeland.

The old saying "for a talented person even a blade of grass is a weapon" has to be revisited by the Diaspora. In the post-military conflict era, the Global Tamils Forum and the various country specific Tamil organisations in Canada and the European countries must take the initiative to tackle Sri Lanka's economic foundations, which are Western clothing retailers.