is no deterrent
again the talk in the private sector is how the latest political
uncertainty is affecting business activity and damaging the economy’s
Every time political uncertainty rears its head in this country
our corporate sector, or at least sections of it, plays the same
record. “Nothing is happening” is a remark that is heard
very often in business circles every time some crisis or the other
shakes the government.
latest one, where the JVP has quit the ruling coalition, is no different
and the talk is how economic activity has slowed down and decision
making stalled. Now it is true that political uncertainty, or uncertainty
of any sort, affects investor sentiment adversely and makes it difficult
for corporate decision making. But we have been living with regular
bouts of uncertainty for so long that it is almost the norm now.
This country has been lurching from one political crisis to another
for much of our recent collective memory. In fact it could almost
be said that we’re a nation of political crisis junkies getting
high on uncertainty because we have been living with recurring bouts
of uncertainty ever since the ethnic riots of July 1983, which triggered
what now appears to be a never-ending series of crises.
latest crisis has taken its toll of the markets and stock market
activity has fallen to abysmally low levels. Brokers do not anticipate
any significant turnaround in trading activity given the prevailing
uncertainty and the fact that we now have a minority government.
A comment by a broker, Asia Securities, sums up the situation nicely.
“In this political quagmire, the only certainty is that the
uncertainty is likely to continue,” they said in a report.
However, not everything is doom and gloom. Amidst all the uncertainty
and talk of the government toppling with the withdrawal of the JVP,
those investors with a long term view are continuing to invest.
A good example is what we now know as Sri Lanka’s most profitable
company, Dialog Telekom, which in just a few years has begun generating
super profits that exceed even those of our most venerable blue
chips who have been in business for over 100 years and trace their
roots to the colonial era.
Malaysia, the parent company of Dialog Tekeom, is ready to invest
additional US $ 100 million within next two years to ensure the
island-wide coverage despite the political uncertainty.
joint mechanism issue that has rocked the government has received
the formal support of the business community. The J-Biz, or Joint
Business Forum, which represents much of the organized business
sector, has once again reiterated its support for it and has expressed
satisfaction over the firm stand taken by President Chandrika Kumaratunga
and opposition leader Ranil Wickremesinghe in their support for
implementing the scheme. J-Biz has commended what appears to be
some level of bipartisan consensus on the issue and said that the
scheme, now called P-TOMS, would create a conducive environment
for the resumption of peace talks.
this uncertainty and talk of crisis is happening while the words
of former Malaysian premier Mahathir Mohamad – of the importance
of political stability for economic growth - are still ringing in
had his own way of ensuring political stability and there are many
who have reservations about the manner in which he did so, however
much they may admire his economic achievements. We have no option
of adopting similar methods. So it looks like we will have to live
with the uncertainty for the foreseeable future. That means the
private sector simply has to get on with it, instead of complaining.