Did the CFA help Jaffna grow?

Ananth Palakidnar, President of the Tamil Media Journalists Association said he doesn’t think the CFA caused any real difference in the economy of the north. He said that now, after the abrogation, although it cannot be said that Jaffna is growing now, it is certainly “stable”.

The CFA, he said, did not make a significant difference to agriculture. According to him, for the inhabitants of the peninsular, agriculture is an integral part of life and living. “For them the war is a real menace,” he says, adding that the main problem for farmers in Jaffna has always been finding ground-water supplies. He says that even before the war, when the South was going through the dark period of the 1970’s JVP insurrection, the peninsular farmers held their own. With the CFA coming into play, the situation improved in the form of costs of fuel, fertilizer and machinery reducing, especially because transport became smoother.

However, “CFA or not, he (the Jaffna farmer) can do wonders,” he insists. According to Palakidnar, the crop of Jaffna paddy produced last year was “remarkable” and the farmers have already moved on to attempts at producing up-country vegetables, since it is difficult to get the vegetables from the South. On the economy, he says that most banks that operate in other areas of the country exist in Jaffna town as well, since as he says “Jaffna people are very saving-oriented”. That, combined with the inflow of cash into Jaffna from all parts of the world ensures that the banks stay in place, he says. “Jaffna is very stable.”

Another senior Jaffna journalist who did not wish to be named for security reasons, told The Sunday Times FT by telephone from Jaffna, that the opening of the A9 highway was the significant post-CFA decision that had the most beneficial economic impact in Jaffna.

Sector-wise he outlined the spurt of growth that Jaffna saw during that period. The opening of the transport sector was the spearhead. Pre-CFA travel between the North and South of the island was dangerous and mostly confined to exorbitantly-priced air travel. Post-CFA, travel was far easier.

He said, in terms of agriculture, traditional food stuffs of Jaffna like bananas, grapes, chili and tobacco that are grown in the North could be taken directly to the South for trade, minus a middle-man. “When the CFA came in, they were able to do as they were doing 25 years ago without the war”, he says. The middle-man complex was eliminated in most cases of retail and trade.

The second main profession of the peninsular is fishing. According to the source, the pre-CFA period hit the fishermen most strongly as sea excursions were limited and strictly monitored by the Sri Lankan Navy. The CFA literally opened up the seas for the fisher folk to reintroduce to Colombo the prawns and crabs that Jaffna is famed for.

The construction industry grew, as helped along by loans from the government agencies and relatives, many damaged houses were re-constructed. This in turn fuelled employment. In and around Jaffna town, news traveled mainly on foot or by bicycle during war time. When the A9 opened, the telecommunications giants in the South took their operations north, resulting in telephones and mobiles in almost all the houses in Jaffna now. Even the inflow of fuel saw an unprecedented high, he says. He revealed that a certain businessman was transporting 3 or 4 tanks of petrol daily along the A9 into the peninsular.

Beside all this, the north of the island saw a mass movement of people - to the places of worship, to the beaches, to the hot-springs and to the small islands flocked Sri Lankans and tourists alike. “For us who live here (Jaffna) we couldn’t believe it could be like that,” he enthuses.

However, he emphasizes that more than the abrogation of the CFA this year, the closing down of the A9 in August 2006 brought “everything back down to point zero”.

Bishop of Jaffna, Bishop Savundaranayagam had the same thing to say. “Consumerism increased and more people started profiting”. Speaking about telecommunications, he said that it was an unprecedented spurt of forward growth. “Cell phones became popular. Even people who couldn’t afford land lines bought mobile phones”. He too pinpointed the A9 as the crucial point of the ceasefire and lamented its closure, saying that it meant the closing of the “initial link” for many other things. “Even if they abrogate the CFA, they should open-up the A9” he said.

A retired teacher in Jaffna was convinced otherwise. Although he allows that there was an “improvement” in the overall situation, he says the only significant difference was that the prices of the goods available in the North fell considerably, post-CFA. “The government provides the essential goods here so we have no problem, it is only that the sellers increase the prices”, he says.