Abrogating the CFA was a foolish move-Biz leaders

While political parties are divided about whether the Sri Lankan economy benefited from the 6-year CFA many business leaders say abrogating it was a foolish move.

Confifi Group Chairman Prof. M.T.A. Furkhan said the CFA did not make much of a difference on the ground. “Regardless of the CFA, the violence carried on, but since the CFA was theoretically on paper it had a certain positive impact on tourism,” he said.
However he said that abrogating the accord was a foolish move. “I cannot understand why we removed the CFA, because it did not mean a thing. By removing the CFA we have antagonised the international community and we will suffer as a result. It was a foolish move to remove the CFA as there will be serious consequences to the entire economy.”

Wimal Weerawansa, JVP Propaganda Secretary told The Sunday Times FT that during the CFA there was a war situation. “Abrogating the CFA does not mean the war situation will increase,” he said. He asked why the people of this country in 2004 defeated the government which entered into the CFA, if there was a ‘so called thriving of the economy’. “Our economic situation is not running on a positive note for a long time – even before the CFA. We need to first defeat the LTTE and then change the economy. We have to face the difficulties on the short term and defeat the LTTE, after which we can develop the country,” he pointed out.

Udaya Gammanpila, JHU’s Legal Advisor, said that the CFA had short term economic benefits to the country, but in the longer term it did not have any impact. “The CFA has been in existence only for 15 days. On February 22nd, 2002 it was signed and ceasefire started immediately, but on March 9th, 2002 an army informant was shot by the LTTE. The ceasefire was a unilateral one where the army adhered to and the LTTE on numerous occasions blatantly broke it,” he explained.

Gammanpila noted that on July 29th, 2006 there was no de facto ceasefire with the Mavilaru operations being launched. “The dejure ceasefire where the CFA was only a piece of paper ended on January 17th, this year. Due to this there is no significance in abrogating this CFA – it is only a legal implication.” He said that JHU is of the stance that the government decision to withdraw from the CFA was not prudent. Gammanpila retreated that the government has achieved ‘nothing’ by abolishing the CFA. “On the other hand the government has unnecessarily antagonised the international community, resulting in undue pressure regarding human rights issues and a political solution to the LTTE problem. JHU strongly believes that the LTTE should be defeated military and for this the country depends on foreign sources from bullet to rocket,” he added.

He said that above all foreign aid plays a vital role on economic stability. “If we do not curtail the cost of living, political parties like the JVP will launch strikes and protest marches disturbing the government’s war focus,” he said.UNP General Secretary Tissa Attanayake pointed out that the CFA was signed when the economy had deteriorated beyond repair.

“The ships and aircraft which used our port and airport had to pay a huge insurance premium due to the war risk. For the first time in history Sri Lanka had recorded a minus growth at the time. Tourism was virtually stopped,” he said adding that within the first one and a half years of the CFA – that is between February 22, 2002 (when it was signed) to November 3, 2003 when the UNP went out of power -- we saw a remarkable change in the situation,” he said.

He noted that the LTTE is not an organisation which respects the law. “That is the reason we brought in Sri Lanka Monitoring Mission (SLMM) to monitor the ceasefire agreement. CFA did not bring peace, but it gave an impetus for discussions with the LTTE in order to curb their unlawful activities,” he said

Ashok Pathirage, Chairman Softlogic Group said that there was an economic benefit during the initial period of the CFA. “People had more confidence in the country – especially for investing, but later on the CFA was just a piece of paper,” he added.
However he said abrogating the CFA has sent negative signals to foreign investors. “Now it is a wait and see approach from most of them.”

Mangala Yapa, Managing Director Colombo Dockyard Plc noted that certain businesses would have thrived with an indifference to the CFA and that the ceasefire may not have impacted those businesses. “Some ask peace at what cost and my personal belief is ‘peace at any cost’. Once you have this pre-requisite you can put all others in place,” he added.

“It all depends on how we manage the situation at hand. Peace is a pre-requisite for businesses, but it all depends on ‘how’ it is implemented,” he said. Yapa said even during the war, there are businesses which thrive. “So businessmen need to manage their businesses in a war situation. Also we cannot always expect a booming stock market for an example. There are also recessions,” he pointed out. Prasanna Jayewardena, Chairman Tropical Pleasure (Pvt) Ltd pointed out that it is incorrect to take the entire six years of the CFA as it is. “You cannot take your kindergarten, middle schools and university together, because they are parts of your education. CFA during the first couple of years was very beneficial to tourism and maybe other businesses because there was no war situation in the country. When the UNP was in power the talks failed and Prabhakaran started killing,” said. He noted that after the first euphoria of two years on to the CFA, the Norwegians became Sri Lanka’s big brother. “Together with the Norwegians the other Caucasians who also wished to continue the big brother practice which they had done for 500 years in this country tagged along. As soon as the new government was elected by the people, the big brothers and the LTTE turned against the government, while the LTTE started their killings. They thought they can terrorise the President and the government thinking they could dictate the course of this country. As such there was no purpose of having that CFA,” he said.

“I feel the CFA is immaterial to the existence of businesses,” he added.Nimal Perera, Managing Director Royal Ceramics Limited (ROCEL) pointed out that abrogating the CFA is a good thing as it lets the government ‘go in one direction’. “Controlling a terrorist organisation and getting them to keep to a CFA is impossible,” he added.

He pointed out that the CFA and economy in this country are not co-related. “ROCEL has done the highest ever turnover in 2007 in the month of December and it also recorded the highest profit for that year in December. If the economy is not doing well, how can we be doing well? The CFA never factored in to businesses during the last six years,” he said.