Business booms as guns fall silent, embargo lifted

By Nilika de Silva and Faraza Farook

The flow of traders to the Wanni region, which is still officially described as an uncleared area — meaning an area under the LTTE control — tells a story of how hundreds of thousands of people had been denied of certain basic essentials in the name of fighting a war against terror.

Crowds queue up at the Bambalapitiya Lion Air office to book flights to Jaffna

Following a mutual ceasefire that came into force on Christmas eve, the Ranil Wickremesinghe government, relaxed the economic embargo in the north on January 15, setting off a sudden demand for goods with producers and distributors in other parts of the country struggling to meet it.

The opening of the Piramankulam checkpoint — the gateway to Wanni — and the setting up of another entry point through Mannar for flow of goods have made a major impact on the economy that its effects are also felt in Colombo, some 150 miles south of Wanni.

Since January 15, traders have been visiting the North including uncleared areas to asses the ground situation to establish their businesses there while some have already cashed in on this opportunity. 

Bicycles which have been the main transport mode in this region are one of the most sought after products, prompting traders to send in larger quantities. 

City Cycle Industries Marketing Manager M. R. M. Naqeez said the demand was so great that they were running short of stocks. 

It is not only bicycle dealers who are rushing to the north, but traders who deal in products ranging from shoes and boxes of matches to pharmaceuticals and milk products are making their presence felt in a big way. Not to be left out, banks are also exploring the possibility of setting up branches in the north, including the Wanni region.

Multinational shoe giant Bata says it has already recorded a 10-15 percent increase in sales in the north.

Bata Marketing Manager M. I. Sameen said the company was hurriedly drawing up plans to expand operations in the north.

"We visited our old representatives and the old distributors last week. We are carrying out renovations at our stalls and repainting the sign boards," he said.

Ceylon Chocolates Ltd. Marketing Director R. Udawatte said his company had already started sending large quantities of chocolate to the uncleared areas. 

The Hatton National Bank, which already has branches in Jaffna, Mannar, Trincomalee and Vavuniya, hailed the relaxation of the trade embargo, predicting the move would have a positive impact on the low level of business. 

The bank's chief executive officer, Rienzie Wijeyatilleke, said more offices would be opened in the region to meet the new demand for financial services.

"If Jaffna gets active, there will be an immense benefit to everyone around," Mr. Wijeyatilleke said, adding that the Pettah market had virtually been in slumber during the period the embargo was in force.

Sun Match Company Director, B.D.R. Rajan said his company had been getting several calls from traders in the north since the embargo was lifted. "The demand is increasing," he said.

Osu Sala already, which has several distributors and franchise outlets in the North and East, is also taking steps to expand its operations in the uncleared areas, according to Marketing Manager E.S.M. Samuel.

P. Sundaram, president of the Old Moor Street Traders Association, said a large trade delegation would visit Wanni and other parts of the north on January 26 to establish businesses contacts there.

Mr. Sundaram, a dealer in dry rations and poultry feed, said he intends to make available his items through cooperatives while setting up his own business outlets in the region.

The new surge in the economy will not only be reflected in the goods being distributed and sold in various parts of the country, but also in the jobs created in transport, storage and other middleman services.

Economists said the north-south business link would benefit not only people of the north, but also of the south with prices of fish, onion, chillies and other agro and marine products dropping drastically.