Young
business leaders plea
Peace, stability to do business
By Feizal Samath
Despite hectic efforts by Sri Lanka's senior business leadership
to resolve the current political crisis, the country is heading
for a turbulent period in the next three to six months, according
to private sector economists and young business leaders.
There are indications
that even if the spat between President Chandrika Kumaratunga and
Prime Minister Ranil Wickremesinghe is resolved, the uncertainties
will continue given that 2004 is an election year with provincial
polls due on a staggered basis. Kishu Gomes, managing director at
Caltex Lubricants Lanka, says the economy and industry is unlikely
to grow in the first six months of the new year. "That's my
reading of the situation. It would be turbulent and there would
be some kind of disarray," said the young corporate chief and
winner of the young director of the year award.
Gomes, also
president of the American Chamber of Commerce in Sri Lanka, says
his argument is based on the fact that for the first four months
of 2003, there was a good growth which was not maintained through
out the rest of the year. Most industries in the second half have
shown flat growth while the real impact of the current political
crisis could only be seen next year.
"I cannot
see the trend (industries showing flat growth) changing in the short
term," he noted, however adding that a permanent solution to
the cohabitation crisis is likely to emerge in the first half of
the year - due to pressure from civil society and the business community.
Pravir Samarasinghe,
director at Richard Peiris & Co and CIMA president, said he
wished for peace and political stability in the country which unfortunately
may not happen in the short term. "Before the present political
crisis we (RPC) were bullish on the economy and looking at investments
in real estate and leisure. These are now on hold."
He said elections
would send interest rates and government borrowings up and hurt
macro economic targets. "There would be a two-three month period
of stagnation (after polls)." Jeremy Carter, the IMF senior
representative in Colombo however believes that the economy would
grow as long as the peace process continues. Asked about uncertainty
over clashes between the two governing leaders, he said: "Well
that's an issue that Sri Lankans need to decide (sort out)."
He also rejected
reports and statements made by government ministers that disbursements
of the $4.5 billion pledged at the Tokyo donor meeting have got
stuck in the political quagmire. This year at least $1 billion in
donor money would have been received by the government, he said
adding: "The ADB is disbursing funds, the World Bank is disbursing
money, the IMF is disbursing money and even the Japanese government
is providing funds." However he said disbursements would be
faster if the tempo of the peace process rose.
Central Bank
Economic Research Director Dr. A.G. Karunasena said the economy
was expected to grow by six percent but such growth would also depend
on progress in the peace process. GDP growth this year is expected
at 5.5 percent. |