Financial Times

Gazing into the crystal ball
The Sri Lanka Freedom Party (SLFP) alliance with the Janatha Vimukthi Peramuna initially sounded alarm bells amongst the business community and the Colombo bourse.

But by the end of the week, there were lesser fears expressed and in some cases businesspeople saw some positive signs out of the initiative. The Colombo bourse showed some gains while one stockbroker noted that the ruling United National Front may now consider seriously working with the President on the peace issue because of pressure from a powerful alliance.

Much as it would like to, the JVP is still unable to dust off the 1970s and 1980s baggage of a revolutionary group that tried to oust the government through bloody armed conflicts. Questions still keep popping up about their past though in fairness to the group, every effort should be given to encourage the organisation towards the path of parliamentary democracy which it has so far embraced. The uncertainty however persists because of the JVP's militant control of unions in the private sector, which is clearly evident despite the repeated denials by the group.

The JVP trade union has spread its tentacles across corporate Sri Lanka and has led some crippling strikes in some companies in the past including Unilever and Munchee.

An interview with the group's charismatic parliamentary group leader (see below) reveals much more than a hint as to its policies towards to the economy and business. Some proposals are indeed pragmatic - like the plan to invite expatriate Sri Lankans to invest in the re-engineering of local industry.

The JVP appears to have won the hearts of at least one section - small and medium scale industrialists with their policy of encouraging and driving local industries with protection against imports. Previous governments have failed to adequately support local industry against the plethora of some types of imported goods that could easily be produced locally. The JVP is said to be seeking the agriculture and industry portfolios in the event of a SLFP-JVP government being formed.

Dozens of local firms have failed in recent years with their properties seized by banks for non-payment of loans. Hundreds have lost jobs. While some companies may have crashed for bad business decisions or directors fleecing the companies, there are the genuine ones which are rightly annoyed because while their businesses have often failed for external reasons, big-time defaulters linked to politicians and big business interests get away with loans being written off without a fuss!

Small business interests have faith in the JVP ability to handle the economy in ensuring a level playing field. Two other issues the JVP may be able to mobilize support from the business community are corruption and law and order. Given its strict discipline and no-nonsense approach, the JVP is seen as possibly the only political party capable of wiping out corruption in society, ensuring good governance and eradicating violence in our culture. These are steps that the business community has urged governments to do but not met with much success - even under the current pro-business UNF regime.

Little is spoken about the SLFP's economic policies because of its pro business policy when last in power and also being pro-privatisation. Alliance spokespersons have given an indication that the economic policy would constitute the "right" mix of SLFP and JVP strategies.

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