Financial Times

Weakness in handling crises
Sri Lanka is a country that has lurched from crisis to crisis virtually without respite for the past two decades, and which could rightfully claim to have a wealth of experience in handling a wide variety of unpleasant shocks to the system. But the response of the authorities to the latest crisis - the suicide bomb blast at the Kollupitiya police station - shows how inadequately prepared we still are.

In the first place, while the security guards of Douglas Devananda did a good job in preventing the suicide bomber getting access to him, the response of the police from then on appears to have been rather careless in that they failed to secure the suspect and prevent the blast.

The government's response is also seen as being slow and inadequate because news of the blast and reactions and speculation about its repercussions were broadcast to the world almost instantly. The government held a news conference only the next day - almost too late in today's environment of instant news where virtually every second is a deadline for the wire services and TV channels.

This country has survived much bigger shocks than this such as the devastating attack on the Katunayake Airport in July 2001. As one of our columnists says elsewhere in this section we have been described as a country of 'crisis junkies'.

It is only in the last two years, since the ceasefire was signed, that we have had some relative peace and quiet, and other countries, notably Israel and Iraq and the USA, began to go through the same trauma caused by suicide bombings we went through.

We also seem to have a strange knack for shooting ourselves in the foot as demonstrated by the way we have handled numerous recent crises such as the Karuna affair and the exposure and killing of intelligence agents. The government's handling of such situations have given an impression of incompetence and bungling and would be closely watched and noted by investors, especially foreign ones who are no strangers to operating in Third World conflict zones. A more professional response to such crises is required to counter the alarmist reactions and speculation that inevitably follow such incidents and create unnecessary fear.

The government already has its plate full what with its inability to secure a majority in parliament, the peace process locked in a stalemate that apparently cannot be broken because of the intransigence of the LTTE and a looming budget crisis as the government struggles to find the funds required for its increased spending. Having to cope with added security problems would only make matters worse.

The attack undoubtedly was part of the Tiger pressure tactics. Apart from wanting to get rid of one of their main opponents in the form of Devananda, who is supporting the breakaway Karuna faction, a combination the Tigers rightfully need to be worried about, the LTTE would also have wanted to raise the stakes in the peace process. Isolated attacks of this nature, if they continue to happen and form a pattern, would serve to undermine what little investor confidence remains in this country.

As it is such confidence is at a low ebb, given the deadlock in the peace talks. Further attacks could undermine confidence even further, increasing the pressure on the government.

Fortunately, the market reacted in a fairly mature fashion - a positive sign most brokers feel. Investors have got used to these hiccups in the peace process. After the initial shock of the blast triggered panic selling, the market recovered the very next day as realisation sank in that a single incident like that would not jeopardise the peace process.

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