By Kumar David –

Prof. Kumar David

Industrial and agricultural development prospects seem bleak: What options for Jaffna economic revival?

Sometimes countries rise phoenix like from the ashes of devastation and war; the best known are Germany and Japan after WW2. Others like post-crisis Central African basket-cases remain depressed basket-cases. The Northern Province, unlike the East which is picking up smartly is near the bottom end of the spectrum. I spent the last three days in conversation with a Tamil businessman-entrepreneur who is keen on “doing something” to revive the North, especially the Jaffna Peninsula, two concerned Sinhalese (an academic and an NGO person) and a Colombo ex-businessman all of whom are keen to see real economic activity in the North. While you are reading this I will be in Jaffna with a group which will conduct a three day study, led by local activists, to get hands on experience. The purpose of this piece is to say that so far the scene is depressing; it seems difficult to get anything moving. The worry is not the army or the government, though that side is not encouraging. It is that stuff has happened in the last thirty years during the war; conditions have changed so much that to pull oneself up by the bootstraps and rise again is difficult. I need to explain carefully.

KKS and environs

Lest anyone get the impression that I intend to whitewash the military and the state let me spend a few paragraphs explaining their deleterious effects. The army first; it has surrendered a portion of the occupied territories. I am not sure if the figures provided by anyone can be trusted so let me stick my neck out and say that about 30 to 40% of occupied lands have been returned. The point however is that the choicest pieces are still in army hands. Two types of land are not returned; the best agricultural lands and chic houses and mansions. The latter are occupied by military brass; spacious homes with nice toilets and fittings. Brass enjoying an uninvited sojourn in other people’s homes is not going to give up privileges without a fight – President Sirisena note. Top quality pieces of real estate have been turned into holiday resorts and circuit bungalows to earn bucks, or for the enjoyment of top brass.

The beneficiaries of occupied agricultural lands are the ranks. Produce is marketed and a tidy profit earned. I don’t know how it is shared. Produce from these lands is sold well below the price that the local farmer asks, so he is going to the wall. The manpower ‘cost’ of army labour is zero, or rather you the taxpayer pays, and there is no way a farmer who has to feed a family can compete against fully remunerated labour. Soldiers collect a salary from the taxpayer and a reward from agricultural business. This arrangement of the military commandeering the choicest houses and engaging in business is known the world over. In Egypt the military is the country’s largest business empire and monopolises key product lines. In Egypt as in Lanka tall stories of national security are bunkum; its just money. I was amused by the lacklustre labours of Minister Swaminathan on BBC (or was it Al Jazeera) explaining that there were “certain technical reasons” why return of military occupied lands was held up. Financial gain is a funny version of technology that my Engineering Faculty professors failed to enlighten me about!

I don’t know whether Commander in Chief President Sirisena is naïve and swallows “security concerns” fairy tales served up to him. He would do well to visit Jaffna in mufti with a civilian escort and insist on entering occupied lands and homes without notice. He will be in for a big surprise. Both he and the PM know that the security yarn is a cloak for business gains salubrious vacations. But both fear that they are powerless. This is false; the Gotha-Mahinda rump in the army is not capable of mounting an extra-constitutional challenge to elected institutions.

The foregoing is by way of a lengthy introduction to my subject, which is that even if impositions and obstacles were removed the likelihood of agriculture flourishing is not high. One of my discussants put it pithily: “What annai, what all you are talking; where are the farmers; who is going to farm the land even if we get it all back?” And he went on to explain: “All those old farmers, all those buggers in komanam (loin-cloth) who made Jaffna’s onions and chillies, rice and tobacco famous, they are all dead, all gone; they do not exist now. These young fellows in their fancy jeans with cigarettes dangling from their lips, can you imagine them farming? They want motorbikes, desk jobs and Canadian papers. What annai you are dreaming?” (It sounds so much richer and more musical in Tamil).

And this sentiment is endorsed by others. The Jaffna farmer that we fondly remember is much depleted though I hope not entirely gone; times have changed, things have moved. I remember Oliver Goldsmith from school days “A proud peasantry, their country’s pride, when once destroyed can never be supplied”. The question then is this. Has the thirty year hiatus and social, material and commercial havoc wrought by war made harking back to the old days of past glories of Jaffna (Northern) farming an illusion? The concern is less serious with fishing. Notwithstanding the numerous impediments put in the way of the fishing community by the navy, the sea fortunately is a little too big to seal off. Let me mention though that the prohibition on fishing from the Mailaddy beaches is cruel and unjustified.

The scene is not much more encouraging on the industrial side. What projects are feasible in the NP? Restarting the KKS Cement Factory and the Paranthan Chemical Plant have to be looked into but to check out true feasibility they should be offered to private investors on fair terms. Let us see if there are takers? A project that has interested local and Indian investors is development of the KKS harbour where the biggest step, the breakwater, was erected before the war. A large Indian cement manufacturer and a local (Tamil) shipping entrepreneur are keen. The idea is to dredge the harbour to accommodate larger vessels, import clinker which the Indian cement tycoon will grind with gypsum, pack and release into the local market or re-export. The investment will be of the order of Rs 500 million and the Indian thinks it may be worthwhile. It will probably be a joint venture with a Lankan state owned port enterprise. Other customers will have access for a fee. There are so few doable industrial options in Jaffna that the matter is worth following up.

And this is the depressing point; there are not many credible industrial options. The government is pressing ahead with road building and the Palali Airport; infrastructure development is on the move but hard projects – manufacturing and agriculture – that will turn out tangible commodities are not visible. I inquired about the fishing industry only to be told that thirty years ago there were two or three merchants with large ice making plants, packing and transport facilities, who moved big consignments. They like the farmers are no more. And there seem to be no (not necessarily Tamil) businessmen who wish to invest in Jaffna. There is difficulty in identifying feasible industrial projects. As with farmers so with industrial entrepreneurs there is not much to do and not many businessmen (apart from jazzy hotel projects and the aforementioned KKS harbour proposers) who are straining at the leash to get on with investments.

Therefore the big picture, leaving to one side the military and the state, is a depressing one. The thirty year war has brought about a huge emptiness. I have focussed here on the impersonal side and not touched on the now well know social breakdown among young people – unwillingness to take on skilled (electricians, carpenters, welders, masons, fitters) or unskilled hands-on employment, a drug problem and even footloose and fancy free young ladies. All evidence points to the conclusion that unless ECTA is rammed through, economic growth, not only in the Western Province but in all parts of the country, will be stymied. More generally, the economic outlook of this government is no help. The Ranil-UNP way of life is to create openings for the private sector and foreign capital and sit back and wait for Godot to deliver. This is not working; these two actors have frozen up. The leadership of this government and Lanka’s cannot-think-out-of-the-box NGO “experts” simply do not have the experience nor can they conceptualise how an interventionist state leads development.