The following article has been written by an informed non Sri Lankan businessman who has interests in Sri Lanka – he is concerned about the implications of the constitutional amendment passed last week. His identity is concealed to ensure his safety.
I have read many pleas from concerned citizen groups, journalists, policy groups and the opposition parties about the dangerous amendments to our country’s constitution. But one in particular stood out – a strong call to action made by the Anglican Bishop of Colombo, “It is therefore imperative that Parliament rejects this Bill, and that all who value democratic freedom in the country voice their objection to it.” Now, how often do you hear the most senior Bishop of a country use the word “imperative”?
Indeed, there are several disastrous sections of the amendment (a neat summary is made by Charu Lattu Hogg from London’s Chatham House) and I support the Bishop’s call to reject the Bill and urge others to do the same.[By the way, one wonders why the array of (very well paid) international advisors to the GoSL haven’t been able to exert their influence and avert this damaging course of action. Bell Pottinger, the PR agency to past “bully boys” (such as General Pinochet) are one such organisation].
So why am I, a businessman concerned? What is the cost of the constitutional amendment, and who is going to pay? Well, I am concerned, because one by one, all the measures of a civilized society are being abandoned. This creates a huge risk for potential foreign investors, at a time when the country desperately needs economic growth and to tackle the debt crisis. The weak judicial system should be noted by investors to avoid the kind of problems that BP had in Russia (the chief executive had to leave the country without the backing of the local judiciary). In these situations, companies need significant benefits to outweigh the disadvantages of the lack of a rule of law. I’m not sure Sri Lanka can offer those benefits. Just ask Siemens or BAE. Before long, mid range players will also back out. (Local businesses who want to continue trading, have to adapt to the situation by bribing government officials. For Global 500 companies this is not a viable way to do business).
Last week, Forbes speculated on a decline in the Sri Lankan economy, highlighting the policies of the current president as the culprit. Some investors are becoming worried about the recent constitutional amendments. One analyst, Benjamin Griffith, Caravan Capital Management, a global frontier fund for high net worth individuals is now looking at Sri Lanka as a long term risk.
The same article recounts past volatility in the Sri Lankan stock market during intense periods in the civil war. It quite rightly points out that the war came to a bloody an end last year, but the root causes of the conflict have not been addressed. Some say that a future insurrection could be on its way including bombings in the Capital, Colombo.
My fear is that the economic future looks bleak for all Sri Lankan’s (not just the ethnically and politically marginalized) due to a re-think on foreign investment and having to pay for the huge debts that the government has built up; Greece will tell you about the problems of large debts and pilfered assets. My last thought is for the ordinary men, women and children who will bear the brunt of the impending economic crisis in Sri Lanka.