For the past nine years the Sri Lankan Tamil diaspora has had strong reservations about investing in their country of origin, claiming that they would withhold themselves from committing to any business ventures unless Colombo had a clear plan for a permanent political solution to the ethnic issue. But now there is some indication that the Sri Lankan Tamils living abroad, who were earlier sympathisers of the militarily defeated LTTE and were therefore keen supporters of the move to push the international community to penalise the Lankan military for alleged war crimes excesses, might be changing their attitude in respect of their economic power.
Business sources said that even as the government is faced with a scarcity of foreign exchange, the Tamil diaspora has taken small steps towards investing in Sri Lanka. Following the defeat of the LTTE and the Tamils’ loss of bargaining power, which was earlier based on the insurgents’ military strength, it is likely that members of the ethnic group who left the country during the civil war may now see opportunities to establish their financial clout. The diaspora has reportedly begun investing in Sri Lankan businesses irrespective of whether these are Tamil or Sinhala-owned.
Meanwhile, the National Economic Council of Sri Lanka (NECSL), appointed by President Mahinda Rajapaksa, has suggested providing special incentives to the Sri Lankan diaspora community, encouraging them to bring their dollars to the country in an effort to boost foreign exchange reserves, NECSL Secretary-General/Chief Economist Professor Lalith Samarakoon was quoted saying in the local media.
The Tamil comprises both salaried professionals who hold white-collar positions abroad as well as those successfully running businesses in Europe and elsewhere. Sources said that the NECSL will shortly discuss with the Central Bank of Sri Lanka (CBSL) about special provisions for the diaspora, such as attractive rates for their Non-Resident Foreign Currency (NRFC) or Resident Foreign Currency (RFC) accounts.
Sri Lanka’s Finance Minister Mangala Samaraweera is on record stating that he expects the rupee to depreciate further, a view that is contested by some economists who feel that the Lankan currency will stabilise in the weeks to come. But regardless of what is expected of the rupee crisis, reports confirm that initiatives are being discussed to ensure diverse means of attracting investment to Sri Lanka, with specific emphasis on the Tamil expatriates.
The establishment of the background for investment by Sri Lankan Tamils and the current conducive conditions seen by them is especially significant in the backdrop of Sirisena’s appeal at the recently concluded 73rd UN General Assembly for a new approach to take his country’s post-war reconciliation to the next phase.
While there was criticism of Sirisena’s backtracking over the 2015 agreement by Sri Lanka through Resolution 30/1 to look into wartime accountability in the UN speech, sources and analysts on both sides of the Tamil–Sinhala divide say that strategising and tapping into the diasporic power could be beneficial to both sides.
“The Tamils have hitherto seen themselves as victims,” one Tamil analyst explained. “They have depended on the LTTE to win their rights militarily and when that attempt was defeated in war, the Tamil diaspora looked towards destroying the military through war crimes allegations and in general continuing the Tamil victimisation attitude,” he stated, adding that where needed the military or anyone accused of rights violations during the war should be investigated.
“While certain questions on the war should be asked, the Tamils have not focused on capitalising on their intellectual and financial capital in negotiating with the government pertaining to aspects of a long-term political solution,” he said, adding that if this was properly done, it would be a matter involving Tamils becoming economically indispensible to Sri Lanka and its Sinhala majority administration and that it would be easier to get certain demands met. However, there is the counter-view that to get the Tamil diaspora to invest would be challenging, given Sri Lanka’s past.
Historically, the Tamils and other minorities such as the Muslims, have been key players in business. In 1983, the Tamils suffered major economic loss when their businesses were destroyed in the ethnic riots targeting the community. A resurgence of interest in involving themselves in business within the country may help the Tamils, but instability arising out of ultra-nationalist sentiments on both sides should be prevented, observers say.
“We expected this government to be more progressive in ushering in a new Constitution that will bring about a permanent solution on devolution of power to the Tamil majority in the north and east. This has not happened and there is no indication it will happen in the near future. In this respect, there still exists trepidation among the Tamils to bring their hard-earned money to Sri Lanka,” a Tamil analyst said.
Investment by the Tamils has been generally discouraged by the community’s radical leaders, especially the Northern Province Chief Minister C Wigneswaran who is on record stating in June this year that the region is sitting on a powder keg which could explode anytime.
“However much the army and our people might want to maintain peace and order, the slightest provocation could trigger off violent activities by either side. How would this fit into a peaceful vibrant environment needed to promote trade and commerce, export and entrepreneurship?” he had asked at a recent public gathering.
Many Tamil politicians such as Wigneswaran nurture a major fear that Sinhala radical groups such as BoduBalaSena (BBS), notorious for stirring up trouble with the Muslim community, could at any time turn their attention on the Tamils, at a time when the current regime has not been able to control racist elements. Muslims suffered severe economic loss during the riots in Kandy this year.