ECONOMY-SRI LANKA: Peace Prospects Good for Tourism, Growth

By Feizal Samath Reprint | | Print |

Feizal Samath

COLOMBO, Mar 20 2001 (IPS) - British nationals sip beer in a downtown Colombo bar. At the local test venue, they raise flags and cheer the test series won by their national team against Sri Lanka last week.

This is despite the fact Britain has advised its nationals to avoid Colombo when they are visiting Sri Lanka, due to possible attacks by Tamil separatist guerrillas.

That advice did not deter hundreds of British cricket fans from swarming into the capital and other parts of the country in the past month for the England tour of this Indian Ocean island.

Colombo’s five-star hotels have reported a full house for the first time since 1983, the year the conflict between Tamil Tigers and seeking their own homeland and government troops began.

“We are 100 percent full in the past few days with more than 50 percent of the guests being British cricket fans, journalists and officials accompanying the team,” said Stefan Pfeiffer, general manager at the plush Hotel Lanka Oberoi.

“We have had our best couple of weeks in terms of occupancy in years,” said a jubilant Chandreenie Kariyawasam, public relations manager at the city’s Trans Asia Hotel. “I don’t think we have had these occupancy rates since the war broke out in 1983.”

The tourist industry is hoping that a leap in the number of British tourists, plus prospects of an end to the conflict with peace talks between the government and Tamil rebels due to start in May, would revive an industry that has been shattered by the unrest.

The number of British nationals visiting here in 2000 totalled 8,049, down from 9,066 in 1999.

“We are hoping against hope that the peace talks would be fruitful. If that happens, then tourist arrivals, over the next couple of years, could rise by at least 50 percent,” noted Renton De Alwis, chairman of the state-run Ceylon Tourist Board (CTB).

Foreign investment and tourism have been the worst casualties in the 18-year long ethnic conflict that has dragged down the economy to growth rates averaging four to five percent — instead of eight percent if there was peace.

The war has also stalled attempts by the government to establish Colombo as a global financial centre.

More than 65,000 people have died in the fighting between government troops and Tamil rebels since 1983. The rebels are demanding a separate state, but in recent months say they are prepared for devolution of power, instead of independence, in the north and east where most of the Tamils live.

Norway has been trying to arrange talks between the warring factions for the past year and Oslo’s efforts are slowly bearing fruit.

Both President Chandrika Kumaratunga, currently touring Europe, and rebel leader Velupillai Prabhakaran say they are ready for unconditional talks. The rebels have been observing a unilateral ceasefire since last Christmas, rejected however by the government.

Hopes are peace are fueling hopes for the fortunes of the tourism industry, especially with the current influx of British tourists.

A contingent of 7,000 British cricket fans has been in the country since Feb. 17 watching their test side beat Sri Lanka 2-1 in a three- test series. The tour ends on Mar. 28 after a series of one-day matches starts this week.

The fans have crisscrossed the countryside following the team play matches in the southern, central and western regions filling up hotels when matches were on.

Tourism industry officials hope the increasing numbers of British tourists would spur not only Britain but also other countries to lift travel advisories on Sri Lanka. Germany, France, Japan, Italy, the United States and Britain have issued travel advisories to nationals visiting Sri Lanka.

These advisories range from warnings for nationals not to visit Colombo because of possible rebel attacks, and the east coast and other parts of Sri Lanka where the rebels operate. The warnings are a major deterrent to the industry.

Yet despite these setbacks, tourist arrivals reached a record 436,000 in 1999, slightly over the number of arrivals in peacetime 1982, but slowed down to 400,000 last year due to parliamentary elections in December and a few rebel blasts in the capital.

“We could do much better if not for the unrest,” believes Udaya Nanayakkara, president of the Travel Agents Association in Sri Lanka. He noted however that “we need to look beyond the problem and counter a negative press.”

The industry’s main grumble is that whenever there is fighting in the north or the east which is several kilometers away from the capital or the regularly-visited areas by tourists, foreign media reports project the fighting as if it was happening in Colombo.

“When newspapers overseas run a story with a Colombo dateline of an incident that has taken place out of the city, there is an immediate feeling abroad that Sri Lanka is not safe. We need to counter this and show that Colombo and areas of tourist interest are safe,” said an industry official.

CTB’s De Alwis said the industry was banking on the proposed peace talks being successful to bring the industry to its pre-1983 glory. “Everywhere, everyone says let’s wait for the peace talks for the industry to prosper,” he said.

“Ambassadors of countries that have issued travel advisories have also told me, ‘let’s wait for the peace talks and then see what we could do about travel warnings’,” he added.

The success of the English tour in terms of benefits to tourism has led authorities to twin international sporting events taking place here with tourism. This is made easy by the fact that tourism and sports come under one minister, Lakshman Kiriella.

Authorities are promoting special tours and packages for foreigners during the visits of the Indian, West Indies and New Zealand test sides here for matches with their local counterparts.

The biggest event however being pursued by the industry is the Asian Athletic Games, Asia’s version of the Olympics, due to be held in Colombo next year. At least 1,500 athletes across Asia will be taking part and the CTB is hoping they will bring their families, relatives and friends along.

An end to the war would not only spur tourism and trigger a construction boom in the country to meet the additional demand for rooms and facilities, but also bring a whole heap of plus factors to an economy that has been resilient in the face of adversity.

Central Bank governor A. S. Jayawardene says that Sri Lanka’s economic growth averaging five percent in the past decade has been creditable given the unrest, and was all due to a resilient economy driven by strong private sector growth.

Unfortunately, war spending has eroded much of the gains. An expansion in the defence budget at a projected 64 billion rupees (752 million dollars) this year — six percent of the Gross Domestic Product — and an average 50 billion rupees in the past 10 years has been at the expense of development projects.

The economy is set to record lower growth of 4 to 4.5 percent this year compared to six percent last year. Residents, already reeling from a combination of high living costs and rising fuel prices, have been told by the government to tighten their belts for a further six months.