Developing private sector’s social conscience and economic statesmanship

International scholars such as Prof. Rohan Gunaratna, Head of the International Centre for Political Violence and Terrorism Research, Singapore have noted that the backbone of the Sri Lankan government was its economy. This was reflected by the fact that attacks on key economic targets such as the Central Bank in Colombo and the Katunayake international airport by the terrorists were a part of its strategy to cripple the country Ultimately, the crux of the matter lies in the consolidation and stabilization of the dividends of peace in Sri Lanka, which has been ravaged by years of deprivation and economic hardship. The development of the private sector’s social conscience then becomes paramount to this endeavour

Is there a change of heart among business leaders? Can the business community change to create an environment from which both businesses and the community could mutually benefit? Times have changed and so have the motivations of the business sector. Traditionally, it was widely accepted that businesses and multinational corporations were driven by profits alone. However, with the turn of the century it has become increasingly apparent that businesses do in fact have a social conscience. As Harvard Business School professor Rosabeth Moss Kanter has documented, doing the right thing has begun to permeate the corporate boardroom. Admittedly, though social justice and the advancement of peace have not yet evolved to occupying centre-stage in the corporate agenda, a significant development is that businesses are no longer averse to the idea. In recent years, there has been acknowledgement within the business sector that the credibility of its operations can be strengthened by subscribing to altruistic ideological pursuits and embracing its latent social role.

Commentators such as Rosabeth Moss Kanter points out that conventional attitudes of the private sector towards the social sector was ‘as a dumping ground for spare cash, obsolete equipment, and tired executives; today smart companies are approaching it as a learning laboratory.’ Herein therefore lies the context for the emergence of ‘a partnership between private enterprise and public interest that produces profitable and sustainable change for both sides.’

Post-conflict development

There has begun a national momentum in Sri Lanka to raise awareness on the development of the social conscience of the private sector, following the conclusion of the three-decade war that ravaged the country. It is opined that there exists a need for reprioritizing the state agenda in the post-war situation from military aims to socio-economic and political aims. To illustrate this is the fact that globally the world has spent US$ 1 trillion on defence but only US$ 100 billion on development. Alluding to affirmative and conflict-sensitive approaches taken in countries like Australia for example, in the telecommunications company Telstra, where a policy of including and employing underprivileged indigenous people was adopted, Sri Lankan companies would be well advised to embark on such a paradigm in their operations so that they implement policies that ensures the inclusion of LTTE cadres, and other war-affected persons and groups in the economic growth and development activities of the country.

International scholars such as Prof. Rohan Gunaratna, Head of the International Centre for Political Violence and Terrorism Research, Singapore have noted that the backbone of the Sri Lankan government was its economy. This was reflected by the fact that attacks on key economic targets such as the Central Bank in Colombo and the Katunayake international airport by the terrorists were a part of its strategy to cripple the country. Gunaratna has gone further to identify four key aspects as necessary for the national strategy of the business community in reconciliation and peacebuilding. First, livelihood and income generation activities; second, infrastructure development in the North and other conflict-affected areas; thirdly a need for the business community to engage directly with individuals and communities in war-affected regions of the country and finally, to ensure that all endeavoures undertaken embrace the vision of preventing economic stagnation which has been at the root of most political conflicts.

Reflecting on the work of the Central Bank in the conflict-affected areas of the North and East of the country, the Governor of the Central Bank, Ajith Nivard Cabraal has highlighted the challenges of attracting investment into and maintaining existing investment in the regions. He has recorded the 1-2 percent loss in growth that had resulted from the withdrawal of the GSP+ concession, delay in the International Monetary Fund’s contributions and attacks on the Central Bank building in Colombo. He has gone further to recall criticism that the Sri Lankan administration received in the warning that a counter-terrorist operation would cost the country significantly. However, he has stated that the defeat of the terrorist movement proved to be one of the most critical investments towards the future of the country. The 60,000 + loans granted and utilized in the former conflict regions is indicative of the opportunities for rapid economic development in the impoverished sections of the country. Worthy of note are the drop in poverty levels which was 15 percent in 2009 and were recorded as 8 percent in the year 2011; the generation in livelihood opportunities in the field of vocational training; facilitation of new bank lending schemes via the Central Bank to the former conflict regions of the country; the rapid infrastructure development programmes in the North and East of the country including those of roads, bridges, electricity, schools and hospitals; and the projected investment amounting to Rs.251,000 by the private sector in Sri Lanka.

Reconciliation as CSR

Highlighting the attractiveness of investing in the North of the country, the Government Agent of Jaffna, Imelda Sukumar has pointed out the availability of rich natural resources in the region such as limestone, land, groundwater, sea salt, fisheries and agriculture that could be tapped into in order to create industries, income generation and livelihood opportunities. Additionally, the market demand for produce and jobs is increasing with the return of formerly displaced persons to their original habitats. Thirdly, there exists potential for the development of tourism-related infrastructure as Jaffna is gaining increasing currency as a tourist destination, both by locals and foreigners.

Ceylon Chamber of Commerce Secretary General Harin Malwatte has called on the need for further strengthening of already built infrastructure and rebuilding of dilapidated infrastructure as being essential in attracting both foreign and local investment. Stressing the importance of focusing on post-conflict national governance issues, he has declared the chamber’s support of public-private partnerships and ventures as crucial to the future economic growth and development of the country.

The conflict between the north and south of Sri Lanka has been largely due to the lack of economic opportunities. Waiting for perfect conditions to invest can be counter-productive to social progress. Reflecting on the Sri Lankan political history, both insurrections in the south, and the north, were largely resource, class and caste related. Leaving behind a segment of the community whether in the north or the south will result in the seeds of dissent taking root. Allowing marginalization of a segment of the community will result in ethnic entrepreneurs exploiting it for personal and political advantage. There are some considerations that need to be made when decision to invest in the north and the east are taken, namely, the youth and the adult population in the north have been deprived of basic education during the conflict. Capacity building is a sine qua non for generating employability and creating opportunities for income generation. The business community is well placed for developing capacity of potential entrepreneurs by playing a major role in skill building. Recognition of such a role for the private sector and business community is beginning to emerge. The former Tamil Tiger cadres have been given vocational training and skill building, and are now employed by many companies. None refused, and many others were willing to employ former Tamil Tigers and in many ways, it has been an enlightened, long-term vision for Sri Lanka – a land yearning for equal opportunities sans deprivation and discrimination.

The business community has traditionally crafted social responsibility in the areas of education, employment, and poverty alleviation. It is now recommended that reconciliation be considered as one of the corporate social responsibilities. It is not only big businesses but small businesses that can also help in the national reconciliation process.

Establishing investment incentives

Although engagement of the business community has been acknowledged as essential for peace-building by both the World system Bank of rewards and the to United lure early Nations, private a ing with private investment. nomic tive means challenge both would turn ate strategy of ing Further, the sector formulating the of ownership international by the much sustainability the and to require entry private sector establishing public it in make therefore war is non-economic hesitation Sri Despite recommended has investment sector in such innovative and Lanka of the May yet and the private lies engagement post-war of their in appropriate and to 2009, will process, national outcomes. the in be incentives since furthermore, having thinking finding sectors. larger help that devised, it recovery has the involv- and levels. attrac- gener- work been been This new end- eco- The for by in at chip chiefly companies by the large operating and successful in the country blue- The identification of the benefits of early involvement for private business- es in post-war, uncertain and fragile contexts need to be brought to the forefront in any discourse on the role of the business community in reconciliation and peace-building. First, it is a test of the resilience of the sector’s ability to navigate adverse conditions and establish suitable conditions for economic proclivity. Second, it can play a crucial self-serving role in shaping of the market for decades to come by securing preferential rights for early entrants and contributing to developing the legal and regulatory framework in which they will have to operate. Such need to be highlighted to the private sector in Sri Lanka who are still weary of potential fallouts associated with investing in the war-affected regions of the country; and are only now being sensitized to the critical role that they can play in rebuilding the nation and fostering durable peace.

Sri Lanka’s strategy of building and strengthening a public-private sector partnership to create economic growth in north and east is visionary. That said, much remains to be done in the north and east of the country. At present, the approach has been one of a charitable orientation. There is an urgent need to integrate such investments into the paradigm of the agenda, goal and vision of the private sector and business community, so that they begin to see themselves as one of the stakeholders in bringing the country to economic prosperity and sustainable peace. Although a growing number of companies throughout the world are involved at the early stage of war-to-peace transitions, a few will be able to sustain their involvement, absent extraordinary profits, unless initiation of the rule of law and institutions practicing good governance soon follow. For this reason there is a business interest in promotion of the rule of law and the development of open markets as a means for creating an environment conducive to doing business.

The challenge now is to promote awareness on how the notions of social justice and peace could in fact be profitable which would in turn lead to it becoming a priority in the business agenda. This would involve minimizing the risk associated with entry of businesses in war-torn areas with uncertain futures. Under these circumstances, there appears a proclivity today to venture forth where a decade ago business

would have feared to tread.

Need for economic prosperity

A potential nexus that needs to be highlighted as crucial to the development of sustainable peace and reconciliation is the need for economic prosperity in post-war contexts and the role of the businesses in such a national endeavour. In Sri Lanka, the need for economic prosperity or at least movement away from abject poverty and economic hopelessness is pivotal to moving towards reconciliation and peace building if the spirit of peace is to not falter and be extinguished. It is the private sector that can provide in the long-term for economic growth opportunities, jobs and wealth creation.

The recognition of such a nexus has been underscored in the policies of world bodies such as the World Bank and United Nations which have begun to entrench in its vocabulary the idea that the private sector should be coupled with the non-governmental sector under the label of ‘civil society.’ Both institutions have realized the role of the private sector in the generation of wealth and economic opportunities. This approach ought to percolate to the private sector and business communities all over the world in their ethos of operations. The public sector and the regulatory bodies of the private sector could be instrumental in developing a movement towards achieving such an aim.

The second challenge then is how to induce the entry of the business sector at the early years following the end of terrorism in Sri Lanka, being only three years since the armed combat ended. Possible ways of stimulating such an inducement would be to develop commitment within the international private sector to envision that investment abroad would also be an investment in social change. Closely related to this is the need to cultivate a positive attitude towards state structures, administrative structures, public service and international institutions. Hence, these two considerations ought to be integral to Sri Lanka’s foreign policy strategy, which would necessarily involve both direct bilateral and multi-lateral engagement with relevant foreign powers and world bodies.

Ultimately, the crux of the matter lies in the consolidation and stabilization of the dividends of peace in Sri Lanka, which has been ravaged by years of deprivation and economic hardship. The development of the private sector’s social conscience then becomes paramount to this endeavour. In the words of Prof. Rohan Gunaratna, “Let me say that Sri Lanka’s top priority today is economic development and reconciliation. Any country recovering from decades of conflict must put a strategy in place to prevent the relapse into violence. No country should take peace and security for granted. The stabilization strategy should seek to influence the general population where the very conflict emerged. Instead of taking peace for granted we must engage different sectors. The government alone cannot meet this challenge. There are limitations to what law enforcement agents and intelligence services can do to stabilize Sri Lanka beyond this point. It is good governance and economic statesmanship that can help to create a harmonious society.”

(The writer is an alumnus of Queen Mary, University of London specializing in International Law and Human Rights, with interests in transitional justice and reconciliation)