After Ceasefire, Northern province has grown twice as fast as the Western province
[August 03, 2005] 

by Jayantha Dhanapala
Colombo, 03 August, (Asiantribune.com):

Rejecting the claim that the North and the East have not reaped the benefits of the peace dividend, Jayantha Dhanapala, Head of the Peace Secretariat, told the business community that research into the post-Ceasefire situation “has shown that, in fact, it has triggered economic growth in the North and the East.”

He was addressing the fourth session of the Domestic Investors Dialogue held by UNDP’s Invest-in-Peace Project on July 29, 2005. All twenty-two regional Chambers of Commerce in Sri Lanka was represented.

Dhanapala said: “Of course it is only the beginning and much more can be achieved, but if you look at the GDP of the Northern province it grew by an average of 12.6% during the post-Ceasefire period compared to 3.4% during the pre-Ceasefire period. In the Eastern province the gross domestic product increased by 10.1% per annum during the post-Ceasefire period compared to 4.6% during the pre-Ceasefire period. And in the North Central province which shares common borders with both the Northern province and the Eastern province, there was an increase of 8.2% in the post-Ceasefire period when you compare it with the -0.2% in the pre-Ceasefire period.

“The Northern province grew twice as fast as the Western province in respect of the annual post-Ceasefire GDP growth 12.6% vs. 6.2%. Of course it can be argued that they were starting from a lower base, but these are not the only 3 regions to have realised significantly higher GDP growth rates during the post-Ceasefire period compared to the pre-Ceasefire period. I think it is plausible to argue that the increase in the average GDP growth rate of Sri Lanka as a whole from 3.9% to 5% in the post-Ceasefire period was due largely to the exceptionally high growth rates realized collectively by the Northern, Eastern and North Central provinces . So these findings are compelling evidence that the transition from war to peace has realized a substantial economic dividend in the 3 main provinces affected by the civil conflict form which the entire country has also benefited to some extent as reflected in the National GDP growth rate.

”There has been a phenomenal growth in the agricultural sector in real terms in the Northern province , 32% per annum, and in the Eastern province 19% per annum, compared to 4.3% and 4.9% respectively in the pre-Ceasefire period. Now data published by the Department of Census and Statistics shows a marked increase in paddy production in the affected areas during the transition period. In the Northern province paddy production annually average 138,000 metric tonnes during the post-Ceasefire period compared to, something like half that, 65,000 metric tonnes during the pre-Ceasefire period and in the Eastern province the post-Ceasefire average was 752,000 metric tonnes compared to 619,000 metric tonnes before the Ceasefire. So the combined share of the North and the East in national paddy production is also significantly higher in the post-Ceasefire period amounting to 31% than in the pre-Ceasefire period. The contribution of the North and the East towards food security of the country has also been very considerable. Now I think its important that in the sectors of industry and services also, you have a positive growth and that means a creation of employment opportunities in these two sectors as well,” said Dhanapala.

Moving on to the private sector he said: “I believe that the Chambers can help, not only in providing an impetus for this growth, but in also getting us the data that we need on private investment, because comprehensive data on pre and post-Ceasefire private investments are not easily available. But in some sectors like banking, retail trade, information communication technologies, there is certainly an indication of private sector activity in the conflict affected areas. In the communications sector we looked into what Dialog Telecom has done as they were not operating in the North and the East before the Ceasefire. But have now invested more than one million US dollars in the North and the East. Of the 1.5 million Dialog mobile users in the country, 250,000 or 17% are located in the North and the East alone. This is a very interesting statistic because the population of the North and the East combined is only 13% of the entire country.

”I think the role of the Chambers therefore is a very important one because you can establish links amongst yourselves and try to form mutually reinforcing links which will help integrate the national economy,” he said.

 

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Last Updated Date: August 03, 2005 .