Student Research Project Sri Lanka 2002 Supervisors: Prof. Dr ...

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interpreted as acting against the LTTE had to be avoided by the CCIY. In order to be able to influence the LTTE and thereby to lighten the constraints the LTTE posed for entrepreneurial activities, maintaining a ‘good’ relationship with the LTTE was essential. &RQFOXVLRQ 9.1 Summary This paper has made clear that six months after the cease-fire agreement coming into force, a considerable ‘peace dividend’ failed to appear for the local entrepreneurs 53 Adequate loan and overdraft facilities as well as government or donor support for local entrepreneurs remained absent and constrained the entrepreneurs’ DELOLW\ to fully rehabilitate and modernise their enterprises. It also prevented them from benefiting from the relaxation of import restrictions and the re-opening of the A9. Moreover, investments from outside the peninsula had not been made in the local manufacturing sector and compensation for losses caused by fighting had not been paid. Taken together, the entrepreneurs expectation of a considerable improvement of conditions for entrepreneurial activities through the cease-fire agreement were not fulfilled and the circumstances described above made the local entrepreneurs perceive their situation as one of “standstill”. A closer look reveals however, that this situation of “standstill” was embedded in and partly nourished by profound changes taking place in the peninsula. A sudden competition with more ‘modern’ products being imported from the South since the re-opening of the A9 and furthermore the strongly increasing demand for ‘taxes’ and protection money by the LTTE, posed new challenges and difficulties for the local entrepreneurs. The LTTE tax and protection money collections contributed to the situation of “standstill” in that they added a new dimension to the prevailing (post-)war related overall unpredictability and (legal) uncertainty, thereby further reducing the ZLOOLQJQHVV of local entrepreneurs to substantially invest in the rehabilitation and/or modernisation of their enterprises. In the face of omnipresent unpredictability, peace- and legal uncertainty, retaining a cautious investment behaviour appeared to be the most reasonable strategy to most local entrepreneurs. In that the entrepreneurs perception of the cease-fire situation as being unpredictable influenced seeking information on the economy of the peninsula. 53 With reference to <strong>Sri</strong>skandarajah (2003) the term „peace dividend“ is used to denote the material dividends arising from peace, or in this case from „non-war“, rather than peace or non-war as a dividend itself (p. 3). 48
their investment rationale, economic action in the peninsula was profoundly embedded in the political context of this early stage of the peace process. Moreover, economic action in the peninsula was politically embedded in that the emerging opportunities and prevailing constraints for entrepreneurial activities were considerably shaped by the political considerations and political strategies of the various national and international actors involved. This so in the way that the GOSL’s and the international aid agencies’ hesitance to launch substantive mid- and long-term private sector development measures can be explained with their uncertainty on the peace process. Furthermore, the GOSL’s condonation of the LTTE’s tax and protection money collections, facilitating its increasing reach, can arguably be drawn back to the GOSL not wanting to spoil the peace talks by discussing or acting on critical issues at an too early stage of the negotiation process. While the entrepreneurs could but accepted the restraining conditions for entrepreneurial activities during the periods of fighting and economic isolation, this acceptance diminished rapidly with the <strong>2002</strong> cease-fire agreement taking effect. It gave way to what this paper has called the “injustice discourse”. As they themselves had to operate in the given uncertainty, the local entrepreneurs did not accept the unpredictability of the cease-fire situation as a legitimisation neither for the continuing absence of accessible loan and overdraft facilities, nor for the government’s hesitance to substantively invest into the rehabilitation and development of the peninsula’s private sector. Rather, they interpreted the government’s hesitance as a political statement, indicating the continuation of what they perceived as a deliberate uneven distribution of economic development opportunities between the south and the north-east. In the entrepreneurs’ view, substantial investments and support from the government and southern business people would have been essential steps to balance out these inequalities. Investments despite the remaining risks would have indicated the readiness to share the ‘burden of war’ and a sincere interest in balancing out the perceived unequal economic development opportunities that arose from it. In that the local entrepreneurs’ claim for investments were actually understood as claims for ‘justice’ and ‘social responsibility’, the former thus had strong moral and political implications. The interweavement of economic action with the sphere of morality as highlighted by the concept of the social embeddednes of economic action, becomes apparent here. 49
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