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

The social and political embeddedness of economic action in the peninsula furthermore
became evident in the influence of informal institutions and concrete social relations on the
entrepreneurs’ approach towards influencing political actors. A combination of contradicting
factors like informal institutions (feelings of loyalty, moral obligations and shared beliefs) on
the one hand and the fear for LTTE reprisals on the other, reduced the entrepreneurs’
willingness to negotiate ‘tax issues’ with the LTTE. This led to the paradoxical situation that
the taxation activities as one of the main constraints for entrepreneurial activities were
widely blinded out in public discussions and events that were aiming at identifying pressing
constraints.
While feelings of powerlessness turned out to be related to both conflict parties, attitudes of
loyalty or feelings of moral obligation were pre-dominantly associated to the LTTE. Despite
manifold grievances caused by the LTTE, the entrepreneurs often felt “somehow” obliged to
the LTTE. This especially owed to the notion that the heavily war affected population of the
Vanni area relied on these taxes. It turned out to be especially this belief, that in their eyes to
a certain extent OHJLWLPLVHG the LTTE’s demand for taxes and protection money and made
them feel uneasy about criticising the LTTE’s tax and protection money collection and
taking action on them. Again, the interrelationship of entrepreneurial considerations with
moral considerations becomes evident, with the LTTE taxation activities being a major focal
point of this interweavement.
Concrete relations with political and administrative actors such as the LTTE, local and
national authorities and local politicians undoubtedly constituted crucial resources to ease
the constraints for entrepreneurial activities. While the research findings in this respect do
not allow for comprehensive statements for the level of individual entrepreneurs, interesting
conclusions can be drawn with view to the collective economic actor CCIY. Throughout the
research process it has become apparent, that for the CCIY to gain and maintain influence on
the LTTE in tax and other matters relevant for entrepreneurial activities, there was a clear
need for them to establish a ‘good’ relationship with the LTTE. This balancing act between
attempting to ease the constraints for entrepreneurial action and at the same time remaining a
credible negotiating partner shaped the CCIY’S action in so far, as it had to avoid or
suppress open criticism on the LTTE in its meetings and workshops in favour of informal
and personalised negotiations.
50