Jaffna’s Glitzy Exterior Hides A Stagnant Local Economy

But the glitzy exterior, created by the infusion of money from outside, hides a stagnant and dispirited local economy.

Published: 20th June 2016 08:02 AM  |   Last Updated: 20th June 2016 08:02 AM   |  A+A-

Posh hotels dot Jaffna

JAFFINA: Jaffna, the capital of Sri Lanka’s Tamil-majority Northern Promise is today a far cry from what it was during the 30 year war which ended in May 2009. A town known for its roofless houses, walls pock marked by shell hits, and pot holed roads, now has swank buildings, well-stocked department stores, posh hotels and carpeted roads.

But the glitzy exterior, created by the infusion of money from outside, hides a stagnant and dispirited local economy.

According to R.Jayasekaram, President of the Jaffna Chamber of Commerce, the  Northern Provincial Council is more interested in extremist politics than in economic development, and the Central government in Colombo cares little about exploiting the existing resources in the province and encouraging local and expatriate investors.

“The five salterns in Elephant Pass, if used, could supply salt to the entire island. The abandoned cement plant in Kankesanthurai could be restarted with imported limestone, and Paranthan chemicals could be revived. If the 6,000 acres of agricultural land held by the armed forces in Weligamam North is returned to civilians, food could be produced. Cashew, coconut, sugarcane, grapes and mangoes could be grown in plantations and food processing could be given a fillip,” Jayasekaram told Express.

“If Indian and South Lankan fishermen are prevented from poaching, fisheries would thrive. The water problem in Jaffna district can be solved by implementing schemes suggested by eminent engineers long ago. North Lanka had accounted for 40 percent of the island’s GDP before the conflict. But today it accounts for only 3 percent because of governmental neglect,” he pointed out.

Jayasekaram, one of Jaffna’s leading businessman, regretted that even the liberal Maithripala Sirisena regime is showing no interest in reviving the Kankesanthurai port; turning the Palaly military airport into a civilian regional airport; and introducing a ferry service linking Thalaimannar with Rameswaram in India.

“Better connectivity with India and the region will turn Jaffna into a wholesale market. The shortening of travel time between Lanka and India will bring prices down. Seventy percent of the goods in the Jaffna market comes from India, but their prices are high because they have to brought via Colombo,”  he explained.

Lankan and foreign investors have evinced interest in the construction and tourism sector but few want to invest in industry. The Indian government has been trying to attract investors to the Achchuveli Industrial Estate, but with no success.

Officials in charge of investment promotion mention bureaucratic apathy at all levels and a lack of local entrepreneurial talent as the reasons for stagnation. The Jaffna Chamber of Commerce has been asking for a special soft loan facility for the North Lankan entrepreneurs who had suffered during the war, but government is yet to respond. In fact, the Sirisena government has asked funding institutions not to introduce incentive schemes till a national policy is worked out, a local official pointed out.

There are cultural barriers too. Jaffna businessmen, who tend to work in the traditional manner, are unable to collaborate with persons with a modern outlook. This thwarts Joint Ventures and recruitment of competent personnel.

Tamil Diaspora

The Tamil Diaspora settled in the West, has been invited to invest, but the response has been very poor because the Tamil Diaspora is made up of salaried professionals, and not entrepreneurs.

Some of them evince interest in investing but these are small scale projects in construction, agriculture and poultry, and not industry.

Labor-Needs Mismatch

 There is a mismatch of labor and needs. In some sectors, jobs are available, but suitable labor is not. In other cases, there are workers, but there are no suitable openings.

“Generally, the Jaffna man is averse to taking blue collar jobs or even jobs in the private sector. The demand is for white collar government jobs. But these are not aplenty in war-devastated North Lanka,” observed an investment promoter.

Silver Lining

However, there is a silver lining in the dark cloud. Thanks to the Jaffna branch of the Board of Investment, major Lankan garment manufacturers cum exporters  like MAS and Hirdaramanis have set up factories in Mannar, Kilinochchi, Vavuniya and Mullaitivu which employ 10,000 girls. Private investment in wind power is generating 17 MW, though more could be done in this sector, especially in the seven islands off the Northern coast.

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