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What U.S. Businesses Must Consider In Sri Lanka

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The Sri Lankan government is in hot pursuit of U.S. businesses, seeking to usher in more investment dollars to help rebuild the country following the end of the civil war two years ago. Jobs that help to grow the economy and benefit all Sri Lankans are welcome. But companies are on notice that the Sri Lanka government is following ethnically discriminatory policies, and those that favor only certain segments of the population -- wittingly or not -- are compounding the ethnic divides that caused the 26-year war in the first place.

In theory, ramped up American business investment could benefit Sri Lanka by expanding its infrastructure and markets and creating jobs. However, many of the country's ethnic Tamils remain disenfranchised politically, socially and economically. The Sri Lankan government has buoyed military occupancy of traditionally Tamil-majority areas in the north and east, where it is increasingly relocating the majority Sinhalese in an obvious policy to change the island's demographics. The government has also failed to locate much new employment-generating businesses in the war-devastated north and east of the country where there are tens of thousands of impoverished women-headed households due to the war.

Development projects in the north rarely help local Tamils, with jobs largely going to newly-relocated Sinhalese and foreign workers. This, and other government policies of ethnic discrimination, fuel continuing tensions and stoke fears of renewed conflict. In fact, a report last November by the International Trade Union Confederation (ITUC) urged the Sri Lankan government to provide legal protections against workplace discrimination for all citizens, including Tamils, after finding widespread discrimination against them in government employment and services.

"On-going exclusionary policies," according to a recent report by a UN panel of experts on Sri Lanka, "have been at the heart of the conflict." But little is being done to correct the problem. Certainly the government has not taken meaningful steps, largely because it is more interested in promoting opportunities for the Sinhalese and the president's family. In 2009, President Mahinda Rajapaksa appointed a 19-member task force on northern development, which included only one Tamil and one Muslim in an area almost 100 percent populated by minority groups. Additionally, both the Ministry of Economic Development and the Urban Development Authority (UDA) are under the control of the President's brother, Basil Rajapaksa, and in 2010 the UDA was brought under the authority of the Defense Ministry, headed by another presidential brother, Gotabhaya Rajapaksa.

Even former Sri Lankan President Chandrika Kumaratunga, herself a Sinhalese, said on July 24 in Sri Lanka's capital that the government should not continue its "winner take all policy." Due to the lack of good governance, which requires transparency and accountability in development programs, "the country is deteriorating to a level of anarchy," said the former president.

U.S. businesses, primarily apparel brands that import Sri Lankan-made goods to the United States, must begin to act in a more socially responsible and thoughtful manner if they want to be regarded as good corporate citizens. They should demand an accounting of who produces the products emblazoned with their world-famous logos and who benefits from their investments. Simply put, they should stop hiding behind a veil of political ignorance. The garment industry ships 40 percent of its exports to the US, supplying brands such as Victoria's Secret, Gap and Nike. These companies wield significant clout since the United States accounts for $1.77 billion, or 21 percent of the Sri Lanka's exports. They should demand that the jobs created by their businesses be used to promote empowerment, equality and reconciliation, not discrimination and division.

Amid the many ethnic equality-related concerns that continue to go unresolved, American businesses must do their homework and not allow themselves to become smitten by Rajapaksa or his family as they seek corporate dollars in the name of developing the country while building a political dynasty and family business empire. Many regions of Sri Lanka, including areas around the capital that were never involved in the conflict, have rising reports of alleged murder, torture, rape, and kidnapping by soldiers and other government agents. Journalists face intimidation and the media continues to be censored or to practice self-censorship. Many of the island's lingering problems go unreported.

If American businesses want to invest in Sri Lanka, they must craft equitable investment strategies that fully support policies of non-discrimination and investment in war-devastated regions. If the government of Sri Lanka is not willing to cooperate in these and other efforts for accountability and reconciliation, then American businesses should take their investments elsewhere. Many of the conditions that led to the brutal, decades-long civil war in Sri Lanka have yet to be resolved. Shareholders and consumers must not become unwitting accomplices to the on-going oppression and discrimination by pumping investment dollars into the island without understanding the policies they are funding.

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