A tiger by the tail

If peace really does break out in Sri Lanka after 25 years of deadly conflict between government forces and Tamil rebels, it could usher in a much-needed economic revival. Matthew Gwyther visits the island to see how tourism and the textile trade are priming the pump in anticipation of the better times to come.

Last Updated: 09 Oct 2013

I first visited Sri Lanka 16 years ago. On the morning of my arrival I was slumbering in my room at the delightfully eccentric Galle Face hotel (founded in 1864) in Colombo, looking forward to a fortnight on the island Marco Polo described as 'the finest in the world', when I was roused by the loudest bang I'd ever heard in my life. A naked sprint to the window revealed a plume of smoke rising from the other side of the road. A member of the LTTE (Liberation Tigers of Tamil Eelam, aka the Tamil Tigers) carrying a large bomb in a rucksack had driven his moped into the limousine of Admiral Clancy Fernando, a commander of the Sri Lankan navy. The poor man's plimsolls are still probably in orbit.

That was my first encounter with the Tigers, and I've tried to avoid getting up close and personal with them ever since. The FBI describes them as 'the most dangerous and deadly extremists in the world', and there's a fair bit of competition for that accolade these days. You may inadvertently have crossed the Tigers' path yourself: in recent years, several major UK petrol station credit card-skimming scams have been traced back to the Tigers, who would rather die - by swallowing the cyanide capsule that each carries - than be taken alive.

However, when you're interviewing Sri Lanka's president Mahinda Rajapaksa, a big guy in a white tunic, red sash and sandals, and he, together with his brother, Gotabhaya, the defence minister, earnestly suggest that you might like to meet one, you can hardly say no. For Sivanesathurai Chandrakanthan - also known by his nom de guerre Pillayan - is truly The Man of the Moment in Sri Lanka.

Pillayan, who is still only in his early thirties, was taken from his family by the Tigers at the age of 15 and spent all his adult life as a terrorist involved in the ferocious conflict that has taken the lives of 70,000 since 1983. Until last year, when, following a Damascene moment involving the handing-in of his rocket propelled grenade launcher and some extraordinary political manoeuvring, Pillayan was voted in - amid allegations of ballot rigging - as chief minister for Sri Lanka's Eastern province. Many were taken aback by the development - it was a bit like the Americans making Bin Laden mayor of the Windy City.

I was driven at speed through Colombo's numerous checkpoints to the defence ministry, put through the metal detector and told to wait in the boardroom. On the large table was an Airfix model of a Russian MiG 29 fighter. After a while, in marched the diminutive Pillayan, with a small entourage of advisers even younger than himself. He has a firm handshake and sported a shirt in the loudest shade of salmon pink.

Pillayan now has a price of millions of rupees on his head as one of the most notorious turncoats of the Tamil struggle. He was the target of a suicide bomb attack in Colombo in May and would be wise to keep watching his back. But he remains unrepentant about his conversion to the ballot box. 'The Tamil people are completely fed up with war,' said Pillayan. 'A separate country was their desired solution and it's impossible to achieve that. Their leaders have missed their chances and a solution for our people is very important. A democratic way is the only way.'

Did he think an end to the military conflict was in sight? 'For the first time now the Tigers are very loose and very weak. They've lost most of their important commanders and the Sri Lankan forces are going very well.'

President Rajapaksa had earlier confirmed that the aim is now to annihilate the LTTE by military means, and fighting thus rages in the north of the island. Negotiations seem, for the time being, to be over.

As one of the world's deadliest ongoing armed conflicts, the Sri Lankan civil war has caused enormous harm to the population, especially in the north and east, and severe damage to the country's economy. The following day, I flew by battered Sri Lankan army transport plane to Trincomalee in the east - the capital of Pillayan's new fiefdom.

Things remain tense in the region. We were picked up from the airstrip at China Bay by a naval gunboat, and our minibus was escorted everywhere by a couple of soldiers on a motorbike, one of whom was leaning precariously off the back with his automatic rifle.

Trinco, as the town is known, remains pretty as a picture, despite all that its mixed population of Tamils, Singhalese and Muslims has been through. It possesses the fifth-largest natural harbour in the world and was near the top of every tourist's must-visit list in the old Ceylon. Tourism across the island has dropped off badly in recent years and the effects of the Boxing Day tsunami in 2004, which killed 30,000 people on the island, were ruinous.

The NGO-badged Toyota Landcruiser, favoured transport of aid agencies worldwide, is still very much in evidence here in the east. Many inside the government harrumph that they don't know what all these NGOs are up to - and, worse, that by continuing to hand out aid they are creating a dependency culture.

Ministers get very irate when foreigners criticise their record on human rights. In May, Sri Lanka lost its place on the UN Human Rights Council, which the government finds highly embarrassing, as countries with a less than perfect commitment to democracy such as Saudi Arabia, Cuba and Russia have kept their seats.

One suspects that the conflict is the main thing holding Sri Lanka back from what is potentially a bright economic future. Yet despite all its problems, it already has one of the highest per-capita incomes in South Asia, although an annual inflation rate that has touched 26% is not helpful. Later that evening, when I attended a gathering of the country's top business people back in Colombo, I realised that they see Sri Lanka's future as a sort of offshore powerhouse riding on India's coat-tails. They are an earnest, ambitious and enthusiastic lot, and they are very fed up with the conflict.

Over an orange juice - the whole country was dry because Sri Lankans were celebrating the anniversary of the arrival of Buddhism on the island - I met the charming Ashroff Omar, CEO of Brandix, one of the country's clothing magnates. Omar is a big supplier to Marks & Spencer and is most proud of his newly refitted eco-factory. A visit was arranged.

It's hot, sweaty and frenetic on Colombo's streets at this time of year, as the monsoon rain sheets down. The scene inside the Seeduwa eco-factory, however, is one of calm, quiet industry in a temperature- and humidity-controlled environment. Piped 'music' of tropical birdsong fills the air to accompany the whizz and whirr of the sewing machines.

The plant is Sri Lanka's answer to the call of M&S chief executive Sir Stuart Rose's Plan A. Omar can see which way the sustainable wind is blowing and has just spent £1.25m converting one of his apparel factories into this 'green' establishment; as a result, carbon emissions are down by 75%, energy usage by 45% and water consumption by 60%. There's air-conditioning and natural lighting, rainwater is collected, and none of the factory's waste goes to landfill.

To celebrate the opening, Lasith 'The Slinger' Malinga from the national cricket team was hired to show Al Gore's Inconvenient Truth movie (with Singhalese subtitles) to the entire 1,600-strong Brandix workforce.

Rose, who visited in April to cut the ribbon, is pleased - and so is Omar, who described the M&S knight over-generously as 'probably the world's most potent warrior saving the environment'. The 300 (mostly female) employees at Seeduwa earn about £80 per month for a 57-hour week, and get 90 days' paid maternity leave. In a Bangladeshi sweatshop, says a Brandix manager, the figure is only £25 per month.

As the slowdown bites and pressure on suppliers from UK retailers grows ever stronger, this sort of endeavour will be put to the test. Brandix turns over £170m a year and operates above the cut-throat basement market - it does shorter orders of more complicated items and can turn batches round quickly. But the eco-factor is now one of the new forces in globalisation. With fuel costs rising so rapidly, Brandix knows this eco-refit will pay for itself in four years. And, who knows? - maybe Plan A will eventually demand that suppliers adopt environmentally friendly working practices.

Brandix also produces garments for US retailers Abercrombie & Fitch and Gap, and its biggest customer is lingerie retailier Victoria's Secret. But so far it's the Europeans who have shown more interest in sustainability. Meanwhile, Omar is feeling so bullish he's about to bet the farm on Brandix Apparel City, a 1,000-acre development offering 'end-to-end apparel solutions' in Andhra Pradesh, southern India.

The air of confidence masks an underlying anxiety, though. After the tsunami wrecked its eastern coastline, the Sri Lankan authorities were given an exemption from EU import tariffs on textiles, a deal known as 'GSP plus'. Garment exports are now booming, making up more than half the country's exports, 67% of its industrial production and 10% of its GDP; 40% of Sri Lankan exports go to Europe.

Tourism has been dealt a blow by the unpredictable security situation, as the bitter war with the LTTE continues in the north. The tax exemption is now up for review and, if removed, could add 10% to the cost of a pair of Sir Stuart's underpants. The garment industry was quietly pleased at the news of Primark's disgrace when it was revealed by the BBC's Panorama that child labour was being used in southern India to make clothing. (The kids in question were, incidentally, Tamil refugees.) A 'garments without guilt' campaign promotes Sri Lanka's ethical and green credentials.

And what of tourism? Tourist arrivals were down nearly 12% in 2007 to around half a million. This fall is almost entirely due to the poor security situation. Sri Lankans look enviously across the Indian Ocean to the Maldives, where the industry is currently going gangbusters. (This might not last for ever: 80% of the islands' land mass is less than three feet above sea level and, if global warming predictions prove correct, the atolls will be among the first to disappear beneath the waves.)

But for Sri Lanka, if the conflict is sorted out, the sky is the limit. There are no fewer than seven Unesco world heritage sites on the island. The eastern coast teems with fish because its few fishing grounds have actually been under-exploited in recent years. The so-called Cultural Triangle possesses huge numbers of ancient monuments, and in the south, the area around Galle has become fashionable for the establishment of boutique hotels.

'Where in the world,' demanded a businessman in the tourism game, 'can you see the two largest animals on the planet in one national park in one day?' Elephants and whales are free for inspection, on and off the eastern coast, any time you wish to drop by. It's still best to avoid unreformed Tigers, though.

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