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By the Business Desk

The terrorist attacks in the United States on Tuesday would lead to a further slow down in the world economy and it will be a new challenge to Sri Lanka's economy, the business community said yesterday.

Exporters were worried, but said that it was too early to comment on the exact impact.

The following is a cross-section of the views of the business community.

Ruwan Cooray, Assistant General Manager (Treasury) of Sampath Bank said that the local business sector had enough to worry during the past few months due to political instability, adverse climatic conditions, terrorist attacks and the slowdown of the global economy. "That had a negative impact on the country's banking sector as well. Most of the local banks today are showing a negative or flat growth. The terrorist attack on America will make it far more difficult for us to recover from this situation. We will have to cut down unnecessary imports and promote local production."

"Our banking correspondents in the USA were in a 40-storey building opposite the WTC. Immediately after the first plane hit one of the towers correspondednts evacuated the building and people were relocated in New Jersey. However, we have received reports that our transactions are normal."

Patrick Amarasinghe, President, National Chamber of Exporters said the export market had already been affected by the US recession. The terrorist attack in America would only worsen the situation. "It is still too early to say to what degree it would affect our economy. However, it is better to prepare our people to face any adverse situation in the near future. Fuel prices have already gone up and the prices of commodities too may rise. We must look for alternative ways of keeping the country's economy stable at this critical moment," he said.

The US attack came at a time when we have not yet recovered from a similar terrorist attack on our international Airport recently. The incident would open the eyes of the super powers on how destructive terrorism is. It is time all these countries rally round to find a solution to this global problem. It will undoubtedly help our country to solve our own problem, he said.

Dr.Lalith Gamage CEO/MD SLIIT said that the incident will not have a major impact on the IT industry in Sri Lanka since technology companies are not listed with the NYSC but NASDAQ. The US has a more sustainable economy than any other. "This will however have a great impact on containing world terrorism. It will not affect trade between Sri Lanka and the US. I am optimistic of things returning to normal soon," he said.

Rohan Masakorala, Chairman of the Sri Lanka Shippers' Council said: "Our buying offices at the World Trade Centre might cancel orders from Sri Lanka. It is too early to comment how it will affect our export industry. We will come to know about it a couple of days."

Several other authorities in the banking and finance sector said that it was too early to comment on the issue.

A Tourist Board spokeswoman said that their Honorary Director, Dilan Ariyawanse who had an office at the WTC was safe and that he had telephoned from New York yesterday.

Impact on Asia

However, reports from Asia said that Tuesday's attacks on US landmarks would have a lasting impact on Asian regional currencies, but analysts believe an enormous dose of near-term uncertainty cannot be avoided.

Authorities in the region will have to act fast to stem panic in the markets and avoid damaging volatility and capital outflows, a Reuter report said.

Asian currencies were marked up in severely restricted trade early on Wednesday as several regional markets suspended action or imposed shorter trading sessions after hijacked airliners slammed into the Pentagon and World Trade Centre in the United States in terror attacks.

The US slowdown along with the slump in global electronics demand has taken a heavy toll on export-dependent Asian regional economies, massively exposed to the tech-sector.

Analysts said Asian Central Banks prefer to keep their currencies weak against the dollar on a trade-weighted basis to help maintain a competitive edge against their export rivals, the Reuter report said.

Japanese Finance Minister Masajuro Shiokawa said Wednesday devastating terrorist attacks in the United States would worsen the world's economy and have a major negative impact on share prices in Tokyo, acording to an AFP report.

"This terrorist attack is terrible and intolerable. Each country should consider how to protect peace and prevent the recurrence of such a disaster. It will worsen the world's economy much further, he said.

"The tragedy in the US will also negatively impact on the Japanese stockmarket so the Government should strengthen its efforts to boost employment to cope with this as soon as possible," Mr. Shiokawa said.

"The world's leading economies need to cooperate to overcome the effects of the tragedy," he said.

President of South Korea, Kim Dae-jung vowed on Wednesday to take urgent measures to cope with the expected large impact on export-dependent South Korea from the financial turmoil caused by the multiple aircraft attacks in the United States.

South Korea is already experiencing a pronounced slowdown sparked by the downturn in the US economy.

"The Government will respond swiftly and appropriately with whatever urgent measures in the diplomatic, security and economic (fields) it takes to overcome this crisis," he said. points.

South Korea's two airlines, with cargo as well as passenger schedules, cancelled all scheduled flights to the United States.

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