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Rasheeda Bhagat

recently in Port Blair

The tsunami has devastated the economy of Andaman and Nicobar (A&N) Islands, and put paid to an estimated Rs 50 crore in tourism income the next four months, the peak tourist season, says Mr Mohamed H. Jadwet, President, Andamans Chamber of Commerce and Industry. In an interview to Business Line, he outlined the relief the business sector expects from the Finance Minister.

Excerpts from the interview:

How severe has been the economic havoc due to the tsunami?

First let me give you the pre-tsunami picture, which was very optimistic. There was a lot of buoyancy in the market, sale of automobiles, scooters, cement, steel... all commodities had picked up; property prices were up. There was interest in the islands and people wanted to invest a lot of money; the banks were flooded with new proposals.

Over the last five years small hotels have come up to cater to the needs of increasing tourism trade. Amidst this buoyancy final arrangements had been made for a chartered flight from Bangkok to Port Blair on a regular basis bringing in mostly Western tourists.

The December 26 disaster wiped out about 70 per cent of private and public infrastructure in Nicobar. In Port Blair there was not much damage to life or property except that in low-lying areas paddy fields were inundated. Also, on that day we had 5,000 tourists here. They were all evacuated within 10 days. January to April is the peak season for us; flights were full, hotels were all booked. So, now, the tourism sector alone will end up losing revenue of Rs 50 crore.

We're talking about 40,000 people spending about Rs 1,000 a day, and the money would have circulated in the economy; gone to hotels, tour operators, taxi people, etc... Rs 50 crore is not much of a figure by mainland standards but in a small economy, it is a lot. In a four-lakh population with negligible revenue generation, Rs 50 crore being sucked out of the market is a big blow.

What about business and trade?

In business and trade, Port Blair is the main centre; and 30-35 per cent of sales comes from the southern group, the badly affected areas where sales have plummeted. As of today 45,000 people are living in relief camps, including Port Blair, Nicobar and Nancowree. Shopkeepers and wholesalers here had given credit worth almost Rs 14 crore to retailers from other places.

That money is out of the economy and we don't know if we can ever get it back. In certain cases the shops are not there; in certain cases even the person is not there. In such a situation asking for money is heartless. Every shop in the main bazaar of Port Blair has an outstanding of Rs 5 lakh to 15 lakh, which they don't expect to recover. That is a big blow to the trade sector. Apart from this there is loss in confidence.

Coming to agriculture and paddy, settlers here were given about five acres on which they grew paddy that didn't have much commercial value but was consumed by the growers. Quality paddy is imported from the mainland. In the south, Little Andamans downwards, the main product was coconut converted to copra.

The Nicobarese, over the last 100 years, have not looked beyond coconut as far as their economic health is concerned. According to initial surveys, about 5 lakh coconut trees have been flattened.

Which is about 40 per cent...

Yes, so you're talking of a 40 per cent drop in production. Every month from the sale of copra Rs 1 crore was generated and it will take five-seven years for revival if you plant new trees. So this is an immediate loss and the future is uncertain.

I am told some businessmen have left...

That is a small in number; I think the figure is being exaggerated. On the whole I don't think more that 15,000 people have left A&N; not the tsunami hit but those who left in panic. People exaggerate when they say 50,000 to one lakh people have left. There are no roads where people can just walk or drive off.

The majority of the people who've left are unskilled labourers with roots elsewhere, who might come back. In Andhra Pradesh the labourers who returned were given such sops as free rice and money because they were coming from a tsunami-hit area. That was also an attraction, but most of them will return, as it's a question of their livelihood.

What about restoration of livelihoods? A&N has one third of India's coastline; should not there be more of fisheries?

Absolutely. Fishing is one area where nothing much has been done. We hardly catch Rs 6-7 crore worth of fish, which is nothing. The administration has said it will now concentrate on tourism, fisheries and high-value agriculture; that is now very relevant in the sense that we've lost a lot of land and whatever land is left had to be used more productively.

But don't you think that trade and industry will have to think of new areas and options? At the moment the entire country is looking at you and people want to help. You have to use this opportunity...

Yes, though there is gloom today, I tell my members that even if we had spent crores of rupees on marketing, we wouldn't have got this kind of publicity, so let's encash that. Forget the rest of the world, there were people in India who did not know us. .

So what are the opportunities?

We have projected a few greenfield projects. One is that at the lowest point — that is Great Nicobar — we fall in the international shipping route, where every five minutes a super cargo carrier passes the area. We want steps taken to make this point an international transhipment port terminal, just like Colombo.

Coming to tourism, there is hardly any effort to promote it; commercial flights are too few and the fares very steep.

Today, A&N unfortunately is a destination for 80 per cent of the people availing themselves of LTC (leave travel concession); their fare is being paid by either the government or PSUs and they look for hotels of Rs 300-600 a day.

While that sector is mushrooming, we've not seen Taj or Oberoi coming in. We're not in their ambit at all. Phuket, a small island one tenth our size, gets three million tourists a year.

The whole of India gets only 2.6 million and A&N 98,000. The problem with A&N is that nobody has looked at it as an independent, commercial, self-sufficient group of islands. Every year they give us about Rs 450 crore from Plan funds, and another Rs 400 crore comes from non-Plan sector for salaries, etc. When we cry, we get another Rs 100 crore. Nobody talks of revenue generation; the government generates only 10 per cent of this money.

You should demand apex fares; the rest of India gets it...

We've done that and also said at least reduce the price and let's have flights from Delhi and Mumbai. Now they have flyovers; let them at least have a weekly stopover so that those going to Singapore can include Port Blair as a destination without too much cost. But we need the government to act fast; the population of four lakh is too small and we just have one MP to represent us.

Suppose we were an independent nation we would have had to earn our bread and butter. Now we know ki Delhi se paisa ayega. The Maldives is such a small country, it is Muslim and conservative and yet has a liberal tourism policy; it is doing well economically whether in fisheries or tourism.

What about luxury cruises?

We have the geographical advantage of being so close to South-East Asia. We've talked to Star cruises that come up to Phuket, but they feel it'll be a very long trip. But we do get cruises coming in the morning and leaving in the evening and these are European, Caribbean, Russian and other ships.

Also, from Phuket, we get every year some 40 small private yachts of up to 10 seat capacity, which almost spend a week here. People live on board, travel around and are charged $100 a day.

Also promoted by a Phuket operator, we have an Andaman sea rally between Phuket and Port Blair for power and sailing boats.

Are you happy with the relief and rescue operations?

It could have been better. Even now we are a bit slow; the package from the Centre is not yet announced. It should be at least Rs 3,000 crore, to compensate the losses and rebuild the islands. That rebuilding will have to be done on a war footing just like the rescue and relief operations.

Rehabilitation cannot take 10 years; it has to be done within three years. If this kind of money is spent, the local economy will automatically be activated.

Unless the economy is revived, long-term problems cannot be solved. After all, how much relief can you give and for how long? But, unfortunately, there is no sign that rebuilding has started. For tourists, this gives a very bad picture.

So what is to be done?

You have to make sea walls, or bunds, or whatever it takes. The scientific community has to be involved. Certain things have to be done immediately. To go to Jollybuoy there is no jetty. So all this has to be done.

What else is the business community seeking?

Quite a bit. We want the FM to waive bank interest for 2-3 years and loan repayment to be re-phased. As I told you, most people have suffered direct and indirect losses. We don't say we won't pay, but give us some interest relief, attractive investment packages, waiver of service tax, subsidised airfares and more flights.

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