SRI LANKA: Anti-Corruption NGO Fears Misuse of Funds

by Clive Freeman

BERLIN, Apr 12 (IPS) - Transparency International (TI), a global non-governmental organisation battling world-wide corruption, has spoken of the risks of large-scale donor funds for Sri Lankan reconstruction being misallocated.

The Berlin-based TI says, unless ”safeguards” are built into tender procedures, there is a danger of money ending up in the pockets of dishonest politicians and regional power-brokers.

”The topic of corruption in post-war reconstruction can no longer be ignored by the donor community,” warned TI chairman Peter Eigen, ahead of a meeting of donor agencies in Washington on Monday.

Eigen, who heads TI's International Secretariat in Berlin, said the manner in which funds for Sri Lanka's reconstruction are to be managed must conform to best practices in terms of good governance and transparency.

”The international community has a particular obligation to be fully transparent in its aid procedures,” he continued, adding that the government of Sri Lanka must ensure that funds received go to ”reducing poverty, and improving health, education and vital infrastructure projects.”

”Otherwise, the intended effect of this aid will not be met and the Sri Lankan people will be the losers, because they will have to pay back the loans,” he said.

Eigen's warnings are poignant, for they come at a moment when international controversy has been fuelled over reports that Washington has begun negotiating with companies in countries ”loyal” to the U.S.-British war effort in Iraq, regarding huge reconstruction projects in that region.

Gopa Krishnan, TI's Berlin-based Asian department director, says they also come in the wake of recent disclosures in Sri Lanka, suggesting that 70 per cent of foreign aid received in that country since independence ”has never reached the intended beneficiaries”.

TI, he says, is urging the government of Sri Lanka to establish clear lines of accountability for use of funds received, and also to establish transparent procedures.

The organisation also calls on it to make a public commitment that donor aid and loans ”will be used solely for development purposes and will not be diverted into the private pockets of politicians, regional power-breakers or their associates, nor used for the purchase of weapons and military equipment.”

Transparency International also says there are lessons to be learned from reconstruction efforts in other conflict zones, including Bosnia-Herzegovina, where today corruption remains a serious problem facing the country.

J.C.Weliamuna, executive director of TI Sri Lanka, notes that donor aid is proving a key incentive where the ongoing peace talks with the Tamil Tigers are concerned. ”Corruption threatens not only to trap vast amounts of the population in poverty, but also to derail the peace talks themselves,” he warns.

The international community has focussed on reconstruction in the region ever since a ceasefire was signed between the government and the Liberation Tigers of Tamil Eelam (LTTE) in February 2002.

Japan, the Asian Development Bank, the U.S., Norway and the EU have all promised donor aid to rebuild war-ravaged areas in the north and east of Sri Lanka, and to resettle an estimated one million people displaced by the war.

TI calls on western governments and the international financial institutions to:

- Ensure that funding and lending policies are fully transparent and made public; - Include a requirement for accountability and transparency in funds or loans and obtain a statement from all parties that corruption will not be tolerated; - Make immediate plans to prepare monitoring mechanisms - where possible by citizens' groups in the country such as Transparency International Sri Lanka - to ensure that aid and investment reaches targeted projects, such as schools, hospitals and housing.

An estimated two billion dollars in grants and loans is thought to have been earmarked so far for reconstruction projects. More than 60,000 people have been killed during the 20 year conflict.

”Corruption practices” will be the main topic when experts from around the globe attend the 11th International ”Anti-Corruption” Conference workshop in Seoul, Korea on May 25-28, says Transparency.

TI, through its international secretariat and more than 90 independent national chapters around the world, works at both the national and international level to curb both the supply and demand of corruption.

In the international arena, TI raises awareness about the damaging effects of corruption, advocates policy reform, works towards the implementation of multilateral conventions and subsequently monitors compliance by governments, corporations and banks.

At the national level, chapters work to increase levels of accountability and transparency, monitoring the performance of key institutions and pressing for necessary reforms in a non-party political manner. (END/2003)