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Development & Aid

Dwindling Aid Slows Sri Lanka

Beneath a veneer of development, reflected in this newly laid railtrack, Sri Lanka's former war-zone is plagued by poverty, debt and lack of jobs. Credit: Amantha Perera/IPS

KILINOCHCHI, Sri Lanka , Nov 7 2013 (IPS) - When the first trains in almost two and a half decades started running through this war-ravaged town in Sri Lanka in mid-September, Sinngamuththu Jesudasan could not resist the temptation to go and have a look – repeatedly.

The last time the 62-year-old had seen a train on the track in Kilinochchi was somewhere in the late 1980s. “They suddenly stopped,” Jesudasan told IPS, staring motionlessly at the blue train speeding on the track towards Kilinochchi.

He was not alone. The first trains on the Kilinochchi track, declared open by President Mahinda Rajapaksa, attracted dozens of fans every time they sped by on the northern line.

Fathers brought young kids on bicycles closer to the track to see the train, and at least during the first few days, schoolchildren lined up at the newly refurbished Kilinochchi station, the train’s final destination on the northern line, to get on to the carriages.

“It is impressive isn’t it,” Jesudasan asked as he watched the train pass by.

Impressive indeed – the northern rail track is part of a multi-billion dollar infrastructure development undertaken by the government. By the Central Bank’s account, since the end of the war in May 2009, over three billion dollars have been spent in the North on infrastructure development.

The changes are visible to all. The A9 road that runs through the Northern Province is a six-lane highway, a far cry from the pot-hole infested dirt track it was for most of the last three decades. There are new hospitals, new electricity distribution systems and new banks.

Two recent U.N. surveys, one by the Office of the U.N. High Commissioner for Refugees (UNHCR) and another by the Office for the Coordination of Humanitarian Affairs (OCHA), finalised in June this year also found impressive progress in the former war zone, especially in infrastructure works.

Similar sentiments were expressed by U.N. High Commissioner for Human Rights Navi Pillay soon after she toured the region in August.

But just beneath the veneer of development lie the lingering issues of unemployment, poverty, food insecurity and mass debt. There are new roads, but they don’t seem to have brought in new riches.

Despite the impressive development spending, in the last three years, Sri Lanka has been struggling to harness donor funding for humanitarian work in the former war zone.

Since 2010, three successive joint appeals for work in the region have run into a collective shortfall of 430 million dollars. The U.N. has undertaken a new needs evaluation and the next appeal is likely to be released during the first quarter of 2014, OCHA officials in Colombo said.

“The era of cheap aid is over. Increasingly it will become tougher and tougher for the government to look for development aid at concessionary rates,” said Anushka Wijesinha, research economist at the national research agency Institute of Policy Studies of Sri Lanka.

Part of the aid slowdown has actually been blamed on the country’s economic progress. In early 2012, the World Bank categorised Sri Lanka as a low middle-income country, effectively limiting access to concessionary funding.

“The middle-income status directly affects donor contribution towards post-war reconstruction, rehabilitation and remaining humanitarian assistance,” stated the OCHA survey that is yet to be made available freely.

It also pointed out that there were regions of extreme poverty and vulnerability in the island. One of the most vulnerable regions is the war-hit north.

The UNHCR survey that interviewed 917 of the 138,651 families that have returned to the six northern districts since the war’s end found that only nine percent had regular wages. Over 55 percent said their income was based on irregular work, and over 43 percent of the families earned a paltry Rs 5000 (38 dollars) a month – less than one-sixth of the national average monthly income.

And debt seems to be rampant: “52 percent of the respondents report a total household debt of Rs 50,000 [380 dollars] or less, and a total 47 percent of respondents [report a] total household debt at Rs 100,000 [760 dollars] or more,” the survey found.

Experts say the slowing down of funding now puts the onus on the government to step in to carry out the remaining humanitarian assistance work.

“The issue of assistance is definitely one of the current dominant problems to addressing the IDP [internally displaced persons] problem,” said Mirak Raheem, who recently authored an extensive research study on protracted war displaced in Sri Lanka. “Donor financial support has played a crucial role in humanitarian work and now it will be incumbent on the government to fill the gap.”

Chandana Kularatne, an economist with the World Bank in Washington, told IPS that the government should first use the massive investments in infrastructure to foster growth in the region and build transport links.

“Development projects such as the building of roads are expected to improve connectivity and hence economic activity,” he said.

Attracting new investors would work as a great boost to the two main income generators in the region – agriculture and fisheries. Over 90 percent of the provincial population’s income is linked to the two sectors, and over 50 percent of the provincial economic output comes from them as well.

However, both sectors still crave outside buyers who can negate the impact of middle-men who drive down prices.

Wijesinha said that government should be much more astute with development spending and should also look at ways of expanding domestic tax revenue so that more funds could be generated within the island.

The OCHA survey said that its ongoing needs assessment survey will give a clear picture on the most vulnerable communities to help set priorities for aid and assistance.

It also said that things should change from the last three years, when there was a distinct separation between development and humanitarian work, with the government taking over the bulk of the former, and the humanitarian agencies taking the lead in the latter.

“The remaining and current humanitarian needs should be addressed concurrently with the development assistance,” the survey said.

But before all that, there should be sufficient funds to carry out the work, something that has been lacking.

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  • Obamasal

    Large chunk of expenditure is on the military for being idle or interfere with civil administration or local agriculture. This expenditure is justified by the MoD’s obsession with LTTE resurrection and enslavement of Tamil speaking minorities. The military is deployed in the former war strcken areas or Tamil speaking areas to keep the population under fear psychosis, refer to the three independent reports by CaFFE, Commonwealth Monitors and UN HRC High Commissioner, during the election opposition candidates and their supporters were assaulted and harassed. During the last 4 and half years since the end of the war there has not been a single incident of violence that can be attributed to the rebels, yet, the military rules Tamil areas.

  • Sinniah Sivagnanasun

    Those who contribute do not have any check at all. They spend lavishly as they like. Diaspora is there to bear all costs of relatives there.

  • srivanamoth

    It is obvious that just spending on infrastructures without enabling the local people cannot lead to growth of the local economy especially after a stifling war of attrition. Indebtedness is high and that is understandable after the war. Active banking, lending on easy terms support to farmers, fishermen, local businesses and the like may be one way to speed local economy. This alone may be insufficient to spur growth as compared to real needs without external donor support channeled possibly through the Provincial government direct.

  • Eusense

    Most unemployed in the north lacks real education and job skills. The terror group who took this region 30 years behind never gave a thought about the future of people except themselves. The gov. should now spend money on education and job skills. One thing for sure, these will not happen overnight. The Tamil diaspora should help all Tamils in the north rather than burning money on anti Sri Lankan propaganda that they think will make their dreams come true.

  • lightweaver1213

    So many nations and peoples of all walks of life are suffering poverty and the like without the wherewithall to rise above it. The money invested in the train was well worth the expense. Rail systems and trains promote trade/commerce, and enables unemployed people to travel to areas where work might be available. This should prove to be quite a blessing to the country of Sri Lanka.