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Serving Sri Lanka

This web log is a news and views blog. The primary aim is to provide an avenue for the expression and collection of ideas on sustainable, fair, and just, grassroot level development. Some of the topics that the blog will specifically address are: poverty reduction, rural development, educational issues, social empowerment, post-Tsunami relief and reconstruction, livelihood development, environmental conservation and bio-diversity. 

Saturday, May 21, 2005

Thirty complaints against officials handling tsunami relief

Daily News: 19/05/2005" by Nadira Gunatilleke

Seven officials charged with pilfering tsunami aid have been interdicted and investigations are proceeding. The Women's Empowerment and Social Welfare Ministry have received about 30 complaints regarding Tsunami relief malpractices, Acting Social Welfare Minister S.M. Chandrasena said.

He said that no human rights organisation has reported to the Ministry about misuse or not receiving Tsunami aid so far. The Ministry is ready to investigate such incidents as soon as similar incidents are reported to the Ministry.

The media helped to disclose malpractices related to tsunami relief distribution and it decrease the number of malpractice incidents. The authorities started investigations on incidents after the media reported them. The persons who were planning to engage in malpractice abandoned their plans after the media started to report them.

"I came from Horowpathana where the LTTE massacred 34 innocent people including infants in one night. I saw what had happened to the people in Horowpathana but I support the joint mechanism.

This strategy does not divide the country but unites it. This Joint Mechanism helps to use Tsunami relief effectively. Otherwise the valuable aid sent by foreign countries will be wasted or misused. JHU confused the donor countries by opposing Joint Mechanism at the donor forum," the Acting Minister added. Chandrasena said that the Women's Empowerment and Social Welfare Ministry carries out other routine relief programs such as flood relief programs, drought relief programs long before and after the Tsunami hit Sri Lanka but sometimes Opposition politicians use this to sling mud, saying we distribute Tsunami aid in inland areas not affected by Tsunami.

The Ministry receives foreign relief for the victims of other natural disasters such as floods, droughts, cyclones and landslides but now it seems that all have forgotten the victims of other natural disasters and they never get relief, he added.

The Acting Minister revealed those details during an interview held on Tuesday (17) at his office, Sethsiripaya, Battaramulla.

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Sri Lanka’s largest Housing & Construction, Exhibition ‘Construct 2005’ in August

The Island: 18/05/2005"

Lanka’s biggest construction industry related exhibition - "Construct 2005" — will take place from 12-14 August this year at the Sirimavo Bandaranaike Memorial International Exhibition Centre in Colombo.

This prestigious annual exhibition has been organized for the fifth consecutive year by the National Construction Association of Sri Lanka (NCASL) and showcases the achievements of Sri Lanka’s construction industry. "Construct 2005" also brings together the entire value chain of the building and construction industry under a common roof for the dissemination and sharing of knowledge in advances made in skills and technology in the industry.

It takes on a multi-faceted and greater dimension this year in the aftermath of last December’s tsunami disaster. Chairman of the "Construct 2005" Exhibition’s Organising Committee Mahanama Jayamanna said that the ensuing rebuilding process had given many opportunities to the local construction industry. He anticipated a soaring demand for building material, equipment and construction technologies in the immediate future, with the envisaged post-tsunami reconstruction work in Sri Lanka. This would in, turn necessitate major reconstruction and rehabilitation work in infrastructure, housing and other facilities valued at an approximate USD 1.8 bn. "The theme chosen for this year’s exhibition — "Reconstruction; Let Us Make It Happen" — is an appropriate reflection of the optimism prevalent throughout the nation as we all look forward to the rebuilding of our nation", he added.

Jayamanne said that this year’s exhibition will feature over two hundred local and foreign exhibitors with Lafarge Mahaweli Cement (Pvt) Ltd coming in as Principal Sponsor for the third consecutive year. This also follows the success of Construct 2004 which surpassed the organisers’ expectations. A special innovative feature of "Construct 2005" will be the incorporating events — Lighting Asia, House & Property, Furniture & Interior & Air Con Shows — providing additional strength to the exhibition. One of the key objectives of this exhibition is to infuse Sri Lanka’s construction industry with world-class products, services and state-of- the-art technology, especially since the ‘Construct 2005’ exhibition has been viewed as the No 01 networking platform for all buyers and suppliers in the industry.

"Sri Lanka is, at present, rated as South Asia’s leading sea and services hub, strategically located at the cross roads of both East and West maritime routes, and serving as the point of entry for South Asia, The country is also an attractive investment destination for a number of reasons and is thus a naturally preferred venue for international companies eager to meet and transact business with Sri Lankan entrepreneurs", Jayamanne added.

The ‘Construct 2005’ exhibition will provide an opportunity for exhibitors to display the latest range of products and services to an ideal target audience. It is also expected to enable them to make key business contacts and gain access to emerging markets, while increasing brand awareness and reviewing competitor activities etc. The organizers will also facilitate one-to-one business meetings with the business community in Sri Lanka and visiting foreign delegations

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FCCISL faults CB’s tsunami loan scheme

Daily Mirror: Financial Times: 17/05/2005

The Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) yesterday expressed its serious concern and dissatisfaction over the operationalisation of "Susahana" Loan Scheme introduced by the Central Bank (or rehabilitation of Micro, Small and Medium scale enterprises (MSMEs) affected by December 26 tsunami.

According to the feedback received from its member Chambers in Kalutara, Galle, Matara, Hambantota, Ampara, Batticaloa, Trincomalee and Jaffna the number of loans disbursed by the Bunking network in the affected areas is not satisfactory in terms of number of MSMF's directly affected, number of livelihoods and employment lost, the extent of economic destruction caused by the tsunami and the urgency of reiteration of sustainable economic activities in the affected areas.

FCCISL's "Back to Business" programme is being successfully in operation in all affected areas and District Help Desks have been established in each of the District Chambers of Commerce. These help desks play the role of a co-ordinating point of financial and non. financial post tsunami MSME support services in the respective districts. In order to coordinate the back to business programme, FCCISL also has established a National Coordinating Unit at its Secretariat in Colombo.

FCCISL said one of the major draw backs of the "Susahana" Loan Scheme is that, it is very much collateral oriented and has now become another common "asset based" Loan Scheme demanding collateral instead of being "project based" by considering the viability of the projects.

"Even though the original objective of the Central Bank was to be very relaxed and flexible on collateral requirement in actual operationalisation of the "Sushana" Loan Scheme it has failed to meet that objective," FCCISL said.

In order to overcome these major drawbacks of the scheme FCCISL has proposed the Central Bank to bear the credit risk either fully or jointly with the Participatory Financial Institutions (PFIs) of the "Sushana" Loan Scheme.

FCCISL said Banks are reluctant to bear the credit risk and that is the main reason why the "Susahana" Loan Scheme has been so much collateral oriented. Since most of the affected MSMEs have undergone extensive damages and losses in terms of machinery, buildings, stocks, raw materials etc, they are unable to provide sufficient collateral to meet the bank’s requirements.

FCCISL is of the view that in a post tsunami rehabilitation context these regulations should be flexible and more development oriented in order to stimulate speedy recovery of both livelihoods and economic and industrial activities. In this regard FCCISL request the Central Bank to introduce a Credit Guarantee Scheme also in addition to the existing refinance scheme.

A number of cases also have been reported to several District Help Desks where Banks have demanded proof of adequate transactions during the last few months after tsunami from the affected Customers in order to process their Loan Applications.

FCCISL said affected entrepreneurs have become more helpless in the face of such unjustifiable demands particularly when the bank officials themselves are aware that the particular customers have been severely affected. There have been instances where Banks have requested personal guarantees from the Customers of the same Bank in order to process loan applications. Another practice of certain Bank reported by certain District Help Desks is that Bank prefer personal guarantees of Government Servants drawing a monthly income of over Rs. 15,000.00. FCCISL is of the view that such rules and regulations imposed by Banks are unjustifiable and tend to jeopardise post tsunami rehabilitation efforts of the Government and the Private Sector.

The district help desks also have reported that certain banks die reluctant to reschedule existing loans of tsunami affected entrepreneurs on concessional terms and thereby provide any relief to affected parties. FCCISL is of the strong view that the banks should be more socially responsible in this hour of rebuilding the nation than being very much profit oriented.

It is the view of the FCCISL that the rate at which the loan applications are processed at branch level is very slow despite a large number of applications being registered under the “Susahana’” loan scheme with the Central Bank for refinance purposes. FCCISL request the Central Bank authorities to closely monitor the performance of the “Susahana” loan scheme particularly at branch level.

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Friday, May 20, 2005

Special Rapporteur on freedom of religion or belief ends visit

ReliefWeb - Document Preview: "Source: United Nations Commission on Human Rights
Date: 13 May 2005

The following is the statement delivered today by the Special Rapporteur on freedom of religion or belief of the Commission on Human Rights, Asma Jahangir, at a news briefing in Colombo following her 2 to 12 May visit to Sri Lanka:
"First of all, I would like to introduce my responsibility here as Special Rapporteur on freedom of religion or belief. I serve in this capacity as an independent expert, distinct from any United Nations agency, and report to the United Nations Commission on Human Rights on the worldwide situation of freedom of religion or belief. My methods of work include visits to countries of concern for the mandate. These visits are not limited to countries which have a weak record in terms of freedom of religion or belief but include countries where emerging issues may threaten a satisfactory level of religious tolerance.
A Special Rapporteur visits countries at the invitation of the Governments concerned and I take this opportunity to express my gratitude to the Government of Sri Lanka for its excellent cooperation during the entire duration of the mission.
I am also aware that I have come to Sri Lanka shortly after the tragic event that have affected your country with the Tsunami. The resilience of Sri Lankans in dealing with their trauma and sufferings is in this regard particularly remarkable.
During my stay in the country, in addition to Colombo, I have traveled to different locations, including Homagama, Kandy, Batticaloa, Ampara, Jaffna and Killinochi. I have met with a number of Government officials, including the Minister of Foreign Affairs, the Minister of Justice, the Minister of Constitutional Affairs and the Ministers responsible for the different religious communities present in the country. I have also met with representatives of the different political parties as well as with the leader of the opposition. Meetings have been held with representatives of the Buddhist community, including the Most Venerable Udagama Sri Buddharakhitta, representatives of the Hindu, Muslim and Christian communities as well as of smaller religious groups. In Killinochi, I met with representatives of the LTTE. Finally and most importantly, I met with a number of representatives of the civil society, concerned Sri Lankans and members of non-governmental organizations (NGOs).
The report on my visit to Sri Lanka will be submitted to the Commission on Human Rights after my visit and will include conclusions and recommendations to the Government as well as to the international community. At this stage I am therefore only in a position to share with you some of my preliminary observations.
During my visit I have noticed that there is a high degree of transparency in the Sri Lankan society, including amongst the government functionaries and the political leadership that I met. They were open to discussion and keen to preserve their culture of religious tolerance. However, I have noticed that certain issues related to the right to freedom of religion are not appropriately addressed. In this regard, I am concerned that inaction or lack of proper attention could lead to numerous misunderstandings and promote a climate of religious intolerance.
Over the last few years, I have received a number of reports of violent acts of religious intolerance such as the destruction or burning of places of worship. These have been perpetrated against different religious communities and have been widely confirmed by interlocutors from all sides. I have noted that in most cases the perpetrators have not been brought to justice. Moreover, in many cases, the police and other competent authorities appear to have been reluctant to take appropriate actions despite the identification of perpetrators. The inaction of the Government can only embolden the forces of intolerance and paralyzes rational voices. Inability to take appropriate and timely measures in arresting the rising trends of religious intolerance could make political as well as religious leaders a hostage to the very few who take extreme positions. I consider that the reported attacks on places of worship, mostly on churches, constitute clear violations of the right to freedom of religion or belief and the Government has an obligation to prosecute their perpetrators and to compensate the victims.
During my visit, I have received numerous allegations of organized groups involving in improper or unethical practices to induce individuals to change their religion. While it was not claimed that anyone was coerced to or forced to change his or her religion in a manner that is clearly incompatible with the right to freedom of religion or belief, many of these allegations have remained vague as to the identity or circumstances of the so-called victims. Despite several requests and efforts in this direction, I have been unable to hear direct testimonies of such cases. Nevertheless, second hand accounts by credible sources indicate that conversions through improper means have indeed occurred and certainly raise a concern.
There were a few reports of incidents of deliberate 'hurt' to religious feelings and of defiling of religious symbols. These are of concern to my mandate and I will be following the outcome of the investigations. I believe that the existing legal provisions in the Penal Code of Sri Lanka are sufficient in dealing with the nature of offences reported to me and urge that these be effectively implemented.
Moreover, in the same context, there have also been allegations that faith based organizations that have brought humanitarian assistance to Sri Lanka for the victims of Tsunami, have adopted certain methods exploiting the vulnerability of the population. I have also not been able to confirm these allegations by precise and individual cases but a sufficient number of allegations are confirmed by a number of sources.
I would therefore call on those Sri Lankans and foreigners that are involved in humanitarian and development efforts to respect the guiding principles on humanitarian law. The United Nations General Assembly Resolution 46/182 urges NGOs, religious and missionary organizations to provide aid without espousing any particular religious opinion. A large number of humanitarian workers and organizations have scrupulously observed this principle. They have generously donated and tirelessly worked for the victims of Tsunami but regrettably a few have not strictly observed these guidelines. These are regrettable practices but do not constitute a criminal offence or a clear violation of the right to freedom of religion, as long as such conversions are not carried out under force, pressure or other coercive methods. Nevertheless, they do raise anxiety.
In response to these religious tensions, some initiatives have led to the introduction of two draft laws that would criminalize acts of 'unethical' conversions. Contrary to what has been often claimed, the content of these drafts as well as the implementation of their provisions do raise concerns under human rights law, including the right to freedom of religion or belief.
In this respect, I note with some satisfaction that there are in Sri Lanka independent mechanisms and pluralistic as well as democratic traditions. As such Sri Lankans are adequately experienced to resolve emerging religious tensions. The Supreme Court of Sri Lanka in its determination has declared portions of one of these draft Bills as unconstitutional. In my opinion, the provisions of both draft Bills could result in the persecution of religious minorities rather than the protection and promotion of religious tolerance. The enactment of these Bills could seriously undermine the culture of religious tolerance enjoyed for decades in this country. It could impair the religious harmony that this country can rightly be proud of sustaining even through the difficult period of a civil war.
More essentially, while I could be apprehensive by the relative determination of a few, I have been encouraged by the fact that the important majority of my interlocutors have expressed their willingness to resolve this question through appropriate means".
For use of information media; not an official record "

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Rice bumper crop: Don’t thank weather gods alone!

The Island: 17/05/2005" by Dr. Sarath L. Weerasena, Ph.D.
Cornell University Retired Director General of Agriculture

Consequently, the water in major reservoirs has also been conserved for the next Yala cultivation season. Solar radiation during the Maha season has been good for the crop photosynthesis. When the water and sunshine combination is ideal, we believe that the country becomes rich in rice to feed 20 million mouths, two to three times a day. In fact, the rice harvest just gathered is the highest ever obtained during a Maha season. (See Table).

Given the sunshine during Yala season, the country should produce another bumper rice crop because water is already available in the major irrigation systems. However, is it only water and light that arrive from the heavens that determine crop performance?

How significant are biotic factors in crop production? The purpose of this write-up is to focus on some of the biotic factors and their combinations which have collectively contributed to the realized rice bumper crop. Understanding their significance is sacrosanct to further scientific thinking to achieve even higher levels of crop performance.

Soil and plant nutrient environment


Soil as a living substratum for rice cultivation provides anchor, nutrients (macro and micro), microorganisms and growth promoting hormones. Their right combination is needed to provide the ideal situation for optimum plant growth. Age-old technology of incorporating organic matter into the soil has been neglected with the importation of inorganic fertilizer. It was believed, (and made to believe) that inorganic fertilizer could fully cater to plant nutritional requirements. The notion sidelined the fact that soil is very much a living entity and must be cared for to help raise healthy crops. After decades of using only inorganic fertilizer, it became apparent to rice scientists that the expected yields with new rice varieties would not be forthcoming.

Genetic improvement of rice varieties by itself is inadequate to meet the challenges in the biological environment. The ‘living’ soil must be helped to develop the capacity to deliver what the rice plant needs. With the "new" thinking, the Department of Agriculture embarked on a programme to re-educate the farmers on the virtues of using a combination of organic material with inorganic fertilizer. Whatever organic matter the farmers could access would be incorporated into the soil at the time of land preparation. Green leaves, cattle manure, poultry dung and half-burnt rice husk were prescribed to be compulsory additives to the soil at land preparation. The yields obtained were most encouraging to the farmers. Rice farmers who obtain the highest yields ever in this country report over 200 bushels of grain per acre (10 tons per hectare) with the combination of organic coupled with inorganic nutrient technology.

Rice varieties and extents covered

The Department of Agriculture is the sole organisation responsible for rice breeding. Since independence, the department has officially released over 50 varieties of rice at the rate of one variety per year. The public would recall the impact of variety H4 bred by Dr. Hector Weeraratne at the Central Rice Breeding Station, Bathalagoda. It revolutionized rice cultivation in the country and replaced almost 90 per cent of traditional rice varieties grown by farmers. The key features of the variety were the high yields (4 tons per hectare compared to 2 tons per hectare with traditional varieties and excellent palatability. Similar dedicated breeders of the caliber of Dr. Dharmawansha Sendhira and Dr. M. P. Dhanapala and their disciples continued the rice varietal improvement programmes which resulted in varieties that could compete with the best in the world. The yield potential of some of the varieties exceed 10 tons per hectare. Sri Lankan farmers sow over 95 per cent of the asweddumised extent with the improved rice varieties, thanks to the agricultural extension scientists and their programs, enabling farmers to realize high yields. The national rice grain yield level is approximately 4 tons per hectare because of the drag down in the wet zone districts. Yet, Sri Lanka is above India and Thailand in per hectare rice yield levels. The average grain yield in the high potential dry zone districts is around 6 tons per hectare.

Use of quality rice seed

Improved rice varieties must find their way to the farmers’ field without adulteration or decline in the genetic make-up. Similarly, the seeds used by farmers must be high in germination and vigour, have no weeds or contaminants. To ensure these quality attributes to the farmer, the Department of Agriculture has been implementing scientific quality assurance systems from production fields to retail points. Almost 20 percent of the rice seed sown in this country has been produced using this quality assured system. Private and state sector seed production ventures have developed mutually complementing collaborations which have during the past six years blossomed into a vibrant seed supply organizations seldom seen in other countries. The 20 per cent coverage of the extent sown with quality seed today is no mean achievement because it was only 4 per cent coverage in 1999. Government support to launch the project entitled, "Basic Seed Supply Programme" since 1999 and the dedication of the officers of the Seed Certification Service and the government farms network of the Department of Agriculture are commendable.

Quality seed paddy is produced mostly at village level in the dry zone areas. The product undergoes rigorous quality verification at field level and in the Seed Testing Laboratories of the Department of Agriculture before reaching the farmer. It is scientifically proven that crop yields increase by at least 20 per cent by mere use of quality seed alone. Most progressive farmers are aware of this fact and seek quality assured seed every season. In Ampara district where rice is a highly paying crop because of high yields, it is reported that about 60 per cent of the farmers use quality assured rice seed.

The seed programme of the Department of Agriculture sets standards for the industry to follow. Therefore, farmers have the fullest confidence in the seeds carrying the labels of the DOA. Private seed producers who earn the DOA label after following the rules and regulations of the DOA use it as a marketing tool for maximum financial benefit as the label signifies premium quality sought by farmers.

Environment friendly technologies

Rice when grown repeatedly on the same land invites a host of pests, especially in our tropical environment.

Therefore, pesticide use has been increasing up to recent times. However, it is now common knowledge that the excessive or unwanted use of pesticides actually increases pest incidence because of the elimination of the beneficial insects living alongside the pests in the rice growing environment. Therefore, the Plant Protection Service of the Department of Agriculture has launched the Integrated Pest Management (IPM) system during the past two decades with great success and farmer acceptance. It advocates use of pesticides only in the event that a specific prevalent pest population becomes economically threatening. It not only saved costs of pesticides, and spraying costs but saved the environment and the rice consumer as well.

Rice production also increased in the IPM areas because of the build up of beneficial insects and natural elimination of pests. The IPM program continues to be improved and expanded to cover more land in the country with support from the central and provincial extension systems.

Simultaneously, the pesticides that are allowed to be imported are restricted to the safest available through prior informed concept (PIC) practiced between the exporting and importing countries. Sri Lanka is no longer the dumping grounds for pesticides.

The Department of Agriculture has built the laws and regulations to keep away the "dirty" pesticides from our environment for a long period. The return of the flocks of storks, reptiles, crabs, etc., to our paddy field landscapes in recent times are reassuring indicators of the environmentally safe pesticides and the success of the IPM strategies.

Silent scientists


Most of the above-mentioned programmes are operated by scientists without fanfare and publicity as technical officers normally do all over the world. Therefore, people generally are unaware of the scientists’ dedication or contributions to national causes. However, in this case it is a sacred effort for ensuring national food security, and it is worthwhile to bring about some publicity and appreciation of the programmes and our scientists, who use the weather factors, over which we have no control, to the maximum benefit of the rice eating nation. Let this be a tribute to their efforts and dedication.

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It’s still a life in limbo

Sunday Times: 15/05/2005"

Nobody seems to care By Nawaratna Samaratunga
AMPARA: With nearly 20,000 houses damaged, the Ampara district was one of the worst affected regions by the December 26 tsunami, but little has been done to rebuild these partially or completely destroyed houses.

Many coastal villages inclduing Periyanilaweli, Maruthamunai, Pandirippu, Karthivu, Kalmunai, Sainthaamaruthu Ninthavur, Akkaraipattu, Tirukkovil, Potuvil and Panama were badly hit.

According to figures compiled by the District Secretary, 17,018 temporary houses are needed, but so far only 8,016 have been put up. Additional District Secretary Asanka Abeywardene said although lands have been allotted and surveys completed, construction is yet to begin. He also stressed with the onset of the monsoon it was urgent to provide the displaced people proper shelter.

About 152,000 people are still languishing in 25 welfare centres throughout the district, The Sunday Times learns. In addition to the housing problem, the fishing industry- the main livelihood of the people- is yet to pick up. Many fishing boats were either washed away or badly damaged by the catastrophe, causing a loss of about Rs. 15, 319 million.

The other sectors affected include agriculture that suffered a loss of Rs. 28.2 million, the health sector Rs. 424.5 million, the road network Rs. 545.7 million, the water supply Rs.66 million, electricity Rs. 172.3 million, irrigation Rs. 33.4 million and postal services Rs. 9.9 million.

In Arugambay some of the hotels have come up and business seems to be picking up. But those forced to live in the makeshift camps are not happy with the progress of rehabilitation work. Many of them ask the same question, "what is the government doing when compared with the work done by NGOs."

R.Kirubakaran of Pandiruppu, said, "I have four children and we lost our cattle and poultry to the tsunami. We lived near the kovil and soon after the disaster we moved to a temple in Tissapura. Then we moved to the refugee camp at Fatima school. The government said they would be giving Rs. 5,000 a month, but so far we have got only 10,000. I was a carpenter but now I cannot work as I lost everything to the sea. It was a Buddhist monk and the STF that came to our aid. We are now roughing it out in a temporary house, which is very hot by day and night. My children are unable to go to school as the tsunami took away their mode of transport, the bicycle. Nobody seems to care about us."

The Grama niladhari S.Nadarajah who was also affected said, "The tsunami destroyed the houses and I lost some of my relatives. I now live in a relative's house. About 300 people died in my area and most of the survivors are living in tents and many have lost their means of livelihood. "

S.Rasamma lamented that this was the first time she was living in a refugee camp." We have very little facilities. We couldn't even celebrate the New Year. The government's promises are merely confined to talk over the radio and TV.

NGOs came to our rescue By Gamini Mahadura
GALLE: Only about 50 permanent houses have come up in this badly affected district, and that too courtesy of non governmental organisations, say angry tsunami survivors.

In Galle destrict alone, there are still as many as 26 refugee camps and 10 of them are located in schools, disrupting the education of many students. Although 2,739 temporary houses have been built, about 2,000 more are needed.

T. Sunil de Silva, a labourer at the Galle Municipal Council now lives in a welfare centre in a cemetery in Dadolla. He says, "We cannot live like beggars indefinitely. It's nearly five months since we have been confined to the camp. We have had enough of living in a camp located in a cemetery. There are 328 of us living in this hell hole.

"We urgently request the government to give us temporary houses, or else we will take to the road. Our camp is only 30 metres away from the sea and at night we leave this place and spend the night in the temple close by. We did not get tents neither are we getting the Rs. 250,000 compensation via state banks as we have no land outside the 100 metre buffer zone," Mr. de Silva said.

Thirty-six year-old V.Piyalatha said, "We lived in the housing scheme belonging to the Galle MC. We did not get deeds for these houses and the scheme was badly damaged by the tsunami. Although the officials have designated them as half destroyed houses we have been forced to reoccupy them as we have no where else to go.

K.Pushpananda a woman at the Katugoda welfare camp said 61 families were living in misery in 42 tents. "The question is when will we be eligible to get even temporary houses. No one knows where we are heading. We would have died of hunger, had not the NGOs come to our rescue," she lamented.

G.P.Dissanayake of Dadalle said that the heat in the camps during the day was terrible and when it rained it was even worse with the whole place getting flooded. However she said they were at least thankful that the ICRC had provided them with tents.

N.K.Ratnayake of Habaraduwa said, " more than 200 families in our village were displaced by the tsunami, but only 49 families have been selected to receive houses. We are not clear of the selection process.

Neither the Grama Sevaka nor the District Secretary has an answer. We have to depend on the NGOs as no one has come from the state sector." While the plight of these refugees is pathetic, it appears that the state machinery is unable to cope with the enormity of the tsunami tragedy. The district's UDA has only three technical officers and this has delayed the building of temporary houses.

Only foundation stones By Premasiri Weerasinghe
HAMBANTOTA: After more than four months, tsunami victims in Hambantota are seeing very little by way of housing, although foundation stones have been laid for several new housing schemes. More than 1,500 people are still living with only basic facilities in tents provided by local and foreign donors.

Officials say about 79,000 people were displaced, about 4,000 houses destroyed and about 3000 houses partially damaged in the catastrophe. Although the government has promised to build about 6,500 houses, so far only about 100 have been completed, some displaced people complain. In Tangalle, 50 families have received houses.

A new town, Siribopura is to be established three kilometres away from the Hambantota town for which the foundation stone was laid by the President and other ministers on January 19, but only 25 houses sponsored by the Subodhi foundation have come up so far.

Though some displaced people have moved into these houses they complain that they lack electricity and other infrastructure facilities. Though work on other housing projects has begun, the pace of work is slow and in some cases only the ground work like forest clearing has begun.

In February, Minister John Seneviratne visited Mayurapura where plans were drawn up for a project for 70 houses, but little progress has been made. On the same day Prime Minister Mahinda Rajapakse visited Hambantota, where a foundation stone was laid for a World Vision funded project for 116 houses, but work is yet to begin, The Sunday Times learns.

Hambantota Mayor D. A. Gamini said the tsunami devastated nearly two thirds of the coastal belt and those displaced were still roughing it out in three camps.

Adding that the government had started building temporary houses recently, he said it would take about six months to a year to provide houses with proper facilities. "The government does not even have a short term plan and even our views are disregarded.

The chaotic situation is mainly due to government inactivity. I discussed this with the Prime Minister at the District Development Council meeting too," he said. He also said that in addition to building houses the business community should be helped to restart their livelihoods.

Some houses coming up By Sinniah Gurunathan
TRINCOMALEE: Unlike in other districts, some construction appears to be taking place here. Thirty two NGOs have signed MoUs with the Government Agent, Gamini Rodrigo to construct houses for tsunami victims and a Lions Club project has started to build 100 houses at Cassim Nagar in Kuchchaveli.

In other areas land is being located and blocked out and once UDA approval is obtained, donors will begin construction," Ishan Wijettilake, District Manager of Tsunami Housing Resettlement Unit said. According to THRU sources, 6615 houses had been damaged within the buffer zone and 673 outside the buffer zone.

Govt. takes over unclaimed tsunami-aid containers
The Social Services Department is taking steps to clear nearly 300 tsunami aid containers which are held up in the Colombo port due to non-payment of customs duties, a Social Services Department official said..

Social Service Department Deputy Director M. I. Pereira said these containers contained about 3,000 tons of rice, clothes and food items including packets of noodles, biscuits and milk and canned food.

He said the department would clear the containers, sort out the items and store them in its warehouses for distribution among the tsunami-affected people.

Mr. Pereira said some of the food items were outdated while some clothes were not suitable for distribution. "We have to check item by item before they are distributed to the people," he said.

Voice of women should be heard in tsunami rebuilding, says top UN official By Chandani Kirinde
The voice of women needs to be heard in the post-tsunami rebuilding process if the work is to be successful, a top UN official in charge of women empowerment has said.

"Women are not just victims they are survivors and they need to be part of the solution. They should be engaged in the decision-making process," Dr. Noeleen Heyzer, Executive Director of the United Nations Development Fund for Women (UNDFM) said in an interview with The Sunday Times

Dr. Heyzer was on a four-day visit to Sri Lankan to study the post-tsunami rehabilitation process. During her visit to Galle and other tsunami-hit areas, Dr. Heyzer met many women who survived the December 26 catastrophe. She said she was encouraged by the enthusiasm these women had shown to get on with their lives but felt they needed help to do so.

"The women are very concerned about the tsunami grants being disbursed among the displaced but many of the women don't have access to these grants as the money goes to the heads of the households who are men. The same applied to bank accounts and this made it extremely difficult for the women to gain access to the rebuilding process," she said.

Dr. Heyzer said a survey done recently in tsunami-hit areas showed that 40 percent of women want future property in their name while another 40 percent said they want joint ownership while only a minority said the property should be in the name of a man.

She said the voices of women were not heard at the level of policy-making or even at the level of camp management when it was very important that their views also be heard. "They should be able to shape resource allocation so that it goes to the right places," Dr. Heyzer said.

"The women want to be able to rebuild their lives with a strong economic base. We want to help them move up the economic value chain to position themselves better in the whole market system," she said.

Dr. Heyzer said she had met with coir workers in Galle and was concerned that the women had to go to pits to collect the raw materials and it was necessary to find a way so they could work in safer and less hazardous environment.

She said many of the affected women had taken loans and steps should be taken to write their debts off, just like debts of tsunami-affected countries were written off.

2 billion for land: UDA By Marisa de Silva
The UDA has estimated that about Rs. 2.2 billion rupees would be needed to acquire private land for the resettlement of tsunami victims residing within the 100m buffer zone.

This amount is subject to change, as it's only a general estimation based on the varied land value of the respective areas, UDA, Director General K.V. Dharmasiri, said. Furthermore, once the Government Valuer, makes his estimation and the Government negotiates with land owners, this amount is likely to change, he added.

In addition, the UDA doesn't handle any funds and therefore, the allocated funds would have to be transferred directly from the Treasury to the Lands Ministry.

According to reports compiled by the TAFREN, a total of 77,561 houses island-wide have been fully/partially damaged, of which, 50-55,000 were within the buffer zone .

Already 170 MoU's have been signed with 111 donors to rebuild 36,603 houses in the resettlement land identified by the Government. Although, initially, there had been 212 pledges made by donors to build 96,630 housing units, only 111 have been realised. A minimum of Rs. 500,000 rupees per house has been allocated, a spokesperson for TAFREN.

The breakdown of the 36,603 houses to be built are Ampara - 7011, Batticaloa - 4486, Colombo - 2288, Galle - 2495, Gampaha - 901, Jaffna - 1848, Kalutara - 4075, Matara - 2278, Mullathivu - 1000, Trincomalee - 4329 and Hambatota - 4183

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Sri Lanka: OCHA post-tsunami update May-2005

ReliefWeb: 18/05/2005" United Nations Office for the Coordination of Humanitarian Affairs (OCHA)

United Nations Activities in Support of the Relief and Recovery Efforts of the Sri Lankan Government and Its People

A note from the editors

"Post-Tsunami Update" has been created with the objective of providing Sri Lankans and a wider audience a sense of the activities of UN agencies in support of the government and its people in their relief and recovery efforts. Within the few pages of this periodical, it is impossible to record the full dimensions of such support, or to mention the activities of each and every agency. Over the coming months, we hope to report on the activities of most actors in this landmark emergency relief and reconstruction effort. In the interim, we draw your attention to the UN agency contact list and the information on the Humanitarian Information Centre, both located on the back page of "Post-Tsunami Update." They can provide you valuable insight into the work of all the UN agencies involved in Sri Lankan relief and recovery efforts.


Achievements amongst the challenges


The December 2004 tsunami provided unique challenges to the Sri Lankan Government and its people and the international community that has been assisting the country in its relief and recovery efforts. The relief phase, while not flawless, particulary given the extraordinary numbers of actors who responded to the Sri Lankan disaster, achieved most of its humanitarian objectives. Virtually all tsunami sur- vivors have received food, shelter and medical assistance. Schools are back in session and recently the pace in con- struction of transitional shelters has picked up appreciably. Some of the bot- tlenecks regarding land allocation are now being resolved and soon the gov- ernment will table its national recon- struction plan and the recovery phase will begin full force.

Even given these achievements press- ing relief needs still exist. Some tsunami-survivors remain in tents and are challenged by the monsoon flood- ing. Many remain unemployed and without immediate income-generating prospects. It is during this transitional period -- as the emergency relief phase winds down and before the reconstruc- tion phase is in full gear - that all of us involved in responding must redouble our efforts to meet both the immediate needs and longer-term concerns of tsunami-affected communities. "Post- tsunami Update," the first issue of which you hold in your hands, has been creat- ed to share some of the achievements and challenges of UN agencies as they support the Sri Lankan Government and its people in their tsunami relief and recovery efforts.

Miguel Bermeo
UN Humanitarian and Resident Coordinator in Sri Lanka

Confronting the problems of monsoon flooding


While the pace is picking up in the construction of transitional shelters, it has not progressed as quickly as hoped for in Galle district because of assorted challenges including difficulties in land allocation. According to the Transitional Accommodation Project (TAP), 5,403 transitional shelters are needed in the district of which 2,739 have been completed by the end of April and 1,818 more are currently under construction. That leaves 846 shelters still to be built.

In the absence of such transitional accommodations, many IDPs are still living in tents with poor drainage and marginal water supply and sanitation facilities. According to a camp database compiled by Project Galle 2005, some 66 IDP camps are in Galle district with 29 camps in the stretch from Galle Town towards Welligama and 37 between Galle Town and Peraliya. Flooding routinely occurs in the coastal areas, particularly in Hikkaduwa and Seenigama. The flooding is aggravated by the annual high tides (warakan) that come around this time.

In anticipation of the monsoon, and given the slow pace of moving IDPs from emergency camps and shelters, Community Habitat Finance (CHF) and Project Galle 2005 conducted an assessment to identify camps at high risk of floods, and/or camps least likely to be resettled. The objective then was to provide these locations priority assistance - particularly in upgrading tents, replacing tents and improving drainage. Project Galle is proactive in dealing with the plight of those living in tents and other shelters prone to flooding.

They informed the District Secretary of each division where the camps were located, and approached the district Transitional Accommodation Project (TAP) office for approval, in full consultation with UNHCR. Project Galle then conducted meetings with camp leaders and land owners to discuss their desperate shelter situations and their suggestions for improvements. Better drainage was an oft-mentioned priority.

This meant that work had to be done which included such initiatives as raising the ground level on which tents lie, providing shading from the mid-day heat, channeling drainage, and improving sanitary facilities. This consultative process led to a CHF-financed project which is being implemented by Project Galle 2005 to upgrade tents, improve drainage, and replace inadequate tents with appropriate ones where necessary.

Labor for improving drainage is done by the beneficiaries themselves thanks to a CHF Quick Impact Cash-for-Work programme.

Monitoring and evaluation of developments was done to ensure the delivery of approximately 150 camps before the monsoon season.

To date, Project Galle has replaced 60 tents in Galle district. They are using new tents provided by UNHCR and the Italian Civil Protection Unit. Project Galle has begun its drainage and tent upgrades in Seenigama, Hikkaduwa, but has experienced some delays given that the whole water site planning must be vetted by the district Water Board and other government agencies. Upgrading of tents is proceeding well in the Seenigama area with tents provided by the Italian Civil Protection Unit.

Full report (pdf* format - 4628 KB)

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Thursday, May 19, 2005

No political will to fight corruption in post-tsunami reconstruction

Sunday Times: 15/05/2005" By Iromi Perera

Transparency International Sri Lanka (TISL) made some key recommendations for preventing corruption in post-tsunami relief and reconstruction operations at a seminar on 'Rebuilding with accountability after a disaster' on May 11 organized by TISL and the Institute of Chartered Accountants of Sri Lanka (ICASL).

Some of these recommendations were that all stakeholders involved in tsunami assistance must ensure transparency and accountability in their operations particularly in the management of the financial flows, that donors should coordinate with the governments and among themselves to avoid duplication of assistance schemes, and that affected people and also civil society should be involved in decision making.

They also called for better information dissemination and the provision of easily accessible corruption reporting channels combined with effective mechanisms to encourage and protect whistle blowers.

As the affected people's ownership of the relief and the reconstruction process is essential, operations should build on their leadership, participation and commitment to ensuring the best use of assistance. Relief operations must therefore contribute to the strengthening of local institutions, transfer of technical skills, and should promote policies aimed at preventing corruption.

NGOs play an important role in monitoring the relief and reconstruction process and in reporting any suspicion of corruption to authorities. They need to closely coordinate their activities with governments, donors and among themselves, while ensuring the maximum involvement of all groups of affected people in priority setting and decision making.

TISL said that for these ideas to resonate and apply in the Sri Lankan context, certain enabling factors need to be promoted to make sustained impacts on ground. TISL believes that a visible political will to fight corruption in the post-tsunami reconstruction is conspicuous by its absence in Sri Lanka.

In strengthening of local institutions and networks to ensure community ownership and participation in the relief and reconstruction activities a point to emphasize is the need to identify and promote local expertise as there is a clear danger of applying universal templates to culture specific contexts and creating solutions which are impractical and worse, exaggerate existing problems.

Empowering citizens and affected communities through enacting new legal measures such as Right to Information, Disclosure Laws and Whistleblower Protection Acts to ensure effective public participation and collaboration in rolling back corrupt practices are also some of the factors pointed out.

According to TISL, there is a growing danger that all capacity building measures on accountability and transparency will be limited to the relief and reconstruction projects (mostly due to donor compulsions) and will leave the larger domain of public institutions untouched.

There is a strong need to strengthen critical institutions like the office of the Auditor General, independent commissions like the Bribery Commission and Parliamentary Oversight Committees. If these wider measures are not taken, there is a strong chance that particular projects will exist as "islands of integrity" in "oceans of corruption".

TISL also says that the under-currents of conflict embedded into the social and political fabrics need to be kept in perspective while designing participatory structures for the implementation and monitoring of relief and reconstruction works. The idea of broad based consortiums should be promoted to make public participation more inclusive and representative.

TISL strongly believes that these ideas, concerns and suggestions should reverberate within all institutional spaces in the governance arena. The need of the hour is for a constructive inclusive debate and a proactive posture to reflect and review current practices and policies.

Ajith Nivard Cabraal, Management Consultant and Past President of ICASL, made a presentation on 'Creating enabling institutional mechanisms in Sri Lanka - Challenges and Opportunities'.

Institutional mechanism is a body to formulate an acceptable policy and to develop a delivery system for a specified objective. An enabling institutional mechanism should ideally cover assessing the extent of damage, assessing the needs of beneficiaries and victims, raising the funds necessary to meet the cost of relief and reconstruction, ensuring the participation of "victims" in the rebuilding effort, create awareness of the work being carried out, implementing projects while ensuring quality control, people's participation and monitoring and instilling and ensuring financial discipline, arranging disciplinary proceedings and anti corruption measures, and regular reviewing of operations and outputs.

Cabraal said that the fundamental pre-requisite for any institutional mechanism is the empowerment of the people. To ensure this, there should be peoples' right to participation, transparency and monitoring by people, right to information, right to be consulted and to exercise informed choice and consent, right to monitor, evaluate and audit all disaster response work.

The recommendations made by Cabraal for creating institutional mechanism are rebuilding with accountability, rebuilding quickly, rebuilding with people's participation, revival of livelihoods and economy, capacity building and training of those engaged in the relief and reconstruction efforts, trade and enterprise resurgence, engaging local communities, foreign donors and NGOs effectively and establishing credible complaint and grievance channels.

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Revolutionary housing plan for tsunami victims

Sunday Times: 15/05/2005" By Prof. Kopan Mahadeva

The author who lives in the UK urges the government to introduce his simple and feasible rapid system to build 100,000 new solid houses, for tsunami-afflicted people which could be done in 3-6 months. Repairs of damaged houses could begin with aid-materials from abroad. Work can also start in 1-2 weeks on the new houses by scientific project planning. Making wall-blocks can start straightaway. We need over 50 million of them, for new houses alone, irrespective of roof design.

It is vital that the government take correct steps in constructing houses for tsunami victims. For example to what designs are the new houses to be built? What material is to be used? How much? Are these available? Where? What can be done to prevent damage from possible future tsunamis?

Here are some urgent, strategic engineering solutions for immediate consideration of options and choices by top decision makers before preparing plans.

Mahadeva-rapid- concrete-houses system
This system enables the rapid building of small sturdy houses (even in 4-7 days) with concrete walls and semicircular concrete roofs, using precast-concrete wall and roof blocks.

A novel feature of this system is its precast reinforced-concrete arc-blocks (4-6 per foot run) are used to build roofs for main houses, outer kitchens and lavatories. They are usable even for wells. This system was devised and tried out firstly in Jaffna and Batticaloa districts in the early 1970s when the author's MITE organization built new model markets for Jaffna and Chunnakam.

The advantages of the above system are as follows:

*Speed of construction and occupation once precast blocks are ready;

*System is versatile, and enables the use of Intermediate Technology, with local raw materials, men and skills to construct houses, detached kitchens, lavatories, wells, school-classrooms, halls (with lintels), and so on;

*Unlike houses with perishable thatch and scarce timber, tiles, etc., these houses need little care for many years, being largely water-proof, gale-proof, fire-proof, thief-proof and tsunami-proof;

*They enable collection of clean rain-water, for cooking, etc., using plastic gutters and cisterns;

*Facilitates hygienic water-sealed lavatories, using underground septic tanks in rural areas;

*Simplicity and uniformity of their basic concept and design of components promote intrinsic economies of large-scale manufacture, overall time-saving, and ease of execution and management, especially when project planning techniques are used with many simultaneous jobs;

*Concrete wells can be sunk in 2-3 days each, on this system in areas of soft earth or sandy soil.

* This system can also provide open sheds for horticulture; underground water-storage tanks and bunkers; garages, holiday-chalets, etc, even for use by private individuals in the long-term.

One would assume that these houses would be too hot to live in. That is not so. The use of concrete grills at ground and high levels in end-walls will ensure continuous air circulation with cool interiors in the day. Warmth retained by walls and roofs combat any nocturnal cold breezes. The similar dome-shapes of the roofs and the grey colour of concrete may appear to run against cravings for individuality in occupants' minds. Yet this may be a real asset. Their uniformity of design can deter vain and wasteful human envies, boastings and fake prides-of-possession while skewing, different-coloured doors, and gardens can offer variety.

A typical small-scale house may be 10-12 feet wide and 15-20 feet long with short open verandahs in the front and back with a single semi-circular roof supported on concrete side-walls.

Ventilation and light are provided by concrete grills, up to 3 feet x 3 feet each, on every end-wall where doors are also located in front (and back, only if essential). The inside of the roof and walls are lime-washed, to disperse light, and to deter insects and germs.

The roofs are about 6 feet high on the sides and 11-12 feet in the middle. Internal lighting is with paraffin lamps or electricity. These houses are ample for small families of 2-3 adults and 2 children, most of whom would spend their day outdoors, at work, school, or in gardens. The houses may have similar-roofed detached water-sealed lavatories, outside kitchens, and wells -- if no other sources of water exist. Rainwater can be collected for cooking and drinking by using plastic gutters, down-pipes, and storage-tanks. Privacy could be enhanced by internal curtains. The floor is cement rendered. With this system larger houses, and skewing them at site for beauty, are viable.

Technical details
The arc-blocks are made in steel moulds to 2-6 feet radii enabling 4-12 feet wide structures/wells to be built. With properly made 1:2:4 (1/2" or 3/4") concrete no reinforcement is needed to strengthen the blocks but minimum steel rods or fabrics give added safety. The length of rooms may be virtually limitless, since the roof is built in lengths of one foot at a time, using 1:2 cement mortar to seal-up and strengthen the joints between the blocks. The ends of the blocks could also be designed to interlock with one another, strengthened further by the concrete mortar. The walls are built of precast concrete blocks to 4-6 inch thickness with up to 18" x 12" blocks.

Naturally the walls need foundations of 9"x15" wide, and 12"x24" depth, depending on the soil. These foundations themselves may be built using the same wall-blocks as above, placed suitably.

The floors may be made of compacted earth or sand, with ½"x1" rendering of 1:2 cement mortar. There is no need for any timber except for the doors, but these also could be pre-made with metal frames and tin or aluminium sheets (and painted in different colours, as the owners wish) to save available timber for repairing the damaged houses to match existing patterns.

The main materials in this system are locally available crushed stone, sand and cement. These can also be cheaply and quickly imported from neighbouring countries. Moulds for pre-casting wall-blocks can be of sawn-timber. The arc-roof-blocks need welded steel moulds. Construction scaffolding for roofs may be of jungle-poles or joinable/welded, iron-pipes/sections. Asbestos must be avoided.

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Sri Lanka focuses on needs of over five million poor

Sunday Island: 15/05/2005"

Kandy, May 15 — Sri Lanka’s plans to better the lot of over five million poor battered by the tsunami and the ethnic conflict are the highlight of a ground-breaking study to be released this week at the first-ever aid forum to be hosted here.

Persistent problems dogging the plantation sector, the embattled regions of the north and east and other rural areas are set against a backdrop of steady progress in lowering infant and maternal mortality and achieving significant education goals for children.

"There are about five million people living in poverty in Sri Lanka, perhaps more," says the report, noting that if statistics from districts affected by the decades-long separatist war had been available, poverty figures would be much higher.

The Millennium Development Goals Report spotlights the disparity in development and the growing poverty in inland rural areas and the coastal belt affected by the 26 December 2004 sea surges.

Despite the slow pace of development on some fronts, the island boasts of high literacy rates with some 85 percent of youngsters between 6 and 10 years enrolled in school and high numbers of both girls and boys having access to free primary and secondary education.

The analysis, the first of its kind to be drafted by the government under the co-ordination of the National Council for Economic Development, assesses the United Nations’ target of halving poverty in Sri Lanka by the year 2015 and will be the yardstick by which the country can measure the success of long and short-term strategies.

The wide-ranging survey, supported by the United Nations Development Programme (UNDP), covers eight broad areas of development goals and is a ready reference point for data on the state of the economy, aid flows, health and education indicators, water, sanitation and the environment and infrastructure growth.

"Sri Lanka has long been at the forefront of human development among developing countries. Access to health and education is widespread and the results have been impressive," said Miguel Bermeo, the UNDP’s resident representative in Sri Lanka. "But the tsunami disaster and the two-decade internal conflict have raised tremendous challenges."

Fast-track projects funded by foreign aid are expected to alleviate the impact of the tsunami on the thousands of people who were affected. The government’s focus is trained on developing housing, roads, railways and other infrastructure and on generating job opportunities for them.

Among the issues raised in the report are the fight against HIV/AIDS and malaria, the environment, the participation of women in government and public life and regional and international trade.

The report is to be presented at the two-day Sri Lanka Development Forum conclave beginning Monday in Kandy where over 100 representatives of donor nations and agencies are set to gather. (UNDP)

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The economic predicament

The Island: 18/05/2005" by Garvin Karunaratne Formerly of SLAS. PhD,.Michigan State University

Today Sri Lanka is beset with two main problems. The first and most important is the situation of the economy- the sliding value of the Rupee, the ever increasing debt and the increasingly unmanageable balance of payments deficit. The other problem is the terrorist problem. An attempt has been made to merge the two problems, which to my mind is not necessary. The latter is purely an internal problem of a sovereign country, not negotiable.
The economic problem of Sri Lanka has been man made and is of recent origin. The country had a healthy balance of payments record till 1977. In 1976 and 1977 the balance of payments was recorded positive at 58 million $ in 1976 and 117 million $ in 1977. In fact the 1980 Annual Report of the Central Bank states:
“After many years of disappointing performance Sri Lanka’s balance of payments turned positive in 1977. Since then the balance of payments has again turned adverse.”
It is interesting to note that from 1978 onwards the balance of payments has been in the negative. It became 516 million $ negative in 1982, in barely five years of IMF Structural Adjustment and now stands at a 1,000 million $. Sri lanka did not become indebted till 1977. In that year the international debt was in the region of 700 million $ and that too for non-consumption development projects as compared with over 9,000 million $ today, mostly incurred for consumption purposes. The value of the Rupee was Rs. 15.80 to the pound and Rs. 8.60 to the US $, in 1977, which can be compared to Rs. 190.00 to the pound and Rs. 99.90 to the $ today. This clearly points out to a total mismanagement of the economy in the period after 1977. These are indelible facts.
Something went really wrong after 1977 and the answer to the economic problem of today- the inability to manage the economy, the inability to manage the outflow of foreign exchange with the incomes in foreign exchange, the inability to manage the economy unless by extra borrowing or selling assets for a one off payment like selling the laying hen, and the inability to stop the sliding value of the Rupee, all point to the fact that the economy has been totally mismanaged in the period after 1977. Unless and until one can be certain as to what went wrong, one will never be able to liberate the economy and get it on the right track.
What happened in 1977 was that the new Government of President Jayawardena listened to the IMF and the World Bank and did not have second doubts about their advice.
One of the first voices that pointed out the flaws was the SAARC Report of 1992:
The industrial countries, for the first time since World War II are in need of markets for their products and services just as their economies are made vulnerable by the international debt crisis. So they have put into effect the Structural Adjustment Programme… The main prescription of this SAP is therefore a reduction in government expenditure which tends to fall disproportionately on social services, government subsidies and other forms of Safety Nets for the poor. This has often been accompanied by devaluation, increases in the prices of public utilities and import liberalisation. Studies of these programmes show that they are regressive, that they adversely affect the poor.
Till the Sixties it was the United Nations Organisations that organised development. In the Seventies the World Bank and the IMF usurped this task. It took over half a decade for the United Nations to understand what was happening. The Human Development Report 1996:
“The stabilisation measures of the IMF aimed at reducing both budget deficits and trade deficits and usually involved cutting public spending, reducing wages and increasing interest rates. Restoring growth an objective on paper was rarely achieved in practice. Although these policies reduced deficits in some countries they often did so at the cost of inducing recession. In short they often balanced budgets by unbalancing people’s lives”,
It did take a long time for the World Bank to understand that something was really wrong with their advice. In their words many countries were doing well. Among the economists it was only the Chief Economist Joseph Stiglitz that had the nerve to speak out. When the Structural Adjustment was imposed on Indonesia in 1998 he pointed out:
“I suggested that the excessively contradictory monetary and fiscal program could lead to political and social turmoil in Indonesia. … The IMF pressed ahead demanding reductions in government spending. And so subsidies for basic necessities like food and fuel were eliminated at the very time when contradictory policies made those subsidies more desperately needed than ever.”
Indonesia broke up in flames dethroning Suharto who had followed all the IMF prescription for over two decades, even shooting down the protesters.
Even the foremost Capitalist Journal, The Wall Street Journal ridicules the Structural Adjustment policies of the World Bank and the IMF in the following words;
“The IMF Drill is as follows: A Third World poor country with a pegged currency is working towards taming inflation. Instead of a growth formulae it gets the IMF’s old austerity dosage which slows down the economy.
The Banks begin to falter in paying their old debts. The IMF recommends yet more medicine- devaluation making the bank predicament and capital flight worse. The currency slumps and the banks(countries) are now in real trouble…. Is this any way to run an international monetary system? If sound money and pro-growth economic policies are good enough for the US, they should be good enough for the Developing World” (23-02-01)
Now that it is established in an indelible manner that the IMF and World Bank has messed up the Third World countries, it may be worthwhile to find out what recommendations of the IMF Structural Adjustment Programme have had an adverse effect on the Developing Countries including Sri Lanka. The provisions of the Structural Adjustment that brings about an adverse effect are:
High Interest Rates. The imposition of high interest rates is supposed to boost savings. Simultaneously high interest rates cause inflation and also forces local manufacturers and agricultural entrepreneurs to close down as they cannot compete with foreign companies that can get funds at very low interest in their own countries. This helps the Developed Countries to sell their manufactures to the Developing Countries.
Reduction of Public Sector Activities does not enable the Governments to be effective in bringing about development. The private sector is not the engine of growth due to the fact that socialist legislation has thwarted the activities and they have been plagued with restrictions and would not take the leadership like in Western developed economies. The Public Sector has to provide the infrastructure necessary for development to take place. A good example is the Paddy Marketing Board of Sri Lanka that offered a guaranteed price for rice and other cereals and BULOG of Indonesia that provided marketing for rice . Both were abolished. This has caused the death of agricultural development in both countries. It is important to note that in the Developed Countries the Public Sector determines, controls and provides for development which is denied to the Developing Countries under Structural Adjustment.
Removal of Subsidies. Subsidies are required to enable production that is nationally required and to keep people in employment. It is not well known that Japan offers three times the world price for rice farmers to be in production and to keep its farmers in employment.
Free Trade, Deregulation and Removal of Tariffs By Free Trade the USA and other Developed Countries have opened up the markets of the Developing Countries. Mexico lost severely on the NAFTA. Since 1994 US exports have increased 141% to Mexico and 64% to Canada. All Developed Countries placed restrictions during the time that they developed manufactures. Even today the Developed Countries use quota restrictions, tariffs to control imports.
Liberation of foreign exchange restrictions is imposed. The inflow of foreign exchange is severely limited as foreign exchange has to be earned by exports or exports of services. All countries have foreign exchange restrictions to enable them to match the supply of foreign exchange and the demand. When the demand is liberalised while the inflow is the same there is a severe shortage which cannot be found unless by seeking loans. This leads to indebtedness. The currency value falls as a result. This is directly due to the IMF policy of not allowing the Governments to control and restrict the outflow of foreign exchange. In short the IMF itself creates a foreign exchange problem whereby the countries become indebted.
The devaluation of currencies is also caused by foreign banks that hoard their collection of foreign currency and bid the price upwards when any bill has to be paid in foreign currency. The foreign banks in Sri Lanka were caught in this in January 2001, when the State Banks had to pay a large petroleum bill and wanted foreign currency from the other banks. The foreign banks bid the price upwards causing the dollar to reach Rs 116 from Rs. 85 and settle for the day at Rs. 100. This is all due to the IMF policy.
All these policies when worked together will definitely cause the collapse of any economy.
What the IMF and the World Bank did to the Developing Countries is evident in what happened to Tanzania. Under Julius Neyerre Tanzania was proceeding well on its path to self sufficiency, development and self reliance, when the IMF and the World Bank provided them the wrong advice. This is aptly given by Cheryl Payer:
“The IMF in routine consultations advised Tanzanian Leaders that their reserves were embarrassingly large and might lead the country’s Aid donors to reduce their contribution. A poor country, the Fund argued should not hoard its reserves but spend them in order to develop more rapidly. They persuaded the Government to abolish the foreign exchange budgeting system… and lift controls on imports: by the end of 1978, Tanzania had only reserves for ten days worth of imports. Then the Imf imposed its Structural Adjustment Reforms. Tanzania which had a stable self reliant economy was broken down and brought to its knees.”
Now the mantram of the World Bank and the IMF is investment. After breaking down the economies by following the Structural Adjustment policies the economies are opened up for investment. The Third World leaders like this investment because it comes in foreign exchange and gets converted into local currency enabling the leaders to spend it on extravagant budgetary expenses. It is investment for the foreign investors.
They come on tax havens use local resources and get into manufacture and export the products without paying any profits. But their produce and profits gets taxed at 40% or more in their mother countries. It is in reality exploiting the resources of the Developing Country.
A good example is Noritaki that has since its inception been working on a tax holiday which was extended about two years ago. It is true it provided employment but in the process it also depleted the ceramic resources of Sri Lanka. The net result was the taxes it paid to the exchequer of Japan.
A further problem that this investment creates is that the investors move their money from country to country and when they leave the country falters, become bankrupt, the investors run away and once the currency falls comes back and reinvest reaping a fanciful profit.

The futility of this process of investment as a element to bring about development is given by Paul Krugman,
“ The idea of a country or even a whole region that for some reason becomes a favourite of investors and as a result experiences a temporary boom that is not grounded in fundamental productive success is by no means hypothetical. Mexico in the late 1970s, Mexico again in the early 1990s, Russia in 1995 to 1998 all were places that experienced a feverish consumption boom driven by foreign investment for a few years only to crash when some of those investors concluded that the real economy to justify their investments simply wasn’t there”. In fact he concludes that “the world is lurching from crisis to crisis, all of them crucially involving the problem of generating sufficient demand”. Krugman has correctly identified the futility of investment though he fails to find the solution.

Sri Lanka is not alone in this plight. Many are the Third World countries that have become indebted in the process of following the IMF and the World Bank prescriptions of Structural Adjustment. Many countries have had to have their currencies devalued and this has brought a windfall to the Developed Countries by enabling them to obtain imports from these countries at a very low cost purely because the currencies of the exporting countries have been devalued. The following table will illustrate the fall in value of the currencies from 1983 to 2003:

Country Currency Value of currency to the pound Fall %
In 1983 in 2003
Sri Lanka Rupee 35.00 180 415%
Indonesia Rupiah 1330 14,575 996%
Turkey Lira 336 2,395,000 712,000%
Ghana Cedi 5.7 15,711 275,000%
Nigeria Naira 1.11 240 21,800%

The extent to which the local currencies have been devalued illustrates the extent to which poverty that has also been created in these countries. In short the people cannot live with their wages. I have travelled on the vast motorways in Turkey recently. The cost of petrol and other necessities have created a people who have to resort to petty thieving to live. The motorways are empty. A wage earner cannot buy fifty gallons of petrol with a months wages. Turkey spent billions of borrowed money to build these motorways and the country is so indebted that it has to allow the currency to be devalued. Sri Lanka’s present craze on motorway creation will end up the same way making the country indebted and increasing the poverty. There will be no riders on the motorways like in Turkey.

What is the solution
To my mind no expert has come up with a solution. Jeffery Sachs has recently said that extreme poverty can be eliminated by 2015. Poverty can be eliminated in a few years if only the World Bank and the IMF will understand that it is their policies that has aggravated it. Jeffery Sachs thinks that it is the military prowess of George Bush that is the constraint.

It has to be first understood that the IMF and the World Bank has to understand what has gone wrong, which they have failed to understand as yet.

To start with these two institutions have to free the Developing Countries of the yoke of Structural Development that they have imposed. It is a heavy mill stone that they have tied round the neck, a burden which no country can bear.

It is necessary also to study the loans that have been provided so far causing the countries to fall into the debt trap. If the loans had been given for development purposes, i.e. to bring about production, then rightly the onus of repayment falls on the country. If the loans were given for consumption purposes, then the loans should be written off completely because the onus of responsibility also falls very squarely on the donors that did give the loans. Also the officers and the leaders who obtained the loans should be personally held responsible in case they are alive.
This is the only method of starting on a clean sheet.

As far as future loans are concerned the donors should be well aware that the record of loans by the World Bank and the IMF is such that there is not a single country in the entire world that has benefited from their Structural Adjustment Policies.

In the circumstances it is hoped that the donor nations, the IMF and the World Bank will infuse fresh thinking and help the Developing Countries to develop instead of imposing reforms that have been proved to be failures

I humbly request the World Bank and the IMF to impose these Structural Adjustment policies on the USA, UK, France, Germany or any other successful country and see for themselves their economy falling to bits in months not years.

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Wednesday, May 18, 2005

700 NGOs in tsunami whirlpool

Sunday Times: 15/05/2005"

From Thalif Deen at the United Nations
NEW YORK - As a major international donor conference begins in Kandy tomorrow, Sri Lanka's post-tsunami reconstruction plans may go haywire due to the multiplicity of non-governmental organisations (NGOs) operating without a coordinated plan of action.

Coco McCabe of Oxfam, one of the world's biggest international relief agencies, told The Sunday Times that despite some examples of good practices, the overall coordination among nearly 700 NGOs "remains poor".

"The problem on the ground is that many agencies, in their haste to spend and with their lack of experience and knowledge of the context, just want to get on with reconstruction without consulting local communities," she said.

In Sri Lanka, she pointed out, there are cases of transitional housing for fisher families being constructed in an agricultural area, five miles inland with no convenient public transportation.

"How will fisherfolk, who own no trucks of even motorbikes, manage their boats and sustain their access to the sea? The resources and time taken to provide these transitional homes end up as waste: the houses go unoccupied and the latrines unused. Ultimately, they get torn down and replaced by something appropriate," she added.

Ms. McCabe said many aid groups showing up in tsunami-hit areas, both in Sri Lanka and Indonesia, were either unfamiliar with internationally recognised standards or were simply ignoring them as they attempt to define a role for themselves.

"Under these circumstances, coordination becomes critical, and donors should ensure that more money goes towards coordination," she added. Oxfam has taken the lead in some water and sanitation coordination meetings, providing technical support to agencies with less experience.

Ms. McCabe said there remained a lack of clarity on certain issues, such as the impact of buffer zones on people's ability to return to their homes. In the tsunami emergency, the estimated expenditure per person will be a high of over $400 compared with $40 per person in Kosovo and just 40 cents per person in the Mozambique floods.

But although the donor community pledged about $6.7 billion for tsunami reconstruction, only $2.6 billion have been in firm commitments. The rest is in limbo. However, the UN Children's Fund (UNICEF), one of the UN's lead agencies in tsunami recovery, is suffering from an embarrassment of riches.

UNICEF's Gordon Weiss told The Sunday Times that his agency appealed for $144 million for tsunami relief and rehabilitation, just after the disaster struck the countries of the Indian Ocean region back in December last year.

By the end of January, UNICEF had received over $510 million, nearly four times its requirements, most of it in hard cash, not pledges. The agency made a second appeal asking donors to stop sending money. Pointing out that UNICEF was a development agency, Weiss said it will be involved in both relief and reconstruction in Sri Lanka -- including child protection, health, education, water and sanitation.

Asked about UNICEF's policy of working with rebel groups, Weiss said: "We work at the pleasure of the government. We are not an NGO, and we don't have that luxury." In countries such as Sudan, Indonesia and Sri Lanka, he said, UNICEF is caught between governments and rebel groups.

But in both relief work and reconstruction efforts -- whether vaccinating children or rebuilding schools -- the agency works mostly through governments. "Our representatives have diplomatic status," he said, a privilege granted by the government, not by any rebel group.

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WB calls for better relief handling

Sunday Times: 15/05/2005"

The World Bank has suggested that the government should have a clear national policy, systematic co-ordination from the districts, adequate recurrent budget allocation to district implementation programmes and decentralising implementation as possible in the post-tsunami rehabilitation programmes.

The World Bank in a document released ahead of the two-day Development Forum starting in Kandy tomorrow said co-ordination between the national and district levels, including better allocation of responsibilities between various levels of Government, needed to be improved to handle the post-tsunami rehabilitation work.

"The Central Government with the the assistance of TAFREN should focus on setting clear national policies, standards and guidelines for adoption by implementing entities including NGOs," the World Bank said. More than 120 representatives of donor countries and agencies are expected to gather for the two-day event which will be mainly focused on the post-tsunami rehabilitation work.

A major part of the presentations will be focused on the issue of tsunami and the progress achieved so far in rehabilitation and reconstruction. The Government's needs assessment for the post-tsunami period has been placed at US dollars two billion over the next three to four years, according to Finance Ministry Secretary P.B. Jayasundara.

The World Bank has also suggested that shortage of managerial and technical skills at the district level could be addressed more systematically. According to the World Bank report on tsunami financing needs, the highest percentage of 41.1 percent is from the east while north amounts to 17.2 per cent.

However World Bank country Director Peter Harrold said that of the northern and eastern provinces only 10 percent of the affected areas is in the LTTE controlled region. The Southern province requires 29 percent of the assistance while the western province requires 12.6 percent.

According to the World Bank report, the tsunami effect is likely to push prices up further this year due to supply shortages of certain food items. UN agencies, the Asian Development Bank, and donor countries are due to make statements at the Development Forum.

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3 billion dollar bumper package for Lanka

Daily Mirror: 18/05/2005" From Nisthar Cassim and L. B. Senaratne in Kandy

The historic and fully fledged Sri Lanka Development Forum concluded yesterday in Kandy with the Government and donors describing it as open and constructive while the country got an overwhelming US$ 3 billion in pledges and commitment for tsunami reconstruction and overall development.

More than 90% of the financial assistance pledged is by way of grants and unconditional.

On Monday at the end of the first day's proceedings, the Government said that pledges and commitments were US$ 2.2 billion. The increase by the end of the second day was on account of countries such as Japan, China and India confirming their assistance as well as additional IMF debt relief and reserve support and other debt relief to the total.

Forum Chairman and Finance Minister Sarath Amunugama said donors had endorsed the Government's post-tsunami reconstruction programme and the donor forum was a resounding success.

"The outcome exceeded our original expectations," he told journalists after the successful conclusion of the two-day Development Forum at Mahaweli Reach Hotel in Kandy. More than 150 representatives from over 50 donor countries and agencies, senior ministers, MPs, senior officials, leaders of business, trade unions and civil society participated at the event, which was inaugurated by President Chandrika Kumaratunga on Monday.

"We do not want to mislead the country as it was done in the past. In the past false impressions were given that a bagful of money was being brought back from Paris or Tokyo. We must categorically state that these funds pledged and committed will be disbursed sequentially," Dr. Amunugama said.

"The most important thing is that the forum indicated views of our development partners that we are on the right track and they are satisfied with the steps taken so far. We all agreed that there are certain guidelines that need to be followed on tsunami reconstruction," he told a news conference attended by Foreign Minister Lakshman Kadirgamar, World Bank South Asia Vice President Praful Patel, WB Country Director Peter Harrold, ADB Country

Director Alessandro Pio and Treasury Secretary P.B. Jayasundera.

The guidelines include allocation of resources based on local needs and priorities, consultation with the affected community, ensuring transparency, accountability, reduction of future vulnerabilities, sensitivity in equity considerations and effective coordination between the government and development partners.

"These we have already followed and are more than happy to formalize them," the Finance Minister said.

"We have clearly indicated the manner in which reconstruction would be done. It is not a top down exercise but involves working with donor countries, NGOs, local organizations and communities in partnership," he said.

World Bank Vice President Mr. Patel confirmed that there were conditions laid and the forum was frank and open.

He said that the President had reassured the World Bank and the donor community that she was committed to the joint mechanism and the donor community has fully endorsed the post-tsunami relief and reconstruction programme.

"All donors also agreed that if there is lasting peace Sri Lanka could benefit from further aid and could achieve much higher growth," he added.

Country Director Harrold trying to put the pledges and commitments into context said the qualitative message that came from the donor forum was that the post-tsunami reconstruction would be externally funded with certainty be it US$ 2.2 billion or $ 3 billion. "There is enough money to do the job," he said adding that during the 14 hours of discussion at the forum half an hour at best was only devoted to numbers or aid and greater focus was on implementation so that soon a positive difference could be made to the lives of the tsunami victims.

Dr. Amunugama also said that President Kumaratunga's speech had a tremendous impact on the deliberation of the Forum. He also said Sri Lanka reiterated its commitment to achieve lasting peace, reduce poverty and achieve Millennium Development Goals and structural reforms.

"Future budgets will demonstrate Sri Lanka's commitment and action on these issues," he added.

"I want to make it clear that the President's speech was a tremendous mark of confidence and well appreciated by the international community.

Unless we go on the path of a negotiated peace, many of the pledges and assurances will not be realized.

It is by committing ourselves on the path to peace that we can unlock the funding," he added.

Dr. Jayasundera said that it was the first time that Sri Lanka chaired a fully-fledged and locally driven Development Forum where a new framework for economic development and poverty reduction was discussed.

"We shared our problems and challenges and also what the Government can do to address those," he said adding that a well integrated 3 to 5 year reconstruction and development plan had been devised and endorsed by the donors.

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Tuesday, May 17, 2005

Sri Lanka receives record US$ 2.2 b grants from donors

Daily News: 17/05/2005" From Ranil Wijayapala in Kandy

The Government recorded an unprecedented response from the donor community yesterday for its post tsunami reconstruction plan, on the first date of the Sri Lanka Development Forum held in Kandy with donors making commitments worth US$ 2.2 billion yesterday itself, Finance Minister Dr. Sarath Amunugama announced last evening here in Kandy.

Addressing the media at the conclusion of the first day sessions of the Development Forum, which focused on post tsunami reconstruction plans, Dr. Amunugama said the commitments by the donors topped the entire tsunami reconstruction requirements presented by the Government at yesterday's sessions.

"More than ninety per cent of the commitments pledged were in the form of grants", Dr. Amunugama added.

A confident Finance Minister said donors were impressed with the presentations made on the post tsunami reconstruction plans of the government.

The estimated post tsunami reconstruction requirement was put at US$ 2 billion. Minister Amunugama said the donors were impressed by the 'excellent' speech made by President Chandrika Bandaranaike Kumaratunga at the inauguration of the Development Forum. "The President's speech has had a tremendous impact on the donor community today", the Minister added.

Deputy Finance Minister Tilak Siyambalapitiya said the bilateral agencies made a commitment worth US$ 745 million at the Forum while multilateral agencies and Non government Organisations making commitments worth US$ 631 million and US$ 853 million respectively.

"Ninety per cent of the commitments were in the form of grants", the Deputy Minister said.

Finance Ministry Secretary Dr. P.B. Jayasundera said the special feature of the Development Forum was that it had not made any impact on the country's debts or to the country's budgetary provision since these commitments were made in the form of grants.

"This is the first time Sri Lanka receiving aids in the form of grants", he pointed out. He also said the Government has also received US$ 300 million debt relief from donors.

"Italy and China has written off the debts", Dr. Jayasundera added.

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Govt follows broad agenda to raise economic growth - Patel

Daily News: 17/05/2005"

The Rata Perata program of July 2004 set out a broad agenda intended to raise economic growth while taking measures to ensure that the poor could participate in the growth process and the international community is looking forward to a renewed focus on a poverty reduction strategy centred on accelerating economic growth for all Sri Lankans, especially those living in rural areas, Praful Patel, Vice President, World Bank said yesterday.

Addressing the Sri Lanka Development Forum in Kandy, Patel said: "It is of course only right that we focus on tsunami recovery as this continues to consume so much of our collective energy.

It remains a formidable challenge. It now appears to be the case that financing the recovery will not be difficult. We perhaps already have all the pledges we need. We hope that we will not concern ourselves with tsunami fund-raising. The challenge before us now-and on which we can use this valuable time together to focus our minds sharply is implementation."

The text of his speech: "Here in Kandy, this lush and historic hill capital of Sri Lanka's last kingdom, we are a long way from the sea. But not a single Sri Lankan was untouched on December 26 when the island's waters turned on the land so unexpectedly.

The world mourned with you and let me begin today by expressing the deepest sympathy of the entire international community to all the citizens of Sri Lanka. For whether you were at the coast or on higher ground this tragic event reached into every community across the island. Our condolences to all who lost family, friends and colleagues. We too at the World Bank mourn the loss of a dear colleagues from our Colombo Office and staff across our global institution mourn loved ones, showing the reach of this island nation across the world.

I am honoured to be addressing this opening session of the 2005 Sri Lanka Development Forum on behalf of your Development Partners. This is the first time that the full Development Forum is being held in Sri Lanka, and that it is being chaired by the Minister of Finance.

Strong ownership of processes like these by the Government marks significant progress in Sri Lanka's relationship with the international community.

We have before us an important and packed agenda. What do we hope to achieve in this Forum? Permit me to address some of the key themes, and our aspirations for what may emerge from our deliberations.

* Getting people back into homes is perhaps the biggest challenge of all. I hope we can have a good debate on

* Transition housing needs and approaches;

* On the question of acquisition and allocation of land for resettlement- housing;

* On the challenge of the buffer zone and how to apply it with practicality and humanity; and

* On how to involve the affected population in their own future.

* Consultation arrangements with local populations are a key challenge, as is the question of subsidiarity and the role of local levels of government.

* Coordination at the central and local levels remains a core element of our joint preoccupations. Increasingly, we must find ways to involve donors, NGOs and the private sector collectively in discussions and planning with government at all levels. The factor that distinguishes this disaster from all previous ones is that private financing of the recovery may account for up to half of the total. We must ensure that the allocation of funds is driven by needs, and needs alone, and takes account of the difficult factors in Sri Lanka that complicate this, notably the conflict and ethnic balances.

* Accountability remains an area where we will together have to rise to higher standards. Extraordinary sums have been made available from extraordinary sources touched by the scale of the tragedy. The challenge is to think of innovative ways of ensuring the good governance of these funds.

Many of these factors are embedded in the Guiding Principles we have adopted together to govern our approach to the implementation of the recovery program. It is our hope that by the end of our deliberations here we will have agreed how we move forward together in these key areas.

As your development partners, we look to the government to provide a sound macroeconomic framework into which we provide our financial support. Your Budget for 2005 recognised the key challenges that you are facing: raising revenue to more reasonable levels to permit you to address your development needs; and increasing the productivity and impact of your public expenditure with a medium-term policy framework.

The Rebuilding of Sri Lanka and a successful attack on poverty require economic stability. Clearly, the tsunami has had a deep impact on your plans. The development partners hope to learn more about your economic policy plans, and how you will tackle some difficult challenges, notably the fiscal deficit and inflationary pressures.

Sri Lanka has had an enviable record in human development since Independence. It is a concern then that not all the Millennium Development Goals, which Sri Lanka has adopted, are on track to be achieved. Most important, the growing inequality in Sri Lanka deriving from the concentration of economic growth in the Western Province has left many far behind. While the level of poverty in urban areas has been falling sharply, there has essentially been no change in the situation of the rural poor over the last 12 years - no change.

We look forward to learning more about the specifics of such a program and about a consultation framework that will ensure its acceptability to the population.

The final topic for our deliberations is partnership and the peace process. For many development partners, the peace process is at the core of their interest in Sri Lanka. For others, such as the international financial institutions, our deep interest in the peace process is because it is only through a sustainable peace that we can hope to see the prospects of development and poverty reduction for all Sri Lankans. Let me make two key points in this regard.

First, we congratulate all parties for the maintenance of the Ceasefire Agreement for more than three years, and for continued efforts, however imperfect, to implement the Action Plan for Children for the last two years. These are two cornerstones that must be protected.

Second, we have all noted the efforts of the parties to the conflict to reach agreement on a Joint Mechanism for managing tsunami assistance in Sri Lanka. The Development partners are supportive of these efforts and wish the parties success as you go forward.

The Muslim, Sinhalese and Tamil communities have all suffered terribly, and it is only right that ways be found for the representatives of the three ethnic communities to co-operate in this important work. It is the fervent hope of the international community that any such agreement will create an environment conducive to the deepening of the peace process over time.

When we get to our discussions, I hope that they will be open and fruitful; that they will be in the spirit of friends sharing thoughts on core and fundamental issues. We are not here to read statements to each other, but to express our views and exchange ideas.

Let us resolve that we will emerge from these two days with a clear understanding and agreement on the way forward on these four critical areas: on tsunami recovery, on economic policy, on poverty strategy and on partnership and peace.

From such a common platform we can then move boldly to implementation and action, and in so doing, offer hope that tomorrow will be better than yesterday for all the citizens of Sri Lanka."

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