Daily Mirror: 14/10/2006"

OSLO, Friday (Reuters) - Bangladeshi economist Muhammad Yunus and the Grameen Bank he founded won the Nobel Peace Prize today for grassroots efforts to lift millions out of poverty that earned him the nickname of “banker to the poor”.

Yunus set up a new kind of bank in the 1976 to give credit to the very poorest in his native Bangladesh, particularly women, enabling them to start up small businesses without collateral. In doing so, he invented micro-credit, a system which has been duplicated across the globe.

“In Bangladesh, where nothing works and there's no electricity,” Yunus said, “micro credit works like clockwork.”

The Nobel committee awarded the prize to Yunus and Grameen Bank “for their efforts to create economic and social development from below,” it said in its citation.

“Lasting peace can not be achieved unless large population groups find ways in which to break out of poverty. Micro-credit is one such means. Development from below also serves to advance democracy and human rights,” it said.

Yunus was convinced women could break through poverty by taking tiny loans to start or expand tiny businesses.

The Grameen Bank now serves 6.1 million borrowers.

The Grameen Foundation which grew out of the bank, was founded in 1997 and has a global network of 52 partners in 22 countries that has helped an estimated 11 million people in Asia, Africa, the Americas, and the Middle East.

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Daily Mirror: 13/10/2006"

BENCHMARK’s recent interview with RADA’s Chief Operating Officer, Shanthi Fernando, reveals that the government’s promise to rebuild all tsunami-affected houses by the end of the year is more than unlikely to materialise. Almost two years have lapsed since the devastating natural disaster, and yet, much still remains to be done with regard to reconstruction and development in the affected areas. The reconstruction of houses, restoration of livelihoods and infrastructure development are lagging far behind expectations, it was revealed.

When BENCHMARK interviewed the recently appointed COO, a political appointee, it was revealed that the country’s post-tsunami reconstruction process lacked the desired levels of transparency and accountability. Grey areas still remain in terms of monitoring and the facilitation of post-tsunami reconstruction efforts.

RADA is the successor to TAFREN (the Task Force for Rebuilding the Nation) and virtually all employees of TAFREN were absorbed into RADA, which meant that the agency is virtually a continuation of TAFREN with a mere change of name.

When BENCHMARK asked Fernando how much was actually pledged by the international community – including donor agencies such as The World Bank, IMF and ADB, for post-tsunami reconstruction – she divulged that US$ 2.4 billion was pledged in terms of aid for post-tsunami reconstruction and other development projects. According to her, the quantum of that aid received by recipients has so far amounted to US$ 815 million. She also disclosed that the donor agencies have implemented projects in tsunami-affected areas to a rough approximation of this value at present – but, as the anchor on BENCHMARK commented (judging but an evident lack of a proper grasp on the financial details), more clarity was to be desired.

When asked if Sri Lanka could, perhaps, have lost out on some pledges, Fernando maintained: “We have not lost out on any pledges. Some pledges are yet to materialise.” What is received is less that what was actually pledged – since NGOs, which are implementing the projects, had used some of these funds for their benefit… some even to sojourn in star-class hotels in Colombo, she alleged.

Meanwhile, a Central Bank press release stated that the government has received almost Rs. 30 billion in aid through various banking channels. BENCHMARK asked Fernando how much of this sum has actually been disbursed to tsunami victims. The RADA chief responded: “According to the information provided by developmental partners, our database only indicates US$ 815 million as being spent on post-tsunami relief and recovery.”

However, key questions relating to accountability and disbursements of funds received by the government and the NGOs with regard to tsunami aid remain unanswered. Fernando claimed that it was NGOs which received aid, adding that it was not possible to monitor how much these organisations had received as aid to conduct post-tsunami operations in Sri Lanka. “The donors carry out the programmes and we monitor it. We cannot say that we receive anything,” she maintained.

When asked what was impeding the flow of information to the public, Fernando said that a database exists to provide information, but admitted that not much publicity had been given to RADA’s activities in the past. She also admitted that information on projects that were conducted by local NGOs such as Sarvodaya are not reflected on RADA’s national website, which reports the progress of reconstruction. This is because “these organisations have not submitted their details to RADA”, she elucidated.

The present country situation is also impacting on RADA activities. Fernando noted that the prevalent security situation in some areas causes “temporary setbacks in some efforts”; but she affirmed: “Work is going on.”

Nearly 100,000 houses were damaged by the tsunami. How far has housing reconstruction progressed? “We needed 98,000 houses. Donors signed MOUs –vis-à-vis the donor-driven programme – to construct 35,000 houses; they have so far only completed 11,875. Then we have the owner-driven programme, where The World Bank and other multilateral agencies fund partially-damaged and fully-damaged houses. The owner of a partially-damaged house receives Rs. 100,000 while the owner of a fully-damaged house receives Rs. 250,000. That programme is progressing very well and 90 per cent of it has been completed,” said Fernando.

When BENCHMARK asked the RADA chief why some tsunami victims still languished in tents, she said: “The tents have been removed. Officially, we do not maintain tents.” She added that some people were still occupying certain tents for their own, entirely invalid, reasons. “We had about 57,000 transitional shelters; but now, there are only 35,000 – because people have moved into their own houses. If the donors built houses properly, we could have moved all those affected people into houses,” she said, alluding to the failure of the NGOs to keep their initial promises vis-à-vis housing reconstruction.

RADA aims to complete 90 per cent of tsunami-related housing requirements by the end of this year. “I am confident that almost 90 per cent of the houses will be completed by the second anniversary of the tsunami. If the NGOs and INGOs complete their work as committed, then there will not be a problem,” Fernando underscored.

BENCHMARK is presented by LMD and produced by ‘the wrap factory’. It airs every Sunday on TNL at noon, with a repeat at 9.05 p.m.

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The Island: 13/10/2006" By Sunil C. Perera

The Livelihoods Unit of the Reconstruction and Development Agency [RADA], supported by the International Labour Organization [ILO], recently launched its District-based Coordination and Planning System (CAPS) to collect and update information on planned and on-going post-tsunami livelihoods recovery activities from a wide range of service providers. The objective is to provide district and divisional level decision-makers with the information required for coordination and planning of livelihood recovery activities and to minimize duplication in post-tsunami assistance.

According to Divisional Secretaries from the tsunami- affected divisions, the lack of detailed information of the support provided by a number of NGOs and INGOs earlier has been a key reason for duplication and replication of aid during aid distribution. The ILO’s Chief Technical Advisor, Doekle Wielinga, says CAPS collects details on post-tsunami livelihood aid distribution and service providers in a comprehensive manner. NGOs, INGOs and state institutions are now engaged with the CAPS in eight districts and provide details of their post-tsunami livelihoods recovery activities. The compiled information is distributed back to the participating (I)NGOs and is made available to district and divisional authorities. This information dissemination assists aid distribution agencies to avoid duplication and replication of target activities when planning future work in tsunami-hit areas, Wielinga said. Coordination between aid agencies and District and Divisional authorities is crucial. According to the District Secretary of Hambantota M.A.Piyasena, a number of tsunami-affected fishermen had received fibre glass boats from aid agencies without Divisional Secretaries of the area being aware of such activity.

The District Secretary of the Ampara District, Herath Abeyaweera, said he still needs more details of the aid distribution, especially for affected fishermen in the Ampara district.

"I do not know how many boats were distributed among the affected fishermen in the Ampara District due to the information-sharing gap," he said.

`A0According to the Divisional Secretaries of the tsunami affected areas in Sri Lanka, there are still a number of affected people in their areas that have not received adequate assistance from NGOs or INGOs.

Therefore, it is important that aid agencies coordinate their activities with the District and Divisional authorities and vice versa, said W. M. B. S. Nissanka, Acting Director of RADA-Livelihood.

He continued that the Monthly Livelihood Coordination meetings, organized through the District Secretaries, are an important platform for such co-ordination and that RADA District and Divisional staff are facilitating this process.

Wielinga concluded that CAPS is a useful tool for all stakeholders involved in livelihood recovery to share information and better coordinate their activities.

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Daily Mirror: 11/10/2006"

Business and peace lobby group of provincial chambers submits proposals for consideration in Budget 2007

The Business for Peace Alliance (BPA), a network of business chambers with a commitment to building peace and reconciliation from around Sri Lanka has urged the government to take remedial measures to address the existing regional disparities while pointing out that there are grave regional economic issues that deserve the government’s immediate attention.

Among these issues is the inadequate promotion of investment in the regions and the lack of infrastructure facilities. It is crucial that the regions are made accessible via ports, regional air ports, good road networks etc in order to attract investment and create employment opportunities.

It is a widely known fact that investment in the Western Province accounts for more than 50% of the Gross Domestic product (GDP). In the past twenty years or so, investment and economic development has been largely concentrated on the Western Province resulting in a huge disparity in development between the commercial capital and the rest of the country. The trickle-down effect of development has not reached the other parts of the country due to low connectivity between the centre and the peripheries. While these conditions largely inhibit fair competition between businesses in the centre and the periphery, uneven development has resulted in alarming rates of poverty at a regional level. The BPA calls upon the government to bridge the existing development gap by creating a level-playing field.

The BPA also draws special attention to the socio-economic development issues in the war-affected North-East of the country and proposes that special incentives such as tax holidays and tax exemptions be given to investors willing to invest in conflict and tsunami-affected areas and underdeveloped areas. These incentives should be similar to those offered to investors in FTZs. Similarly, the development of industrial estates such as the upgrading of infrastructural facilities in the Vavuniya industrial estate and commencing the actual development of the proposed industrial zone in Jaffna are also of great significance to regional economic advancement. The establishment of an economic centre in Vavuniya to support the entire Northern Province has also been proposed. Another proposal forwarded by the BPA is the upgrading of the A9 road to a highway connecting the Jaffna peninsula to the South of the country while it is also proposed to implement a two-year tax holiday for tsunami-affected businesses speed-up the process of recovery.

The BPA also highlights the significance of making Micro, Small and Medium Enterprises (MSMEs) loan schemes available to a wider target group in order to proliferate entrepreneurship as a solution to the country’s unemployment problem while it is suggested that the local chambers could play an intermediary role in this regard and liaise between the government and the beneficiaries. It is also proposed to have a provision for low-interest credit facilities for tsunami-affected businesses, especially those in the conflict regions. The establishment of a North-East Development Bank has also been proposed. In addition, it is also proposed that the eligibility criteria for Dasuna loan scheme implemented in the South be broadened and its interest rates reduced.

In a bid to reduce the complexities and delays involved in security checks which hinders economic activity through out the country, particularly in the North and East, the BPA proposes the government to install a set of scanners (capable of screening up to 40 ft containers) in the North-East including the main check points of Omanthai and Muhamali along the A9 road.

As the lack of knowledge of the English language and information technology are factors contributing to the unemployment problem, it is also proposed that special programmes be directed at employable sectors such as graduates, school children and professionals so that their skills will match the requirements of the private-sector.

The BPA wishes to bring to light the benefits reaped by the Cease fire Agreement (CFA) where conflict-affected regions recorded high levels of economic growth surpassing that of the Western Province. In this sense, peace and return to normalcy would enable all regions to participate in the development process.

These issues have been underlined in the BPA’s proposals for the National Budget, 2007 and the BPA believes that the consideration of its proposals will contribute towards equitable regional growth. The BPA also hopes that all concerned parties to the conflict including the government will take corrective measures to restore peace and normalcy in the country for equitable economic growth to take place.

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Daily Mirror: 10/10/2006"

The ‘State of the Economy’ is an annual publication of the Institute of Policy Studies (IPS) providing a rigorous assessment of Sri Lanka’s economic performance in light of policy developments in both the domestic and external environment. The report also highlights emerging socio-economic issues in key areas of medium-term policy relevance for the country.

The Sri Lankan economy has seen a return to a relatively strong output expansion with GDP growth expected to be close to 7 per cent in 2006. The post-tsunami surge in foreign capital inflows, supported by broad based growth across all sectors has offered a reprieve to the economy to withstand pressure on the external front emanating from high international oil prices. While the short-term economic outlook has brightened, the Sri Lankan economy will have to overcome constraints – not least the continued threat from escalating oil prices – before it can be confident of sustaining the growth momentum. A critical area for reform remains restructuring the country’s public finances. The report notes that the quality of fiscal consolidation needs to be improved by re-orienting expenditures to priority and growth enhancing areas.

The report notes the urgent need to take Sri Lanka’s economic reform programme to tackle remaining supply-side rigidities. While some key infrastructure projects in the areas of energy, roads, etc. have been initiated, much remains to be done. The policy priorities needed – in the restructuring of state owned enterprises (SOEs), addressing rigidities in land and labour markets, etc. – for the ultimate aim of simultaneously increasing growth and reducing poverty are discussed in some detail. For example, in the key area of agricultural reforms, the report examines the unresolved debate over whether land reforms will encourage small family farms or lead to a dominance by large commercial holdings. Similarly, the policy and implementation issues related to charging for irrigated water and alternative participatory irrigation management systems are discussed at length.

The report looks at issues of social protection for informal workers whose socio-demographic backgrounds and economic activities subject them to various types of risks. The report notes the need for policies to not only facilitate the provision of social safety- nets but also the need to re-examine existing labour legislation that may reduce incentives for job creation and limit informal sector workers from entering the formal labour market. Even existing social protection schemes such as the Samurdhi programme – where benefits are being raised by as much as 50 per cent from 2006 – appear to have inherent problems of poor targeting as discussed in the report.

The report also looks at the future for reform in the SOE sector. It recognizes that there are various modalities of public ownership, with varying degrees of success across countries. The report notes, however, that restructuring of SOEs in Sri Lanka as currently envisaged where institutions are likely to remain firmly under the control of the government may fail to address the root causes for poor performance. These and other issues of emerging policy interest are dealt with in more detail in the report. The report is available for sale from the IPS premises, 131, St. Michael’s Road, Colombo 3 and bookshops island-wide. More details of the report could be obtained from the IPS website www.ips.lk

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Daily News: 10/10/2006" By Irangika Range

Sri Lanka's handloom industry is to receive a fillip through the introduction of a brand new technology that would improve the quality and volume of handloom manufacture.

Cabinet approval has been granted to employ this high productive machinery named "Tara" widely used in India. "The technology has been successfully used in the handloom textile industry in India with quality output," Textile Industry Development Minister Jayatissa Ranaweera said.

Initially 10 such machines will be used as an experimental exercise in the local handloom textile industry to check its suitability for improving manufacture.

The Minister said each machine costing US $ 1,273 can be easily used to turn out 60 inch width textile fabric. The machinery would also double the efficiency over traditional handloom weaving machinery.

Ranaweera said he expects to sign an MoU with the Indian manufacturer to forge technical co-operation at the second stage.

"If this technology proves a success, the Ministry would take steps to popularise this technology to benefit the local handloom industry," he said.

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The Island: 08/10/2006"

Like hundreds of others along the eastern coast, Pathima Nithaya of Akkaraipattu had been overwhelmed by the tsunami.

By dint of sheer determination, however, Nithaya continued to give between 25 and 30 rupees a month to the Akkaraipattu Women’s Association (AWA). According to the rules of the association, contributions had to be made for at least a year before a member could qualify for any benefits.

Nithaya’s diligence paid off. She was chosen as a beneficiary in the association’s revolving loan scheme, funded by the United Nations Development Programme’s Strong Places project. The AWA trained her in agriculture technology and gave her seedlings to start an organic home garden. She had to make an extra effort to prepare the soil which she did by mixing manure and fertile soil before planting seedlings in the small plot in her garden.

Tending an organic vegetable garden while looking after three young children was tedious work but Nithaya was grateful for a chance to supplement her family’s meagre income. The wife of a casual labourer, Nithaya had found it difficult to save even a few rupees a month.

Now, not only can she feed her childxzren chemical-free vegetables, but she can also sell the surplus produce once she extends her organic garden with her husband’s help. She plans, too, to expand to poultry farming with credit facilities from the AWA, valuable support that she can count on given her steady resolve.

Nithaya’s tale is one of many success stories told in the UNDP’s new post-tsunami recovery report. Titled ‘Looking Back`85 Looking Forward’, it showcases the lives of tsunami survivors who learned to help themselves with a little help from outside. These are accounts of courage and perseverance in the face of tremendous challenges.

Take B M A Gunapala. He lives in Ukwatte, a farming village at Gintota in the Galle district. The hamlet supplies Galle town with vegetables. Their main crop being snake gourd but they also grow bitter gourd, okra,(bandakka) capsicum and green chillies.

The tsunami waters flowed up the Gin Ganga and inundated the fertile soil, damaging both vegetable and paddy farms. For the subsequent six or seven months, the soil remained infertile. But farmers say that after a few showers, the soil appeared richer than before for growing leafy green vegetables.

Gunapala, whose father and grandfather were both tillers of the soil, now tends to his two-and-a-half acre farm cultivated with a variety of vegetables. He had sustained considerable losses due to the tsunami. Almost everything in their vegetable plots was destroyed.

But Gunapala was a member of a farmers’ association and the UNDP assisted him through this society. "The fertiliser and equipment we received were very useful," he recalls. "In fact, we didn’t get into debt as on previous occasions because of the assistance we received. This time, our income was good."

"We depend on this cultivation for our livelihood," Gunapala reflects. "We are traditional cultivators. The lands are not my own. They are leased out. Most farmers cultivate in lands that have been leased out. We settle our loans and then we borrow again. I generally market my produce through a wholesaler with whom I have a long-standing relationship. We are aware that the intermediary makes a high profit but we are helpless as we have to accept whatever price is offered to us."

An artist at heart, 23-year-old W H Udara Asanga of Devinuwara in Matara has turned his designing skills into a lucrative business. He builds specially fitted dashboards and stereo lockers for three-wheeler scooter taxis. Himself a three-wheeler driver in the past, he had first tried out a new dashboard and locker design for his own vehicle. His friends were soon admiring his handiwork.

When he lost his house in the tsunami, Asanga moved into his parents’ home. He obtained a loan of Rs 25,000 from the Devinuwara Multi-Purpose Cooperative Society – one of the many microfinance institutions funded by UNDP – to buy a new jigsaw and drill so that he could resume his business.

"I now have customers from Trincomalee on one side and Haputale on the other," Asanga, a father-of-two, says. "I generally take about three or four sets of dashboards and lockers by bus to Trincomalee every month. I sell each set for about Rs 7,000 or Rs 7,500."

"When the three-wheeler looks nice, it is good for the driver’s business," Asanga explains. "As a result he is happy. I get a lot of satisfaction from this work. I introduce new designs, change the colours and the material. These products are made with plywood covered with formica and decorated with printed pictures and stickers with appropriate wording I get the stickers done outside according to my requirements. I also get digital stickers printed in Matara."

Asanga has leased a three-wheeler out of the profits he has made. He pays a monthly lease rental of around Rs 7,000. He also takes passengers on hire.

M Naufiya is one of six members of the Agaram Social Service Organisation of Kalmunai. Like Nithaya, she qualified for a loan from a revolving fund financed by the Strong Places project. A widow fending for four children, Naufiya makes stringhoppers which she sells to people in the neighbourhood. She earns a daily profit of about Rs 200.

The loan helped Naufiya replace old equipment as well as buy larger stocks of rice. "I am happy because I was able to buy some new equipment and because I don’t have to buy rice on credit anymore. Now, I am looking forward to buying a rice grinder and have already begun saving for this."

After the tsunami, the Agaram Social Service Organisation (ASSO) helped clear debris and also contributed towards reconstruction. Recognising the potential of this group, Strong Places gave a grant of Rs 175,900 along with training in writing proposals, identifying needs and financial management. With this guidance, the organisation was able to re-establish itself. Volunteers were taken on, more documentation was introduced and accounting procedures put in place.

"We have become an established organisation, recognised by our community and accepted by donors," says T Thusiyanathan, president of ASSO. "We feel that now we have the knowledge, experience and staff capacity to implement any project that will benefit our village."

The UNDP report documents numerous other post-tsunami projects that had helped Sri Lankans recover their livelihoods and their lives.

For instance, Ratnam – a toddy tapper from Kudiyiruppu in Batticaloa – benefited from the UNDP’s Quick Recovery Project under which palymrah trees uprooted by the tsunami or conflict were speedily replaced by the planting of seedlings.

Ratnam considers the palmyrah palm as a gift from nature. It provides the community with food, shelter, and livelihood and protects them from recurrent natural hazards like cyclones and heavy winds.

Ratnam’s wife and children use the leaves and fruits of the palm to supplement their income. She makes edible items like panattu, jam and sauce from the fruits and odial, khool and pittu from the tuber. The family also makes marketable products such as mats, baskets and fences from the dried palm leaves and even pots and vases.

Palm fronds are used as roofing material and as fencing which the unused parts of the tree go into the family hearth as firewood.

Neglect and two decades of fighting had already left scars on the extensive palmyrah plantations of the east coast when the tsunami uprooted whatever was left.

(Extracted from the UNDP’s post-tsunami recovery report)

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Sunday Observer: 08/10/2006" by Gamini Warushamana

New opportunities are emerging with the latest breakthrough in science, Nanotechnology, for the country's economy and corporate sector, said Chairman of the National Science Foundation (NSF) Prof. Sirimali Fernando.

"We have to act today to grab the maximum benefits from Nanotechnology as two years may be too late since, today, technology is advancing rapidly and countries are grabbing them quickly.

After the industrial revolution in the 18th century it took decades to transform technological innovation to the next stage. But today the phase has shortened and technology is evolving quickly, Prof. Fernando said.

"On many occasions in the past we missed the opportunities and failed to get the benefits from technological revolutions in electronics, biotechnology and IT. We are only consumers of these technologies but we had the potential of being active leaders.

Today even third world countries can be leaders or at least equal competitors in technological advancement and get economic gains. India gains from IT and it has become a leader in IT technology. Cuba is another example and the country gains from bio technology and today it has become a leader in bio technology.

We can see vast scope in nanotechnology in the future and there are enormous economic benefits," she said.

NSF has appointed an international consultation panel on Nanotechnology. Prominent Sri Lankan scientists who are at the top of international nano research institutions have been appointed to the panel.

The panel comprises of Prof. Ravi Silva, University of Surrey (and a member of the five member task force who advice the UK government on nanotechnology), Prof. Gihan Amaratunge of the University of Cambridge, Prof. Kumar Wickramasinghe (who is working for the IBM and the head of the nanotechnology division, USA) and Prof. A. P. de Silva of University of Belfast.

Prof. Fernando's view is that investment to the sector should come from the government and the corporate private sector. For the advancement of the nanotechnology the country needs huge investment and human capital. NSF proposes Rs. 1 billion government investment per year and contribution from industrial sector through increasing their R&D expenditure. We can't expect FDI or donor assistance in the initial stage of the technology, she said.

Nanotechnology is already used by some apparel manufacturers in Sri Lanka.

NSF has already gathered information about expatriate Sri Lankan experts in the field. Prof. Fernando said that human resources is the most important part and we have people with a fine calibre and they are ready to return to the country if we provide them with similar living conditions.

So we have to pay higher salaries and government should arrange other facilities which they may need.

Attracting expatriate professionals back is essential to develop a country and many countries such as Korea, India and China did exactly that, at most decisive turning points of their economies.

Some of these Sri Lankans have their own patented innovations and the country will benefit by foreign income flows from them, she said.

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