Economic growth sans physical planning A recipe for poverty and regional disparities
"The rationality of a ‘roadblock’ in overcoming the challenges of development cannot be condoned for a variety of reasons. Consequently, it will be profitable to examine the notion of the ‘systemic defect’ in the processes which now steer development. In same, higher economic growth rates will continue to remain an intrinsic imperative. Its key issue will therefore be to focus on the places from where growth can be stimulated across the country, without reliance only on one overheated oasis..."
Sri Lanka has been a paradise for both orthodox and unorthodox analysts who have attempted to seek the pros and cons of its challenges in attaining sustainable rates of economic growth with equitable development. Economists have noted that, "the Sri Lankan economy has been going up and down, averaging at approximately 5 per cent, and never reaching the desired growth rate". The focus on same have prompted these Economists to articulate that a rate of 7 to 10 per cent was needed to resolve the country’s problems of poverty, low incomes, and unemployment, which they identified as the underlying reasons for social tensions that often ends in a disruption of economic activities. Yet, they have contended that maintaining such a growth rate for over a decade or so, "has become more a dream". Meanwhile, the Central Bank of Sri Lanka has reported that the growth of Sri Lanka’s economy had hovered at around 7.4% in 2006. It also predicts a growth rate of over 7% in 2007. It may however be too early to conclude that it is a break from the past trends. In contrast, India has been able to get over its "Hindu rate of growth", and to place its economy on a high growth path of 8 to 9 per cent.
In the meantime, it is pertinent to note that in the Budget Speech 2007, the Minister of Finance did assert that, "we have to create an economy that will sustain over 8 percent annual growth over the next 10 years".
A key reason attributed by many analysts to Sri Lanka’s struggle in achieving the desired economic growth rate, has been its missed opportunities related to the 24-year war-like internal conflict. Undoubtably, if a durable peace is attained, there will be every likelihood of achieving higher rates of growth. Nevertheless, Economists have also contended that peace alone will not drive growth. They have indicated the need for many other pre-requisites for maintaining the growth momentum, such as the rates of investment and efficiency of capital. The latter in turn will be determined by a number of associated factors including correct macro-economic policies, infrastructure, education, skills, management abilities, technology, political stability, work ethics, and law and order. Therein have been the difficulty. Some analysts have added that, "the social engineering required to enable higher sustained growth has been difficult in our cultural and political milieu".
The aforesaid has prompted an immediate enquiry on whether Sri Lanka’s development has reached a `roadblock,’ or whether the methodology adopted to date has an inherent `systemic defect’ that needs to be rectified.
The rationality of a ‘roadblock’ in overcoming the challenges of development cannot be condoned for a variety of reasons. Consequently, it will be profitable to examine the notion of the `systemic defect’ in the processes which now steer development. In same, higher economic growth rates will continue to remain an intrinsic imperative. Its key issue will therefore be to focus on the places from where growth can be stimulated across the country, without reliance only on one overheated oasis. An outcome of the latter will be the challenges of "lagging regions". Its most remarkable feature became particularly evident in the political domains of Sri Lanka & India at the last general elections held in the two countries. Each incumbent government promised mega-scale macro-perspectives of prosperity through forecasts of high levels of economic growth. In reality these had little impact on the `lagging regions’ across the country wherein a significant share of the Constituents were in poverty. The classic case of `India Shining’ did not impress the voters, resulting in the installation of a new Government under the stewardship of Manmohan Singh / Sonia Gandhi. For somewhat similar reasons `Regaining Sri Lanka’ too did not appeal to the majority of voters in the ‘lagging regions’ resulting in a change of Government in Sri Lanka, in favour of the leadership of Mahinda Rajapakse.
Thus, in these two neighbouring countries, high in its respective political barometers, was the challenge of overcoming `regional imbalances’. The new Governments in both countries perceived the latter in the context of the `urban – rural’ divide, on the basis that the lagging regions were pre-dominantly rural. Thus, India’s Common Minimum Programme drawn up by its United Progressive Alliance (UPA) Government, established the following key objectives in its development strategy:
i) ensure that the economy grew at least at 7 to 8 per cent in a sustained manner;
ii) provide a legal guarantee for at least 100 days of employment on asset creating public works programmes at a minimum wage for every rural household;
iii) ensure that Gram Sabhas were empowered to emerge as the foundation of the Panchyati Raj bodies to which will be directly credited all funds for poverty alleviation & rural development programmes. Also, such devolution of funds to be accompanied by similar devolution of functions & functionaries.
India’s UPA Government followed through on the above, by carrying out the following:
a) launched the National Rural Guarantee Scheme providing one member for each of India’s 60 million rural households the guarantee of 100 days of work in each year at a minimum wage of Rs.60/- (or US $ 1.35) per day, or an unemployment allowance if there is no work. They will work on building roads, constructing canals, improving rural infrastructure, or conservation work. (India’s Rural Development Minister called it the biggest social security net ever provided in India).
b) launched the project to `Provide Urban Facilities in Rural Areas (PURA)’, to establish physical, electronic, knowledge, and economic connectivity to rural areas.
c) appointed a separate Ministry of Panchyati Raj to oversee the speedy implementation of the 73rd & 74th Constitutional amendments which established the Panchyati Raj bodies.
In Sri Lanka, the new Government designed the following key objectives as per its Mahinda
Chintana policy framework for development:
i) ensure that the economy will be accelerated towards 8% over the medium term by promoting modern infrastructure at both national & rural levels;
ii) establish a Jana Sabha for decisions to be taken for the benefit of the village to realize the aspirations & objectives of the Gama Neguma concept;
iii) empower the people at the grassroots through Gama Neguma involving community participation to achieve poverty eradication by undertaking 100,000 community based infrastructure projects and other livelihood development activities in each year, by expanding the Jana Pubuduwa, Gami Pubuduwa, and Gami Diriya Programmes;
iv) appoint the Regional Development Ministry to co-ordinate with the Local Authorities & Provincial Councils for the efficient use of resources and to address local needs;
v) develop the less developed Provinces by setting up 300 Industries with at least one in each DS Division, coupling tax & other incentives to any company setting up a new industry or re-locating an existing industry in any District other than Colombo and Gampaha.
It follows from the aforesaid that in both countries its policies and strategies for economic growth have been correlated with targets of poverty reduction & in mitigating regional disparities. The overarching aim of the strategy has been to capture the synergies between urban & rural areas as the means of improving opportunities for employment generation, and in achieving higher incomes. Thus, in India, the vehicle to accomplish same has been mandated in Article 243ZD of the Constitution which requires the establishment of a District Planning Committee in each District of every State to prepare a District Plan which consolidates the plans prepared by the Panchyats and the Municipalities. Such consolidation is envisaged as a task that goes beyond compilation, and connotes a degree of value addition through the integration of urban and rural plans, which is particularly important in the light of increasing urbanization.
The Sri Lankan situation which too has focussed on the rural areas for poverty reduction & in mitigating regional disparities, has however yet omitted to capture the rural – urban integration in its planning process. The latter is at the heartland of the `systemic defect’ in planning for economic development to achieve higher growth targets.
In the above context, the emphasis exclusively on the rate of economic growth has to shift to capture its impact across the spatial fabric of the entire country. Its concentration mainly in one province out of the nine provinces, signifies a meaningless economic performance. The latter will not lead to the quality of life of the nation as a whole, but of a small segment. Thus, in 2005, the Western Province contributed almost 51% of the national GDP, while the outermost four provinces of Eastern, Uva, Northern and North-Central contributed less than 5% each to the national economy. Meanwhile, the four provinces neighbouring the Western Province produced contributions to the total GDP in the range of 6 – 9% each.
Analysts have reasoned that the dominance of the Western Province in value addition has been due to its greater integration with global markets, especially after the introduction of economic reforms in the post – 1977 era. Furthermore, its concentration of economic activity can be partly attributed to the easier access to the country’s main seaport & the only international airport, both located within the province, besides convenient access to related support services.
However, other analysts have pointed out that, "the main productive sectors, such as agriculture, forestry, livestock, and fisheries, industry including mining, and tourism, etc., are not concentrated in one or two spatial bounds, but are widespread throughout the country. Therefore, its development has become vital to achieving balanced regional development necessary to eradicate poverty to improve the quality of life of the people of the nation as a whole."
Nevertheless, it is pertinent to note that the Central Bank has reported that historical data on per capita Provincial GDP demonstrates that the agro-based economies in the provinces outside the Western Province, had failed to expand through industry & services due to relatively poor infrastructure, despite the availability of human capital. It further reported that the agriculture sector on its own failed to prosper throughout, due to a host of reasons such as excess labour & low productivity, vulnerability to weather conditions, poor product diversification, and market inefficiencies for key commodities & inputs.
In these circumstances, the Central Bank contends that improvements in infrastructure, especially better roads & telecommunications, in the economically weaker regions would encourage investors to penetrate into such areas, taking advantage of lower land prices. Therefore the role of infrastructure as a key driver of economic growth, by its connectivity of rural & urban areas, can lever the presently lagging regions to significantly increase its contribution to the national economy, & also reduce its levels of poverty.
The magic in regional development is thus not only reliant on its economic wand. The spatial integration of its rural & urban areas by the infrastructure networks & judicious land-uses to ensure environmental sustainability, are complementary measures. In the latter context, the integrated planning of the economic, social, physical, and environmental aspects of land, assumes great significance. It constitutes the domain of Physical Planning which at the provincial scale, provides the spatial framework of the Regional Physical Plan. Its statutory character under the provisions of the Town & Country Planning Ordinance No:13 of 1946 as amended by Act No: 49 of 2000, permits the incorporation of the promotional as well as regulatory features of physical development. Consequently, its harmonious partnership with economic planning processes has become crucial for achieving balanced regional development in the country as a whole.
As previously mentioned, India’s District Planning Committee & its District Plan comprises the vehicle to consolidate the urban & rural area development plans. Sri Lanka’s corresponding vehicle is the aforementioned Regional Physical Plan. Its preparation by the Regional Planning Committee of the respective Provinces, includes the Chief Secretary of the Provincial Council as its Chairman, and the representatives of the Local Authorities and the District Secretaries within the Province, as its other key members. Consequently, its accountability cuts across the major stakeholders responsible for steering development at the provincial spatial scale.
The legitimacy of the Regional Physical Plan is also inherent in its mandatory consideration by an Inter-Ministerial Co-ordinating Committee comprised of Ministry Secretaries, which recommends its approval by the National Physical Planning Council chaired by the Head of Government. Accordingly, the network of the nine Regional Physical Plans offers the catalysm to complement with the economic planning processes in driving economic growth & equitable development across the nation. Its conformity with national physical planning policy will enable the steering of development to be based on a National Spatial Strategy.
Thus, the Regional Physical Plan constitutes the spatial framework composed of land, people, and resource endowments (natural & built), for promoting & regulating development and in identifying the appropriate locations for human settlements, including its economic activity. Consequently, it reflects the vision & mission for the development of the region or province.
The employment of the aforesaid mandate for achieving balanced regional development, has however eluded the economic planning process to date. On the other hand, the creation of Provincial Councils & its related Article 154R(5) of the 13th Amendment to the Constitution obligating the Finance Commission in formulating fiscal devolution principles towards balanced regional development, have breathed life into its dormant state. The statistical infrastructure has subsequently revealed the gravity of regional disparities, & the insignificance of the exclusiveness of the indicator of economic growth. The focus on poverty reduction has compounded the cause.
In this situation, the conclusion is explicit: economic growth sans physical planning will be a recipe for poverty & regional disparity. The `systemic defect’ in the segregated processes of economic & physical planning therefore needs immediate eradication, and substituted by its integration.
Farmers encouraged to grow cash crops
Farmers in Ampara must seriously think of growing more cash crops as the change in weather patterns in the Ampara District helps such crops grow.The shift from cultivating paddy to potatoes would help to bring in more money to the country’s paddy farmers, and the farming community can profitably utilize the highlands for the cultivation of potatoes,” Deputy Director of Agriculture, Nimal Dayaratne said. “We experienced a change in climatic patterns in Nuwara Eliya for a few months and that helped the farmers there to get a bounteous yield by adjusting the rotation of crops accordingly. Deputy Director Dayaratne continuing said, “Forty years ago Ampara experimented with potato cultivation but we gave it up for a variety of reasons, and are happy that we were able to have a successful crop with Canadian support. The interest of the farmers and the devotion of our officers have helped to obtain the desired yields. We hope to expand the cultivation programmes in the future.”
GOAL's John O'Shea recounts the extraordinary work GOAL accomplished in Sri Lanka after a visit to the region
I have just returned from my second trip to the Ampara district on the east coast of Sri Lanka where GOAL’s efforts are based, a place so remote that aid workers did not arrive until two weeks after the Indian Ocean had reaped such unimaginable savagery on the people of South East Asia in December 2004. This was one of the worst affected regions where one third of the deaths in Sri Lanka occurred - some swept away to unmarked oblivion in the sea itself, others crushed in the warren of narrow streets that were turned into open sluice gates by the pummeling water.
With over €20 million donated by the Irish public, I can confirm the quality and scale of the work done ranks among the most awe inspiring I have seen in the 30 years of GOAL. The standard of the buildings is quite breathtaking, and the gratitude of tsunami-affected communities is overwhelming. So impressive is the work completed that a local dignitary stated to a large gathering that it would have taken 20 years for the Sri Lankan Government to achieve what GOAL has accomplished in 16 months.
During the emergency relief phase, GOAL concentrated on providing emergency and transitional shelters, constructing over 1,350 temporary shelters and providing water and sanitation facilities to 6,000 people. Damaged buildings were made safe, rubble cleared and water sources cleaned. GOAL distributed non-food items such as mosquito nets, fishing gear, hygiene kits, tool kits and school uniforms. Extensive cash for work projects were implemented., and GOAL set up a boat yard and repaired almost 500 tsunami damaged fishing craft.
Once immediate needs were met, GOAL’s longer term recovery and rehabilitation programme got underway involving:
Schools and vocational training
GOAL rehabilitated 28 schools which had been occupied by homeless tsunami survivors who fled the coast after losing their homes. GOAL’s schools rehabilitation programme involved re-building 65 schools, so that some 35,000 children can return to their education after one of the most traumatic years of their lives. GOAL carried out an extensive education resources programme supplying school equipment, such as furniture, computers and sports equipment and other essential requirements to improve the quality of the school buildings and enhance learning environments.
GOAL concentrated our housing projects in the South of Sri Lanka. GOAL have completed almost 300 housing units between donor driven, owner driven and shadow population housing.
Roads & Bridges
In the wake of Sri Lanka’s tsunami, many of the east coast’s road drainage and bridges were severely damaged and rendered unusable. GOAL carried out the essential repairs undertaking an impressive infrastructural programme, rehabilitating 6 bridges and repairing 51 km of roads and improving drainage, so that communities could recalibrate themselves to a post-tsunami rehabilitative environment. Contractors employed were local, and materials were sourced locally so that money filtered back into the local economy. Serving more than 75,000 people on a daily basis, affected communities now find it easier to go about their daily lives both travelling and transporting goods and materials, making the region more attractive to business investment.
Improved potable water supply & sanitation
The giant waves contaminated water wells with salt water, and so household wells were either abandoned due the salinity levels or turbidity due to inadequate groundwater sources. GOAL rehabilitated 150 household wells, water supplies to 55 schools were improved benefiting 35,000 students, and tsunami damaged wells repaired and latrines constructed. Water mains connections were facilitated and a large booster pump installed improving supplies for 30,000 families. Water supply, distribution network and treatment to eight remote villages is being provided.
Solid waster management
GOAL distributed 1,500 compost bins and 2,500 polysac bags. A biogas digester was constructed as well as a recycling collection centre. Extensive public information campaigns were conduced through GOAL partners.
Almost 75% of Sri Lanka’s fishing fleet was completely destroyed by the tsunami, and Ampara’s only chilling plant was swept away. This lead to a reduced income for fishing communities, a sharp increase in the price of fish, and fish becoming inaccessible as a staple protein source for the poor. To reinvigorate the local economy and help fishermen and their families to get back on their feet, fishing boats were repaired, and nets and equipment were distributed by GOAL. Four fully equipped fish markets and four fishery community centres were built by GOAL and have been handed over to local authorities. With the introduction of facilities for proper icing and storage, post harvest losses have been reduced improving the earning potential of fishing communities.
In Sri Lanka, 250,000 people were left unemployed after the tsunami – many of these people were the sole earners in their families. Many of the assets people need to perform the most basic of income-generating activities were washed away in Ampara where primary income-generating activities are fishing and large-scale agriculture. In an attempt to assist tsunami survivors rebuild their lives, GOAL carried out surveys and supported business-training programmes for over 1,000 people, and some 35,000 people received livelihood assistance. GOAL assisted organic farmers through agricultural training, and destroyed home gardens were replaced. Rainwater harvesting programmes and equipment was provided to those who needed it, so that communities could work to repair normal routines and start to heal the psychosocial effects of the tsunami.
Tree planting and coastal protection activities were implemented, and GOAL planted 80,000 hardwood trees and 76,000 mangroves as well as establishing a number of sand dunes to improve environmental security.
GOAL rehabilitated over 40km of irrigation canals and repaired sluice gates, pumps, culverts and other damaged infrastructure, benefiting at least 2,000 families. Dredging and clearing work was supported. Bathing steps for mobility-impaired people were also built, as was 9 km of bund road.
GOAL managed to do all of this work on an administration cost base of less than 5%.
The GOAL programme in Sri Lanka is one of the most ambitious and successful emergency and rehabilitation programmes undertaken by GOAL to date. Thanks to the generosity and support shown to us by the public, these devastated communities face the future with hope where previously there was only despair and destruction.
Potato cultivation pilot project a success at Ampara
The first trial crop of potatoes at Akkaraipattu was successfully grown at Illukuchenai, with Canadian aid channelled through Canadian Agro-sustainability in partnership with CIDA, and local expertise provided by the Department of Agriculture, Ampara. The first crop was successfully harvested recently.
Mrs. Ferial Ashraff, MP (Dighamadulla) Minister of Housing and Common Amenities inaugurated the harvesting of crop with Islamic religious observances. Messers, Nimal Dayaratne, Deputy Director Agriculture, Calvin Piggot representing CIDA, Douglas McArthur President of CASP, religious dignitaries and government officials participated at the ceremony.
Farmers in the area told the ‘Daily Mirror’ that a packet of seed potatoes tuber supplied the need for thirty beds and each bed yielded nearly 900 grams of quality potatoes. The yields were very encouraging the farmers said.
Minister Mrs. Ashraff in her speech thanked the Canadian donors who supported the project and the officials who successfully helped to implement the project. She said the success of the project would encourage others to take to agriculture.
Two varieties of potatoes ‘Granola’ the white variety, and ‘Oseiree’ the red variety were cultivated at the trial plots at Barakkathnagar in Irakkamam. The programme commenced in November last year.
She said Ampara had been a major paddy producing region under the Senanayake Samudra and pointed out that while paddy had been successful in the past, today it was not profitable owing to problems connected with marketing, storage, pest and disease control. She stressed that fluctuating prices had discouraged many from cultivating paddy.