Daily Mirror: 03/04/2007" By Gayani Perera

Voice Of Youth established in 1998 is a non-profit organization duly registered under the companies act no. N (A) 684. The organization’s main priorities spans a vast area of which include, the developing and facilitation of job opportunities for youth, developing entrepreneurship promotions and skills developments opportunities, harnessing the talents among youth in personal and national development, poverty mitigation, building awareness on HIV/AIDS, educating youth on democracy and good governance, ethnic reconciliation, human rights issues and environment conservation etc.

Their ultimate goal is to increase access and retention as well as improve the living conditions of youth in par with the Millennium Development Goals.

The organization comprises of a qualified and competent board of governors of which include a number of reputed university lecturers. Their main office is located at Nugegoda and with an additional branch at Anuradhapura .

I spoke to Mr.Senaka Dambawinne, Programme Director of Voice of Youth, on the organization’s contribution towards the youth in Sri Lanka. Our organization has two parallel lines of functioning. Our basic pilot activities are directed at the Anuradhapura district whilst also having various other national level initiatives, says Mr. Dambawinne.

Why we selected Anuradhapura was mainly due to a number of issues, namely that it is one of the largest districts in Sri Lanka located in the dry zone where the poverty levels, suicide rates and illiteracy are quite high. Taking these reasons into consideration we built our organizational infrastructure based on providing an exceptional service to a majority of youth from this district. Due to these reasons it is quite beneficial to conduct our work from this regional office for application in the national levels.

The organizations target age groups are from 15 to 24 years. We are looking at a development-oriented approach catering to individuals as well as benefiting the overall development of the country, says Mr. Dambawinne.

Voice Of Youth have combined their services with UNICEF to conduct a programme including 87 schools in order to promote life skills with the objective of preventing risk behaviour among students.

The primary objective of this programme was to combat HIV transmission among youth. The organization attempts to bring about productive behavioral changes in youth on the concept of developing favourable life skills that will be of advantage to them in their professional as well as personal lives.

A special programme was set up to monitor the progress of youth with regards to the activities they take part in to develop their life skills. Life skills form a crucial part of the day-to-day challenges that youths face in their daily lives. This may be a variety of challenges ranging from suicides to unsafe sexual practices.

Another special project undertaken by the Voice of Youth organization is the Youth Kingdom project. This is the countries first youth network comprising of 42 youth organizations.
Youth Kingdom is a web portal created by the Voice of Youth to facilitate networking of youth organizations in Sri Lanka. This provides them a place to meet, gather information, interact, interrogate, and initiate action and to form connections with the rest of the world.

Among the many services that Youth Kingdom provides include providing detailed profiles of youth organizations currently in operation in Sri Lanka, information on policy documents related to youth, organization of special youth forums, youth news, skills development and career guidance pages, information on educational institutions, sponsorship and funding information and feedback information. The following information provides youth with knowledge and insights on the youth organizations currently operating in the country, and allows them relevant information on how to contact these organizations and how they could actively work with such organizations.

The Youth Kingdom programme also helps the youth to share their ideas with others and find suitable programmes that relate to their common interests, skills and budget.
The career guidance pages provides an in depth knowledge about job opportunities, by providing a person with a list of employment opportunities that are currently available in the job markets. The programme also provides youth with a novel concept of leaning and gathering knowledge about numerous current issues such as Human Rights, HIV/AIDS, Drug prevention, Environmental Protection, Free Speech, Gender Inequality and many more. The Youth Kingdom programme also helps youth to find sponsors to fund their projects.

Voice Of Youth focuses on being the common voice of the youth organizations by connecting their services and channeling them as one in order to help the youth of Sri Lanka to obtain the maximum benefits of these organizations. There has not been any type of effective mechanism as this that has successfully addressed the relevant issues with regards to the youth of the country.

The organization strives to empower and nurture youth to actively participate in the growth and development oriented national projects and to display their deployable inherent talents and potentials, which will lead to their ultimate success in life.

The organization is also driven with a clear mission to bring forth a new generation of youth who will become a valuable element of the national clusters that endeavourers Sri Lanka to achieve prosperity and there by enabling them to come in par with the rest of the developed world.

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The Sunday Island: 01/04/2007"

Addressable satellite radio sets were found to be the best alerting technology of the community disaster warning pilot project conducted by LIRNEasia and Sarvodaya. Java enabled mobile phones which has a wake up siren came next. The GSM based remote alarm device developed locally by Dialog Telekom, MicroImage and University of Moratuwa followed closely. It has both light and siren.

Findings of this project on learning how information-communication technologies and community based training can help in tsunami and other disaster situations had been discussed by community leaders and international experts at a workshop on "Sharing Knowledge on Disaster Warning with a Focus on Community-Based Last-Mile Warning Systems" at the Sarvodaya Headquarters in Moratuwa recently. Difficulties had been experienced in communicating disaster warning to villages when mobile and fixed CDMA telecom networks were not functioning in conflict conditions. Also, the importance of not leaving newspapers on top of sensitive electronic equipment which can overheat and shutdown had been noted. The VSAT based warning system had not run well in the tests.

"This is proto-type technology, using chosen groups to alert particular communities in particular villages," explained Prof. Rohan Samarajiva, Executive Director, LIRNEasia, at the press conference held on Friday at the Institute for Construction Training and Development (ICTAD).
"We are not into the mass market. This is a community leader's programme and not a home product." The cost consideration differed from that of a home-based product, he said. "When the cost factor is considered, java-enabled mobile phones are the best," he said. The emphasis of the project had been on community involvement with an accent on contingency planning including evacuation preparedness. This could avoid panicking, stampedes, heart-attacks and pre-mature child births likely in such a situation, Prof. Samarajiva said.

The project simulations had been carried out in 32 villages with various kinds of communications equipment providing features such as early warning wake-up, addressability and provisions of information in three languages (English, Sinhala and Tamil). The field testing actively engaged the 32 villages in assessing and reporting on the effectiveness of the system and equipment being employed. A number of the key hardware and software components were designed and developed in Sri Lanka specifically for the project. Panama, Trincomalee, Moratumulla, Moratuwa, Modera, Kalutara were some of the filed tested areas. Temple "Ghantars" and mosque bells had been used as alarms.

An advanced Sarvodaya village, Mirissa, designated as a control village and not given any equipment had managed to respond extremely quickly to the simulated warning by co-ordinating with another village, which LIRNEasia saw as an example of organization and determination triumphing technology.

The alerting technology needs a power supply independent of the main supply, regardless of weather conditions and text language support and audio-language to transmit the warning message, said Prof. Peter Anderson, Simon Frazer University, Vancouver, Canada, in his presentation.

If less time is taken in receiving, verifying and sending the warning to communities by the Sarvodaya Hazard Information Hub, then extra time will be available to people to evacuate into a safer area, he said. "Tsunami warning capabilities in the Indian Ocean are improving. How to get the message out to the remote areas is the challenge in Sri Lanka, throughout the region and in the world."

"Alerting machines must be on all the time and used on a daily basis," said Nuwan Waidyanatha, LIRNEasia. Rahul Kumar, Chief Technical Officer at the World Space Channel available at Sarvodaya, explained the dissemination of communications in transmitting voice records from Bangalore, converting to a web file in Singapore and downcasting via satellite. Dr. Vinya Ariyaratne, Executive Director, Sarvodaya, spoke of understanding community dynamics and social and cultural aspects.

The objective was not to declare a winner among the technologies, but to find out how they could be improved to perform reliably in the difficult conditions of Sri Lankan villages. In disaster warning, great emphasis is placed on redundancy and multiple pathways, so more than one technology will be used in project implementation. The findings off field trails are now in the hands of developers who are making improvements to the equipment so that they will perform better in Sri Lanka and in other countries interested in these applications.

Conceptualised in the aftermath of the 2004 Indian Ocean tsunami that claimed the lives of one out of 500 local citizens, the project partnership of LIRNEasia and Sarvodaya had the shared objective of evaluating the suitability of ICT in the last mile of a national disaster warning system for Sri Lanka and its possible extension to other developing countries. International Development Research Centre of Canada had funded the project launched in January 2006. Part of the process had included training young people from Sarvodaya Shantisena as trainers. The project had been unable to retain all the trainers who trained last March establishing a 24/7 helpdesk function at the Sarvodaya Community Disaster Management Center.

Sarvodaya and LIRNEasia intend to work with their multiple partners to further analyze the findings of the pilot project research and implement them in a broad program to make 1,000 Grama Swarajya villages in the Sarvodaya Movement exemplars of disaster resilience.

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Sunday Times: 01/04/2007"

W. A. Wijewardene, Deputy Governor, Central Bank of Sri Lanka, recently delivered the Valedictory Address at Third Training Programme on Microfinance Delivery System in Pune. The course was followed by officers of Sri Lanka’s Central Bank.

Excerpts of his presentation:Microfinance is a very potent instrument of poverty alleviation. It fills the gaps which normally arise in macro-type poverty reduction policies pursued by governments. The usual strategy adopted by governments to attack poverty has been the attainment of a high economic growth continuously over the long run. With that growth, it is expected that the benefits of economic uplifting would trickle down to lower levels of the society.
As a result, the overall economic conditions of all segments of the population would elevate to a higher level. It will kill the absolute poverty levels. Some good examples are countries like Malaysia and South Korea. Both these countries were able to reduce absolute poverty from a very high level of over 50 percent to a very low level below 6 percent within about four decades.
If macroeconomic growth can tackle poverty, then why should one be bothered about microfinance? The reason is very clear. When macro-policies are adopted, there are certain gaps that are created in the alleviation of poverty. As a result, some segments of the society would experience a worsening of their situation.

This is because all the people in a society are not capable of moving along with the market at the same speed. Some move faster than the market. They are the super-performers and stand to gain more. Some move at the same rate as the market. They attain a gain more or less equivalent to the market performance. There is no problem about both these categories. That is because they have the capacity to look after themselves. The problem arises in the case of people who are unable to move forward at the speed of the market. They become laggards and are left out. Hence, there should be a special strategy to bring them to the mainstream of economic life.

The normal strategy that had been adopted to address this issue has been the introduction of safety nets to capture them before they make a free fall to the ground. The safety nets so introduced have taken different forms depending on the era or the country. About five decades ago, the safety nets took the form of providing outright grants to the poor people. The objective of the grants was to provide some relief to them, so that they could at least meet their food requirements. The weaknesses in this type of strategies are well known. It encourages poor people to remain in the safety net forever.

They have no incentive to move out of the net, because moving out would mean their having to work hard for a living. If at least the basic requirement of food is provided free of charge, then why would anyone want to work for the same? Economists have long named this problem ‘moral hazard’ problem. This problem simply says that, when one helps another, the person being helped does not have the incentive to adopt even the minimum safety measures.

As a result, he increases the chance of the occurrence of the event which the helper desires to prevent. The consequence is that it imposes an additional burden on the helper. As a result, neither the helper nor the helped would be able to get out of the vicious circle in which both parties would get trapped.

The experience in poverty alleviation throughout the globe has shown that safety nets in the form of outright grants do not work in the long run. Hence, the safety nets that were introduced earlier were converted to ‘safety ropes’. Those safety ropes were expected to provide a means for the poor to hang onto and then climb upward with the support given to them. Thus came the era of microfinance which indeed was a safety rope through which the poor could cross the poverty line. Such microfinance would help them to attain the goal of getting out of poverty, provided certain conditions are met.

Markets

How can a micro-entrepreneur identify the market requirements? What proxies can he use for that, if he does not have direct information on the same? A problem which he would face in this respect is that he has to produce for the future. Hence, any information relating to the past may be a poor guide for that. This is not a problem unique only to micro-businesses. It is equally relevant to big producers as well. But the advantage for such big business firms is that they have the benefit of the results of consumer preference surveys conducted by various institutions.

Such survey results are expensive and beyond the financial capacity of micro-businesses. Yet, without the benefit of such results, it would be pure gambling for a micro-business to get into the production of these goods and services. In a world where information is costly, this would be a serious blow to the potential micro-entrepreneurs.

Information

What this means is that if correct information is not available, micro-businesses are doomed to fail. Hence, in the delivery of microfinance, it is equally important to arm the micro-entrepreneurs with accurate market information regarding the consumer preferences.
Though such information may be costly to a single user, it may not be so if all micro-entrepreneurs get together and acquire the necessary information wholesale. Such information could be kept in an information bank maintained at microfinance institutions. Since it is not advisable to provide such information free of charge, due to the potential moral hazard problem, a fee should be charged from the users. In addition, microfinance institutions too could conduct such market research and disseminate the required information among their customers. That should also be provided at a price.

Another important requirement of micro-businesses is the need for preparing micro-business plans. The necessary technical know-how for this is not available with the ordinary micro-entrepreneurs. It requires them to prepare the estimates of cash flows, market sales, funding requirements, legal and marketing aspects and business disaster management techniques etc.
Once they are put into a generally accepted format, then only they would be acceptable to the lending banks. It is necessary that all the potential micro-entrepreneurs should be knowledgeable in preparing such business plans. If they cannot do that, they could engage specifically trained business plan consultants for the preparation of those plans at a fee.
This was experimented in one of the development projects implemented by the Central Bank of Sri Lanka. In this particular project, bank financing was available for both micro and small businesses. One of the requirements of banks was the submission of a omprehensive business plan, acceptable to the banker, by the prospective micro-borrowers. But, none of the borrowers had the capacity to prepare them. As a result, the utilization of the money in the project became a problem.

Outsource

As a solution, it was decided to outsource the function to some business development consultants at a cost to the borrowers. Accordingly, a number of youth who had studied economics, business studies and accounting for the GCE Advanced Level were selected for training as business consultants. Then, they were appointed to provide consultancy services to potential entrepreneurs for a fee. The lending banks also paid a certain commission to them for services such as loan recovery and follow up work. The programme worked well and a new generation of fee-based business consultants was developed by the project. At the end of the project, most of these consultants, having used their own expertise, started their own businesses.

Another pertinent issue involved in microfinance delivery is how to reduce the transaction costs and make available the loans at the time they are needed by the borrowers. The transaction cost is simply the additional resources which a person has to spend, other than what is paid to the supplier, in order to complete a transaction. In the case of borrowing, transaction costs include any payment which the borrower has to make other than the payment of interest to the lender. Such costs, therefore, comprise legal fees, application fees, loan processing fees, any bribes or commissions payable, stamp duties and other taxes and, finally the opportunity cost of the time spent for pushing the application through bureaucracy and the waiting time. This can be compared with a village money lender who is alleged to be charging an exorbitantly high interest rate. Yet, the transaction costs involved in borrowing from a money lender is practically zero. Hence, from an efficiency point of view, a village money lender is preferable to a microfinance institution with a high transaction costs, Agri-Credit.

In Sri Lanka, in the late 1980s, the Central Bank ran an agricultural credit scheme of which the interest rate payable by the farmer had been fixed at 9 percent when the market interest rates amounted to about 20 per cent. The subsidy was intended to reduce the farmers’ cost of production and promote agriculture. A study conducted by ADB revealed that the effective interest rate paid by farmers, after taking into account all the costs, amounted to 30 percent, much higher than even the free market rates. The difference between the actual cost incurred by the farmer and the rate paid by him to the lending bank was wastage of resources. It had not been the income of anyone. Hence, such costs are known as deadweight losses. Microfinance institutions should, therefore, strive to keep the transaction costs at a minimum and eliminate the possibility of incurring deadweight losses.

The on-time delivery of microfinance loans is also a very important requirement. Most of the microfinance projects are agriculture based businesses. Hence, there is a necessity for meeting crucial expenses on-time. For instance, if a farmer has to apply fertilizer to his field, he has to do it on the due date. For him to buy fertilizer, he needs money also on the due date. This requires the microfinance institutions to release their loans on the due dates. Any undue delay would be immensely costly.

A final word should also be said about the subsidization of the interest rates under microfinance credit schemes. Such subsidized credit is demanded, not by the microfinance borrowers, but by urban based social workers and politicians. The problem with subsidized credit is that it flows not into the microfinance projects but elsewhere. What microfinance borrowers need is not cheap credit.

They need credit on simple terms in time at zero transaction costs. When the credit is subsidized, it not only leads to wastage, but also goes into the hands of undeserving individuals. Most probably, middle class and lower middle class people would flock to appropriate such credit which they plan to use for other types of non-productive purposes. In this context, informal money lenders would definitely provide a role model for microfinance institutions. Instead of trying to fight the money lenders, microfinance institutions should learn good management practices adopted by them.

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Sunday Times : 01/04/2007" By Natasha Gunaratne

With so much emphasis being put on the development of the coconut industry in Sri Lanka, the benefits of the lesser known palmyrah, most commonly found in the north east and north west of the country was the focus of a presentation given by Professor E.R Jansz when he was awarded the distinguished gold medal at the Bernard Soysa Memorial Oration this past week.

Jansz, a lecturer in biochemistry at the University of Sri Jayawardenapura, holds a PhD and has had a long and distinguished career in the field of chemistry with over 15 years dedicated to internationally published research. On Bernard Soysa, the former Minister of Science and Technology, said he was not the 'stereotypical politician of today' but was instead 'quiet, unassuming, honest and a master of literature' who did not amass wealth during his eminent political career. Jansz added that the University of Sri Jayawardenapura, has been wholly supportive of his career and his research endeavours and that more institutions should allow freedom for scientists to research meaningful subjects, such as palmyrah, which has the potential to be a great national treasure with prospects for commercialization.

Palmyrah mostly grows in the semi arid zones of East Africa, South Asia, South East Asia and Palmyra Island in the South Pacific. However, most of Jansz's research was conducted in Sri Lanka and so far, his team of researchers under his guidance has uncovered many uses for this plant. In Sri Lanka, palmyrah is mostly native to Jaffna, Mannar and Kalpitiya but he says the 'situation is tragic' in these areas. In the Jaffna Peninsula, broken palmyrah is a feature of the landscape and is commonly used for bunkers. Kalpitiya faces a similar situation where changes in the landscape, due in part to human activities, have resulted in palmyrah being replaced with coconuts.

"Although the North and South have problems and cultural differences, scientists are on the best of terms," he said, adding that the most promising palmyrah plantations can be found in the Hambantota district. Palmyrah products range from sugar and toddy related products to odiyal flour, fibre, handicrafts and even building materials. Most products are bitter and Jansz attributes this to the unique constituents in its materials. His research has focused on the underused palmyrah fruit pulp whose main constituents are sugar, pectin, saponins and carotenoids. His first challenge when he started out in palmyrah research was to de-bitter the fruit pulp for creating beverages.

Through his research, Jansz was able to identify the compound which caused the bitterness as Flabelliferin II but found that once products were de-bittered, they spoiled easily. After more research conducted on mice, Jansz and his team noticed that the mice who were given the bitter fruit pulp experienced weight loss whereas those given the non-bitter fruit pulp showed none. It was discovered that Flabelliferin II was preventing the absorption of glucose into the blood stream with no adverse reactions. In order to further this add credibility to these findings, Jansz performed long term and short term studies on 20 mild diabetic humans by administering them six grams of Pinnatu per day. The results were remarkable as the individuals had a 28 – 35% decline in serum glucose. Jansz said this is certainly a prospect for commercialization. Further research uncovered that the fruit pulp can also act as an antibiotic, another prospect for commercialization.

Pectin, one of the constituents of palmyrah fruit pulp is 'commercially usable' and can garner Rs.1000 per kilo, said Jansz adding that research has shown a 25 – 35% lowering of blood cholesterol in mice. However, there was no effect on lowering cholesterol levels when the same mice were given Pinnatu. Carotenoids, another constituent of the fruit pulp has the potential to be 'commercially significant as food colour over synthetic dyes', the latter most commonly found in food and drink today.

Odiyal flour is produced from palmyrah seed shoot and is found to be neurotoxic. One of Jansz's researchers, by accident found that if heated to 80 degrees Celsius for 15 – 20 minutes, toxicity is greatly reduced. Since odiyal flour is widely consumed, there is no appearance of the toxicity to be found in humans even though the toxin in present during food preparation. "Humans may have a detoxification mechanism," Jansz said. Western studies into palmyrah have also been used for commercial purposes, according to Jansz. He cited two such studies which found palmyrah used as steroid for anti-cancer effects and immunosuppressive effects. "Sure there are more discoveries to come and have led to unique chemical features," he said. "The private sector should turn these findings to help the people."

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Sunday Times: 01/04/2007" By Professor Willie Mendis,Senior Professor of Town & Country Planning, University of Moratuwa

Economists have noted that the Sri Lankan economy has been going up and down, averaging at approximately 5 percent and never reaching the desired growth rate. It has prompted them to articulate that a rate of 7 to 10 percent 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”. Nevertheless, the challenge has been confronted by President Mahinda Rajapaksa who in his 2007 Budget Speech asserted that “we have to create an economy that will sustain over 8 percent annual growth over the next 10 years”. Meanwhile, the economy grew at around 7.4 percent in 2006, and a rate of over 7 percent has been predicted for 2007. It may however be too early to conclude that it is a break from the past trends.

A key reason attributed by many analysts to Sri Lanka’s struggle in achieving the desired economic growth rate, has been the missed opportunities related to the 24-year war-like internal conflict. Undoubtedly 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 lies 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’ 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. Thus higher economic growth rates will continue to remain an intrinsic imperative.

The 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”. This became particularly evident in the political domains of Sri Lanka and India at the last general elections held in the two countries. Each of its incumbent governments was defeated due to the little impact their promises had on the lagging regions across the country wherein a significant share of the constituents lived in poverty.
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.

In Sri Lanka, the government’s Mahinda Chintana policy framework for development has as its key objectives, the acceleration of the economy towards 8 percent growth in the medium term, coupled with the empowering of the people by establishing a Jana Sabha for the benefit of each village under the Gama Neguma concept, and by incentivising the development of the less developed Provinces.

It follows that in both countries its policies and strategies for economic growth have been correlated with targets of poverty reduction and in mitigating regional disparities. In India, the vehicle to accomplish same has been mandated in its 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 and in mitigating regional disparities, has however omitted to capture the rural – urban integration in its planning process. The latter is at the heartland of the `systemic defect’ in planning for higher growth targets.

The emphasis on the rate of economic growth must therefore shift to capture its impact across the spatial fabric of the entire country. Its concentration mainly in one province signifies a meaningless economic performance. Thus, in 2005, the Western Province contributed almost 51 percent of the national GDP, while it’s outermost four provinces of Eastern, Uva, Northern, & North-Central contributed less than 5 percent 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 percent each. Analysts have reasoned that the dominance of the Western Province in value addition has been due to its greater integration with global markets, and its easier access to the country’s main seaport and the only international airport, 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 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.”

It is however noteworthy 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 and 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 and low productivity, vulnerability to weather conditions, poor product diversification, and market inefficiencies for key commodities and inputs.

In these circumstances, the Bank contends that improvements in infrastructure, especially better roads and telecommunications, in the economically weaker regions would encourage investors to penetrate into such areas, taking advantage of lower land prices. The magic in balanced regional development is thus not only reliant on its “economic growth” wand.

The spatial integration of its rural and urban areas by the infrastructure networks and 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. It’s 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 Sri Lanka, the vehicle to consolidate the urban and rural areas is the aforementioned Regional Physical Plan. It’s 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.

Consequently, it’s 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 transmits its recommendations to the National Physical Planning Council chaired by the Head of Government.

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 and 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 Commission’s recently published Annual Report has revealed the gravity of regional disparities and the insignificance of the impact of the country’s economic growth on government transfers to meet the needs of the provinces. In this situation, the conclusion is explicit: economic growth sans physical planning is a flawed formula to mitigate regional disparity and poverty. The `systemic defect’ in the segregated processes of economic and physical planning therefore needs immediate eradication, and substituted by its integration.

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