Small grants turn tide for tsunami-hit entrepreneurs
ASSISTANCE: In several coastal hamlets in Sri Lanka the tide has turned for potters, batik designers and other entrepreneurs whose small-scale businesses were hit hard by the December 2004 tsunami.
Their trades are bouncing back and incomes increasing thanks to some post-tsunami assistance from developing countries.
Pottery makers at Puwakdandawa in Hambantota District and batik artists in Balapitiya in Galle District were among tsunami-stricken people in five Asian countries who received funds, to restore damaged and lost equipment and for the purchase of raw materials, from the UN Development Programme’s South-South Grants Facility (SSGF).
“Almost all the beneficiaries now earn much more than they used to because we have helped them develop their businesses and find new markets,” said Sunethra Marasinghe, whose non-governmental organisation (NGO) was one of the local agencies which channelled the small grants to beneficiaries.
She said the results are tangible with small businessmen and women earning Rs 4,000 to Rs 7,000 (US$40-70) a month, a marked increase over the average Rs 2,500 (US$25) they were making prior to the disaster.
After the tsunami, 11 countries - Algeria, Benin, Brazil, China, Comoros, Egypt, Jamaica, Samoa, Trinidad and Tobago, Tuvalu and Venezuela - contributed $3.5 million to the SSGF which channels assistance through local NGOs to resuscitate the devastated coastal communities.
“The idea of southern nations supporting other southern nations has been discussed for close to three decades in several UN fora,” observed Shireen Samarasuriya, national coordinator of the Global Environment Facility/Small Grants Programme, Sri Lanka, which administered the SSGF.
“It was only after the 2004 catastrophe that this concept of southern solidarity became a ground reality.”
So far, the fund has supported some 132 communities in India, Indonesia, the Maldives, Thailand and Sri Lanka. Grants of $4,000-5,000 were given to regional NGOs for disbursement to almost 34,000 people, with Thailand accounting for almost half the number of beneficiaries.
“It is really inspirational to see how a small amount of money, if managed well, can be used effectively,” said UN Resident Coordinator for Sri Lanka Neil Buhne addressing delegates from the five nations who met here last week to pool their experience in putting the small grants to use.
They were treated to a display of Sinhalese dances performed by young adults who had lost family members in the tsunami. SSGF funds were provided for drama therapy workshops and training programmes in music and the performing arts conducted by the Abhina Foundation, a local NGO.
In Sri Lanka, which received the largest share of funding from the SSGF at $550,000, some 4,800 residents benefited directly from SSGF assistance.
The contribution from this non-traditional source represents a small percentage of the foreign aid that poured in after the disaster.
The Sri Lankan government’s December 2006 report released two years after the tsunami said the country received $3.4 billion in overseas pledges for tsunami projects from traditional bilateral and multilateral donor countries and agencies - of which $2.99 billion was actually committed.
The government itself funded 32 percent of the recovery cost through loans.
Despite its modest volume, the SSGF aid revitalised a wide range of enterprises including those involved in marketing and financing, business skills and literacy training, and developing small infrastructure such as schools and playgrounds.
Marasinghe’s NGO, the Human and Environment Development Foundation, has helped some 92 people in the south coast towns of Dickwella, Tangalle and Matara not just by disbursing grants but also by helping them start up and operate community organisations which provide easy credit facilities to members.
Kapila de Silva of Mithuru Mithuro, another local NGO which has provided financial support through the SSGF to some 45 families in the Galle District involved in fisheries and tourism, the two most hard-hit sectors, said: “The revolving loan funds are managed entirely by the members and so are run very efficiently. Whenever members need money, it is much easier for them to get it from the CBO (community-based organisation) than to go to a bank.”
Sri Lanka’s income inequality stagnant for the last 25 years
The rich and poor gap has remained stagnant for the past 25 years in Sri Lanka at 36%.
There is a 36% difference between the total household income received by the poor and rich households, according to the National Estimate of Accounts survey carried out by the Department of Census and Statistics for the second quarter of 2007.
While the poorest 10% of households receive only 2% of the total household income, the richest 10% of households receive 38% and this pattern has apparently remained unchanged over the last 25 years.
“Average monthly household expenditure for the country is Rs 22, 671 in 2006,” said Director General Department of Census and Statistics Suranjana Vidyarathne. “The increase in real terms (after removing the effect of inflation of prices) from 2002 to 2006 is 17 percent.”
Furthermore, she mentioned that out of the monthly household expenditure Rs 8105 was spent on food and drink and the total non-food expenditure amounted to Rs 14, 565.
“In 1990 64.5 percent out of total expenditure was spent on food while in 2006 it decreased to 35.8 percent,” she explained adding that most of the expenditure went for housing, transport and communication costs.
It was also pointed out that urban sector households spend Rs 37, 978 per month and an average household in the rural sector spends Rs 20,620 per month.
The country’s GDP growth rate for the second quarter was 6.4% while the GDP growth rate was 7.7% for the same quarter of last year, clearly indicating a dip recorded this year.
This fall in the growth rate has been due to the fact that prevailed rainfall was not so favourable for the Hydro power generation in the second quarter of 2007 along with the continuation of uninterrupted power generation and distribution during the reference period.
“However, satisfactory economic performance experienced in countries like USA, Japan and European region had favourable effects for better external trade and economic performance during the second quarter of this year,” she said adding that the introduction of favourable fiscal and financial management policies under the ‘disturbed situation in the country’ led to a good GDP growth rate this year.
“The economy is showing encouraging performance for all three main sub sector of Agriculture, Industry and services of GDP,” she said. The industry sector grew by 7.5% and the total services sector grew by 6.5 percent while the agriculture sector has shown a 3.5 percent growth according to the Department.
While the inflation rate grew to 17.3% during the first quarter of this year, it was mentioned that according to the department’s calculations the inflation rate decreasing 12% to 13 %was hoped by the end of the year.
“The Inflation Rate based on GDP Implicit Price Deflator indicated 13.5 percent for the second quarter of 2007 as against that of 2006 and this GDP Implicit Inflation rate was 12.0 percent for the second quarter of 2006,” Vidyarathne said.
Furthermore, the department said that the trade deficit decreased to negative US$ 659.6 million for the second quarter of this year and it was negative US$ 783.8 million for the same quarter of 2006 as indicated in the Balance of Payments (BOP). The over all net value of BOP was US$ 239.8 million for the reference period over the US$ 151.0 million for the same quarter in 2006. This is regarded an improved situation in the BOP.
Remittance from foreign employment went up to US$ 646.3 million indicating a 12.2% increase for the second quarter of this year compared to the same period in 2006.
“With these macro economic factors, rupee value has to appreciate. But this rupee depreciation cannot be explained through the basic economic fundamentals,” it was mentioned bringing to mind what the Central Bank also recently stated, that this rupee depreciation was ‘Unwarranted’.
Sri Lanka buffer zone forces fisher folk into other work: survey
A controversial buffer zone that banned re-building of homes of Sri Lankan victims near the coast after the December 2004 tsunami has forced fisher folk out of their traditional livelihood, a survey has found.
A survey by the International Labour Organization has found that 45 per cent of fisher families who have been resettled five kilometers away from the coast have had to change their livelihoods.
The widest buffer zones were seen in the East of the country.
The agriculture and the private sector services and its workers increased in those areas.
"As you know the houses that were affected in the coastal belt were mostly of fishermen. So 80 percent of the people who were settled in these areas were from the fishing community," Mazahim Hanifa, a livelihood recovery advisor of an ILO-run project told a forum in Colombo.
"But now it has come down to 60 percent in terms of fisheries because of change of locations. Now they are far from the sea and they can’t practice what they did before."
The sample survey was conducted among new post-tsunami settlements. More than 30,000 people lost their lives in the devastating tsunami.
Many victims who were financially stronger, including shopkeepers and tourist hotel operators defied the buffer zone bans and went ahead with re-building their lives without state-sanctioned assistance.
At the time critics pointed out that people settle in coastal areas because of economic opportunities and state buffer zone rules which were imposed arbitrarily without tsunami inundation maps were neither fair nor logical.
The controversial buffer zones were described by some critics as a convenient method to clear valuable coastal land of 'undesirables'; most of whom did not have legal title to the land they lived in.
The earlier strict rules were later relaxed in some areas.
The ILO survey was a part of the Income Recovery Technical Assistant Program, run in Sri Lanka after the tsunami.
"ILO along with RADA [a state reconstruction agency] planned this study in December 2006 and the design was to look at the settlements that have come up," Hanifa said.
"According to UN habitat information there were 775 settlements to come up by RADA. It's data base had only 355 registered at that time - that is in November 2006 - of which only 177 were completed."
The overall study found that before the tsunami, around seven percent of those in the sample were agricultural employees.
After resettlement it had increased to 28 per cent.
The number of private sector workers also increased from 7 to 14 percent after the tsunami.
Fisher folk have changed their primary source of revenue generation depending on the distance of the new settlements from the coast.
The settlements at distances of two to five kilometers from the coast have changed their livelihoods by around 13 per cent.
Fishermen who have been settled over five kilometers away have changed their working patterns by as much as 45 per cent.
The people who are continuing to live in coastal belt between zero to two kilometers have only changed their livelihoods by a smaller percentage of around 12, the survey found.
The researchers say the figures could vary significantly from district to district as the Eastern coastal line’s buffer zone is larger than the southern coastal line.
The fishermen of the Eastern and North-Eastern Provinces would have changed their livelihoods in bigger numbers.
The survey found another two percent of people who are working as temporary employees in non-governmental organizations were those whose livelihood had improved above the traditional sectors.
In the post-tsunami period, 84 international and local charities and other organizations came forward to help victims.
The ILO has now closed its own income and technical assistance project.
Though the project is closed the ILO believes that more has to be done to brighten the victims’ lives.
"My key message to you is that we should not look back," Tine Staermose, head of ILO in Sri Lanka said.
"But there is urgent need to look around us not only look forward. There are still many challenges out there in the field of livelihoods that need urgent attention."
Fresh Perspectives: Exploring alternative dimensions of poverty in Sri Lanka - Book Review
Quantitative information on consumption poverty, from national household income and expenditure surveys, has been available in Sri Lanka for over 50 years, while successive governments, since independence, have placed emphasis on welfare benefits to the needy. Yet, historically, evidence-based policies to address poverty have been somewhat limited. However, development of an official poverty line and regionally disaggregated poverty indicators by the DCS locally, and the introduction of the MDGs and multidimensional poverty indicators such as the HDI and HPI internationally, have changed this.
During the recent past, policy discussion and debate on poverty related issues in Sri Lanka have become more focused on the available quantitative and qualitative evidence, rather than on perception. Also, poverty measures have expanded to multidimensional indicators, rather than those based only on income and expenditure. Most recently, the government has selected the 119 DS divisions with the highest incidence of poverty identified by DCS for development, as a part of its “gama naguma” programme. There is now recognition that poverty could be the result of, not only economic, but also, social, political and spatial exclusion. Therefore, we need to look at poverty from a fresh perspective of its many dimensions, if we are to truly understand why it exists and how to reduce it. Hence, this publication by CEPA is timely, as interest in the subject is currently high among policy makers and other stakeholders.
As stated in the Foreword to this book and in Chapter 1, most available information on poverty, both in Sri Lanka and globally, is quantitative, often consumption and income based, sometimes assets-based. Such information is the starting point for serious research on the WHO? WHERE? and WHAT? of poverty, i.e. who are the poor, where do they live and what are they deprived of? We need this initial knowledge to meet their immediate needs, as well as to move to the WHY? WHEN? and HOW? of poverty, i.e. why are they poor, how and when did they become poor? We need answers to the second set of questions to be able to address the root problem of reducing poverty in the country in a sustainable manner.
Quantitative findings, complemented by qualitative findings, can answer the first set of questions. The second set of questions is probably better answered in the reverse order. However, collecting quantitative data of high quality, while difficult in itself, is simpler than collecting qualitative information. Qualitative research, for the required sample sizes from which conclusions can be extrapolated, is very time consuming. This is where CEPA’s style of research, in general, and this publication by CEPA, in particular, provides significant value-addition to the existing body of knowledge on the subject. The publication provides useful and varied qualitative material on diverse poor communities. It raises issues relating to the second set of questions, the WHY? WHEN? and HOW? and discusses causes and consequences of the specific environment in which each of these identified poor communities operate.
I will not give a detailed synopsis of the book here, as it is provided for the reader in the Introduction, but briefly discuss the content, merely to substantiate my review. Chapter 1 prepares the ground work by summarising the conventional research on poverty. Chapter 2 explains the approach taken in this book. It was heavy going, but I was able to appreciate its message and content only after having read the entire book. Chapters 3 to 7 were each self-contained and provided interesting and useful insights into different dimensions of poverty among diverse poor communities – those geographically or socially isolated (estates, ethnic minorities), those isolated from economic and employment opportunities by crises (civil conflict and tsunami) or inappropriate human development (youth).
The high quality of CEPA’s research, in terms of rigorous methodology, objective focus and clear analysis in each study, was evident in the book. What was interesting was the synthesizing of findings from diverse studies into key insights on the causes of poverty. Also, the innovative presentation in different chapters of the perceptions of the poor themselves about their own situation, as quoted at interviews, provides food for thought to policy makers on what needs to be done. To the best of my knowledge, the qualitative data analysis from each of these different studies did not contradict any of the quantitative research findings in the existing literature, but rather, complemented that body of knowledge, while recognizing its limitations. Thus, the content lives up to its name of providing “Fresh Perspectives”.
It would have been a waste, if the knowledge and insights that CEPA has gained from these diverse studies was confined to within CEPA, and not made available to others. The effort made to publish this book, and present complex research in easy-to-read, non-technical language, epitomises CEPA’s commitment to communicate with that wider community. Translation of the Introduction to Sinhala and Tamil is a useful initial attempt at dissemination in all 3 languages and I commend it. However, one would need to translate the entire publication, if Sinhala and Tamil readers are to receive the benefits of the “Fresh Perspectives” on alternative dimensions of poverty in Sri Lanka. On a practical note, CEPA needs to first market this product, and, if there is adequate demand, let other organisations take on the translations to be cost-effective.
I found the book smooth reading, despite being a compendium of writing styles of several authors.
I commend the editors for a job well done. Although I am conditioned, by my own training and background, to take a quantitative approach to poverty research after reading the book and listening to CEPA’s research findings in various fora, I am now ready to learn from the complementary qualitative approach. I found the research findings contained in the book and the perspectives given to those findings very perceptive. All in all, once I started reading it, despite a bad bout of ‘flu, I did not put the book down till I had finished it.
I consider this book a “must read” for all those who are interested in addressing the causes and consequences of poverty in Sri Lanka. It can help policy discussions on poverty among decision makers at the highest level. It provides insights that would be useful to both state and civil society organizations. While providing fresh perspectives for future research to academics and students, it is also interesting and informative for laymen interested in this subject. I hope that this book will become mainstream reading towards understanding and reducing poverty and raising the cultural, social and economic well-being of the poor in Sri Lanka. It’s a great book- Happy Reading!
(Copies of the book can be purchased at Barefoot bookshop or from CEPA’s office at 29 Gregory’s Road, Colombo 7.)