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| Sunday, 5 June 2005 |
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| News Business Features Editorial
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IPS publication on economic policy challenges after tsunami Sri Lanka is assured of aid amounting to $1.3 billion for the next three years, executive director of the Institute of Policy Studies (IPS) Dr Saman Kelagama said last week. While the Sri Lanka government had recently raised some concerns about aid pledges being converted into commitments, there are also constraints regarding the ability of the government to spend the aid which is committed, according to Paul Steele, associate research fellow of IPS. IPS has just put out a publication by Steele, titled, `Phoenix from the Ashes? Economic Policy Challenges and Opportunities for post-Tsunami Sri Lanka,' Steele, who had conducted the study with Dr Dushni Weerakoon, Malathy Knight-John, research fellows of IPS, says that Sri Lanka has a poor track record in aid absorption, with aid utilisation rates estimated at 15-20 percent. This low level of aid absorption is attributed to several administrative factors including slow procurement procedures, lack of counter-part funds and lack of effective financial monitoring and management. "It is imperative that this same fate does not arise with tsunami funds." IPS is the think tank of successive governments of Sri Lanka, since its inception in 1988. The publication reviews the economic policy challenges and opportunities facing Sri Lanka after the tsunami. It presents recommendations focusing on economic issues, to improve the ongoing tsunami relief and reconstruction efforts and to better planning for risk management strategies in the future. There is need to place the tsunami within the broader debate over policy choices facing Sri Lanka. For example, the public sector problems and shortcomings in the context of the tsunami highlight many well known and long running challenges to the public service. These include the lack of a service culture or consultation, weak procurement and hiring and firing policies, politicisation, limited ministerial coordination, unclear relationship between the centre and local levels and weak oversight of public funds. Some reforms are under discussion or under way to address these failings. The tsunami should provide an added impetus to take these reforms forward, the book says. To date, the focus by government and many donors has been on funds for reconstruction. The challenge now is the process of using these funds to rapidly and equitable restore tsunami affected areas so that people are at least as well off as they were before the tsunami. The objective should be to promote equitable and pro-poor growth in the tsunami affected areas, addressing the special challenges of the north and east. There are now major procedural issues about the allocation of relief, boats and nets, micro-credit and most importantly land and shelter. The increasingly ad hoc nature of the allocation process has allowed a climate of envy and conflict to develop in the affected areas. The reconstruction process must build on the existing capacities and strengths of the poor affected people, as building roads and houses with local skills, constructing fishing craft with local boat builders and rehabilitation of the destitute through community-level centres. The focus should be on the regeneration of the economies of all low income groups. Already there are anomalies developing as the rations provided to those living in tsunami camps are slightly higher than the rations given to the people living in conflict affected camps, the book says. Priced at Rs 250 the book is useful for people engaged in the diverse sectors of the economy and available at the IPS office in Colombo 3. Elmo Leonard |
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