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by Ranga Jayasuriya

For anyone visiting the war ravaged Wanni, the metamorphosis of Kilinochchi from the rubble of war to the centre of economic life in the Wanni is a striking reminder how the ceasefire has triggered an economic revival.

Last week travelling in the Wanni, I was reminded of my visit there on a dirt track, which now has become the celebrated A 9 road, for Tiger Leader Velupillai Prabhakaran's press conference.

Kilinochchi then was a bombed out city. Aerial bombing and artillery bombardment had stripped the town of any kind of building. It was like visiting a medieval town.

Before long, Kilinochchi emerged from rubble and those who are visiting Jaffna will now have a stop over in Kilinochchi for lunch. Only three years ago, a decent meal was hard to find there.

Of course, peace and development are interlinked, one facilitating the other.

But, the initial phase of economic revival of Kilinochchi is heavily funded by the LTTE, which invested on the restaurants, guest houses and communication centres, all of which generally bring a good return for the investment.

All three guest houses and restaurants are owned by the LTTE, which also maintains a monopoly in that business.

The comeback of Kilinochchi is impressive, but, Kilinochchi, perhaps the very reason that Tigers regard it as their defacto-administrative capital, which saw most of LTTE taxes reinvested is not representative to the rest of the Wanni, which is still in the throes of old scares of the war. Nor can most people in Kilinochchi afford a meal at a restaurant there.

Most of them are still living out of food aid and awaiting the promised compensation for houses destroyed by the war.

Of course, the ceasefire facilitated an economic revival in the North-East. If any statistics are needed: a research conducted by two economists attached to the Peace Secretariat, Seneka Abeyratne and Rajith Lakshman reveals that the GDP of the Northern province has grown by an average of 12.6 during the Ceasefire compared to 3.4% during the period prior to the CFA.

The GDP of the Eastern Province has increased by 10.1% per annum during the Ceasefire, compared to 4.6% during the period prior to the CFA.

And the GDP of the North-Central Province has increased by 8.2% per annum during the Ceasefire compared to -0.2% during the period prior to the CFA.

According to the research findings, the Northern Province has grown twice as fast as the Western province in respect of annual post-CFA GDP growth (12.6% versus 6.2%).

But, with outright coordination among the government, LTTE and local and international agencies, it is hard to expect peace dividends of this kind to reach grass roots people, most of whom are still displaced, living away from their lands of origin and living in camps under degrading conditions.

Even though the Government had promised financial assistance for displaced families under a World Bank funded program to rebuild houses, people have received only the first instalment of 50,000 rupees (apart from 25,000 rupees start up allowance).

Under the program, each resettled family is entitled to a payment of 250,000 rupees - the allowance which stood at 150,000 was increased to 250,000 by the World Bank after tsunami in order to catch up with compensation for tsunami victims to rebuild destroyed houses.

The absence of a partnership with the LTTE on the resettlement and rehabilitation in the North-East has delayed the peace dividends reaching the conflict affected local population.

The District Secretariat is the only institution representing the government in the Wanni and understandably, the work load and lack of facilities have caused inevitable delay in government assistance reaching the public.

The Sub Committee for Immediate Humanitarian and Rehabilitation Needs (SIHRN), when it was set up by the two parties during the second round of formal talks, envisaged a partnership in the government and the LTTE in reviving the economy, and to address the issue of resettlement of IDPs.

Multilateral agencies, on the request of the Sub Committee formulated a Need Assessment Report which included project plans for immediate, medium and long term rehabilitation and reconstruction programs. Little more than a week, after the report was submitted to the both the Government and the LTTE, later unilaterally suspended its participation at peace talks and SIHRN meetings, blaming the government, as Anton Balasingham put it "failure to address harsh existing ground realities." - But, the actual reason as it came to light was the exclusion of the LTTE from the Washington Pre-donor conference.

("As a non-state actor caught up in the intrigue-ridden network of the international state system, the LTTE was compelled to act to free itself from the overpowering forces of containment," V.Rudrakumaran, LTTE's international affairs advisor in a recent article quoted Anton Balasingham as justifying the unilateral suspension of peace talks)

SIHRN is now defunct and most rehabilitation and reconstruction activities have been stalled due to the absence of a coordinating mechanism.

Even though political decisions could be taken in Colombo on development projects in the Wanni, a partnership with the LTTE is necessary for these projects to take off the ground.

The LTTE's control over the economic activities in the Wanni is a deterrent to investment in the Wanni. LTTE's rigid taxes and monopoly on certain business, let alone its authoritarian rule discourage potential investors. The LTTE taxes every shop in the Wanni and take "contributions" from those in the government controlled areas in the North-East.

About two years ago, when one mobile telephone operator offered to operate in the Wanni, the LTTE demanded 3,000 free telephones in return. The mobile operator now seems to have given up the idea.

Security procedures at the Muhamalai and Omanthai security forces check points, where every cargo is unloaded for security check up, is causing difficulties.

Even the soldiers on duty at the entry point know that there are sophisticated equipment which could detect explosives or metal. But, they have no option but to do it the primitive way, till the government provide them with scanners, metal detectors or whatever they may be.

Add to all these obstacles is the political risk associated with investment in the volatile North-East. According to the Peace Secretariat Chief Dr. Jayantha Danapala, the government is negotiating a Multilateral Investment Guarantee Agency (MIGA) facility to promote investment in the North-East.

MIGA is the political risk insurance arm of the World Bank, which promotes foreign direct investment in developing countries by insuring against political risk.

A delegation from MIGA is expected to come to the island next month to look into a program in Sri Lanka.

Back to the Wanni; helping war ravaged lives there, would not be as simple as putting up a few star class guest houses, which the LTTE has done to showcase its economic managerial skills. It needs a better coordination and financial muscles, which would only be possible through a partnership between the Government and the LTTE.

Till such a mechanism is put in place, people there will continue to suffer as NGO wallahs and revellers from the South enjoy in the luxury of the 1-9 Bar, which is perhaps the best place for a night out in Kilinochchi.

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