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| Sunday, 19 September 2004 |
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| News Business Features Editorial
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Increasingly concerned about Sri Lanka's poverty issues By Hiran H.Senewiratne
The World Bank Country Director for Sri Lanka Peter Harrold in an interview with the Sunday Observer said that Sri Lanka can perform brilliantly with its wealth of natural resources and hard working committed people. He said that North and East crisis and the political uncertainity dwindled the country's economic development to the background.Here are excerpts from his interview. Q. The Present government has released its economic policy document recently, what is your view of it ? A. I think I would say that- firstly, the positive side that we have been increasingly concerned about the poverty issues and about the problem of the people living in the poor regions specially in the South East and North and East. We are very encouraged to emphasise the increase of investment opportunities in those regions and increase for prospective investment for agriculture and small industries. The government is first to admit that it has long list of intentions aspirations and hopes in this policy document.It's concrete plans and economic framework should be fully elaborated by the government. The Budget of this government is the next big step for the government. Q. The government has established two new regulatory bodies such as State Enterprise Management Agency (SEMA) and National Council for Economic Development (NCED), apart from Public Enterprise Reform Commission (PERC), based on the recommendation of the policy document. What is your opinion on those regulatory bodies and its members ? A. As a broad comment, institutions such as these can be very useful or on the other hand can be a complete waste of time. It is quite possible example the NCED to produce lots of paper work.Most important thing is to introduce a practical government policy with its expenditure, The present government's NCED had started very well. This has targeted the main areas of the economy. This Council has selected very influential business people some of the best academics and some of the best people in the government. What is very important is that the NCED should develop its staff's capacity to change to a more specialist manner and translate that into what government does, therefore it has an impact on the government's activities. Many of the public organisations have problems here such as Railways, Buses, People Banks, CEB, which need to turn around these bodies and make them more efficient within the framework of the public ownership. This is a big challenge and we have decided to provide the advanced technical support for it. Q. The new government is not in favour with the privatisation program in the future. Will it be in conflict with the World Bank policies? A. We don't insist that the government should privatise any entity. We will advice the government that privatisation would be an effective option for certain public organisations. It could say that privatisation has brought enormous benefits to the public. Telecommunications, financial services, SriLankan Air lines are some of the living examples.If the present government says no to privatisation we are still prepared to help the country to bring about the efficiency game, so the service improvement will be possible within government ownership. Q. We all know that the government is very keen on resuming the peace process very soon. Is it mandatory for the government to resume peace talks with L.T.T.E for the WB to approve funds for the future development programs ? A. No.However the volume of assistance we and the rest of the international community provide will be determined based on the progress of the peace process.More the progress in the peace process more the support and financial assistance will be provided. Q. The World Bank has been assisting Sri Lanka for the past 50 years, but the country has not achieved a conducive economic growth to a satisfactory level. What is the reason for that ? A. Well, I can say two things - one is that Sri Lanka has not enjoyed the growth that they could, but it has enjoyed a economic growth.The country is much more developed than it was 50 years ago. Secondly the anti privatisation in early 70 and the conflict in the North and East since 1980's has affected the country in a negative way, while the rest of the world has seen an enormous growth. We cannot talk of the Sri Lankan economy without talking about the conflict. But no one can say that this country has failed. Sri Lanka could perform brilliantly in every aspect if they work hard. Q. Any important development program that the WB is going to fund in the future? A. I am leaving to Washington DC during the weekend to present to the WB board a proposal for a US $ 53 million fund for the e-Sri Lanka program.This is a program to bring information technology and service to the rural areas.This is about using technology to help the poor for them to access IT.This will mainly result in building tele centres in the rural areas. In a few months time we could approve new credit to support the reconstruction of housing that was damaged during the conflict in the North and East areas, which will be approximately US$ 75 million. Q. What are the recently granted loans for Sri Lanka? A. Few months ago we approved three programs , one is a US$ 50m loan for a district health program. Another US$ 64m for North East irrigation agriculture program and US$ 50m support for the communities specially in the poorest areas such as Hambantota, Monaragala and Ratnapura. Q. The government has started the rehabilitation of 10,000 tanks in the country. Do you see it as an economically viable program and will the World Bank be ready to fund it? A. Yes. We are doing the biggest work in the North to rehabilitate tanks in those areas. We are already financing large amounts of money for tank rehabilitation in the North. We are looking at this area for support in the future. Q. The government has recruited more than 40,000 graduates to the public sector. But your policy is to minimise the public sector in order to reduce the budget deficit.What are your comments? A. The Sri Lankan public sector is large and not sustainable.It often suffers from the desire to use the public sector just to create jobs, not the question of people needed.On the question of graduates, Sri Lanka is not producing much graduates and it is relatively small, the university sector.Most unfortunate that only a few were able to find jobs.We have ourselves provided resources of US$ 10 Million for the "Sarasavi Saviya" to provide skills for graduates for employments. Second thing, within the structure of the public sector is that there is a shortage of well trained graduates to do the technical type of work. Q. You know that our graduates need the skills development to be employed by themselves especially in the private sector. Does the World Bank have any mechanism to support them? A. The Sarasavi Saviaya program is oriented to encourage private sector employment for graduates. We provide financing to get training in technology into details and English language skills, which is very often what local universities don't get . Q. The Sri Lankan literacy rate is more than 91 per cent, while the computer literacy rate is less than 2 per cent. Therefore has the World Bank any funding program to increase that number? A. To increase the computer literacy rate in the country, the government should start from schools and have computer centres in schools and train teachers. We will be contributing US$ 10 Million for this program. Q. What are the successes and failures of poverty alleviation programs implemented by Sri Lankan government during the past 50 years ? A. It is good to have programs to reduce poverty in the country.Poverty alleviation programs like Samurdhi in this country should be used to help the really poor and the vulnerable in society and it should help them to have enough money to live with dignity.Unfortunately political influence entered the Samurdhi program.The 60 per cent of Samurdhi recipients are not rich but they are not below the poverty line, they are above the poverty line. Unfortunately 40 per cent of the people who are below the poverty line are not receiving the Samurdhi benefits.It should be targeted at the really poor and really vulnerable regardless of their political affiliation and provide enough money for those people to make it different.The poverty alleviation programs of this nature should not be a tool to be used by politicians to generate political support.I think politics have failed in Sri Lanka's poverty alleviation programs or cause them to have less successful that they should have.We do not want these programs to disappear and want these programs to be better since quarter of the population are poor.It is said that 10-15 per cent of the country are extremely poor and getting nothing and state must help those people. Q. Foreign aid utilisation is low in this country. what is your comment? A. It has been very poor.There are many reasons for this- one reason on the donor side as much as on the government side.Sri Lankan public sector is very complicated, very slow moving and slow to take decisions, creating inefficiency.Another reason is that some projects have been regarded as donor projects and not government projects by the government officials.When a project is really supported by the government with donor support only that hings move fast. Therefore to increase the utilisation we need to reform the public sector and also donors have to behave better in integrating their support to government's own programs in a better way. |
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