Extreme weather in rural Sri Lanka

With a "Super Storm" hitting the Eastern US right now, its a good time for a reminder of how hard extreme weather hits the poor. Throughout the weekend friends of ours who live in the Eastern US we sharing pictures of empty store shelves. The stores were emptied because people had the money to clear out all of their merchandise. They had the means to be prepared for the storm. Hurricanes that do hit our shores often hit the poorer countries of the Caribbean first.

A story we read today about rural Sri Lanka shows quite the opposite. Many families do not have the means to protect themselves from the storm. The only means they have of generating income through the crops they grow, often gets wiped out by floods and droughts. Writer Amantha Perera of the Inter Press Service interviews one family that had two years worth of income wiped out.

Gamhevage Dayananda, a farmer from the remote village of Pansalgolla in Sri Lanka’s north-central Polonnaruwa district, can attest to this reality, as he and his fellow farmers struggle to survive alternating periods of drought and flooding. 

Unexpectedly heavy rains in February 2011 forced engineers to open the sluice gates of large irrigation tanks in the area, flooding hectare upon hectare of farmland, including Dayananda’s modest plot.

He lost his entire rice harvest, no small setback for his family of four who depend on this crop for their very survival.

This year, Dayananda found himself facing another crisis when drought destroyed his crop and put him at risk of falling deeper into debt.

“One season it’s all rain, next it’s all sun,” Dayananda told IPS. “There is nothing in moderation, it is all in extremes.”

The trend of extreme weather events alternating year after year is unlikely to change, according to W L Sumathipala, former head of the climate change unit at the Ministry of Environment, adding that Sri Lanka is at the receiving end of changing climate patterns. 

Last year’s annual report for the United Nations Central Emergency Response Fund (CERF) noted, “Climate-related emergencies, such as those linked to drought, floods, and storms, expose the poor and most vulnerable to hazards that have lasting consequences for the health, livelihoods, and well-being of people who have the least capacity to cope with and mitigate the effects of natural disasters.”

Currently about 8.9 percent of this South Asian island nation’s 21 million people live below the poverty line.

Of these, according to Abha Joshi-Ghani, head of the World Bank’s Urban Development and Local Government Unit, “the poor in urban areas are likely to be affected more by the changing climate patterns. They are the most vulnerable because they live in sensitive areas, on precarious land where no one else will settle.”

The British-based charity Homeless International estimates that 12 percent of Sri Lanka’s urban population of about three million can be found in slums.

Defence and Urban Development Secretary Gotabaya Rajapaksa was recently quoted as saying that shanty dwellers in the capital Colombo can be found “mostly on government lands”.

“Many of them are on the reservations set aside around the lakes, canals, roadways, and railway tracks,” he added.

Graduates in Northern Sri Lanka demand government jobs

From IRIN, a story on how job opportunities have been too slow to develop even two years after the end of civil war in Sri Lanka.

Peace dividends have yet to reach thousands of unemployed graduates returning to Sri Lanka's northernmost, conflict-affected Jaffna District.

In Jaffna, the impact of graduate unemployment is significant and more pronounced compared with other areas of Sri Lanka's Northern Province, with limited state employment opportunities and few alternatives, local graduates and professors say.

According to Muthukrishna Sarvananda, principal researcher at the Jaffna-based Point Pedro Institute of Development, a private social science research institution, the dearth of opportunities in an area once ravaged by war is taking its toll.

"It is an important aspect of developmental planning and the [unemployment] numbers are presumed to be large," Sarvananda said.

Addressing this problem is important to prevent the disenfranchisement of youth, a contributing factor to the country's 26-year civil war in the north that ended in May 2009, experts say, and will prove key to the country's future peace and stability.

Some say the Sinhalese majority, mostly in central and south Sri Lanka, had long enjoyed better access to education and jobs than the Tamil minority, in the north.

Despite the war coming to an end and a consequent increase in the country's economy and decrease in overall unemployment, graduates claim the divide continues, with rising unemployment and poverty in the Northern Province.

In Jaffna alone, 6,000 graduates are finding that state jobs are not available.

Post-war economic boom

According to the Department of Census and Statistics, the national unemployment rate was 4.5 percent in 2010. The government attributed this decrease, from 5.8 percent in 2009, to the post-war economic drive attracting foreign direct investment.

Yet, there is little reflection of this emerging prosperity in Jaffna, said the president of the Unemployed Graduates Committee, Thyagaraja Dhanam. "Nobody pays attention to our plight," he said.

Unemployment statistics do not include Northern and Eastern provinces and a district breakdown is not available for the entire Northern Province. "The rate [in Jaffna] is expected to be more than double the national rate of unemployment," Sarvananda said.

Sunil Navaratna, the Higher Education Ministry Secretary, told IRIN more than 400,000 students sit for university entrance each year, with only about 20,000 succeeding.

He said every year at least 6,000 graduate and more than half join the unemployed, with 42,500 jobless graduates nationwide.

"This is despite schemes to absorb them. Of course the Northeast is worst affected as job creation is still low despite many initiatives," he said.

Private sector doors closed

Jaffna's graduates say they see a number of industries - private companies and banks - moving to their province, creating jobs that elude them.

"There aren't many opportunities in the private sector. The practice is to bring employees from the south, excluding locals," Muhunthan Sivayohanathan, an unemployed graduate, said.

However, according to one private business operator in Jaffna interviewed by IRIN, such graduates are "unemployable", because they have no information technology skills and lack English proficiency.

Sarvananda agreed, saying universities needed to increase the calibre of both their staff and graduates. But he said perhaps a boom in private sector opportunities was imagined.

"There are small private companies coming in, but there are no strong corporate sector investments. The centralized system does not encourage it. The ongoing projects generating employment are all government-driven," he said.

Government jobs, please

The young graduates feel it is the government's role to absorb the unemployed into the public sector, but high expectations of government jobs will likely not be the answer.

Jaffna Government Agent Imelda Sukumar said young graduates fixated on public sector employment had to seek alternatives. "They demand government jobs. They should be open-minded about the private and non-governmental sectors that generate significant employment," she said.

Be it public or private sector, graduate or not, there is a need to consider the whole picture, insists Saroja Sivachandran of the Jaffna-based Centre for Women's Development.

"The Jaffna youth did not have opportunities to develop skills and pursued higher education despite serious difficulties. The state has a responsibility to devise special programmes post-war, to ensure they have opportunities for growth and suitable employment," she said. Adding a new, inclusive recruitment policy should require a percentage of jobs go to local youth.

According to the Deputy Minister of Youth Affairs, Duminda Dissanayake, the government was mindful of the unique situation in the north.

"Through different divisions, skills development, vocational training and youth development we try to cater to this need," he said.

New report finds no improvement in sweatshop working conditions

Sweatshops churning out fashionable clothing became a trendy issue about ten years ago. A new report out today says there has been little improvement since then.

The report on current conditions in textile factories in Philippines, Indonesia and Sri Lanka was conducted by the International Textile Garment and Leather Workers' Federation. The clothing brands behind the sweatshops include just about every major brand name in the industry including Adidas, Nike, Ralph Lauren and DKNY.

From the Guardian, writer Madeleine Bunting unpacks the report for us.

Factories in three countries – the Philippines, Indonesia and Sri Lanka – were surveyed, and not one of them paid a living wage to their combined 100,000-strong workforce. Many of them didn't even pay the legal minimum wage. What the report also makes clear is that this is a gender issue: 76% of the surveyed workforce are women. Globalised supply chains exploit predominantly female labour. It's an irony that probably escapes most of the women who do the bulk of high street shopping in the west. Women shopping for products made by other, underpaid, exploited, women.

What's more, things seem to be getting worse, rather than better. Employment is becoming more precarious as more workers are put on to temporary contracts, day labour, on call rather than with permanent jobs. That enables employers to dodge holiday pay, sick pay and written contracts. Employers also imposed compulsory overtime, lower wages and higher production targets on workers on these short-term contracts.

Such precarious employment makes it harder for trade unions to organise and recruit, because contracts are not renewed if the worker has been involved in trade union activity. On average, 25% of workers in Indonesia were short-term or temporary, while in the Philippines it rose to 85% in one factory, 50% at another.

In Sri Lanka, wages were paid on productivity targets – despite such a practice being illegal. At one factory in Girigara, basic pay was cut if targets set by the management were not achieved. At another factory owned by the same company in Katunayake, workers didn't receive any incentive pay unless the entire quota was reached, but workers reported that the targets were impossible to meet so they never got their bonuses, even if they missed toilet breaks and rest periods to try and reach the target. At other factories, workers were forced to work overtime to meet productivity targets.

The report found that excessive overtime was the "norm" in sportswear and leisurewear factories in Indonesia; workers in all the factories surveyed were doing between 10 and 40 hours of overtime a week. There were incidents of mental and physical abuse when workers failed to reach production targets – in one factory, 40 workers were locked in an unventilated room without access to toilet facilities, water and food for over three hours as a punishment.

Video: SL floods force fish off the menu

From Al Jazeera, a video on the flooding in Sri Lanka and how it will effect the livelihoods of fisherman.

Video: Sri Lanka search for missing continues

From Al Jazeera, a video on the search for Sri Lanka people who have been missing since the end of last year's civil war.

1 million people could go hungry in Sri Lanka

Save The Children says that Sri Lanka is facing a food crisis caused by the recent flooding and is asking for donations to bring food into the region. 21 percent of the country's rice production has been destroyed by the flooding. 1 million people could be without food unless more is shipped into the flood victims. Save the Children warns that this will not only cause a food shortage but an employment shortage as farmers will not be able to work the fields this season.

From the Guardian, writer Karen McVeigh details the appeal for Sri Lanka.

More than 1 million people in the country are affected, with over half estimated to be facing food shortages and the threat of waterborne disease.

It is an enormous setback for an area that was only just beginning to recover from the decades-long war and the 2004 tsunami which killed 400,000 people and left 2.5 million homeless.

"The average ten-year-old in eastern Sri Lanka has lived through conflict, the tsunami and now risks facing a food crisis in the coming weeks caused by these floods," Gareth Owen, Save the Children's emergencies director, said.

"It is absolutely essential that the world does not wait until these children are starving to act.

"Many families in affected areas are facing a nightmare scenario in which both their food source and their livelihoods have been washed away by the rains. They need help to survive until the next harvest. It may not have been possible to prevent the floods, but we can avoid a food crisis if help is given to families now."

An estimated quarter of a million acres of agricultural land and more than 240,000 livestock are thought to have been lost when the east of the island was hit.

UN calls for emergency aid for Sri Lanka

The United Nations is asking for emergency aid money from donor governments to help with the flooding in Sri Lanka. The flooded areas have a lot of people that have already lost everything once before in the tsunami of 2004. 390,000 people had to flee their homes to avoid being swept away by the flooding.

From the Guardian, this Associated Press article provides more details on the latest natural disaster.

The death toll continued to rise as flooding swamped areas in the east of the country, leaving hundreds of people homeless. At least 37 people had been confirmed dead by this afternoon, and the cost of the floods has been estimated at £315m.

Medical units have been sent to the area to help those who have sought shelter in crowded relief camps. The government sent military helicopters to distribute aid and used transport aircraft to move aid from the capital, Colombo. However, only six tonnes of aid was moved yesterday, according to the country's Daily Mirror newspaper.

Four camps have been set up to help flood victims and reports said troops had been deployed to distribute food and medical supplies. India sent a plane loaded with food supplies as well as blankets and water purification tablets. The US said it was sending aid and has supplied boats to rescue the stranded and distribute bottled water, cooking materials and tarpaulins.

The floods followed heavy rainfall in the east of the country.

UN Resident and Humanitarian Coordinator Neil Buhne said an appeal would follow shortly. "I urge donors to generously support priority needs such as mosquito nets, clean water and food," he said.

Ten more people were reported dead today and at least 12 more are missing and 49 injured. The worst hit district was Batticaloa, where 18 deaths were reported.

Video: Fear of disease epidemic haunts Sri Lanka flood victims

From Al Jazeera, a video on the flooding in Sri Lanka.

War produces 50,000 Sri Lankan widowers

The recent war in Sri Lanka created a nation of widowed parents who fear for their family's security. As their husbands and sons died or disappeared in the war, the women now have to find employment and safety without them. A recent survey finds that there 50,000 such widows on the east side of Sri Lanka.

From the IPS, writer Suvendrini Kakuchi talks about the survey from an advocacy group representing the Sri Lankan widows.

Indeed, a year since the bloody ethnic conflict ended in May 2009, research conducted by local women’s groups on the plight of the South Asian island state’s war-affected women shows employment and security are their top priorities as they struggle to rebuild their lives. Many of them lost their husbands to the war, because they were either killed or went missing during the almost 30-year conflict with the Tamil secessionists.

A report compiled by the Association of War-Affected Women (AWAW) in August 2009 following a visit to the Jaffna peninsula and the east coast showed women continued to feel vulnerable and feared the heavy military presence in their areas.

AWAW represents some 2,000 women across Sri Lanka whose sons or husbands were either disabled or killed during the war against the LTTE rebels, who were fighting for a separate homeland for the Tamil minority.

The women surveyed by AWAW also voiced their desperate need for economic stability so they could provide for their young children and elderly parents. Many of them had neither high school nor college education while others were younger women who had gone into computer training but still lacked jobs.

"Providing better conditions for women to rebuild their lives as well as giving them a voice in postwar development must take priority as the Sri Lankan government moves into a large-scale resettlement and reconciliation process," said Visakha Dharmadasa, head of AWAW.

Government estimates some 50,000 war widows are living on the east coast, including Trincomalee in the north and Batticoloa and Ampare districts farther south.

Widows usually receive around 250 dollars as a one-time settlement and an extra 100 dollars from the state when they can produce their husbands’ death certificates. On a monthly basis, they also get food rations that barely cover their basic needs.

A majority of the widows are Tamils, followed by Muslim and Sinhalese ethnic groups, and belong to rural farming or fishing communities, where poverty and malnutrition are major problems.

"Imagine being with traumatised people every single day"

From IRIN, comes the story of a social worker in Sri Lanka who works with children at a free nursery.

Selvanayagam Selvantha, 34, has worked as a pastor and social worker for eight years in rural northeast Sri Lanka, helping people to recover from the country’s civil war and the 2004 tsunami, which displaced more than a million people. He works with the Jaffna Diocese of the Church of South India, which provides free nursery and after-school activities for affected children, and spoke to IRIN about his experiences:

“I work in the rural parts of Amparai and Batticaloa, and the biggest problem is the poverty that is combined with trauma.

“When we see the suffering, our hearts, minds and spirits are also very affected. These people have suffered a lot. So many died. So much property was lost.

“I have nearly 42 people families attending my ministry. Almost all of them live far below the poverty line. When I visit them, I see no food in their kitchens.

“Most families here have more than six or seven children. Their family head, the father, is usually a farmer working for a daily wage. It’s very hard for him to sustain the family.
“Due to poverty, parents don’t even want their children to have a good education. They want them to become breadwinners from an early age. They are usually sent to work drying fish along the coast.

“One of the most important parts of my work is to listen to these people. Sometimes, it can be the hardest part.

“Imagine being with traumatised people every single day. They share all their problems with us because we are all they have.

“Every time they share their problems, the problems become like my own. When working in this kind of an environment, you have to absorb the trauma into your heart, yet be able to balance and manage your emotions and rationality. In many ways, it’s a hard process to explain.

“We are not only social workers improving education and livelihoods, but we’re counsellors for these people.

"It’s personally very challenging to work in this situation; however, we cannot give up.”

Moved by the tsunami, charity to Sri Lanka continues

After seeing news reports of the devastating tsunami that hit Sri Lanka five years ago, Cavan Sullivan was determined to help in some way. Sullivan made the New Year's resolution to build a house for a family there. Five years later, the house has been built but Sullivan's charity to the people of Sri Lanka has not stopped.

From the Wales Online, writer Cathy Owen tells us more about Sullivan's adventures.

The house, which cost £1,900 to build and furnish, is in a tiny remote village, five kilometres inland on the banks of a river, close to a town called Hikkaduwa in the south west of Sri Lanka. The village was devastated as the killer wave rushed up the river devastating areas in its path. The house is now home to the Lounaris family – Samina, who at the time was aged four, and her grandfather and grandmother.

It was all paid for by Cavan, friends and customers of his double-glazing firm, Welsh Windows. He also provided curtains for the house, a bike for Samina’s grandfather, and set up a fund so Samina can be educated to university age.

“She may not want to go to university, but a least she has the opportunity,” said Cavan, who also pays for the family to buy Samina milk.

“They had very little when the tsunami struck and they lost everything.”

He was going to end it there but during their trip, Cavan visited a school and saw that the majority of children didn’t have any shoes.

That was it, he couldn’t stop with just a house. He had to do more and set about raising money to buy shoes for the children. He contacted some of those friends who helped him raise money and many children received shoes for the first time in their lives.

Much of the initial fundraising was done by Cavan, Debra, their daughter Aimee and her friend Nichola Adams. It snowballed from there and the charity has a board of trustees, including fellow Barry businessman Andy Rogers. Last month, Cavan and Andy travelled to Sri Lanka to see how the charity’s money is making a difference.
...

They held a Christmas party for 300 of the poorest children and organised a five-a-side football tournament. The trip also included a visit to a school that was built 98 years ago but never had electricity. The HAT Foundation paid £720 to change all that and now the children have fans, lights and sockets.

World Vision says thousands at risk of disease in Sri Lanka

Monsoon rains are about to come to Sri Lanka, and for those who are in displacement camps, the rains could cause diseases. World Vision is concerned about the poor sanitation at the camps that could create rivers of sewage running through the camps.

From this World Vision press release, writer Rachel Wolff receives comments from workers in the country.

“We are very worried about the outbreak of diseases,” said Suresh Bartlett, World Vision's national director in Sri Lanka. “When the rains come in two weeks or so I can’t imagine what conditions will be like due to the lack of any proper drainage and toilet system.”

The sanitation facilities in the largest camps where most of the displaced are living are woefully inadequate and at least 11,500 more latrines are needed in the camps to comply with international minimum standards. With the monsoon rains expected to arrive within the next two weeks, at least 2,500 are needed immediately to meet even the most basic needs and to prevent a potential health crisis.

Unsafe drinking water and inadequate sanitation facilities give rise to waterborne diseases such as diarrhea and cholera as well as malaria and dengue fever, according to World Vision health experts. Most fatalities occur in young children.

“Camps further north in Jaffna have already experienced rains and there we have seen people trying to keep their things dry in overturned buckets and hanging their babies in saris to keep them off the ground and out of flood waters, “ said Bartlett.

Children stunted, wasted, underweight - Sri Lanka government health survey

from IRIN

Few die at childbirth, most go to primary school and almost all are vaccinated at the right time, but the sizeable number of Sri Lankan children who are stunted, wasted and underweight for their age are a cause for concern, according to nutritional authorities.

Recently published government statistics show that despite countless initiatives to alleviate malnutrition over the years, the condition is still entrenched in traditionally poor and conflict-hit regions, and affects hundreds of thousands of children.

The Demographic and Health Survey 2006/2007, a draft of which was released by the Health and Nutrition Ministry and the Census and Statistics Department, shows that 22 percent of Sri Lankan children are underweight, 18 percent are stunted and 15 percent show signs of wasting.

The latest figures could be distorted, with the survey leaving out five districts in the Northern Province - Jaffna, Kilinochchi, Mannar, Vavuniya and Mullaitivu - where government forces are fighting rebel Tamil Tiger separatists, and access to accurate date is almost impossible.

The UN Children’s Fund (UNICEF) has for some time expressed concern that although Sri Lanka’s overall health indicators are on track to achieve the 2015 Millennium Development Goals.

(MDGs), the nutritional status of children and mothers is the single exception.

The worst-hit districts include Trincomalee and Batticaloa where the conflict raged until last year, causing large-scale displacement of populations. In the districts of Badulla, Nuwara Eliya, Moneragala and Hambantota, poverty among tea plantation workers and farmers has long been endemic.

Stunting, wasting

At the top of the categories, 41 percent of children in Nuwara Eliya District were stunted, while height-for-weight measurements showed that wasting was highest in Trincomalee - 28 percent. In Badulla 32 percent of the children were underweight.

The figures reveal regional disparities, with districts in the western and southwestern parts of the island showing fewer cases of under-nutrition.

“What is very common now is to see people struggling to buy food because of the high prices of staples like rice and bread,” said Judy Devadawson, an adviser to a Trincomalee-based non-governmental organisation (NGO), the Women and Child Care Organisation (WACCO). “In some places, we see very thin children with sunken eyes and they seem lethargic.”

She said she had seen the effects of the rising cost of living and lack of jobs on families, especially in conflict zones such as Trincomalee District, where many have only one breadwinner. “It is almost impossible for them to provide enough food for the whole family.”

Link to full article. May expire in future.

War is only job available in Sri Lankan village

from ABC33/40 Alabama

Written By RAVI NESSMAN

Iyathigewewa is a classic company town. But the youth don't head off to work in the local mine or factory - they go to war. With no other job prospects in this impoverished, remote northern village about 27 miles south of the front lines, roughly half the men of fighting age have enlisted in the army, navy, police or other security branches.

"When we want to find a job, the easiest thing is to join the security forces," said Sisira Senaratna, 38, a 16-year police veteran who has two brothers who enlisted in the army and another in the police force.

After a quarter century of civil war between government forces and ethnic Tamil rebels, fighting is so entrenched in this Indian Ocean island it has become a career for tens of thousands seeking a path out of rural Sri Lanka's brutal poverty.

For their part, the Tamil Tiger rebels have been accused of filling their ranks by forcibly recruiting at least one member of each family in their de facto state in the north.

With the military promising to crush the rebels in the coming months, its appetite for more recruits is huge. Two weeks ago, the defense ministry sent a nationwide text message calling on "Young Patriots - come join with our armed forces (army navy or air force) and be a part of a winning team."

Kadirage Leelawathi's entire family had already answered the call.

Her husband joined the army 20 years ago after failing to scrape a living from his tiny farm. The family lived in a clay hut with a floor made of cow dung and used kerosene lamps for light, she said. They could only afford to eat meat once a week.

"We couldn't make ends meet with three children," she said. "With the little money he earned from farming, we had a hard time even sending the kids to school."

With his army salary, they built a two bedroom concrete house with electricity, running water, a telephone, a 21-inch color TV and a 20-foot antenna piercing the sky.

Her oldest son dreamed of becoming a Buddhist monk, but grew disillusioned with the clergy and joined the navy five years ago. Her next son, seeing his father and brother serving, enlisted in the army two years ago. Seven months ago, her youngest son joined the paramilitary home guard, which protects villages in the north from rebel infiltration.

With the fighting escalating, Leelawathi said she is worried about her family: "But there's no option. What can we do?"

"If there were any other job opportunities, they wouldn't go," said her sister-in-law, Kiriyage Kamalawatee.

The economic situation was not always so bad.

In 1952, Iyathigewewa's 430 acres of farmland were enough for its 30 to 40 families. But many parents had 10 or more children, and the population explosion soon overwhelmed the village.

Parents divided their modest farms among their offspring, who subdivided them among their own children. Many of the 375 families living here now are left with slivers of land far too small to support a family.

Without the option of pushing plowshares, the youth of Iyathigewewa picked up swords.

The village's first recruit joined the army in the late 1970s. A trickle of youth followed, eventually becoming a flood.

Now, 175 of Iyathigewewa's 1,161 residents are in the security forces, where many earn a solid living of $230 to $280 a month. That money has brought relative prosperity to the village.

Its small shacks have been replaced by modest cement houses filled with kitchen appliances. Motorcycles and shiny, red three-wheeled vehicles purchased with army salaries shoot down the only paved road.

"The way the village is now, economically, that is because of the military," said Susil Premaratne, a village councilman.

But the fighting has taken its toll as well, robbing the village of 16 of its men.

Kalu Hamy's son Premasiri was killed in a land mine explosion in the eastern town of Trincomalee in 1991. Another son, Piyadesa, disappeared several years later after a battle near the rebel-held town of Kilinochchi. Her grandson was shot and killed in a 1998 ambush in the town of Vavuniya.

They joined the army in search of money and meaning for their lives, but the sacrifice wasn't worth it, the 72-year-old woman said, her voice cracking with grief.

"I would never let my children or grandchildren join the military again," she said.

Link to full article. May expire in future.

[Comment] Targeted aid more effective than sanctions

from United Press International

By JEHAN PERERA

COLOMBO, Sri Lanka, The Sri Lankan government has been engaged in a battle against the human rights lobbies in the international community, and not only in battling the Liberation Tigers of Tamil Eelam, in recent months. Wide publicity has been given to the prospect of unfair aid and trade sanctions by Western countries.

Government spokespersons have been making powerful arguments against such sanctions. They have pointed out that the human rights situation in Sri Lanka is better than in comparable cases worldwide. The most serious of the potential sanctions against the country is the possible withdrawal of the European Union's GSP+ privileges -- the Generalized System of Preferences that gives duty-free access to European markets. These privileges are contingent on Sri Lanka satisfactorily implementing 27 international legal instruments it has acceded to.

At stake is the viability of the Sri Lankan apparel industry, which employs over 100,000 persons and directly and indirectly supports a multiple of that number. Leaders of some EU countries have expressed their determination to put sanctions in place. A difficult economic situation could materialize if sanctions, including travel advisories that would affect the tourism industry, came into play as global prices of fuel and food continue to escalate.

Apart from the difficulties that could befall the formal sector of the economy as a result of trade sanctions, there are also calls for sanctions in respect of development assistance or foreign aid to the country. Some Western countries that have been longstanding donors to Sri Lanka are in the process of either withdrawing or downscaling their assistance to the country.

They have given two main justifications for their disengagement. One is Sri Lanka's elevation to the rank of a middle-income country on account of its per capita income in excess of US$1,500. The other is their reluctance to have their development assistance provide space to the government to divert its own resources for the war effort.

The argument that Sri Lanka is a middle-income country and is not in dire need of international development assistance has some justification. The past decade has seen the emergence of most Asian countries from the depths of poverty, with Sri Lanka being ahead of many. But the same positive results are not to be found in most of Africa, which continues to be poverty stricken and conflict ridden on a continental scale.

It would appear only reasonable and proper that the African continent should have the first claim on the relatively scarce development aid that is available from donor countries. However, the argument that development assistance should be reduced or withheld from Sri Lanka on account of its prosecution of war as the solution to the ethnic conflict is more problematic.

Most of the assistance given by donors who are sensitive to poverty and human rights issues is targeted at the poorer sections of the population. In the absence of adequate budgetary support from the national government, many local government bodies that depend on foreign assistance for projects that benefit local people would find themselves incapacitated.

On the other hand, the threat of economic sanctions to induce the government to change its policies with respect to war and peace is unlikely to be effective in cases where national security is deemed to be paramount. A government such as the present one, which believes the LTTE is a military threat and must be militarily defeated, is unlikely to be dissuaded by threats of economic sanctions.

In these circumstances, international donors need to reconsider their approach to trade and aid sanctions against Sri Lanka. A 2007 poverty assessment study by the World Bank has shown that apart from the war-affected north and east, high levels of poverty are prevalent in the estate sector and in remote districts such as Badulla and Moneragala. This study showed that in the period 1990 to 2002 poverty halved in the urban sector, while rural poverty only declined by less than 5 percent and poverty in the estates increased by more than 50 percent, making this sector the poorest in the country. The high inflation over the last two years has made the situation even worse.

Another concern of some international donors is that their assistance to Sri Lanka would free up government resources that could be deployed for military purposes. If donors provide direct budget support to the government, the government can utilize those funds for military purposes. On the other hand, if donors target those areas of the economy that the government has already decided to neglect, such as the road system, this problem is less likely to arise. Investing in the road and transport system is probably one of the most effective poverty reduction steps that can be undertaken in the current situation.

The World Bank's poverty assessment study shows that "geographical isolation measured by the distance to the nearest market or town is highly related with district poverty headcounts." As rural roads are a devolved subject the donors could work directly with provincial councils and thereby strengthen the implementation of the 13th Amendment, which is also government policy in respect of an interim solution to the ethnic conflict.

Ultimately, this infrastructure will also serve the development of the north and east when peace dawns, as it must and will. Instead of imposing economic sanctions on Sri Lanka, the international community needs to consider the better targeting of its development assistance.

(Dr. Jehan Perera is executive director of the National Peace Council of Sri Lanka, an independent advocacy organization. He studied economics at Harvard College and holds a doctorate in law from Harvard Law School. ©Copyright Jehan Perera.)

Sri Lanka tops South East Asia in Malaria control

from the Daily News

COLOMBO: Sri Lanka has won kudos as being the first among all South East Asian countries which had successfully controlled the Malaria epidemic. Healthcare and Nutrition Ministry sources said.

The sources said that in 2007 Sri Lanka recorded only 196 Malaria patients down from 591 in 2006. The number of Malaria patients recorded in Sri Lanka in 2005 was 1640.

No patient has died from Malaria in Sri Lanka after the year 2000. This is a record in South East Asia. In 2007 one patient died and he was suffering from a combination of Dengue and Malaria.

According to the sources, at present, 4000 persons die from Malaria annually in South East Asian countries. The highest number of cases are reported from India while Myanmar tops the number in Malaria contracted deaths.

Sri Lanka’s health sector successfully controlled the Malaria epidemic due to the large funds received from the World Health Organisation (WHO) and Global Fund for Anti Tuberculosis and Malaria (GFATM).

Healthcare and Nutrition Minister Nimal Siripala De Silva expressed his gratitude to all workers in the Sri Lankan health sector who worked with dedication to control Malaria in Sri Lanka, the sources added.

Poverty focussed development and microfinance:

from The Island

Policies and prospects - Part I

by M U A Tennakoon Ph.D,DSc

Early Policies

Sri Lanka, by the 1980s, possessed substantial achievements in human development in areas such as universal primary school enrollment, a high literacy rate, gender equality, lowered infant and maternal mortality, a high life expectancy etc. largely due to the welfare-oriented development strategies followed since independence in 1948. According to the World Human Development Index, Sri Lanka ranked 99th out of 191 countries. Some of those achievements are in par with those of the middle income countries.

In those development aspects, Sri Lanka has already met some of the Millennium Development Goals towards the turn of the twentieth century. But poverty remains a persistent worry. Out of the urban population, about 8 percent still remains poor. More than 23 per cent of the rural population is living in poverty. Poverty of the estate population is a staggering 30 percent. On the whole, out of the island’s population of nearly 20 million, a fourth or less is still living in poverty.

The welfare oriented inward looking development strategies of the post independent era though bolstered some of the human development indices stated above, they did not sufficiently facilitate a speedy economic growth amidst rapid population growth. The population of 8 million at the time of gaining independence (1948), more than doubled during the next three decades while the economic growth was slow.

It was in the late 1970s that, in place of the welfare-oriented inward looking economic development policy, an outward looking and more open development policy with a growing privatization in consonant with the global free market economic development was adopted. By that time, the slow economic growth, rising prices of imports and declining prices of agricultural commodity exports amidst an increased population, reduced the wealth of the nation, while inequalities of income distribution increased alarmingly, leaving a significant proportion of the population in poverty.

From the 1970s to the end of the 1990s, there was a significant change in the broad direction of economic policies. During this period more liberal trade and industrial policies spanned a higher growth in industry while dynamism waned in agriculture largely due to weak infrastructure. As a result, the income growth has become heavily skewed in favour of Colombo and adjoining districts while poverty persists in rural and estate areas. The economy of the North and East too was undergoing the negative impacts of the conflict.

Decline in foreign investment, falling income from tourism, rising cost of imports, slow economic growth all round etc. caused growing fiscal deficiencies, rising interest payments and declining public investment on infrastructure development (roads, water supply, electricity) and strained the nation’s economy as a whole with widening regional imbalances.

Recent Policies

At the turn of the 1980s, poverty alleviation came to be high in the development agenda. Hence, at the dawn of the 1990s the Janasaviya programme aimed at poverty alleviation was launched. Since then, every successive government attempted to alleviate poverty. The approach of the political party in power from 1977 to 1994 and once again from 2002 to 2004 differed somewhat from that of the political party in power from 1994 to 2002 and once again from 2004 to date. The approach of the former with the exception of the Janasaviya programme, was poverty reduction largely aimed through employment creation in the private sector and encouragement of self-employment creation. It desired urbanization more. In fact the desire (rather the expectation) was to facilitate about 60 percent of the population to be urban by the year 2020. This government, though did not discontinue welfare provisions to the poor, demonstrated a tendency to scale down welfare grants. In other words, it relied less on welfare-oriented development and relied more on competitive open market economic development approach.

In 1994, following the change of government, the new government evolved the Samurdhi programme for poverty alleviation under playing the previous government’s Janasaviya programme. In fact, it first wanted to abolish the Janasaviya programme in favour of the Samurdhi programme. However, in 1996 there was a change of heart and Janasaviya was scaled down by disbanding its functions such as Human Resource Development, Community Development, Strengthening Partner Organizations (POs) and Nutrition Programmes, retaining only the Microfinance Division to continue the lending to the poor under a new microfinance institution called National Development Trust Fund (NDTF).

Way back in 1982, when there were neither Microfinance Institutions (MFIs) nor widespread networks of partner organizations (POs) to liaise with the MFIs to provide microfinance on any wide scale, the Central Bank of Sri Lanka (CBSL) set up a Rural Credit Department, established Regional Rural Development Banks and a Training Institute (Rural Banking and Staff Training College) to train requisite personnel to strengthen its agency portfolio of rural credit besides training personnel for central banking. Even though a central bank is purely a regulatory body, CBSL’s extra effort made to expand the rural credit outreach is continued to the present day largely through foreign funded projects is noteworthy.

Vision for the 21st Century

While direct efforts through the provision of microfinance to the poor increased towards the end of the 20th century, overall economic development efforts too contribute to poverty alleviation. With this belief in 1999, the government declared its vision for the 21st Century where it aimed to : (a) maintain a rate of economic growth of 7-8% per annum; (b) raise the per capita income of Rs. 60,000/- per year ($ 850) to Rs. 175,000 ($ 2,500) by the year 2010; (c) raise the income level of the poorest group by raising their income from the current 4 per cent to 15 per cent by the year 2010; and (d) reduce unemployment to 5 per cent by 2010.

Despite all these policy intentions, by the year 2002, Sri Lanka experienced a negative economic growth. A new government which came into power that year, in its ‘Regaining Sri Lanka’ effort, the policy focus was largely on : a) generating a vibrant Small and Medium Enterprise (SME) sector to take the lead in generating employment opportunities and avenues for production growth and raising income for a large segment of the low income earners; (b) improvement of the SME policy environment (in SME White Paper in 2002) and the establishment of a SME policy unit to monitor SME development, review legislation and co-ordinate donor programmes in the sector; (c) inducement of banks to develop quality credit system suitable for SMEs, ensuring the provision of resources directly to ultra poor communities, with a strong element of community-based mobilization for development (d) the channeling of government subsidies to provide assets (seed capital) in the form of start-up investments, community goods and social capital to augment the resources available to the hard-core poor; (e) vesting the community-based organizations (CBOs) with responsibility, authority and capacity to operate and maintain assets created through community specific investment support; (f) provision of vocational training leadership and personality development training and career guidance to unemployed youth; (g) encouraging banks to forge formal links with the Samurdhi financial institutions while those institutions are required to undertake financial audits as they expand in size; (h) empowering women economically to be effective entrepreneurs by providing facilities to them to produce quality goods in their self-employment in Income Generating Activigties (IGAs) and effectively face the market challenges; (i) supporting microfinance institutions in a way that contributes more towards the development of financial bodies that are sustainable, solvent and secure; (j) re-structuring NDTF to become the apex organization for the development of microfinance with responsibility for the microfinance organizations and complimentary to this was the aim to develop a legal framework that classifies the role and responsibilities of the different organizations involved in microfinance; and (k) encouragement of microfinance entities at the local level to mobilize savings from target communities for investment in IGAs individually or collectively (group-wise).

The ‘Mahinda Chinthana : A Vision for a New Sri Lanka’ introduced in 2006 as a document for development for 10-years aims to increase GDP growth rate over 8 percent (9-10 percent from the 7th to the 10th year) following market oriented economic policies with the domestic aspirations by providing necessary support to domestic enterprises while encouraging foreign investments. It aims to increase economic growth particularly in sectors such as agriculture (4 to 5%), industry (8-9%), services (9-10%) plantation sector, fisheries, livelihood development and social protection, all of which have bearing on poverty alleviation.

There is provisions for gender-balanced development. For instance, in the fisheries sector, livelihood development strategies for women are intended to be established for generating/supplementing IGAs among coastal fisheries communities, and encourage them to promote savings and invest in micro-level IGAs with enhanced institutional micro-credit support. Similarly, in the industrial sector outreach of the formal financial institutions for the delivery of microfinance is to be promoted for the encouragement of the growth of micro enterprises.

Livelihood development and social protection within the context of the ‘Mahinda Chinthana’ has two major components planned – (a) ‘Gama Neguma’ or ‘Village Awakening’; and (b) Samurdhi (Prosperity) programme referred to earlier.

In the former, the concern was more on the improvement of livelihood based rural agriculture and cottage industries in particular with the objectives of : (a) increased productivity ; and (b ) marketing arrangements for the products and improved and expanded markets for traditional crafts. Programmes being launched in this regard include : a) a productivity improvement and marketing programmes; b) 1000 industrial village programmes ; and c) a dairy village programme (‘Kiri Gammana’) with credit facilities up to Rs. 100,000/-.

Poverty alleviation programmes ineffective - CEPA

from the Sunday Times

The effectiveness of poverty alleviation programmes like Janasaviya, Samurdhi and Maga Neguma) have been hindered by political patronage and misallocation of resources, says the Centre for Poverty Analysis (CEPA).

In a statement issued to coincide with the international day for the eradication of poverty commemorated last week, the CEPA said the Samurdhi programme for example, has come under increasing criticism since the Department of Census and Statistics revealed that its targeted food stamp programme, which constitutes 80% of the total programme budget, misses about 40% of the households in the poorest quintile while almost 44% of the budget goes to households in the top three quintiles.

It said there was an inconsistent approach to poverty. “The lack of a consistent poverty reduction strategy at national level over the past few decades has meant that the improved performance in the economy has not contributed to employment generation and human development in several groups,” the statement said adding that many poverty eradication efforts have been driven by the need to gain “the electorate’s support, and in recent years these have focused on large-scale investments in infrastructure, such as highways, power generation, irrigation, etc.”

Three main donors - the Asian Development Bank (ADB), the World Bank and the Japanese government -- provide over 60% of foreign aid to Sri Lanka and their efforts in poverty reduction have focused on economic growth as the main driver. “However, the ‘trickle-down’ effect which this relies on has not borne fruit and economic inequality is worsening.

Donors have failed to recognise and adequately engage with some of the political and social issues that have contributed to poverty in Sri Lanka and led to spatial and social inequalities,” the CEPA said noting that issues of lack of sustainability, limited interaction between different donor activities, and a lack of accountability for the way funds are spent by donors and the state also limit the effectiveness of programmes.”

On the rising cost of living, the CEPA said many people are just above and below the poverty line, which means that shocks such as inflation can quickly push them into poverty.

Rising fuel costs and food prices have a significant bearing on the poor’s ability to meet basic needs. Given the transient nature of poverty in Sri Lanka, these shocks could easily push the vulnerable back to levels of poverty that they had struggled to move out of, it said.

The CEPA said that while there are many success stories of individuals and households who have succeeded in overcoming these hurdles, significant progress in poverty eradication cannot occur unless these larger, structural factors are addressed. “The poor can only be empowered to move out of poverty if they are offered the right resources and opportunities – for this we must all take responsibility,” it said.

The CEPA said access to services, jobs and infrastructure is patchy across the country and inequality is growing as growth continues to be heavily focused in urban areas and in the Western Province. A majority of the poor and the non-poor are clustered around the poverty line, indicating the vulnerability of those who struggle to move out of poverty.

It said CEPA’s work on poverty over the last five years provides some interesting, and sometimes counterintuitive evidence about how individuals and families move out of poverty, and how they act to transform their environment and become agents of change. For example, CEPA’s research on poverty dynamics in the estate sector and in areas affected by conflict reveal that families and individuals that have succeeded in moving out of poverty did so by combing both internal and external factors. They acted to improve their own situation by developing a culture of saving and investing back into livelihoods, avoiding alcoholism and being willing to exploit new and alternative livelihood opportunities. Most of the dynamic households had multiple and diverse sources of income, to avoid reliance on one earner and vulnerability to economic shocks such as a birth, death or marriage in the family.

The CEPA said factors outside people’s control such as lack of land and capital frustrate people’s efforts to increase their income through small businesses, and the overall lack of opportunities have led many, especially young, people to migrate outside of the province, or even outside the country to find higher paid work. In both conflict affected areas and on the estates CEPA found that many people who had moved out of poverty had also moved away from the community, and in turn the remittances they sent back to their families and networks enabled others to move out of poverty.

People living in areas where livelihood options are limited face great challenges in moving out of poverty. In the Central Province for example, small, low productivity agricultural units give very low returns so households are forced to look for additional income sources. However, much of the alternative work available is precarious and insecure and involves working on a casual or contractual basis, self-employed or unpaid.

Limited investment in areas outside the Western Province means that people, jobs and infrastructure are drawn to the more prosperous areas, creating poverty pockets in the regions that suffer from underinvestment, limited facilities and inadequate service provision.

The conflict has transformed traditional livelihoods by imposing restrictions on access to land and on movement and destroyed much of the local economy. Public sector employment is often the only steady source of income and a route out of poverty for those in conflict areas. Among traditional agricultural households, families tend to look for opportunities outside their immediate geographical area, or even outside the country, the statement said.

Sri Lankans use IT to beat poverty

from The Asia Times Online

By Feizal Samath

MAHAVILACHCHIYA, Sri Lanka - In a north-central village, deep inside Sri Lanka's backwoods, a young man is glued to a computer screen, pushing a mouse and filling in figures.

Isuru Senevirathna is entering data at Sri Lanka's first business processing outsourcing (BPO) company set up in a village, and probably among the first in the world that is surrounded by tall trees, bird calls, paddy fields and streams.

"It's nice to be able to do a job like this," the 20-year-old youth, operations director of OnTime Pvt. Ltd, told Inter Press Service.

BPO is a growing IT business which Sri Lanka embraced with relish. Dozens of companies are now springing up in Colombo as many of the world's best Western corporations look for cost-effective ways to handle their back-office operations in countries where labor and communications are cheaper.

But OnTime's setting, next to a wildlife park, and subject to the occasional threat by Tamil Tiger guerrillas, makes it unique. Mahavilachchiya lies 250 kilometers north of Colombo and the fact that it is close to the ancient town of Anuradhapura is an added feature.

OnTime owes its existence to the vision of Nandasiri Wanninayaka (better known as "Wanni"), an English teacher-turned village entrepreneur. Except for its sylvan location it is no different from the rest of the BPO industry. Its clients include John Keells, Sri Lanka's biggest conglomerate, and once the blinds are drawn and with air-conditioners running, it could well be an office in downtown Colombo.

OnTime operators log into an accounting system through a secured link and enter data like prices and inventories. Some 150 documents are handled by each operator per day. New clients negotiating with OnTime include Dialog Telekom, Sri Lanka's biggest mobile phone operator, and Singer, the multinational sewing machine giant.

"The BPO entry came because we needed to create job opportunities for our youngsters to remain in the village after their initial training in English and IT," said Wanni.

OnTime is a part of the "Horizon Lanka" initiative launched by Wanni, while still a schoolteacher, in 1998. Starting off as an English teaching exercise for the children of rice farmers, its scope widened dramatically following the gift of a personal computer by the United States Embassy.

From there the village quickly progressed into a center of IT learning where one in every eight families now has a computer (a ratio of 100 computers for 800 families). Impoverished farmers are now reading online newspapers in their ramshackle homes with the help of seven wireless nodes. The villages have wireless Internet access at all times.

Wanni and his Horizon Lanka exploits are legendary and have been profiled in newspapers and other media across the world. The IT village's big moment came when Wanni and his best students shared the stage with Intel chairman Craig Barrett in December 2005, during the latter's visit to Sri Lanka.

Wanni said the idea of setting up a BPO emerged as he pondered the next stage of development. "Having taught English and then IT, the next issue was where do they get jobs? How can we retain them in the village?" he said.

Enter the Foundation for Advancing Rural Opportunities in Sri Lanka (FAROLanka) to help Horizon set up its BPO and find its first client. FARO's help however comes with conditions - Wanni's support and guidance to help other villages develop on similar lines.

Sponsored by John Keells, OnTime staff received BPO training in Laos and India. For other Mahavilachchiya youngsters, the choice of careers is limited to joining the armed forces (or, in the case of girls, garment factories) or remain in the village as a farmer.

OnTime's CEO Nirosh Manjula Ranathunga, a 30-year-old university graduate who studied IT while doing his commerce degree, lives in Anuradhapura and visits Horizon only twice a week because he says he can handle operations from his hometown easily over the Internet.

Ranathunga is interested in transferring his skills and learning to other villages. "I joined Horizon Lanka two years ago as a project manager and am very happy with this BPO initiative," he said. Some 50 youths are now being trained to take up BPO jobs in Mahavilachchiya.

In a reversal of sorts, boys and girls from the cities are now visiting Horizon Lanka. "They come here to learn from us," said Wanni.

Because of their English speaking and writing skills, youngsters here are beginning to write software programmes for overseas companies and individuals earning foreign exchange. They have a far better future - compared to youths from other villages - as computer programmers, software programmers and related jobs.

"This [OnTime] has helped us to take on the world from this small hamlet," says 24-year-old Chamila Priyadharshini. Currently in a state-sponsored teachers training course for English, Tamil (language of the biggest minority group) and Japanese, Priyadharshini says she wants to be a trained teacher in three years and spends her spare time teaching IT and English at the Horizon center.

Replete with a modern gym, video and audio equipment and other electronic modern gadgetry the center also prepares youth for other aspects of urban life, should they choose move out.

Wanni's current target? "I want to send at least one youngster from here to the prestigious MIT [Massachusetts Institute of Technology] in the United States."

Sri Lanka can wipe out poverty in a generation with practical policies: development economist

from Lanka Business Online

If market reforms and globalization that brought prosperity to Sri Lanka's Western Province could be replicated countrywide, extreme poverty could be eliminated in a generation, a development economist said.

Sri Lanka's Western Province which had seen the most market oriented reforms since 1977 and was most open to the world, had grown the fastest and had reduced poverty to 9 percent while the national poverty headcount was 23 percent.

"If the rest of the country can mimic the Western Province’s performance Sri Lanka can eliminate extreme poverty in one generation," Naoko Ishii, World Bank's country chief, told the annual sessions of the Sri Lanka Economic Association.

"The rising inequality within the country has severely limited the extent the growth could have reduced poverty."

Despite an internal conflict consuming massive resources Sri Lanka had grown by 4.5 percent a year on average with the Western Province growing by an average of 6.2 percent between 1996 and 2005.

Ishii said the war which had worsened regional iniquities could itself undermine peace prospects and little data was available about the ground situation in the northern and eastern areas.

Bang for Buck

Sri Lanka's poverty head count had fallen to 22.7 percent in 2002 from 26.1 percent in 1990, indicating that poverty headcount had eased by 1.1 percent a year. Real economic growth measured by Gross Domestic Product (GDP) had increased by 3.1 percent a year.

"The implicit growth elasticity of poverty reduction was therefore about one third," Ishii said.

"This is exceptionally little “bang for the buck” in terms of poverty reduction per unit of economic growth."

She says most East Asian countries had reduced poverty much faster per unit of economic growth with even China - which many critics accused of increasing inequalities – doing much better than Sri Lanka.

Despite suffering deep economic crisis in the 1990 East Asian nations such as China, Korea, Malaysia, Thailand and Vietnam has per capita GDP that was higher than Sri Lanka's 3.1 percent.

"As you would expect, China is the front runner growing by almost 9 percent per annum during the 1990s," Ishii said.

"Korea, Malaysia and Vietnam grew about 5 percent per annum, while Thailand grew at 3.5 percent, only a bit faster than Sri Lanka."

In all the comparator countries poverty reduction per unit of growth (a measure of growth elasticity of poverty reduction) was higher than Sri Lanka.

Compared to Sri Lanka's 0.35 growth elasticity, Thailand had 2.6 percent, Vietnam 1.4 and China 1.

"In other words, China is not efficient in reducing poverty, but with its high growth rate and modest growth elasticity, it reduced poverty headcount by 8 percent annually during 1990-2001," Ishii pointed out.

Compared with East Asian nations excluding China, Sri Lanka's Gini coefficient, a measure of income disparities across income groups, had gone up faster.

Western Province

The Western province grew at double the rate of the rest of the country's 3.1 percent since 1996.

In the Western Province poverty had fallen faster and inequality had increased slowly, indicating pro-poor growth while inequality had increased faster in the other provinces.

"In Uva, Sabaragamuwa, and North- Western, poverty has even increased," Ishii said.

"The growth pattern of the Western Province is very pro-poor. The problem is not that the Western Province has grown too fast, but that other provinces have grown too slow."

The rural farm and non-farm economy was stagnant, though 80 percent of the population were contained there.

There was not even data to get an accurate idea about the North and the East.

"Nevertheless, there is little doubt that the population in the North and East in many respects is disadvantaged: not only have they borne the brunt of violence resulting in several hundred thousand internally displaced people over the years, they have also seen their opportunities for economic growth severely curtailed," Ishii said.

Unemployment was clearly higher and infrastructure such as power and roads as well as health and education were poor.

Forty six percent of the children below the age of five were underweight in the North and East compared with 29 percent for the rest of the country.

Infrastructure

Ishii said market access was strongly co-related to poverty. Though Sri Lanka had a dense road network, maintenance was poor making it difficult for poor farmers to get products to the market.

"Here comes an issue of “inequality traps” of budget allocation where the voices of the poor may not be well heard," she said.

Numerous critics have charged that Sri Lanka's fiscal policy beggars belief. In 2005 alone, 33 billion rupees had been spent on fuel and fertilizer subsidies.

This year 18 billion is to be spent on fertilizer subsidies, while there was no money to improve the safety of crumbling dams.

They point that the wealth of the nation is squandered on subsidies on the whims of politicians which leave their recipients just as poor or just as rich in the case of fuel subsidies.

Meanwhile roads, power and irrigation infrastructure is built with loans from the Asian Development Bank, World Bank or Japan.

Infrastructure

However Ishii says infrastructure and accessibility do not fully explain regional poverty. She said an accessibility index shows that the Western Province is only 25 percent higher than the Uva Province which scores worst.

"This may suggest there is more than infrastructure which explains the regional difference in growth," Ishii said.

"The Western Province was able to take advantage of the opportunities from market oriented policies adopted since the late 1970s and was better integrated with global markets.

"By contrast, market oriented policies have been much more limited outside the Western Province, which has remained predominantly rural."

She says research and extension services in agriculture are not up to the market needs. Private investment in commercial agriculture and agro-business are yet to come in full.

"Inadequate infrastructure, together with those policy shortcomings, has constrained the development of high-value agricultural industry," she said.

Agricultural productivity growth in Sri Lanka during 1990's was only 0.65 percent a year compared with 2.8 percent for Vietnam and 3.51 percent for China.

"Policies aiming at higher value added in agriculture sector, which is envisaged in the government’s ten year vision framework, needs to be implemented as soon as possible," Ishii said.

Inflation

Meanwhile other speakers at the SLEA sessions pointed to inflation and economic instability as a major cause of poverty as well as poor governance, corruption, weak institutions, badly targeted welfare measures and a poor tax system.

SLEA President ADV de S Indraratna said a per capita real economic growth of more than 3 percent suggests that money incomes were growing faster than inflation but that it was focussed on the rich.

"The money incomes of the poor on the other hand have been lagging behind inflation," Indraratna said.

"Is it then surprising that the poor have been telling our policy maker that while 'you are trumpeting so much of a 6 – 7 percent growth rate, we are suffering from sky rocketing prices?'"

High inflation suggests economic instability as well as a reduction of real wages and incomes. While richer sections of society can hedge themselves against inflation, the poor who are largely assetless are hardest hit by inflation.

Except for a half a dozen years Sri Lanka has had high inflation, balance of payment problems and economic instability for most of the last five decades.

Many economists had pointed out that Sri Lanka is held back by policy errors, despite being rich in human, natural resources and an unmatched geographical location, which time and again has allowed the economy to recover from policy shocks.