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In the words of Peter Harrold...
The Sunday Times publishes today the text of a Q and A with World Bank Country Director who is at the centre of a controversy over what he said in this interview
Transcript of the tape-recorded interview The Sunday Times Deputy Editor Tyron Devotta had with World Bank Country Director Peter Harrold on Friday March 4 at 2.30 pm at the bank's Colombo office.

The interview centres on references to a two-page World Bank statement issued on February 24. The statement titled "World Bank Support to Sri Lanka' said that total financing needs for Sri Lanka's recovery and reconstruction were estimated to be around US $ 1.5 to 1.6 billion, according to a damage assessment report released early February by the World Bank in partnership with the Asian Development Bank and the Japan Bank for International Co-operation.

The WB statement ends with the following sentence: "To translate these principles into reality, the Bank will now be participating with all other development partners and key stakeholders, including the Liberation Tigers of Tamil Eelam, and in close collaboration with the Government on the development of district-based reconstruction plans for the affected areas."

Tyron Devotta makes reference to his above press release
Devotta: Several interesting things here but I noticed one, that's the last paragraph. "To transfer these principles into reality the bank will now be participating with all other development partners and key stakeholders including the Liberation Tigers of Tamil Eelam." Is there a kind of shift in the way you'll handle this?
Peter Harrold: Er.. no. I don't think so. Oh, you mean with regard to financing?

Devotta: Yes.
Peter Harrold: No.

Devotta: You say that the bank will now be participating with all other development partners and key stakeholders including the LTTE - what does this mean?
Harrold: Correct…. Well, we have always regarded the LTTE as a key stakeholder. I have often been roasted by various members of the press and by… no doubt will again after you print all of this interview. There are various members of the press and for example the Patriotic National Movement who have regarded the fact that we have wished to have conversations with and consultations with the LTTE as inappropriate. We have regarded…. given that there is such a thing as the LTTE-controlled area, an unofficial state and an officially recognized part of this country as the LTTE-controlled area … given that they are a party to the ceasefire agreement with the Government of Sri Lanka which confers on them a certain status as a legitimate stakeholder.

And given that many of the poorest people in Sri Lanka happen to reside within the Wanni area controlled and influenced by the LTTE we will always regard them as a group who were a legitimate stakeholder and with whom therefore it was not only appropriate but actually critical that we had a dialogue as we designed programmes of activity that would actually physically take place within the area under their influence.

And anybody that thinks that, anybody including the government itself can successfully carry out activities in the North East without having a dialogue with the LTTE and without bringing them in as a stakeholder, that is just naivety.

You know, the Government Agents carry out activity all the time and of course have a constant dialogue with the LTTE. How on earth is the poor GA from Mullaitivu or Kilinochchi otherwise to exist ? It can't be done. They are surrounded and they would simply be prevented from effectiveness if they don't have a dialogue with the LTTE. But what this statement does not imply is that we have changed the way that we transfer financial resources. It does not mean that we are embarking on a programme to transfer financial resources to the LTTE because we have not been asked to do that by the Government of Sri Lanka nor would I be expected to be asked to do that. The question, and the more, I should say the more difficult challenging question will be what happens if there is a joint financing mechanism approved and what would be the nature of that joint financing mechanism - that remains to be seen - whether the Government and the LTTE will come to an agreement on that.

Devotta: Till then you are operating through the GA?
Harrold: Till then we are operating through the GA and the North East Provincial Council. As we always have.

Devotta: So that is for transfer of funds, but you know there is so much in this document here like for instance income support - the five thousand rupee income support, and all this… and when you say that you are including them also as a key stakeholder for the tsunami relief operation would it mean that you would go by their statistics?

Harrold: Well they don't really have statistics ... I mean it is interesting ... because the LTTE itself also tends to use government statistics. I mean we don't go by anyone's statistics without verifying them - no, but do we ask them for their estimates - absolutely. Did we ask the LTTE for their estimates of the damage - absolutely, absolutely we did, yes and that's fine.

Devotta: You previously gave us a figure you said … er… how much was it... of a total of about er ... 60 million US dollars?
Harrold: For housing, yes ?

Tyron Devotta: Yes for housing.
Harrold: About 60-65 million.

Devotta: How much of that will go to the North and East?
Harrold: Probably close to three quarters. Something over 70 percent.

Devotta: Seventy percent will go into the North East obviously because er…?
Harrold: The provision of support has to be driven by needs not by politics. It's a human disaster and a capital disaster and the fact of the matter vis-à-vis housing, that the housing damage disproportionately hit the North East. Perhaps because there was a tendency in the East especially to build very very close to the coast. There is a predominance of fishing communities in the east which tend to build very close to the coast and of course the east got the first of the .. the largest brunt. The most powerful.

Devotta: Do you have any….
Harrold: Well not of course as anything like as densely populated like the west and so numerically there is quite a large amount but in case of proportionate damage the east is very heavy.

Devotta: Do you have any idea of what proportion would actually go into the LTTE-controlled areas?
Harrold: In the housing side?

Devotta: Yes.
Harrold: Yes it would be about... between 10 and 15 percent in the directly-controlled areas - it depends whether you regard Batticaloa as a Government controlled or LTTE controlled. I guess it is a bit of both, but I mean it's not Batticaloa is technically in the government-controlled area. If you look at the total damage, our estimate is that we take the two districts of Mullaitivu and Kilinochchi - they account to a total of about 10 percent of the damage. Now the housing is a little bit higher than that…., so it will be between 10 and 15 percent of the housing support…. would be within the LTTE controlled area.

Devotta: So then Peter…
Harrold: But in parallel of course we have another programme, the North East Housing Recovery Programme which was approved just in December just in time in a sense. That's for… That's 75 million dollars for the North East, that's just for families who are returning … for IDPs.

Devotta: How much did you say that was?
Harrold: That's 75 million. 7.5 billion rupees. So that is...er a lot of that is in the Wanni and of course Jaffna.

Devotta: How is that being channelled?
Harrold: Through the North East Provincial Council. There's a special office being created the 'North East Housing Rehabilitation Office'.

Devotta: That has not come into operation as yet?
Harrold: It's just started - it's just signed… a few weeks ago it er - it's just, it is only approved in December but it is starting and now they are unified in the same they will look after our support for the housing in tsunami as well as conflict affected but that is a unit of the North East Provincial Council for the moment that's how we do things.

Devotta: So after this tsunami and all these decisions, has there been a shift in levels of dialogue between the LTTE and the World Bank?
Harrold: No, there is a shift in the levels of dialogue between the government and the LTTE. I wouldn't say no. We've had dialogue all along and that was at the request of the government and it… er… although various members of the press attempt to make us ashamed of this from time to time so long as the government is … er … so long as the government does not oppose this and of course they don't, we continue to do it.

And if you accept the basic rationale of why the World Bank is around - we say it's our rationale, which is to trying to address poverty. You have to then accept that we will work in those areas where the largest numbers of the poor exist and the fact is that the conflict has rendered the North East, a home to many of the poorest members of society, and therefore it is right and proper that we work there and if we are going to work there you have to talk and should talk to the LTTE. And by engaging with them that can only be good we feel for the future of the peace process in Sri Lanka which remains the heart of everything despite the tsunami.

Devotta: So how many people have you identified to get this aid. You said you have about er…?
Harrold: Just about twenty thousand, its a bit more than… its between twenty and twenty five thousand families or more if they disproportionately use it on the damaged houses rather than re-construction

Devotta: And about 75 million US dollars?
Harrold: For the North? Oh for the North there are 28,000 families for the North East on the conflict side.

Devotta: How many families did you say?
Harrold: 28,000.

Devotta : For 28,000 it is 75 million US Dollars. How long will it take to disburse this?
Harrold: About four years, probably.
Devotta: Would it be right if I say that the World Bank now considers the LTTE a key stakeholder and a development partner ?
Harrold: Well a development partner is a technical word. But we have and always regarded the LTTE as a key stakeholder absolutely. You know there has been a conflict here for 20 years and there is a ceasefire agreement. You know if there was no ceasefire that would make it much more difficult, but the fact that there is a ceasefire that has been signed between the Government of Sri Lanka and the LTTE - the fact that there were negotiations and peace talks between the previous government, and the current government is er… the current government is er… contemplating the revival of peace talks with the LTTE; the current government has been having discussions with the LTTE and its representatives on the possibility of establishing a joint financing mechanism, a phrase that they are using for the tsunami affected areas of the North East. So the Government has conferred… so the Government of Sri Lanka has conferred on the LTTE the status of a key stakeholder. The Government has de… what do they call that…. not de criminalized ….. they have taken them off.

Devotta : De-proscribed ?
Harrold: De-proscribed the LTTE, which is no longer a banned organization. The head of the LTTE peace secretariat can come and go freely between Colombo and Kilinochchi, the army happily transports the head of the political section of the LTTE around the country, in fact chastises the LTTE for not using their security services enough and exposing themselves therefore to potential dangers as what happened to Kaushalyan. All of this is that the Government itself has conferred on the LTTE a status of stakeholder, encouraged organizations such as the World Bank to have a dialogue and to finance development activities within the area controlled by the LTTE; has approved of the establishment of United Nations Offices within the LTTE-controlled area, so all these things suggest that they are indeed a key stake holder - but one whose responsibilities are limited by the fact that they are not the government. Because until such time as there is an alternative administration for the North East, we will continue to work through the government's own mechanisms.

Devotta: Why did you think of mentioning this 'including the Liberation Tigers of Tamil Eelam - what was the thinking behind that? If you say that it was something normal that you were doing?
Harrold: I did wonder whether it would cause any furor? ..... The fact is let's take the reality, there are three organizations which have prepared needs assessments, the government of Sri Lanka prepared a needs assessment, the World Bank with ADB and JBIC prepared a needs assessment and the LTTE prepared a needs assessment. The fact that so much of the damage occurred within the area of the country - that is the subject of the actual or potential discussions between the government and the LTTE makes them a key stakeholder. The fact that the government and the LTTE are sitting down, that the head of the peace secretariat of the government and the head of the peace secretariat of the LTTE are sitting down and negotiating and discussing - I haven't, by the way, seen any documents related to this but they are widely reported so we all read the same documents the same reports, that they are discussing the establishment of a joint financing mechanism. Now the government is not to the best of my knowledge not discussing a joint financing mechanism with any body else. The actions of the government confer on the LTTE a special status. And we all take our signals from the government's behaviour.

Devotta: The joint financing mechanism will certainly help you, help the World Bank in the disbursing of funds?
Harrold: It will be designed to help everybody, now it can be done with or without a mechanism. We and the ADB and others have demonstrated, to some people's displeasure, but we have demonstrated very clearly that it is possible to disburse and to support the people of the North and the East without a joint financing mechanism. But it will make it a lot easier and be intrinsically useful in itself to have such a mechanism. It would be good if the two sides were working together. That can only lead to improved mutual understanding and clearly one of the difficulties of the present time has been the lack of trust, the lack of mutual understanding, a lack of comfortable working relationships. Such a mechanism will presumably help that and we would all hope that in itself might improve the prospects for the future achievement of progress in the peace process itself. I mean they are not obviously linked but it would pave the way for a better relationship in the future. And clearly it would make life easier if you didn't have to talk separately to different people. If they work and decide together what are the priorities, what is it that deserves finance. Make life much more straightforward.
(Note: Mr. Peter Harrold also answered questions put to him on other issues.)

Peter Harrold’s first reaction
The World Bank Country Director Peter Harrold who claims he was misquoted by Sunday Times, has clarified the position on World Bank aid to North East Sri Lanka

The following is his statement:
Colombo, March 7, 2005: It is clear that the misquotes contained in an interview I gave to the Sunday Times have caused some considerable misunderstanding and controversy. To clarify the World Bank's position on these issues:

I never used the phrase "a kind of unofficial state". A careful review of a recording of the interview shows that what I said was that "given that there is such a thing as the LTTE-controlled area -- that's an official statement, an
officially recognized part of the country is the LTTE-controlled area".

There is an enormous difference between recognizing the LTTE's role in this process (which we and the Government do) and recognizing an unofficial state, which we do not.
The World Bank works in Sri Lanka with the sovereign Government of Sri Lanka, and we would do nothing to challenge or question that.

We regret the inaccurate and misleading portrayal of the World Bank's position in the JVP statement and the subsequent reports in the media.
The ceasefire agreement signed during the previous government is currently being upheld by the present government and the LTTE remains a de-proscribed organization in Sri Lanka.

The Peace Secretariats of both the Government and the LTTE have stated that they were negotiating a joint financing mechanism for post-Tsunami reconstruction. The World Bank is working within the policy framework established by the Government.

The World Bank has for several years now been working in the North and East of Sri Lanka, to try to improve the situation of the population that was affected by the conflict. Part of this same population has now been affected also by the Tsunami.

As was stated in the article, the basic rationale of the World Bank is to help to reduce poverty, and many of the poor happen to be located in the Districts of the North and East.

This work has been done at the request of the present and the two previous Governments of Sri Lanka. Most recently, with the current Government, we have agreed to finance a North East Housing Reconstruction Project for $75 million, and the Tsunami Emergency Recovery Credit, also for $75 million, which includes possible support for all of those affected by the Tsunami.

All World Bank funding for the North East is disbursed through the official government channel of the North East Provincial Council. The World Bank and I have made it clear on many occasions in the past that we do not and have not disbursed any funding directly to the LTTE, and there is no intention to change this policy. Indeed, in the interview I was asked if we were planning direct funding of the LTTE and I clearly stated that we were not, since we had not been and did not expect to be asked to do so by the Government of Sri Lanka.

The World Bank has had --with the full knowledge and approval of the Government of Sri Lanka -- quite a number of meetings with the LTTE, and on each occasion the Government is informed in advance of such meetings.

The process of contacts with the LTTE and the international community is considered to be a useful aspect of the overall peace process.
The majority of the interview was dedicated to issues related to post-Tsunami reconstruction, and how to improve rapidly the situation of those who were most affected by these events in all parts of the country, and we hope that this clarification permits us to return to addressing these key issues.

Peter Harrold
Country Director for Sri Lanka

Apologise or go home, PNM tells Peter Harrold
“Sri Lanka is not another Sudan", "Peter Harrold Go Home". "Your statement is a threat to our sovereignty" were among dozens of placards by protestors who joined a demonstration organized by the Patriotic National Movement demanding the removal of World Bank Country Director in Sri Lanka, Peter Harrold following his controversial remarks.

Protestors ignored the scorching heat to march from the Liberty Plaza in Kollupitiya and head towards the World Bank Sri Lanka office off Galle road on Thursday. In a marked contrast protestors advanced without obstacles from the Police deployed in the vicinity.

JVP Parliamentarian Wimal Weerawansa addressing the gathering said he does not believe that Mr. Harrold was making public the ideas of the World Bank, but it was the duty of the World Bank to explain whether Mr. Harrold's views were in keeping with the policies of the World Bank or whether the views expressed were the personal views of Mr. Harrold.

'Our problem is not with the World Bank. It is with Peter Harrold. Any of those who are representing international organizations do not have the right to make a serious statement that affects the internal problems of the country', Mr. Weerawansa said.

'If Mr. Harrold made comments about the outstanding loans we do not mind. But to accept that the LTTE has a separate area under its control and to say that there is an unofficial state was a serious statement.

He has made several serious statements that affect our country. Whether it is the World Bank or any other foreign organization they should act in a manner that does not impact on the sovereignty of the country.

"That is very clear in the agreement between the Sri Lankan government and the World Bank. Mr. Harrold has gone beyond his duties in making the statement which affects the sovereignty of the country", he said.

He should withdraw his statement in full and apologize to the people of Sri Lanka or otherwise he should leave the country on his own. "Mr. Harrold should understand that Sri Lanka is not similar to Sudan. Nationalistic movements will not allow to make any statements that affect the sovereignty of the country. Therefore they should be careful when they make comments", he said.

Ven Elle Gunawansa Thera addressing the gathering said they were protesting mainly on the comments made against the sovereignty of the country. He said there have been several organizations which try to equate the LTTE to that of another state and the people were protesting as Mr. Harrold was trying to do the same thing.

'We are demanding that he apologises for his statement or leave the country as the comments made are damaging to the country', he said. After a strong protest Mr. Harrold's effigy was burnt opposite the World Bank Sri Lanka office.

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