Financial Times

Tripartite deal in reforms mooted
The possibility of a tripartite arrangement between international lending agencies such as the International Monetary Fund (IMF), the government and civil society groups to discuss key economic policy reforms has been mooted.

The idea emerged during talks between the visiting IMF delegation and civil society groups on ways of improving the public dialogue on the policy reforms that affect large sections of society.

Sarath Fernando, representing one of the civil society groups that took part in the talks with the IMF, said the government had not made any serious effort to consult the public and civil society groups and that their input in policy formulation was inadequate.

"Even when such discussions have taken place they have usually been after plans for key reforms had been drawn up," he said. A good example was the 'Regaining Sri Lanka' strategy based on the Poverty Reduction Strategy Paper supported by the IMF. "So whatever we suggested or proposed was not taken into account," Fernando said.

One of the proposals discussed at the meeting, where there had been representatives from several groups, was a tripartite arrangement - to set up a committee or a 'desk' - where civil society can make recommendations and suggest amendments in the government's process of economic policy formulation.

IMF Senior Resident Representative Jeremy Carter said the tripartite arrangement was one of the possibilities discussed at the meeting but that it was not a firm suggestion and that the issue of how to improve dialogue had not been resolved.
"There was no firm proposal for a tripartite agreement but we discussed whether that would help so that the views of civil society are more adequately reflected in policy formulation," Carter said.

"We'll continue to talk and discuss with civil society groups about what the right method is of relating to the government's policy formulating framework." The possible methods of improving the dialogue between the government and various levels of civil society and the possible role for other players were discussed, he said.

One of the difficulties in creating an arrangement for improving the dialogue on economic policy formulation was the diverse nature of civil society and the non-governmental organisations that represent them.

"Civil society means different things," said Carter. "There are hundreds of groups. So the difficulty is how to deal with such diverse groups." The meeting was an initial attempt on the IMF's part to ask civil society representatives how they think the dialogue could be improved because they are the ones who are complaining.

"We will continue to discuss and suggest a number of ways to look for mechanisms to make this dialogue easier," Carter said. The Poverty Reduction Strategy Paper is an ongoing thing and open to discussions. "Many aspects of poverty reduction and growth strategy will change over time - it is a living process," said Carter.

Civil society groups could contribute by helping to move ideas forward and by continuing their talks with the government, he added. They could suggest changes to the PRSP which needs to evolve, he said. Civil society groups have been complaining that they have been largely left out of the loop in the formulation of critical reforms despite government paying lip service to transparency.

They have warned that the lack of dialogue had led to misunderstandings about government policy reforms and IMF aid, creating apprehension among the public and resulting in popular opposition to such reforms.

Japanese team here next month
The Japan Bank for International Cooperation (JBIC) is considering a Sri Lankan government request for a Poverty Reduction Support Credit (PRSC) facility of $150 million linked to economic reforms, a top Japanese official said.

Katsuhiko Okazaki, country director for Sri Lanka and Bangladesh for the JBIC, told The Sunday Times FT that this, among other matters, would be discussed by a high-level Japanese government mission visiting Colombo next month.

"In addition to the PRSC, the delegation would also discuss projects where Japanese funding is needed and a range of other aid issues and the peace process," he said during a visit to Colombo. He met a range of people including government officials, journalists and civil society groups to assess the mood in Sri Lanka over the peace process, its public support and the status of peace talks.

The credit line requested is similar to the $125 million PRSC credit approved by the World Bank in June. It is provided as budgetary support and linked to reforms. The extent of the proposed credit line would be decided by JBIC after the review mission. It would be part of the $1 billion that Japan pledged at the June donor meeting in Tokyo.

Okazaki, who first visited Sri Lanka on his honeymoon in 1984, said while Japan is keen to start financing northeast reconstruction, no new projects would start - apart from ongoing rehabilitation of 10 tanks there - unless peace talks resume.

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