Development assistance pattern changing

Government officials are insisting that the North East conflict should not hinder development assistance and noted that the pattern of grants was changing.

Minister Enterprise Development, Dr. Sarath Amunugama told The Sunday Times FT that the pattern of donor assistance was changing rapidly and emerging economies such as Sri Lanka do not have to depend ‘too much’ on large donors, who impose restrictions. “Our development partners in the forefront now are Japan, China, India, Eastern European countries such as Hungary and the European Union. The pattern of development assistance is changing. We do not have to go behind the World Bank or the Asian Development Bank (ADB) who are posing conditions,” he said.

The Sri Lanka Development Forum 2007 held for two days saw over 50 development partners, including the World Bank, ADB, International Monetary Fund, other UN agencies and bilateral donors, key Cabinet Ministers, representatives from civil society and trade unions, private sector representatives and senior government officials participated in the discussions. The donors indicated the importance of harnessing the linkages among poverty reduction, governance, peace and equality, and the need for addressing issues related to the implementation of the languages policy. Reiichiro Takahashi, of the Ministry of Foreign Affairs of Japan said that Japan is impressed with the ambitious development strategy but expressed concerns over the stalemate status of the peace process.

Dr. Amunugama reiterated that the country is for peace, but until then development has to move forward. “We cannot stop development waiting for peace,” he said.

Many participants at the forum also echoed this sentiment and said that it is imprudent to hold development till the conflict is resolved.

Dr. Saman Kelegama, Executive Director, Institute of Policy Studies (IPS) said that some donors link development to peace, conflict resolution, human rights and good governance, whereas there are others who see these separately. “We want the first category to be flexible – especially for emerging economies like ours,” he said, adding that it is unfair to victimise the government on the ethnic conflict that two parties are involved in.

Professor Buddhadasa Hewavitharana, Governor, IPS said that the international community and the donor partners must realise that separatist and the donor partners must realise that separatist group, LTTE con not dictate the development agenda of the country. “They must realise that the country’s development has to go on and that Sri Lanka cannot draw back because of the ethnic conflict,” he said, adding that development of the country and accelerating growth will contribute to conflict resolution, because people of the North and the East will benefit from economic activities.

The government noted the concerns expressed by some of the development partners about the difficulties that some of these NGOs and INGOs are facing, while pointing out the need for transparency of these NGOs and INGOs to work.

Frederick Lyons, United Nations Resident Coordinator, describing the challenges on the development of the country marked conflict high in the list, while urging the government to respond to regional economic disparities.

Dr. Amunugama said that Mahinda Chintana, the detailed account of the ten year development framework and related issues arrests the disparity and the disparate growth patterns in different provinces of the country. “This is not an ethnic issue, but we are not in a position to put money in the conflict affected areas because of the war,” he said.

The President explained that the non-cooperation of the LTTE to participate in the negotiation process and their refusal to allow other democratic parties to function prolonged the conflict and interrupted some of the development activities in the Northern and Eastern Provinces.

Both the government and the development partners recognised that a solution to the ethnic conflict would involve improved power sharing and development cooperation, could expand the development horizon for the country, with higher aid and private capital inflows, including accelerating the development of conflict affected and other lagging regions.

Treasury Secretary, P. B. Jayasundera, who was praised by the donors on the presentations made, said that during the last development forum in 2005, the assistance by donors was mainly due to sympathy. “This time, we conducted the development forum under a most challenging environment,” he said. He said that with the existing funding in the pipeline, Sri Lanka’s total development assistance will rise to around US$ 9 billion within the next three years.

Dr. Jayasundera said the initial one third of US$ 4.5 billion donor assistance is not repayable and the rest is on soft loans.

“We are working on a three year development framework from 2007 to 2009 and will implement specific infrastructure projects. The flagship project is the northern expressway,” he said.