Sustainable route to rural development

A key decision made by the Cabinet last week was the formation of a new entity named Department of Divineguma Combined Rural Development. On a proposal made by Economic Development Minister Basil Rajapaksa, five institutions coming under him – Commissioner General of Samurdhi, Samurdhi Development Authority, Department of Upcountry Peasants Rehabilitation, Sri Lanka Udarata Development Authority and the Southern Development Authority – are to be brought under this new department.

It was stated that the objective of this new move is to implement the programme of one million domestic economic units branded ‘Divineguma,’ as announced by President Mahinda Rajapaksa in the Budget 2011 and the empowerment of rural economy in a combined manner. The Head Office of this new department will be located out of Colombo, whilst three regional offices will be set up as the Northern Regional Office, Up Country Regional Office and the Southern Regional Office.

A key initiative under this move is staff of the Samurdhi Development Authority, estimated to be 25,000 persons, of which 23,000 are Samurdhi Development Officers and 2,000 are Samurdhi Managers, being granted pensionable status. A VRS will be offered to those who are unwilling to come under the new arrangement.

Rationalisation of Government departments is a welcome move. This approval by the Cabinet last week should be a permanent reminder whenever the Government or a minister comes up with a populist idea to start yet another department for whatever reason. Even despite the latest move, the public sector is replete with many departments whose relevance is outdated or scope is duplicated by another organisation.

Even in the sphere of rural development, there are many organisations whose mandate is just that. We have a Ministry of Traditional Industries and Small Enterprise Development, under which the Industrial Development Board functions. The country also has the mega and the new look Regional Development Bank, the successor to the six province-wise RDBs of the past.

‘Divineguma’ is a commendable initiative as it seeks to uplift the economy of low income families towards sustainable development. Under this programme, various projects were launched covering 3,060 ‘Gama Neguma’ GN divisions and other GN divisions, combining agricultural development, industry, animal husbandry and fisheries, marketing and services sectors. 

The total cost of the programme is Rs. 797 million. As per Budget estimates of the Ministry of Economic Development, Rs. 1.6 billion has been allocated in 2011 for rural development and Rs. 840 million for livelihood development. A similar allocation is envisaged for 2012, whilst it will be increased to Rs. 1.8 billion and Rs. 900 million in 2013.

As a national programme, ‘Divineguma’ must be promoted via State agencies whose mandates include poverty alleviation or rural development. However, this has not happened and the other agencies do their own micro programmes. When uncoordinated multiple initiatives are in plenty, their effectiveness remains weak.

Whilst the Government in general and Economic Development Ministry in particular can champion ‘Divineguma,’ it is also important in parallel for the President Mahinda Rajapaksa administration to ensure that laws are simplified and processes are streamlined for a greater emergence of businesses at micro and SME levels.

Politically-championed initiatives have their own limited lifespan, but improving the Ease of Doing Business route is a more sustainable and corrupt-free process. In that context, the expressed intention of President Rajapaksa to ensure Sri Lanka improves its ranking to number 30 from the current 100 in the Ease of Doing Business is welcome because that is the best inducement for rural development to flourish. When the  next Ease of Doing Business rankings are out we will know whether the country has progressed enough or not.