North crying out for more private investment

By Amantha Perera

Kilinochchi (IRIN): More private investment, especially in agriculture, is urgently needed in Sri Lanka’s former conflict zone in the north to lift the local population out of dependence, say experts.

“Private investments are very important to wean away the people from over 25 years of dependence on relief and welfare handouts from the Government, NGOs, donors, et al, and steer them towards self-sustenance,” Muttukrishna Sarvananthan, Lead Researcher at the Point Pedro Institute of Development based in the northern city of Jaffna, told IRIN. “If not, the Wanni will remain a perpetual basket case.”

Tens of thousands of people displaced during the decades-long civil war that ended in May 2009 have returned to Wanni District, northern Sri Lanka, an area formerly under the control of the now-defeated Liberation Tigers of Tamil Eelam. But more than a year on, private investment has been slow to follow suit.

Finance for most of the local economy in the Wanni comes from the public sector or donors. “Public administration, defence, and transfer payments from NGOs and bilateral and multilateral donors account for over 80 per cent of the local economy. The agriculture, industry and service sectors account for less than 20 per cent,” said Sarvananthan.

Returning civilians received US$ 225 from the UN, through the Government, to help build semi-permanent shelters until more permanent housing is established.

But some of that money had been used for other things.

“I used the money to start this [fruit stand] because there was nothing else to do,” Thangavel Gowrinathan, a young fruit vendor from Darmapuram in the far-north district of Kilinochchi. He said if he used the all of the grant to set up a shelter, he and his family of three could starve - if assistance provided by the World Food Programme (WFP) and other donors ended.

Government and relief agencies have targeted agricultural and industrial revitalisation as key to sparking the region’s economy.

The UN Office for the Coordination of Humanitarian Affairs (OCHA) said it was a “race against time” to ready the agriculture sector in Wanni for harvest after the monsoon rains end, typically in October. While most of the paddy land has been demined, planting has not begun due to lack of seeds and equipment.

As a result, officials are setting lower targets for the upcoming harvest.  

“We will be using around 48,000 acres [80 per cent of total acreage] for cultivation this season [in Kilinochchi District],” said District Official, Roopavathi Ketheeswaran.

Given the Wanni’s low population density – 70 people per square kilometre – and the dependence on agriculture for food and livelihoods, agriculture can help kick-start the regional economy, Sarvananthan said.

The little private investment there is, favours industry, he added. Several garment factories are set to open in the districts of Jaffna and Vavuniya. Ketheeswaran said initial plans have been drafted to open a garment factory with private sector funding in Kilinochchi.

While the return to Wanni of more than 200,000 people fleeing fighting since December 2009 has brought with it rapid improvements to the road network, poor telecommunications and intermittent power supplies in the region are driving away potential investors, Sarvananthan said.