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2.

REGIONS AFFECTED BY DEVELOPMENT PROJECTS

National development entails economic, social, political, cultural, environmental and even moral aspects. The contribution of the North and the East during the last three decades or so was hampered in all these spheres by the separatist and the terrorist war. Now that the war has come to an end; it is obvious that the development projects must focus on synchronizing North and East with the rest of the country. This certainly helps to fill the development gap between both the regions. On the other hand; with out a sustainable development in these regions to reduce the disparity with other regions; the possibility of sparking similar conflict is very high; thus, hampering the development of the country again. Sri Lankan government has identified this necessity and oriented its development policies and strategies towards achieving this goal. One of the key indicators of a countrys development is its GDP growth rate. Sri Lanka managed to maintain a GDP growth of at about 5% during much of the last couple of decades despite the soaring war. But, faster growth rates at about 7%~8% are achieved during the years after the end of the war. The palpable reason behind this situation is the massive development projects implemented in the country. This development thrust is not only focused in to rehabilitation of war torn regions; but also improvement of infrastructure of the other parts of the country. It must be said that still the cynosure of the thrust is to develop the north and east. This approach has direct impact on annual GDP growth rate. A clear indication is; that the contribution of the North & East to the annual GDP has doubled in immediate years after the war when compared with the years during the war existed. For North and East alone, government has spent more than 425 billion Rupees during the last five years for reconstruction and development. A large portion of this money was spent on resettlement, de-mining, reconstruction of destroyed infrastructure including the water reservoirs, and for the welfare activities. The main objective is to normalize the livelihood of the people there. The policy is to implement post war development projects to normalize and rehabilitate the northern and eastern regions while gaining the maximum dividend of peace to develop the rest of

the country to achieve a sustainable development as a whole. There fore as earlier said the post war development projects are not limited to North and East; but covers the entire country.

3.0

INVESTING AND FUND SOURCING

All the large scale development projects are planed and implemented by government of Sri Lanka. Small and medium scale community development projects, social and welfare development projects are done by both the government and non government organizations and monitored by the government. Government is leading the way by a huge increase in public investment. The public investment has increased from 5.4% in 2007 up to 6.2% in 2010. Direct foreign aid also plays a key role in funding. During the post war period the official development assistance provided by foreign countries amounted to around 1.7% of Sri Lankas annual GDP. The Leading donors include European Union, Japan, United States, Australia, China, India, United Kingdom and Canada. The latter two countries have essentially ended their development assistance programs due to principled disengagement over the way in which the civil conflict ended and/or because Sri Lanka is now a middle-income country. On the other hand the power and influence of China and India as donors continues to grow in Sri Lanka. These donors work bilaterally, in isolation from others. China remains the largest donor, with an estimated US$678 million commitment in 2011. Apart from direct donations from foreign countries; international donor agencies (such as World Bank, Asian Development Bank and United Nations) funded development projects are also in progress. The World Bank and ADB play a key role in post-conflict development. Both have generally sound relationships with the government. The World Bank has announced its country partnership strategy (CPS) for 201216, dramatically increasing resources. The CPS aligns with the ADBs long-term strategic framework and Sri Lankas Mahinda Chintana. Several NGOs and INGOs too involved in development projects mainly in north and east. Sri Lankan governments regulate the activities of these organizations tightly and encourage donors to direct their funds through the government rather than NGOs or INGOs.

4.0

ON GOING DEVELOPMENT PROJECTS

The civil conflict and its aftermath has left some womenincluding war widows, around 100,000 homes were destroyed during the conflict, along with other community and productive infrastructure. Inadequate land titles are a serious constraint to resettlement and long-term development. Many regulatory and political impediments to private sector investment remain. The Sri Lankan Governments development priorities, outlined in its national Mahinda ChintanaVision for the Future, include rural development, economic infrastructure, education and health. The governments main focus since the end of the war has been infrastructure. Major infrastructure investments are underway and more are planned, mostly in the southern, northern and eastern province. Government aims to double GDP per capita by 2016. The government policy frame work (Mahinda ChintanaVision for the Future) underpins the following objectives Achieve growth with equity Balanced Growth across provinces Bridging regional disparities Support lagging sectors of production Five Hubs Maritime, Aviation, Energy, Commercial, Knowledge.

The ongoing development projects can be broadly classified in to following categories with respect to their field of operation 1. Poverty reduction. 2. Education. 3. Employment and skills development. 4. Health. 5. Agricultural development. 6. Infrastructure development (Road, Telecommunication, Electricity, Housing, Ports etc...). 7. Tourism. 8. Industrial development. 9. Environment and natural resources. Below is an overview of projects implemented and progressing with respect to each category.

4.1

Poverty Reduction

As stated earlier, the war situation was one of the key factors that has exaggerated poverty; especially in the north and east. The war has contributed directly by the losses of public entitlements and indirectly through the losses of market, livelihood, and civil/social entitlements. Government has launched several medium and long term development programs to address these issues. Public entitlements MagaNeguma, Gama Neguma and Gamidiriya" (village-level). These programs are implemented island wide supplementary to the Nagenahira Naodaya and Uthuru wasanthaya which focuses only the north and eastern region respectively. Market Entitlements Gamidiriya program basically focuses on this area. The scope includes linking villages to the markets and urban centers and grassroots ICT initiatives. Samurdhi poverty alleviation programme was not operational in most of the affected areas during the war. Now the situation has changed and it is in full swing across the country. 4.2 Education

Education of the most of the students of the war affected areas was disrupted due to displacement, loss of family members, psychological impact, loss of school materials and the destruction of the school buildings and infrastructure. Rehabilitation of educational infrastructure is addressed through the Uthuru Wasanthaya and Nagenahira Navodaya Programs. Other than that general infrastructure rehabilitation and development of educational institutes are done by their respective ministries. 4.3 Employment and skill development

Employment opportunities within the country exist within the expected standards. The ongoing development projects and the rapid growth in the economy have created more job opportunities not only in the north and east but also in the other parts of the country. Government is focusing in promoting small scale entrepreneurships through institutions such as Samurdhi Authority and Divinaguma program. Improving of vocational training facilities is also a priority. 4.4 Health

With the end of the war the returned refugees are making a greater demand for health services and the probability of epidemics has risen. The health sector development projects are done through the ministry of health by the government. The ministry of health has taken several steps in recent moths to develop the main hospitals in Jaffna district. Government has allocated more funds (US$3.2 Million) to uplift the health care facilities in the Jaffna district. More funds were

injected to the development of health sector through Uthuru Wasanthaya and Nagenahira Navodaya Programs. 4.5 Agriculture Development

Traditionally, East was considered as the granary of the country. The North and the East are two distinct and important portions of the Sri Lanka's agricultural production that became obliterated by the war for nearly three decades. Agricultural output growth was boosted by the return to production of previously fallowed land with the cessation of fighting. More land was free to farming and start new cultivations. Fisheries sector began to operate freely without the earlier fishing restrictions. Government has done and doing its work for facilitates the agriculture and fishing in north and east to harvest the peace dividends. Government funds were directed to renovate the damaged tanks, canals, irrigation schemes, agriculture service centers and granaries. Apart from that new export based food productions such as large scale Cashew plantations are started with the help of the private sector. To uplift the fisheries industry government is working on to reconstruction of fishing harbors and cold stores. 4.6 Infrastructure Development

Infrastructure development in North and East is an important issue with respect to economic growth of the country and also to improve the livelihood opportunities of the people in the region. Current infrastructure development by the government is done through the programs, Randora (National level infrastructure development), Nagenahira Navodaya and Uthuru Wasanthaya These programs primarily focus on rehabilitation of harbors, Tanks and Roads. Foreign financing for infrastructure has increased remarkably in the post war environment. 75% of 2009s foreign capital inflows were directed towards infrastructure development; such as power generation, port development, and road and bridges construction. Following large scale infrastructure projects and developments are underway in post war Sri Lanka 4.6.1 Connective Infrastructure Internal: Southern Express Way Colombo Outer Circular Highway Colombo Katunayake Expressway Rural road development through Maga Neguma

External 4.6.2 Colombo South Port Mattala International Airport Magampura International Port

Energy Infrastructure Norochcholai Coal Power Plant Sampur Coal Power Plant Upper Kotmale Hydro Power Plant Uma Oya Hydro power Project Wind Power plants at Kalpitiya and Mannar Hydrocarbon exploration in Mannar Basin Vavunia-Kilinochchi and Kilinochchi-Chunnakam Transmission line projects Strengthening of Eastern Grid Strong encouragement on renewable energy projects 90% of Sri Lanka is electrified

4.6.3 Communications/ICT infrastructure Nearly every Sri Lankan has a mobile phone and communication industry leads the service sector in GDP contribution. Government has regulated the industry to have a healthy competition and the country is benefitted with lower telecom rates, island wide coverage and moder communication technology 4.7 Tourism The Government of Sri Lanka envisions building tourism as an industry playing a significant role in the economic advancement of the country whilst preserving the countrys cultural values, ethics and its rich natural endowment in view of the recent policy reforms to develop the competitiveness of the tourism sector in a sustainable manner. Since the end of the conflict in 2009, Sri Lanka is experiencing a steady rise in its tourism arrivals. Sri Lanka recorded a 16.5% Sri Lanka has exhibits its potential as a market for ICT outsourcing.

Year on-Year growth in tourist arrivals for the period from January to mid December 2012 attracting more than 950,000 tourists, outstripping Maldives, a key tourist attraction in the South Asian region. Several tourism infrastructure development projects are in progress in several parts of Sri Lanka. These projects are initiated by Sri Lanka Tourism Development Authority (SLTDA) and Private Sector investors as listed below Dedduwa Lake Resort: The Dedduwa Lake project covering 1,800 hectares of wetland lies to the east of the present Bentota Holiday Resort. Eastern Province Region Development: Due to the liberation of the Eastern Province, SLTDA has set in place a process to fast track the development of Passikudah, Arugambay, Trincomalee, Nilaveli, Waakarai, Verugal and Kalkudah. Kalpitiya Project: Proposed zone situated at Kalpitiya in the Puttalam District of North Western Province. There are 14 Island in the proposed zone. 4.8 Industrial Development

In the current post war environment; there are many opportunities for building higher value industrial potential, attracting better foreign investments and boosting the production of higher income earning exports. The government policy frame work pays special attention on developing small and medium enterprise (SME) sector. North and East have potentially an important contribution to make this regard. Most of the large industrial production facilities are located in the Western Province. However numbers of Export Processing Zones have now been established to enable the expansion off industry to the other region especially to the North and East. Achchuveli Industrial Zone in Jaffna and Kappalthurai Industrial Zone in Trincomalee is two such zones. 4.9 Environment and Natural Resources

Natural resources and environment management frame work was not fully implemented all over the country due to the war situation existed in North and East. Now, the proper regulatory measures are underway through the Ministry of Environment in these areas for pollution prevention and environmental conservation of wildlife, fauna and flora.

7.3

New Development Projects to Be Introduced.

Socio-Economic out look of Sri Lanka is promising but both short and medium terms risks to stability remains. The new development projects shall be introduced to address following issues for better results. The projects must focus more on reduction on poverty levels not only in North East Sri Lanka bur all over the country. Increased investment on human capital is also needed to ensure peoples ability to take advantages of the new opportunities being created, and to prevent the intergenerational transmission of poverty. Investments in education and skills development must be made in a manner that generates skills that are in demand. In addition to replacing infrastructure investments must be made in new technologies and training communities to use them in order to ensure the competitiveness of the market place. In the health care sector government spending and funding has remained static at 1.7%-2% of GDP. Therefore increase of government intervention or private sector involvement in more healthcare service facilities is needed. Public spending in agricultural research as a percentage of agricultural GDP is low. More development in this field is required in order to boost productivity. Introduction of new technology for cultivation, harvesting and post harvesting activities are required. Tourism shall focus on sustainable tourism projects and community based tourism projects. The adverse impact on the social and environmental aspects of tourism will be thus, minimized. When the industrial sector is concerned; programs must focus on building a skilled labor force. Projects seeking industry-research linkages and public-private partnerships for improvement of R&D are also required. The governments policy framework has many programs to address these challenges, but there are some loose ends. Moreover, there is no integrated strategy to address the issues to generate more inclusive growth. These areas need policy attention.