Macroeconomic approach should govern reconstruction - Don

[TamilNet, January 13, 2005]
Professor V. Nithyanantham of the Dept. of Economics, Jaffna University, talking to TamilNet on the socio-economic setting in NorthEast and problems facing the residents in the post Tsunami period, said that planners should adopt a macro-economic approach to reconstruction taking into account relevant humanitarian and social factors.

Excerpts from the interview follow:

TamilNet: Can you describe briefly the socio-economic setting of Northeast before the Tsunami disaster?

Professor Nithyanantham: The North East consists of eight Districts, namely, Amparai, Batticaloa, Trincomalee, Mullaitivu, Vavuniya, Mannar, Kilinochchi, and Jaffna, with a total area of about 18,860 square kilometers and a population of roughly 2 million.

Maritime resources have a dominant role in the lives of people in the North East. All districts, except Kilinochchi, have coastal borders and fishing and fish-related small industries form a major component of the economy. Although, fishing is included under agriculture along with crops, livestock, and forestry, fishing assumes a special significance in the current post-tsunami context. Yet, the overall importance of the agricultural sector to the North East economy too should not be underestimated. While in the entire Sri Lanka, it contributes about 20% to the GDP, the North East share is around 40%.

TamilNet: What about the industrial sector and its contribution to Northeast economy?

Professor Nithyanantham: At present, the industrial sector contribution to the North East economy is almost nil. The three major industries flour milling, minerals, and paper are located in the East, but they are under the control of Sri Lanka central government. No benefit accrues to the North East from these sectors. Most of the industries that existed in the Northeast have been closed or are shifted to the South. Ruhuna cement and Pelwatte sugar have replaced the Kankesanturai cement and Kantalai sugar. As a result, any industry in the Northeast is small-scale and primarily owner-operated. The growth of a vibrant service sector is usually determined by production needs. When production is largely confined to agriculture, the prime service need has also been agricultural services beginning from input supply to marketing. The under-provision of necessary infrastructural facilities (transport and electricity), financial services (banking and insurance), and social services (health and education) has hampered growth in economic sector.

TamilNet: How about the future economic development of NorthEast?

Professor Nithyanantham: The policy framework governing economic management has always been with the Sinhala dominated government. As a result none of the contributing sectors could grow to its full potential that will result in higher standard of living for the entire people. When people are denied the opportunity of economically linking their lives with the resources surrounding them, they are compelled to look beyond their areas of habitat for economic upliftment and progress. The result has been an outward looking economy, where people had to search for avenues outside their region, giving rise to what is generally known as a 'money-order economy.'

TamilNet: You state that the Tamils were subjected to socio-economic marginalization. Can you elaborate?

Professor Nithyanantham: When ethnic politics gradually became to dominate Sri Lanka Government policy making, not only were the people of the North East completely marginalized and left out of economic policy decisions, but they were also subjected to deliberate discrimination. They couldn't rely on public sector employment and internal retail trade. These have now been steadily monopolized by the majority Sinhala community. The planting of Sinhalese colonists through colonization schemes either by taking over marginal tracts or mass uprooting of Tamils from their villages affected the economic options available to people of the North East. Tamils in the NorthEast, are fast running out of suitable alternatives for economic survival.

The economic marginalization also extended to socio-cultural aspects, which is interwoven with the economics of the Tamil speaking people. Official language act which made Sinhala the official language of Sri Lanka is an example of such ethnic politics.

TamilNet: How does the post- Tsunami reconstruction prospects look like?

Professor Nithyanantham: When one analyses the tsunami impact on the North East, this point of history could be taken as a watershed, because it denotes the beginning of the destruction process of the North East resources. In any situation of war, destruction is inevitable. But, what is significant in the Sri Lankan ethnic war had been how civilian resources were deliberately targeted with the ulterior objective of obliterating the socio-economic power of an entire society. It could, therefore, be even appropriate to dub this course of action as Tsunami-I and the current devastation as Tsunami-II.

Systematic destruction of Northeast resources commenced during the mid-1980s. While the military operations by land, sea, and air inflicted large scale destruction on every conceivable resource in the Northeast, the economic embargo reduced living standards of people to subsistence levels. Resources that escaped the military onslaught were taken over by the armed forces on the pretext of maintaining security. The farmlands and the coastal resources the army occupy directly affect the livelihood of nearly 50% of the population of Northeast. In addition, key infrastructural facilities were completely shut to the public again severely affecting their socio-economic activities. Roads, harbours, and airports came under this category.

In the Northeast the immediate relief stage has been successfully completed and temporary settlement arrangements implemented with speed and efficiency. Our concern here is to highlight long term reconstruction needs leading to overall development of the region.

TamilNet: What about the reconstruction of the Fishing industry?

Professor Nithyanantham: Fisheries sector is the most affected by the disaster. In the entire North East, out of a total of 77,284 fishing families, more than 90% (about 72,945 families) have been very badly affected. In the districts of Amparai, Batticaloa, Trincomalee, Mullaitheevu, and Kilinochchi the destruction has been almost total. 13,698 fishing boats of all types valued at Rs. 3,823 million were completely damaged. Houses belonging to these families have also been fully flattened or damaged beyond repair. Human toll is very heavy reaching nearly one hundred percent in certain villages.

Reconstruction of the fisheries sector is a monumental task and a task of very high priority, in economic and social terms. Notwithstanding the human loss and pain suffered by the fishing community, one striking feature is their desire to return back to fishing. They don't want charity, but require assistance with concessionary loans towards replacement of fishing gear. They readily acknowledged loan facilities previously given by the LTTE and other NGOs towards post-war reconstruction which they were in the process of repaying.

TamilNet: What about the reconstruction of Tsunami destroyed houses?

Professor Nithyanantham: Housing construction should begin without any delay. The objective here is to prevent or minimize any future loss of human lives. There is general agreement among experts that houses should be located beyond 300 meters from the sea shore. But there is marked resistance among fisher families to this suggestion. In some coastal stretches this limit would extremely be difficult to enforce. Houses should be designed not simply to withstand future tsunamis, but other natural disasters like cyclones and floods. Housing experts have to study housing architecture in other countries similarly placed and decide on a suitable plan.

But, in the Sri Lankan context, there could be another intervening factor, namely, the political expectations. The ethnic balance of electorates in the East is a key element. Political impediments in the rebuilding process will likely surface.

TamilNet: What is your advice to planners of reconstruction?

Professor Nithyanantham: Marketing facilities, not only for fishing, but also for other agricultural and industrial products should receive high priority.

Agricultural segments like crops and livestock incurred heavy loss and damage. Paddy fields in the vicinity of the coast have been destroyed by the tidal waves. Ironically, most of these fields were poised for rich harvests after plentiful rains during maha cropping season. Provision of drinking water to the coastal area residents will also be a challenge.

In conclusion, what is required is a clear deviation from conventional approaches to planning and restoration. Popular strategies like 'participatory development' are inappropriate since participants are too traumatized to make any meaningful contribution. It is therefore necessary that the planners take a macro-economic approach and not overlook social or humanitarian issues that affect reconstruction.