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North crying out for more private investment

Many returning IDPs have used part or in some cases all of a US$225 cash grant to set up small businesses like this one in Puliyankulam south of Kilinochchi
(Amantha Perera/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,” Muttikrishna Saravananthan, lead researcher at the Point Pedro Institute of Development based in the northern city of Jaffna, told IRIN. “If not, the Vanni 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 Vanni District, northern Sri Lanka, an area formerly under 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 Vanni comes from the public sector or donors. “Public administration, defence, and transfer payments from NGOs and bilateral and multilateral donors account for over 80 percent of the local economy. The agriculture, industry and service sectors account for less than 20 percent,” said Saravananthan.

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 revitalization as key to sparking the region’s economy.

Agriculture problems

The UN Office for the Coordination of Humanitarian Affairs (OCHA) said it was a “race against time” to ready the agriculture sector in Vanni 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 percent of total acreage] for cultivation this season [in Kilinochchi District],” said district official, Roopavathi Ketheeswaran.

Given Vanni’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. Ketheswaran said initial plans have been drafted to open a garment factory with private sector funding in Kilinochchi.

While the return to Vanni 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, Saravananthan said.


This article was produced by IRIN News while it was part of the United Nations Office for the Coordination of Humanitarian Affairs. Please send queries on copyright or liability to the UN. For more information: https://shop.un.org/rights-permissions

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