15th  June,  2003, Volume 9, Issue 48
















“Utilisation of aid is as important as obtaining aid”

Ronnie De Mel, one of the most seasoned politicians in the country and one time finance minister who has participated and led Sri Lanka to 12 aid group meetings, says the donor conference that was concluded last week in Tokyo was successful to ‘some extent.’ He says any money coming into the country at this juncture would be beneficial. However, he says in the past Sri Lanka has obtained more financial assistance from such donor countries. He says one must not forget that the 1980 US dollar was not the same as the 2003 US dollar. “The rates have changed considerably. With this huge change of rates, in actual fact, I wish to point out that the sum obtained works out to about one billion US dollars per year only,” he told The Sunday Leader in an interview.

Following are excerpts;

By Wilson Gnanadass

Q: The donor conference has just concluded with Sri Lanka receiving a substantial aid package. Do you think it is good for the development of the country?

A: All governments in Sri Lanka have regularly gone to aid consortium meetings and obtained aid for the economic development of the country. I have myself led the Sri Lankan delegation to 12 such aid group meetings, 10 of which were held in Paris and two in Tokyo. Therefore this is not the first aid group meeting held in Tokyo as some people wrongly assume. These aid group meetings are normally under the aegis of the World Bank (WB). The WB regularly holds such meetings for several countries like ours in Asia, Africa and Latin America. What was somewhat special in this meeting was that it was not called by the WB alone but co-sponsored by Japan, USA the EU and the WB. The aid package was about four billion US dollars spread over a four-year period from 2003 to 2006 both years inclusive.

While congratulating Ranil Wickremesinghe in getting considerable aid for Sri Lanka, I wish to point out that the sum obtained works out to about one billion US dollars per year only. In certain years in the period 1977 to 1988 Sri Lanka obtained as much as two billion US dollars and a little over this amount per year both from the aid  consortium  and from certain countries which gave us aid outside the consortium. Also we must not forget that the 1980 US dollar was not the same as the 2003 US dollar. In 1980 the Victoria dam and power station  cost us only 100 million US dollars. Now it cannot be built for even one billion US dollars. The same with the port, airport, Lunugamvehera and many other things we did then. Therefore all these things have relative values and four billion US dollars over four years though a considerable sum does not go all the way that money did in the 1970s and 1980s when we embarked upon the biggest economic progress programme in Sri Lanka’s  history.

Q: Sri Lanka could not utilise some portion of the aid received previously from donor countries properly thus resulting in a lot of money going back to the donors. Now how do you think such money should be utilised?

A: Utilisation of aid is as important as obtaining aid. In the old days Sri Lanka utilised upto 50% of the aid and our utilisation record was among the best in the world. This had dropped to nine per cent in recent times. In my opinion this is entirely due to red  tape, bureaucratic procedures, and unnecessary delays in feasibility studies, technical evaluations  and tendering, and above all to multiplication of ministries, departments and authorities responsible for the ultimate utilisation of the aid received.

In the old days everything was concentrated in the Ministry of Finance and Planning which dealt with the functions of about five ministries today,  in addition to the Ministry of Policy Development which is now under the Prime Minister. Everything was done under one roof in one ministry with a weekly meeting with the President who also summoned any line ministries concerned if there were any delays. The entire machinery of government at that time was conducive to much quicker action with regard to economic development than today. For example the southern express way has now taken more than 12 years and has still not started although all the money is available.

Q: What are your views of the Tokyo declaration and the aims and objectives of the aid conference?

A: I must indeed congratulate the donors on the Tokyo declaration, which in my opinion is an exemplary document. In the midst of all media hype and propaganda eye wash surrounding the aid consortium meeting, the declaration stands out as an excellent document. The donors have very clearly stated the three main aims of giving substantial aid to Sri Lanka. One for peace and the furtherance of the peace process and to bring it to a successful conclusion soon. Two, for  quick economic growth and the creation of jobs. Three,  to reduce poverty in the country. In addition to these the aim which has been clearly stated in the Tokyo declaration,  the reconstruction, rehabilitation and relief to the north and east plays a significant role in the aid consortium objectives. In this connection I would like to point out that although the present government has made a significant and worthwhile contribution to bring about peace in the north east in the last one and a half years, its record in the area of creating jobs and reducing poverty has been dismal.

Q: A common allegation leveled against successive governments is that they don’t utilise the money received from donor countries properly. Why is this?

A: Some of the aid received by Sri Lanka over the years has been properly utilised and has  indeed benefited the country. Our dams, power stations, thermal power plants, ports, airports, telecom, urban development, large irrigation schemes, rehabilitation of plantations, some hospitals, universities  etc., have been built or expanded only because we obtained the necessary foreign aid. At the same time some of the aid has been misused or badly utilised due largely to corruption, lack of transparency and accountability, unsatisfactory planning even above all political interference. For example I obtained all the money for the Lunugamvehera scheme in Hambantota District which should have irrigated 30,000 acres for both seasons and given a satisfactory life to 15,000 farmer families. Due to political interfenrece the dam was cited in a particular political constituency when it should have been cited much higher  up stream. As a result the project has not given the agriculture benefit it should have given. In the same way I obtained all the money for the Nilwala ganga scheme in Matara District which should have prevented all floods and enabled the cultivation of 30,000 acres in that district which gets inundated by floods several times a year.

Q: How do you view the LTTE’s total rejection of all proposals put forward by Prime Minister Ranil Wickremesinghe. Are they indications of a resumption of war?

A: It is very unfortunate that the LTTE has totally rejected the Tokyo proposals. I strongly hope that a way will soon be found for them to come back and the peace process which we all desire. I don’t think this will lead to a resumption of war. Because even the LTTE will realise the futility of such an exercise. A way must be found to bring about reconciliation between their idea of a politico-administrative interim structure and the development oriented interim structure proposed  by the government. After all there was provisions for an interim council in the Indo Lanka Agreement which both Chandrika Kumaratunga and her husband Vijaya supported in 1987. There was similar provision for an interim council and also interim cabinet in the constitution of August 2001 proposed by the PA government and rejected by the UNP. So the interim council idea is not a new thing. And there are various ways of finding a solution if there is a will.

Q: Tamil parties say an interim council could be set up outside the constitution like how the ceasefire agreement was framed for the sake of finding a solution. Do you think it is possible?

A: A ceasefire agreement is something that is quite different from a constitution. No ceasefire agreement anywhere in the world comes within the ambit of the constitution of a country. It is only a temporary military expedient to cease fighting temporarily which may also lead eventually to a permanent peace. It is quite different from a politico-administrative structure like an interim council, which will require a two-thirds majority in parliament in my opinion. Without provoking, annoying and ignoring the President in every way possible the government should make every endeavour to discuss all matters with President Kumaratunga and arrive at a consensus with her in matters of this nature. This is the only way forward to a lasting peace in this land.

Q: Some of the left parties including the main opposition and majority of the Sinhalese in the south charge that Prime Minister Wickremesinghe is trying to divide the country by giving ‘Eelam’ to the Tigers. Do you also subscribe to these sentiments ?

A: I have always been for peace in Sri Lanka. I will never change my stand on this subject. Without peace this country can never go forward economically or in any other way.

Q: As a politician with many years of experience what do you think needs to be done to  bring Sri Lanka a lasting peace?

A: We had a solution in 1987 and it was sabotaged by some of the leaders of our own party, which was the UNP then. President Kumaratunga came very near to a solution and it was again sabotaged by the UNP. This is not in any way an insoluble problem. We can solve this problem without dividing our country. If we do not take this path of peace and reconciliation soon, we may end up by eventually dividing Sri Lanka.

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