Bridging income inequalities, a growing challenge
POVERTY REDUCTION: The outgoing World Bank Country Director Peter Harrold yesterday said that although Sri Lanka's per capita GDP is growing at a reasonable rate much has to be done in order to reduce the gap between the rich and poor and also the regional disparities.
"The growth of per capita income is nothing much to cheer about because the gap between the rich and poor has been growing rapidly. The fact that inequality between urban and rural areas has been also widening with people in rural areas being left out of benefits from economic development is also a cause for concern," Peter Harrold said.
Addressing the media in Colombo yesterday Harrold also said that statistics show that during the 12 years starting from 1990 and 2002 per capita consumption increased by 29% in real terms.
"The disturbing factor is that the average consumption for the richest 20% of the population increased by 50%, while that for the poorest 20% barely increased by 2%.
Almost all of the growth during this period occurred only in the Western Province. The rest of the country, which is mainly rural, remained virtually stagnated," Harrold said.
According to statistics the country's per capita GDP is currently estimated at around US$1,030. During the last 20 years the country's per-capita GDP grew at over 3 percent a year.
However, about 23% of the population still live under the national poverty line. Disparity between Western province and other regions has also widened during this period. The Western Province's share of GDP went from 40 to 50 percent in the 1990s while the development of other provinces stagnated.
Harrold also said that although peace is vital for development it should not be ignored that eradicating rural poverty is also of equal importance to achieve long lasting peace.
"We cannot satisfy ourselves by saying that we have achieved a better rate of economic growth or the per capita income growth. If the number of poor is rising it can be a major obstacle in achieving peace," he said.
He said that the World Bank's poverty reduction programme will be implemented in harmony with the development programme proposed under the Mahinda Chinthana.
Naoko Ishii, who will be assuming the role of World Bank Country Director for Sri Lanka from September 1 said that one of her priorities will be to guide the country team in formulating a new results-based Country Assistance Strategy.
"Our main objective is to help Sri Lanka to reduce poverty and ensure a faster economic growth. We will be supporting the Government's development initiative to reduce imbalances in income," she said.
Ishii, a Japanese national, has been a Director in the Japanese Ministry of Finance since 2002 where she has been responsible for working on Japanese policy on development assistance, including policies pertaining to multilateral development institutions.
She said her other priorities will be to support the Government in strengthening donor harmonisation efforts and to lead the Bank's efforts in assisting the country's tsunami and conflict related reconstruction activities.
BoC micro credit scheme, a boon to Horana's unemployed youth
YOUTH EMPOWERMENT SCHEME: Under the 'Micro Credit Scheme' of the Bank of Ceylon, Horana Branch in 2006 more than Rs. 7.5 million has been released among unemployed youth in Horana, Ingiriya and Madurawala Secretariat Divisions for self-employment ventures.
During the past few months 150 self-employment projects have been initiated under this scheme.
Manager of BoC Horana Branch B. R. Kularatne told Daily News that under the new scheme, many new project proposals were submitted by youth in the area, and many of them had been approved. Credit facilities had been granted to start or continue their projects. Most of them were given a loan of Rs. 50,000 at the initial stage, and progress reports showed they had been running their projects successfully.
Recently mediamen were able to inspect some of the projects being carried out in Horana area with the credit facilities released by BoC (Bank of Ceylon) under its Micro credit scheme.
Manager, Horana Branch (BoC) B. R. Kularatna, Credit Officer Hurburt Perera joined in the tour.
There are many creative, talented, skilful youth in rural areas who can't stand their own feet as they are economically handicapped with no one to assist them. So the micro credit scheme that supported many of them have showed marvellous development and they are conducting their small workshops successfully without much fanfare.
According to project and credit officer BoC Horana Branch Hurbert Perera, some of the projects carried out are ornamental fish breeding, animal husbandry, running of small bakeries, minor trading, beauty culture and motor cycle repair centres.
One such is Nirodha Lakmalee of Wewala, Horana running an electrical workshop with her husband. Their job is to produce decorations with LED bulbs for vehicles and houses.
She said, "We started this shop in a small way with my husband. We create various designs using pictures of Lord Buddha, Jesus Christ, Gods and scenes with LED bulbs and other bulbs.
After we received a loan from the Bank of Ceylon, we expanded it. Rented a room at Wewala bought everything we required. Now we produce attractive designs with electric circuits sales are brisk. 'Monthly we get a sales orders for Rs. 50,000 and earn a profit of around Rs. 18,000. 'During Vesak season we had a good sale.
We expect to expand our industry in future. Her face showed a bright future before them."Gayan Sanjeewa of Galabodawatta, Mahena, Horana is a 19 year old youth running 'Sanjeeva Rubber Industries' in a small room sheltered with galvernised sheets.
He looks after his father and brother. He had made up his mind to start a self-employment venture to work without yielding to anybody. So he has started a small workshop of his own to produce items like rubber bushes, rings, and other items for motor cycles.
He says, "I started this workshop with a machine. I made the machine, I produce spare parts and items made of rubber used for motorcycles. When I buy a sheet of rubber worth Rs. 8,000 from the Industrial Development Board (IDB).
He can produce rubber spare parts worth more than Rs. 40,000. A rubber bush or a ring is sold for Rs. 4.00 but shop owners sell it for Rs. 20 saying imported items.
I have no problem in selling. There is a great demand. Monthly sales are good and I receive an income of Rs. 20,000 a month." I expect to expand this and train two youth."
Vajira Nishantha of Poruwadanda, Horana is a youth who is running a cushion workshop 'Vajira Cushion Works' of his own. After obtaining a loan from BoC the under Micro Credit scheme, he had developed his workshop.
He cushions vans, cars, buses and three wheelers.
Though it seems a tiring job it is interesting for him and his wife. He says:
"First I got to this job in a small way. Now I have my work shop. My wife helps me. I can cushion two or three, three wheelers a day, a van takes one day, my charges are not high. I can complete cushioning a van around Rs. 16,000. It changes according to the materials used. Two boys work under him.
The credit from BOC helped me to purchase machines and materials needed.
Actually this is a good job. I can earn around Rs, 25,000 a month leaving all expenses. If financial assistance is given I can expand. Vehicle owners from Colombo, Kelaniya, Piliyandala come to his workshop to get their vehicles cushioned.
R. D. Liyanage, of Mapatuna, Bellapitiya, Horana is a brassware producer. After he left his government job he has taken to production of brasswares as he has gained brassware technology from his father in Kandy.
He says, 'I started this industry in my home. I have put up a temporary shed and set up the oven. After I got the loan from the Bank of Ceylon. I purchased necessary raw materials, equipment and other necessary things. My main problem is finding raw materials.
Today a killo of brass is Rs. 250. After heating raw materials at a temperature of 1500 degrees, brass melt. Then I pour the liquidated brass mixture into moulds. I produce brass elephants as there is great a demand for them from tourists.
I sell my production to Colombo and Kandy shops. This is an industry that earns exchange. Therefore small scale brassware producers should be helped by the government by providing raw materials at a fair rate. My monthly income is around Rs. 50,000 and I earn about Rs. 20,000 a month. There is one youth to assist me."
Helan Chinthaka (25) of Manana, Poruwadanda has started a new venture. That is the bottling of drinking water. His workshop is close to his house.
He had started this project with a capital of Rs. 200,000.
This is also a loan. After I received the loan from BoC I improved it with necessary plants.
He gets pure drinking water from a deep well from his garden.
Water is pumped into the workshop after purifying, water is bottled through machines.
The trade name of his business is Dumbara. His products are sold in Hambantota, Moneragala, Dambulla and many other areas.
'Although pure water is obtained free, the process of bottling of water and transporting from here to far away places incur much money. We don't charge money for water but the other expenses.
'Eight others work in the centre. Each is paid 3,000 a month. I am satisfied with this new industry. I am able to earn a profit of around Rs. 25,000 a month. At present the sale is on the increase. When we think of these hard working youth, they try their level best to find their living carrying out a remarkable service to the people and to the national economy'.
Rs. 9 billion worth fruits, vegetables go waste
HARVEST LOSS: The country's post harvest loss of fruits and vegetables is more than Rs. nine billion per year due to the absence of proper value-added methods and a stagnant food development technology, industry sources said.
This Rs. nine billion waste is equivalent to 40 per cent of the total fruit and vegetable output in the country. This ultimately impacts the local farmers and consumers, who have to pay through their noses, President of the National Task Force for Minimisation of Post Harvest Losses, Harsha Karunaratna told the Daily News.
He said that at present more than 10 post harvest units in the country are not effective due to the funding problem. Further, the packaging cost is also quite high with the absence of proper incentives from the Government for the purpose of minimizing the post harvest losses in the country.
Karunaratne said that this sector has enormous potential for local and foreign investment if the Government addresses said requirements for the fruit and vegetable industry. Further, the Government should provide proper incentives for packaging industry when transporting them.
When transporting food and vegetable from one end to another they go waste, which needs to be addressed soon to minimise the loss or waste.
Consultant to the Minister of Agriculture Dr. Gerry Jayawardena said that the lack of awareness from farm-gate level to consumers' level resulted in this loss.
He said that our farmers are adopting bad practices when handling their produce due to the lack of awareness and the Government is now in the right direction to popularize best practices.
Director, Agrarian Research Station, Tellijjawila, Dr. Sujatha Weerasinghe said that there is no well-planned mechanism to promote post harvest concepts for the sector, which are developed by the Agriculture Department.
She said that their department has developed many concepts to minimise post harvest losses in especially food and vegetables but no resources to promote them among farmers through farmer organisations.
Dr. Weerasinghe said they are in the process of encouraging people to use different methods of minimising post-harvest waste including movable racks, craters, scientifically developed banana leaves when transporting fruits and vegetables.
Director, Institute of Post Harvest Technology in Anuradhapura Dr. K.B. Palipana said that they have done a loss assessment study to quantify the losses, which are approximately 30 per cent to 40 per cent.
Under the survey they have found that of the total post harvest waste 25 per cent is due to improper packaging system and transportation methods, he said.
As a solution to this the Government has identified the problem and is now in the process of introducing plastic crates at a subsidized price for farmers who are involved in fruits and vegetable cultivation in the country.
According to Dr. Palipana more than 100,000 plastic crates are to be distributed among fruit and vegetable farmers before the end of this year. The total crates requirement for fruit and vegetable sector is 350,000.
Victims still in camps
One and a half years after the tsunami, more than 4500 affected families in Galle district are still to get permanent houses and are therefore languishing in refugee camps.
The refugees have appealed to those authorities to give them houses as early as possible as they have gone through much misery already.
There was immense loss of life and property caused by the tsunami in the divisional secretariat areas of Hikkaduwa, Balapitiya, Ambalangoda, Bentota, Habaraduwa and Galle Gravets. As many as 10,360 families in the Hikkaduwa Pradeshiya Sabha area were affected and more than 3000 houses were destroyed, while over 2000 perished in the train tragedy at Peraliya.
The Galle district restoration and development unit has estimated that over 14,650 houses have to be built to house the tsunami displaced. However, only 1157 houses were built with benefactors’ funds which poured in, in the wake of the disaster while 482 more houses are in the final stages of construction. Construction is proceeding on another 1380 houses with donations provided by benefactors.
In Galle district alone 6083 houses were partially damaged and work on 5722 of them has been completed with the Rs. 100,000 grant for each house given by the State. 2419 houses completely destroyed are to be repaired by owners themselves for which the State is giving a grant of Rs. 250,000 each in four stages.
The first instalment of Rs. 50,000 has been issued to 2,419 builders while the second instalment of Rs. 60,000 has been issued to 2,220 builders and the third instalment of Rs. 80,000 rupees issued to 2,008 builders.