Why donors failed to bring peace to Lanka

SRI LANKA: In the past four years, the international donor community has pledged billions of dollars to Sri Lanka with the aim of promoting peace and economic reform. And a lot of it has already gone into the country's kitty. Yet, aid has not met its objectives.

The necessary preconditions of peace still do not exist and Sri Lanka continues to be perched precariously on the edge of war.

According to studies sponsored by The Asia Foundation, the reason for this failure is that the donors have not addressed the political issues.

The issues, which underlie the conflict are poor governance, an un-accommodative state and political structure, and perceived ethnic and regional grievances.

The donors expected economic inputs and macro level economic reform to trigger political change as desired by the Western world.

But the changes never happened. In some ways, these external inputs even helped reinforce the existing political divide and accentuate the ethnic conflict.

"The development cart has been put before the political horse," say Goodhand, Klem et al, in Aid, Conflict and Peace Building in Sri Lanka 2002-2005 (The Asia Foundation, Colombo, 2005).

"Economic imperatives were never likely to override political and strategic interests in a conflict that is primarily about governance and the nature of the state," they observe.

Differences between donors

However, all international donors cannot be put into the same basket.

There are crucial differences in the way in which the donors have approached Sri Lanka and the issues in it. And the differences in this regard have impacted the international aid effort and its results are very significant.

According to Goodhand and Klem, the first distinction is between the Asian and Western donors, and the second is between big donors like the International Financial Institutions (IFIs) and the smaller bilateral donors.

The Asian donors (principally Japan and India) have been concerned primarily with trade and geo-strategic objectives.

But the Western donors, comprising the US, EU and individual European countries, have had a "menu of concerns" including democratization, human rights and the liberalisation of the economy.

Unlike the Western donors, Japan, India and the IFIs have been apolitical, preferring to work through the government of Sri Lanka rather than seeking other channels to disburse their aid or carry out their projects.

The difference between the large and the small donors is also of importance.

The IFIs and Japan are the largest donors. According to Adam Burke and Anthea Mulakala (Donors and Peace Building-2000-2005, The Asia Foundation, Colombo, 2005) these large donors account for 75 to 80 per cent of the aid flows into Sri Lanka.

And because these large donors have been largely indifferent to the conflict in the island and its social, economic, and political underpinnings, foreign aid has not had a significant impact on the pattern of governance and the peace process.

It is not denied that the post-2000/2001 Sri Lankan and international scenario did bring about a change in the outlook of the previously apolitical or indifferent major aid giving countries and institutions.

The conflict-affected North and East did begin to get substantial aid from the IFIs and Japan.

Tokyo even appointed a Special Peace Envoy (Yasushi Akashi) to tie economic aid to peace building. But the impact has not been commensurate with the expectations.

According to Burke and Mulakala, this is because the ethnic conflict has only been a "secondary factor" in the process of deciding resource transfers from the development banks and Japan.

"Given that these donors represent some 75 to 80 per cent of donor funds, this is significant," they say.

Their plans are based on the theory that greater deregulation and economic openness will eventually remove the "impediment" of ethnic conflict.

The IFIs did strive to bring about policy changes in the government of Sri Lanka towards this end.

But this approach was not founded on a correct appreciation of ground realities and ground level popular concerns.

Oslo and Tokyo conferences

Undoubtedly, there was political awareness among the donors at the top level.

And this was reflected in the decisions taken at the Oslo (December 2002) and Tokyo (June 2003) conferences.

Oslo got the Sri Lankan government and the LTTE to agree to find a "federal" solution within a united Sri Lanka.

But Tokyo was the "high water mark" in the convergence of aid, security matters, and liberal ideological objectives, observe Goodhand and Klem.

USD 4.5 billion was pledged at Tokyo, with the top most donors being Japan, the ADB and World Bank. And they saw to it that political conditions for the delivery of the whopping aid package were put in place.

"Assistance by the donor community must be closely linked to substantial and parallel progress towards fulfilment of the objectives agreed by the parties in Oslo," paragraph 18 of the celebrated Tokyo Declaration said.

The Declaration called for compliance with the Ceasefire Agreement (CFA); participation of the Muslim minority in the talks; promotion and protection of human rights; gender equality; and progress towards a final political settlement.

Economic reform was another key aim of the major donors.

They found the United National Front (UNF) government led by Prime Minister Ranil Wickremesinghe, to be attuned to this objective.

Both the donors and the UNF believed that economic growth through liberalisation and foreign investment would automatically blunt social, economic, ethnic and regional conflicts.

Donors over-play development card

But the UNF regime and the international donors over-played the development card. First of all, the Tokyo conference was held without the LTTE.

The LTTE had withdrawn from the talks process earlier in April 2003, complaining of slow progress and "over internationalisation" of the peace process.

The rebel outfit did not want to give up the option of fighting for total independence, under international donor duress. It also wanted to take on the Sri Lankan government on a footing of strategic equality.

It feared a state shielded by a strategic and economic International Safety Net (ISN), which the UNF was assiduously putting up.

The South too was not happy with the internationalisation of the conflict, albeit for different reasons.

Here, it was felt that the CFA was a Norwegian-inspired sell out to the LTTE. The South feared that in its bid to find a quick fix solution to the conflict, the West might have no compunction about yielding to the separatist demand of the LTTE and dividing the country.

Commenting on the Tokyo declaration and its aftermath, Goodhand and Klem say: "Arguably this was a case of international actors pushing ahead with their own time frames and agendas (encouraged by the UNF government) without taking into account the changed ground situation."

Not surprisingly, the international donors could not implement the Tokyo Declaration.

A popular mood in the South against the peace process as it was going, resulted in the defeat of the pro-peace and pro-donor UNF in a snap election in April 2004.

Power went into the hands of the United People's Freedom Alliance (UPFA), a Sinhala nationalistic grouping which was opposed to almost everything the peace process stood for, including international involvement and the new economic policy.

The UNF government's enthusiasm for radical economic change, as per the Western model, endeared it to the donors no doubt, but it resulted in the government's getting alienated from the masses.

Poverty alleviation

A poverty alleviation scheme called "Samurdhi" was denied to 300,000 recipients; fertiliser subsidies were curtailed; electricity charges were hiked; and efforts were made to restructure the public sector. A major nationalised bank, providing cheap credit to the poor, was to be privatised.

"In the main, these reforms were done by stealth and there was very little public consultation," observe Goodhand and Klem.

As for the LTTE, it too resisted the Western concepts of development administration.

While the donors wanted decentralised decision making, the LTTE was "extremely statist" and "hierarchical".

The donors wanted the North East to enter the globalised market, but there was resistance to this, given its immediate economic costs to the common man there.

Both the South and the LTTE felt that the other was getting pampered by the donors. The donors had only exacerbated existing ethnic tensions.

Goodhand and Klem say that policy formulation did not appear to be conflict sensitive and to adequately take into account the need for balanced assistance to the North East and the South. And the attitude remains the same to this day.

"In spite of the evidence that shock therapy and a growth-first model are politically destabilising, donors do not appear to have changed their thinking on this matter," the authors say.

Political opposition

Between 2002 and 2005, the donors, Sri Lankan regimes and the LTTE did put up proposals for institutionalising the new democratic development and aid utilisation strategies.

But these did not survive or even come into existence, because of underlying political conflicts.

With the backing of the donors, the government and the LTTE set up the Sub-committee on Immediate Humanitarian and Rehabilitation Needs (SIHRN) and the North East Rehabilitation Fund (NERF). But both SIHRN and NERF lacked legal status and the requisite independence, which the LTTE insisted on.

Political opposition in the South to any institutional recognition of the LTTE or to the grant of powers to organisations in which the LTTE was represented, prevented the UNF government from implementing its agenda to co-opt the LTTE into Sri Lanka's administrative structures and wean it away from terrorism, separatism and armed struggle.

Not surprisingly, SIHRN and NERF fell by the way side. Later in mid 2005, the internationally backed and funded post-tsunami rehabilitation organisation for the North East (P-TOMS) also did not come into existence because of political opposition in the South.

Conflict over "normalisation"

The Sri Lankan government and the LTTE had agreed that "normalisation" of life in the North East was a sine qua non for carrying out any political or economic development plans and having any meaningful peace talks. But the definition of normalisation differed, leading to conflict.

For the LTTE, normalisation meant the withdrawal of all kinds of movement and fishing restrictions in the North East; the dismantling of checkpoints and the High Security Zones in Jaffna; and the army's quitting public and private places.

But the state had consistently viewed such demands as being extremely dangerous to its security.

The implementation of every good scheme and thought got stymied by underlying political and strategic considerations, an inherited baggage of fears about each other, and deep anxieties about survival.

Goodhand and Klem wonder if there can be normalisation without addressing the underlying political questions.

"Governance" is key

Goodhand, Klem, Burke and Mulakaka, say that the only way out of the current impasse is for the donors to show greater sensitivity to the political dimensions of the Sri Lankan problem and also to see the issues as stemming from poor governance, basically.

"The root cause of problems currently being experienced - such as uneven development patterns, an ethnicised education system, a lack of minority voice in the political process - can be traced back to the political culture and quality of governance in Sri Lanka," Goodhand and Klem say.

They also point out that donor policies, instead of helping to change the structures to rid them of their maladies, have only reinforced the existing systems. In other words, conflicts have been exacerbated by donor policies.

Some donors like Japan do not think of systemic changes, while others like USAID do, and are addressing governance issues at the grassroots level, with some success.

But again USAID touts the Western model, which may not suit local conditions or meet the requirements in Sri Lanka, the authors argue.

The Asia Foundation researchers also recommend that the donors redefine "civil society" and go beyond interacting with "like-minded" civil society groups mainly located in cosmopolitan Colombo, and include "non-like minded" groups outside the metropolis, so that they get a rounded picture of the ground situation in Sri Lanka.

(The writer is Special Correspondent of Hindustan Times in Sri Lanka)