Global funding for development

President Mahinda Rajapaksa has once again made it quite clear that Sri Lanka’s friends in the international community are with the Government as it seeks to destroy terrorism and develop the country.

Contrary to claims by anti-Government elements that foreign funding for Sri Lanka has dried up under the UPFA Government, President Rajapaksa, addressing a rally in Polonnaruwa, has said that Sri Lanka was receiving more funds for its development.

While the ideal goal would be to utilise our own funds for development, it is not always possible due to economic constraints. Some development projects do need foreign funds and expertise. There is nothing wrong in seeking and utilising foreign aid as long as Sri Lankans benefit in the end.

Yet one of the main complaints of our donor countries and lending agencies is that our rate of aid utilisation is low compared to that of many other countries in the region. This issue deserves serious consideration by the Government.

It is also apparent that more countries are granting assistance to Sri Lanka, apart from the traditional Western donor countries and agencies. Iran and China, for instance, have granted billions of Dollars for Sri Lanka recently.

Moreover, these countries have not attached any preconditions such as human rights to their funding, which is a usual factor with Western countries and agencies.

This does not mean that Sri Lanka overlooks the traditional sources of funding. It was just a few months ago that the World Bank approved a US$ 900 million Country Assistance Strategy funding for Sri Lanka, which will be in line with the Government’s 10-year Mahinda Chinthana policy framework.

The USAID is helping to upgrade fisheries harbours through the island. France has helped rehabilitate the Trincomalee-Batticaloa road while Japan is engaged in many multi-million Yen development projects here.

All these countries and donor agencies have expressed their confidence in the Government’s development plans and policies. There is also widespread support for the anti-terror drive, as exemplified by the tough action taken by many countries against LTTE operatives on their soil.

The European Union will shortly assess Sri Lanka’s eligibility to receive the GSP Plus concessions, a lifeline for the garments industry.

The Supreme Court has ruled that Sri Lanka complies with all Human Rights and other conventions required by the EU and Lankan officials are confident that Sri Lanka would see the extension of the facility.

However, Sri Lanka cannot expect to depend totally on foreign aid in the long term as we are no longer a low income country. As countries move up the ladder towards the fully developed state and as the Per Capita Income rises, donors gradually curtail funding.

We must face this challenge. There is thus a need to identify the most urgent projects that have to be completed using foreign funds. Where possible, the authorities should use local funds, as in the case of Moragahakanda. Joint ventures and projects with foreign collaboration, as opposed to direct aid, should also be contemplated.

Even if a project is completely foreign funded, it is vital to infuse local expertise into the design and building stages so that Sri Lanka would gain in more ways than one.

Sri Lanka should follow the motto ‘trade not aid’. Enhanced exports do boost a nation’s economy and the funds thus acquired can be chanelled for development. There has been a surge in exports this year, which has helped the economy in no small measure.

The employment of skilled Lankans abroad is also helping to drive foreign remittances up, strengthening the economy.

Many may hate the term globalisation, but it is an inevitable process. No country can exist in isolation. Countries which hitherto followed a closed economy have now opened their doors to the world.

We need foreign expertise and funding in addition to trade to make our development plans a reality.

With troops knocking on Tiger strongholds, the one other factor that has been impeding Lanka’s development may no longer be in the picture in the near future. The total elimination of terrorism will augur well for the country.

Peace will indeed accelerate Lanka’s development and spur the international community to assist us with more enthusiasm.