In this column, my articles have drawn attention to the failure of reconstruction and the escalating problem of indebtedness in the post-war North. My understanding of the economy of the East is limited to insights gained through periodic visits, which suggest that the dynamics of the economy may be quite different. Given my limited engagement in the East, my comments here are tentative.
The message from a cross section of people from the District Secretariats, co-operatives, women’s groups, NGOs and academia from Batticaloa, Amparai and Trincomalee, where I spent some time recently, is that the economic situation in the East is dire. Driving along the beautiful lagoons, lush green paddy fields, pastures, and fishing villages of the Eastern Province, however, it is hard to understand why such a resource rich region has such high levels of poverty.
The political economy of the East may be understood in relation to its troubled history. The East has been subject to many narrow political agendas. Its Tamil population was dominated by the Jaffna Tamils in academia, administration and politics. Successive governments in Colombo manipulated the East to strengthen their political base, leading to gerrymandering and the carving out of ethnic enclaves. The LTTE and its violence against the Muslim community, as well as counter violence with state backing, have left deep ethnic fissures that continue to this day. More recently, the East has been sadly neglected in post-war development efforts.
Paddy, milk and fish
As with much of rural Sri Lanka, the major sectors in the East are agriculture, livestock and fisheries. The Eastern Province is a major producer of paddy in the country, only matched by the North Central Province. According to Economic and Social Statistics of Sri Lanka 2017, annually, the East produces close to a quarter of total national paddy production. In 2016, out of a total of 4.4 million metric tons of paddy produced in the country, the East accounted for 1.1 million MT. However, only a minuscule amount of that paddy can be stored in the East, which means farmers cannot get a higher price by selling the paddy a few months after harvest. Furthermore, there are hardly any rice mills to create additional employment and increase incomes.
"Paduvankarai area is consisting of six Divisional Secretariat areas is subject to mass displacement and resettlement – is one such region with a very high incidence of poverty"
Similarly, with respect to milk production, over a fifth of the cows in the country are in the Eastern Province totalling to 200,000 cows out of a national total of 945,000. However, when it comes to average daily milk production, only a mere 92,000 litres or approximately 10% of the total daily milk production in the country of 883,000 litres comes from the East. Worse, there is very little value addition in terms of milk processing in the Eastern Province, as the milk is mainly collected and sent for processing in other regions. Thus investment in the dairy sector, both to increase yields and for processing into various dairy products is a critical need. The same is true of fisheries, where almost a fifth of fish production comes from the Eastern Province, but officials claim the fishing communities have not advanced much and incomes remain low for fishing households.
These rural sectors have historically been neglected by policymakers all over Sri Lanka, but the situation in the East, relative to other provinces, is worse. Clearly, a region that produces such large quantities of rice, milk and fish should not have such high levels of poverty and malnutrition.
Prevalence of poverty and indebtedness
The poverty headcount in the Eastern Province is a worrying 7.3%, and only second to the Northern Province with 7.7%. Notably, in Batticaloa and Trincomalee, the poverty head count is in the double digits at 11.3% and 10.0%, respectively (Household Income and Expenditure Survey 2016). While absolute poverty levels are high,according to some officials, there are pockets of resettled and other peripheral regions in Batticaloa, Amparai and Trincomalee, where estimated poverty headcount levels are possibly as high as 45%.
The Paduvankarai area of Batticaloa, which is the western part of the lagoon consisting of six Divisional Secretariat areas – formerly controlled by the LTTE and subject to mass displacement and resettlement – is one such region with a very high incidence of poverty. The numbers of children out of school and levels of malnutrition are known to be highest in the region. The war having ended in the East in 2007, the plight of the residents of areas like Paduvankarai is, for the most part, forgotten in development efforts. Research as well development initiatives to uplift the socio-economic situation of formerly displaced and resettled communities is urgently needed.
It’s hard to understand why such a resource-rich region has such high levels of poverty
Rural sectors were historically neglected by policy makers all over Sri Lanka
Poverty headcount in the East is 7.3%; only second to the North with 7.7%
The Eastern Province, and particularly rural Batticaloa, is caught in a crisis of indebtedness. Predatory micro-finance schemes charging massive interest rates have resulted in the out migration of women to work in the gulf countries and even families selling their houses to repay loans. According to women’s groups in the East, the rates of suicide and attempted suicide are on the rise. Even the Muslim community that normally avoids interest bearing loans considered to be usury, has seen more desperate households get entrapped in micro-finance schemes. Poverty and indebtedness seem to go hand in hand, with exploitative micro-finance companies targeting the poor to exploit what
little they own.
Inclusive development and co-existence
The Eastern Provincial Council, unlike the Northern Provincial Council, has shown a keen interest in development over the last decade. However, resources for such development have been meagre. Furthermore, partisan politics in the Eastern Province has created fissures between communities, undermining broader development of the region, as political actors cater to their narrow political bases.
In the post-war years, the Central Government and international donor agencies have neglected rural development in the Eastern Province. In the national budget for 2018, for example, there is sizeable investment for rural development in the North, but there is little for the East. Given the dire economic situation in the East, greater resources towards programs of rural rejuvenation, and sectors such as agriculture, livestock and fisheries,are a major need.
"The rural Batticaloa, is caught in a crisis of indebtedness. Predatory micro-finance schemes charging massive interest rates drove women to seek employment in the gulf countries"
A shrinking economic pie is also a site for dangerous opportunistic forces seeking to create ethnic animosity. The recent spurt of anti-Muslim violence originated in Amparai, before it spread to Kandy, and created a climate of fear for the Muslim community all over the country. In a predominantly Hindu school in Trincomalee, moves to restrict Muslim female teachers wearing the Abhaya led to virulent ethno-religious rhetoric spreading across the country and undermining Muslim-Tamil relations.
Politically, there is perhaps no province that is as important when it comes to transforming inter-ethnic relations in the country as it is the only province with more or less equal proportions of Muslims, Tamils and Sinhalese. The ethnic, religious and linguistic diversity in the East are also its strengths; the educated younger generations are bilingual or tri-lingual, and have the potential to work in other parts of the country. Economic development alone is not a precondition for rebuilding inter-ethnic relations. However, equitable development initiatives along with social mobilisation can contribute towards co-existence. If the East can succeed with meaningful and inclusive development, then it may set a path of pluralism for the rest of the country.