Features
Prioritize Progress NOT Profits
By Rienzie Wijetilleke
(rienzietwij@gmail.com)
Rural development and self-employment are the most critical issues faced by developing countries. In Sri Lanka, over 80% of the population is considered to be ‘rural’ and significantly, the majority of this population consists of youth. The lives of rural Sri Lankans have not improved or evolved substantially and opportunities for economic advancement are few and far between. Sri Lanka can never attain sustainable development until it improves key indicators amongst its rural population. Crucially, the gap between the richest and the poorest is ever expanding. Rapid and geographically-concentrated urbanization necessarily leads to a polarization of a populace, eventually each segment becomes suspicious of the other, unable to reconcile the values of their counterparts. Many in the working poor and underclass have already begun to notice that the upper middle class might spend more in a night at a restaurant than they may earn as monthly wages. As urban city-centres become beacons of opportunity, the rural countryside slips further into stagnation.
US President JFK wrote that “if the free society cannot help the many who are poor, it cannot save the few who are rich”. This quote was part of my introductory message to the “Gami Pubuduwa” scheme which was launched by our team at HNB all the way back in May 1989 with the explicit purpose of providing the rural community with at least part of the multitude of banking facilities available to the urban community. Our idea at HNB was to complement the uplifting of those living in rural areas, areas that are in dire need of accessible roads, formal education and health services. Credit is perhaps considered a villain in the context of the 2008 financial crisis and the numerous cases of fraud and delinquency. Yet without credit, many of the economic success stories of the past several decades would not have been possible. Upward social mobilization, home-ownership, and entrepreneurship are just some facets of human development that simply would not exist if it were not for the concept of credit.
Throughout history, the rural population of Sri Lanka did not have access to credit or other banking facilities, they were denied opportunities for social advancement. “Gami Pubuduwa” was meant to be a tool to enhance the financial inclusivity of the rural population and to harness the innate talents of the farmers and those with an entrepreneurial mindset. As someone born in a small fishing village close to Hikkaduwa, I understood the challenges: the scheme would need to operate within the cultural and social constraints of the village. To achieve this, the “Gami Pubuduwa” scheme could not be successfully managed as a centralized operation, it required an understanding of the economic and social dynamics at the grassroots level. We invested heavily in field officers who were dubbed “Gami Pubudu Upadeshakas” (GPUs). The GPU would become an integral part of this system and would counteract many of the issues that have been known to plague micro-credit schemes. The GPU would necessarily be involved in social, cultural, religious and educational activities and develop close interpersonal ties with the village. The GPU must be able to identify the entrepreneurial spirit and meet their needs by advising the project, drawing up project proposals and fulfilling the documentation. I wrote in 1995 that the GPU is a multifaceted role; a friend, financier and advisor all in one. During this period the recovery rate of the “Gami Pubuduwa” scheme was 97%.
Some of the criticisms or draw backs of micro-credit are certainly legitimate. A poor household can very easily fall into a debt trap, especially since they may not possess sound financial management skills. Some try to hide expenses and borrow funds for consumption purposes. Some schemes are simply “gini poli” loans window dressed as microfinance schemes, charging exorbitant interest rates that necessarily encourage debt traps. Then there is the phenomenon of the informal intermediary who is usually also from the village but with significantly more access to funds. This intermediary, who will easily qualify for a loan will then redistribute the funds to villagers who are unable to qualify, but do so at high interest rates and thus become the ultimate beneficiary.
The GPU, as part of the “Gami Pubuduwa” scheme, becomes essential to the system for many of the above critiques. The GPU will have knowledge of the local industries in the respective village, thus all facilities will only be approved for projects deemed viable. Whether it is farming or agricultural enterprise or small industry, the feasibility of the project is the foremost consideration. The GPU’s constant presence in the village will also deter the intermediaries. In terms of interest rates, our scheme at HNB always applied an interest rate ceiling to ensure that the loans were not exploitative in anyway. Another important issue is that as these borrowers are outside the traditional credit system, they were not supposed to be entered into the CRIB, which makes it challenging to deter a borrower drawing funds from multiple schemes from different institutions. Once again it is the GPU that must be alive to the situation and as an added protection, borrowers are requested to sign a disclaimer that any additional borrowings will only be initiated following discussions with the GPU. For some of the above restrictions to be lifted, we were lucky to have some broad minded individuals at the regulator who supported this vision. The former Governors of the CBSL; late Neville Karunathilake and A.S. Jayawardena saw the benefits such a scheme would bring to our nation’s economy.
It is also critical to understand that agricultural projects and other pursuits of those in the village are unlikely to pay off immediately. It is not simply a case of ensuring monthly repayment, following up on recoveries and executing a mortgage or reclaiming an asset. In the case of an agricultural project, there could be drought or floods, there may be other external factors that reduce prices on the market or there may be some disease or germ which infects the crop. In such cases, the facility should be rolled over for the next harvest period and not simply classified as a statistic. Another issue for agri-businesses is the restrictive cost of transportation to market places and agri-centres which will then buy the produce from the farmer, often at wholesale prices, thus the farmer has virtually no margin when he deducts the cost of transportation. To counteract this, we tried to establish agricultural centres which would be in closer proximity to villages. These centres would act as collection and distribution hubs which, when scaled, would bring fresh produce to the market efficiently with a cost saving to the farmer.
All of the above challenges show that microfinance is no easy task, if it were, the capitalist model would have certainly ensured vast and rapid growth of microfinance around the world. However the opposite is true: microfinance is complicated, requires resources, patience and a willingness to forego short-term profitability. The various economic activities financed under the scheme aside from cultivation and agri-businesses include handicrafts, fisheries, light engineering, trading, construction material production, horticulture etc. The multiple avenues available provide a pathway to upward social mobilization for the villager as well as the village.
More than a lending scheme, microfinance can inculcate a savings habit and is especially crucial to the development of women in rural areas, to provide them with financial independence and allow them the resources to advance themselves and their families. At one point, we at HNB had gathered a comparatively larger deposit base from the villages than we had envisioned.
The main challenge we face in this journey to uplift rural Sri Lanka is the profit motive. As previously stated, real microfinance cannot be judged by its interest income or interest margin, it has to be judged by other, more qualitative factors. The real rewards are down the road: the inclusion of more Sri Lankans into the financial system creates a stronger and more robust economy. It is not much of a challenge nowadays for banks to lend to large corporates and mega government infrastructure projects. Interest and fee income from trade and working capital facilities are steady and require little grassroots interaction. Microfinance is not the same, it cannot be looked upon as simply ‘finance’. It runs deeper, it requires a more measured approach and the subordination of the profit motive for the sake of the greater good. This will be a major challenge for the private sector, but it is a challenge that if successfully met, can change our economic landscape and bring millions out of poverty and destitution, giving life to the hopes and dreams of the men and women that toil so hard for so little.
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There’s an ill more dangerous and pervasive than the Coronavirus that’s currently sweeping Sri Lanka. That is the fear to express one’s convictions. Across the public sector of the country in particular many persons holding high office are stringently regulating and controlling the voices of their consciences and this bodes ill for all and the country.
The corrupting impact of fear was discussed in this column a couple of weeks ago when dealing with the military coup in Myanmar. It stands to the enduring credit of ousted Myanmarese Head of Government Aung San Suu Kyi that she, perhaps for the first time in the history of modern political thought, singled out fear, and not power, as the principal cause of corruption within the individual; powerful or otherwise.
To be sure, power corrupts but the corrupting impact of fear is graver and more devastating. For instance, the fear in a person holding ministerial office or in a senior public sector official, that he would lose position and power as a result of speaking out his convictions and sincere beliefs on matters of the first importance, would lead to a country’s ills going unaddressed and uncorrected.
Besides, the individual concerned would be devaluing himself in the eyes of all irrevocably and revealing himself to be a person who would be willing to compromise his moral integrity for petty worldly gain or a ‘mess of pottage’. This happens all the while in Lankan public life. Some of those who have wielded and are wielding immense power in Sri Lanka leave very much to be desired from these standards.
It could be said that fear has prevented Sri Lanka from growing in every vital respect over the decades and has earned for itself the notoriety of being a directionless country.
All these ills and more are contained in the current controversy in Sri Lanka over the disposal of the bodies of Covid victims, for example. The Sri Lankan polity has no choice but to abide by scientific advice on this question. Since authorities of the standing of even the WHO have declared that the burial of the bodies of those dying of Covid could not prove to be injurious to the wider public, the Sri Lankan health authorities could go ahead and sanction the burying of the bodies concerned. What’s preventing the local authorities from taking this course since they claim to be on the side of science? Who or what are they fearing? This is the issue that’s crying out to be probed and answered.
Considering the need for absolute truthfulness and honesty on the part of all relevant persons and quarters in matters such as these, the latter have no choice but to resign from their positions if they are prevented from following the dictates of their consciences. If they are firmly convinced that burials could bring no harm, they are obliged to take up the position that burials should be allowed.
If any ‘higher authority’ is preventing them from allowing burials, our ministers and officials are conscience-bound to renounce their positions in protest, rather than behave compromisingly and engage in ‘double think’ and ‘double talk’. By adopting the latter course they are helping none but keeping the country in a state of chronic uncertainty, which is a handy recipe for social instabiliy and division.
In the Sri Lankan context, the failure on the part of the quarters that matter to follow scientific advice on the burials question could result in the aggravation of Islamophobia, or hatred of the practitioners of Islam, in the country. Sri Lanka could do without this latter phobia and hatred on account of its implications for national stability and development. The 30 year war against separatist forces was all about the prevention by military means of ‘nation-breaking’. The disastrous results for Sri Lanka from this war are continuing to weigh it down and are part of the international offensive against Sri Lanka in the UNHCR.
However, Islamophobia is an almost world wide phenomenon. It was greatly strengthened during Donald Trump’s presidential tenure in the US. While in office Trump resorted to the divisive ruling strategy of quite a few populist authoritarian rulers of the South. Essentially, the manoeuvre is to divide and rule by pandering to the racial prejudices of majority communities.
It has happened continually in Sri Lanka. In the initial post-independence years and for several decades after, it was a case of some populist politicians of the South whipping-up anti-Tamil sentiments. Some Tamil politicians did likewise in respect of the majority community. No doubt, both such quarters have done Sri Lanka immeasurable harm. By failing to follow scientific advice on the burial question and by not doing what is right, Sri Lanka’s current authorities are opening themselves to the charge that they are pandering to religious extremists among the majority community.
The murderous, destructive course of action adopted by some extremist sections among Muslim communities world wide, including of course Sri Lanka, has not earned the condemnation it deserves from moderate Muslims who make-up the preponderant majority in the Muslim community. It is up to moderate opinion in the latter collectivity to come out more strongly and persuasively against religious extremists in their midst. It will prove to have a cementing and unifying impact among communities.
It is not sufficiently appreciated by governments in the global South in particular that by voicing for religious and racial unity and by working consistently towards it, they would be strengthening democratic development, which is an essential condition for a country’s growth in all senses.
A ‘divided house’ is doomed to fall; this is the lesson of history. ‘National security’ cannot be had without human security and peaceful living among communities is central to the latter. There cannot be any ‘double talk’ or ‘politically correct’ opinions on this question. Truth and falsehood are the only valid categories of thought and speech.
Those in authority everywhere claiming to be democratic need to adopt a scientific outlook on this issue as well. Studies conducted on plural societies in South Asia, for example, reveal that the promotion of friendly, cordial ties among communities invariably brings about healing among estranged groups and produces social peace. This is the truth that is waiting to be acted upon.
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By Sanjeewa Jayaweera
It was on 3rd January 1972 that our family arrived in Karachi from Moscow. Our departure from Moscow had been delayed for a few weeks due to the military confrontation between Pakistan and India. It ended on 16th December 1971. After that, international flights were not permitted for some time.
The contrast between Moscow and Karachi was unbelievable. First and foremost, Moscow’s temperature was near minus 40 degrees centigrade, while in Karachi, it was sunny and a warm 28 degrees centigrade. However, what struck us most was the extreme warmth with which the airport authorities greeted our family. As my father was a diplomat, we were quickly ushered to the airport’s VIP Lounge. We were in transit on our way to Rawalpindi, the airport serving the capital of Islamabad.
We quickly realized that the word “we are from Sri Lanka” opened all doors just as saying “open sesame” gained entry to Aladdin’s cave! The broad smile, extreme courtesy, and genuine warmth we received from the Pakistani people were unbelievable.
This was all to do with Mrs Sirima Bandaranaike’s decision to allow Pakistani aircraft to land in Colombo to refuel on the way to Dhaka in East Pakistan during the military confrontation between Pakistan and India. It was a brave decision by Mrs Bandaranaike (Mrs B), and the successive governments and Sri Lanka people are still enjoying the fruits of it. Pakistan has been a steadfast and loyal supporter of our country. They have come to our assistance time and again in times of great need when many have turned their back on us. They have indeed been an “all-weather” friend of our country.
Getting back to 1972, I was an early beneficiary of Pakistani people’s love for Sri Lankans. I failed the entrance exam to gain entry to the only English medium school in Islamabad! However, when I met the Principal, along with my father, he said, “Sanjeewa, although you failed the entrance exam, I will this time make an exception as Sri Lankans are our dear friends.” After that, the joke around the family dinner table was that I owed my education in Pakistan to Mrs B!
At school, my brother and I were extended a warm welcome and always greeted “our good friends from Sri Lanka.” I felt when playing cricket for our college; our runs were cheered more loudly than of others.
One particular incident that I remember well was when the Embassy received a telex from the Foreign inistry. It requested that our High Commissioner seek an immediate meeting with the Prime Minister of Pakistan, Mr Zulifikar Ali Bhutto (ZB), and convey a message from Mrs B. The message requested that an urgent shipment of rice be dispatched to Sri Lanka as there would be an imminent rice shortage. As the Ambassador was not in the station, the responsibility devolved on my father.
It usually takes about a week or more to get an audience with the Prime Minister (PM) of a foreign country due to their busy schedule. However, given the urgency, my father spoke to the Foreign Ministry’s Permanent Sectary, who fortunately was our neighbour and sought an urgent appointment. My father received a call from the PM’s secretary around 10 P.M asking him to come over to the PM’s residence. My father met ZB around midnight. ZB was about to retire to bed and, as such, was in his pyjamas and gown enjoying a cigar! He had greeted my father and had asked, “Mr Jayaweera, what can we do for great friend Madam Bandaranaike?. My father conveyed the message from Colombo and quietly mentioned that there would be riots in the country if there is no rice!
ZB had immediately got the Food Commissioner of Pakistan on the line and said, “I want a shipload of rice to be in Colombo within the next 72 hours!” The Food Commissioner reverted within a few minutes, saying that nothing was available and the last export shipment had left the port only a few hours ago to another country. ZB had instructed to turn the ship around and send it to Colombo. This despite protests from the Food Commissioner about terms and conditions of the Letter of Credit prohibiting non-delivery. Sri Lanka got its delivery of rice!
The next was the visit of Mrs B to Pakistan. On arrival in Rawalpindi airport, she was given a hero’s welcome, which Pakistan had previously only offered to President Gaddafi of Libya, who financially backed Pakistan with his oil money. That day, I missed school and accompanied my parents to the airport. On our way, we witnessed thousands of people had gathered by the roadside to welcome Mrs B.
When we walked to the airport’s tarmac, thousands of people were standing in temporary stands waving Sri Lanka and Pakistan flags and chanting “Sri Lanka Pakistan Zindabad.” The noise emanating from the crowd was as loud and passionate as the cheering that the Pakistani cricket team received during a test match. It was electric!
I believe she was only the second head of state given the privilege of addressing both assemblies of Parliament. The other being Gaddafi. There was genuine affection from Mrs B amongst the people of Pakistan.
I always remember the indefatigable efforts of Mr Abdul Haffez Kardar, a cabinet minister and the President of the Pakistan Cricket Board. From around 1973 onwards, he passionately championed Sri Lanka’s cause to be admitted as a full member of the International Cricket Council (ICC) and granted test status. Every year, he would propose at the ICC’s annual meeting, but England and Australia’s veto kept us out until 1981.
I always felt that our Cricket Board made a mistake by not inviting Pakistan to play our inaugural test match. We should have appreciated Mr Kardar and Pakistan’s efforts. In 1974 the Pakistan board invited our team for a tour involving three test matches and a few first-class games. Most of those who played in our first test match was part of that tour, and no doubt gained significant exposure playing against a highly talented Pakistani team.
Several Pakistani greats were part of the Pakistan and India team that played a match soon after the Central Bank bomb in Colombo to prove that it was safe to play cricket in Colombo. It was a magnificent gesture by both Pakistan and India. Our greatest cricket triumph was in Pakistan when we won the World Cup in 1996. I am sure the players and those who watched the match on TV will remember the passionate support our team received that night from the Pakistani crowd. It was like playing at home!
I also recall reading about how the Pakistani government air freighted several Multi Barrell artillery guns and ammunition to Sri Lanka when the A rmy camp in Jaffna was under severe threat from the LTTE. This was even more important than the shipload of rice that ZB sent. This was crucial as most other countries refused to sell arms to our country during the war.
Time and again, Pakistan has steadfastly supported our country’s cause at the UNHCR. No doubt this year, too, their diplomats will work tirelessly to assist our country.
We extend a warm welcome to Mr Imran Khan, the Prime Minister of Pakistan. He is a truly inspirational individual who was undoubtedly an excellent cricketer. Since retirement from cricket, he has decided to get involved in politics, and after several years of patiently building up his support base, he won the last parliamentary elections. I hope that just as much as he galvanized Sri Lankan cricketers, his political journey would act as a catalyst for people like Kumar Sangakkara and Mahela Jayawardene to get involved in politics. Cricket has been called a “gentleman’s game.” Whilst politics is far from it!.
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Believe me, seeing certain videos, on social media, depicting action, on the dance floor, at some of these entertainment venues, got me wondering whether this Coronavirus pandemic is REAL!
To those having a good time, at these particular venues, and, I guess, the management, as well, what the world is experiencing now doesn’t seem to be their concerned.
Obviously, such irresponsible behaviour could create more problems for those who are battling to halt the spread of Covid-19, and the new viriant of Covid, in our part of the world.
The videos, on display, on social media, show certain venues, packed to capacity – with hardly anyone wearing a mask, and social distancing…only a dream..
How can one think of social distancing while gyrating, on a dance floor, that is over crowded!
If this trend continues, it wouldn’t be a surprise if Coronavirus makes its presence felt…at such venues.
And, then, what happens to the entertainment scene, and those involved in this field, especially the musicians? No work, whatsoever!
Lots of countries have closed nightclubs, and venues, where people gather, in order to curtail the spread of this deadly virus that has already claimed the lives of thousands.
Thailand did it and the country is still having lots of restrictions, where entertainment is concerned, and that is probably the reason why Thailand has been able to control the spread of the Coronavirus.
With a population of over 69 million, they have had (so far), a little over 25,000 cases, and 83 deaths, while we, with a population of around 21 million, have over 80,000 cases, and more than 450 deaths.
I’m not saying we should do away with entertainment – totally – but we need to follow a format, connected with the ‘new normal,’ where masks and social distancing are mandatory requirements at these venues. And, dancing, I believe, should be banned, at least temporarily, as one can’t maintain the required social distance, while on the dance floor, especially after drinks.
Police spokesman DIG Ajith Rohana keeps emphasising, on TV, radio, and in the newspapers, the need to adhere to the health regulations, now in force, and that those who fail to do so would be penalised.
He has also stated that plainclothes officers would move around to apprehend such offenders.
Perhaps, he should instruct his officers to pay surprise visits to some of these entertainment venues.
He would certainly have more than a bus load of offenders to be whisked off for PCR/Rapid Antigen tests!
I need to quote what Dr. H.T. Wickremasinghe said in his article, published in The Island of Tuesday, February 16th, 2021:
“…let me conclude, while emphasising the need to continue our general public health measures, such as wearing masks, social distancing, and avoiding crowded gatherings, to reduce the risk of contact with an infected person.
“There is no science to beat common sense.”
But…do some of our folks have this thing called COMMON SENSE!
