Rural development

It was reported recently that Sri Lanka’s Western Province has a growth rate equal to that of China, which is around nine or ten percent. Indeed, there is a vast disparity between the rate of development of the Western Province and the other provinces.

For decades, Sri Lankan Governments had followed a policy of developing the city at the expense of the village. The result was that rural development stagnated. The rural population had to look on helplessly as the best schools, hospitals, factories, roads were built in the cities.

As Senior Presidential Advisor MP Basil Rajapaksa explained in an interview published in these pages yesterday, the Government of President Mahinda Rajapaksa took a bold decision to change this approach under the Mahinda Chinthana.

Rural development is being given priority, with investors urged to set up their projects in the hinterland. Thousands of villages countrywide are being developed under the Gama Neguma (Village Reawakening) project. Rural roads are being developed under the Maga Neguma (Road Development) project. The aim of these projects is to bring prosperity to the once-neglected village.

Several other policies of the Government are also having an impact on rural development directly and indirectly. The Mathata Thitha program has helped reduce alcoholism in rural areas, making the men productive.

The farmers have received a boost through the fertiliser subsidy, which has led to an increased paddy harvest. The setting up of economic centres has also helped rural farmers.

The Government is also dealing successfully with the biggest problem that stymied overall development: LTTE terrorism. The terrorists are on the verge of being annihilated. Sri Lankans can look forward to real peace for the first time in nearly three decades.

In the long-term, this also means that the war expenditure can be channelled to development. The North and the East which bore the brunt of the conflict should be given priority in this process. It is no secret that both provinces lag far behind even the poorest of the Southern provinces.

‘Colambata Kiri-Apita Kekiri’ (Literal translation- Milk for Colombo, cucumber for the rest of the country) was a popular slogan among frustrated rural youth around two decades ago.

The catchy slogan conveyed the resentment of the rural masses that the best things were given to Colombo while they were neglected.

Fortunately, this picture has changed now, with the emphasis firmly on rural development. Peace will augment this process and lead the whole country towards rapid development.

G20’s role

The global economic crisis has taken its toll on nations rich and poor. The main topic at the G20 Summit (a gathering of both developed and emerging economies) under way in London was how the world should face this unprecedented crisis. Recession was the keyword as leaders of major economies gathered to discuss the grim economic scenario.

Both US President Barack Obama and French President Nicolas Sarkozy have appealed for unity and cooperation among the major economies for responding to this crisis. A global response and North-South cooperation are essential to protect more vulnerable economies from the shock.

The international financial system must be restructured to face challenges of this nature more effectively. Uncontrolled capitalism has clearly failed and State intervention has been sought in many cases to save huge private entities. There should be better regulation of financial markets worldwide. Regulatory authorities, not mega corporations, should have the final word.

The G20 agreed last November on four principles that would guide this response: enhanced coordination and cooperation; the rejection of protectionist measures; the strengthening of regulatory systems in financial markets; and a new global governance.

However, no country has practiced all four measures in reality. For example, protectionist measures are still rampant in rich countries despite the call to end the same. Seventeen of the twenty G20 countries themselves have imposed new trade restrictions since November last year despite pledging not to do so.

This is disastrous for world trade and economic integration in the long run, apart from the damage to poor countries depending on export revenue.

There is also a fear that rich countries will be too busy pumping billions of dollars to rescue their own sagging economies to think about helping developing countries. That will be another blow to the world economy. In fact, in reforming global economic governance, more space must be given to emerging nations in international financial institutions and other world bodies.

There have already been calls to developed countries to raise their level of funding to the IMF so that poorer nations can benefit. If the developed world fails to help the developing world at this juncture, it is highly unlikely that the latter would achieve the Millennium Development Goals by 2015. The world will eagerly await the outcome of the G20 Summit. Only a positive result will allay the fears that the leading economies of the world would fail to address the financial meltdown this time as well.