By Ameer Ali –
Minister Mangala Samaraweera’s “inherent moral responsibility” to assist struggling debtors, who are principally women, though commendable yet does not go far enough to tackle the main cause of indebtedness. His official observations need be elaborated to emphasise the gravity of the problem. Among the 75,000 women across 12 districts the vast majority are Tamils in the North and East. This is clear evidence that post war rebuilding of these districts has not really rehabilitated war affected families and tackled the underlying poverty and distress of war widows. It is almost a decade since the war ended and a victorious president proudly declared in 2009 that there would be no more Sinhalese or Tamils in the future but only Sri Lankans. Why then are these victimised Sri Lankan women left to become victims again, but this time in the hands of the microfinance companies, and driven to commit suicide? Will the write off of debts to the value of Rs. 100,000 or less solve the fundamental problem of poverty, which of course is not confined to Tamils only? The minister’s is a one off band aid solution and does not guarantee recurrence of debt-driven suicides.
The government’s resolve to tighten the operation of finance companies is admirable, but the cap on interest rate at 35% needs serious reconsideration. It is far too high to borrowers of small scale non-consumption loans. Low fixed term interest over longer period of repayment for small loans should be the way to go about. Finance companies already earn huge profits from large scale business and riskier loans, and they can easily afford to charge low interest on small loans. These loans also should be part of a wider poverty alleviation program in which local councils should be induced to get involved. Small and medium scale income generating projects based on local resources should be developed by local and provincial councils, which should be generously funded by the government. If it wants to attack the systemic poverty resulting from an unrestrained open market then rural based poverty alleviation programs are a must. Sri Lanka still has a large rural sector that needs be developed with involvement of its residents. It is a tragedy that such programs have been neglected and gone out of government attention in the interest of large scale private enterprise, foreign investment and mega projects. Urban poverty is another area that needs a different set of solutions.
Of what use is economic growth if benefits of that growth do not reach people at the bottom layers of society? Suicides are a symptom of the failure of such growth. Take care of the people and GDP will take care of itself. China uplifted hundreds of millions of its citizens above poverty line not through the so called trickle-down effect of the market but through active state intervention.
The debt-driven suicides in Tamil areas is also the reason why at least one Tamil state minster got frustrated at her impotency to do anything while in government and burst out with a politically unpalatable statement of returning to the rebel days. There is nothing to get alarmed and angry about such outburst because it happens everywhere when governments neglect the welfare of its citizens. When for example, Mikhail Gorbachev renounced communism and embraced the Chicago model of capitalism he ended up creating a kleptocracy in Russia, and common people there were so frustrated they wished the return of Joseph Stalin. Also, without no end to the continuing oppression by Israel aren’t some Palestinians wishing for the return of Hitler? These are natural human qualities that need be understood within the relevant context.
What is needed now to prevent unwanted suicides is a series of people oriented small and medium scale development projects funded by the government and supervised by local and regional councils not only in Tamil areas but in every district to help out struggling women and their families. These struggling families also need free medical help and moral advice to give them hope in life and prevent them from resorting to desperate measures.
*Dr. Ameer Ali, School of Business and Governance, Murdoch University, Western Australia