20 May, 2019

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Role Of NPC In The Economic Development Of The North

By S. Thavarajah

S. Thavarajah

S. Thavarajah

Before I delve into the subject matter given to me to address today i.e. “Role of Northern Provincial Council (NPC) in the Economic Development of the North”, let me first look into what is meant by Economic Development. Economic Growth is often misconstrued as Economic Development. Economic Growth is measured in terms of increase in Gross Domestic Product (GDP) or Gross National Product (GNP) and in terms of increase in GDP or GNP per capita, means per person.

Whereas, Economic Development is a policy intervention endeavour for economic and social well-being of the people. It is really the growth of the standard of living of the people of a country. Its scope includes the process and policies by which a country improves the economic and social well-being of its people. In fact, Economic Growth is only one aspect of the process of Economic Development.

Economic Development is measured in terms of ‘Human Development Indicators (HDI)”. The UNDP in 1990 introduced the indicators for measuring the HDI. Number of items such as Education, Poverty, access to Technology etc. is listed by the UNDP as the measure of HDI.

For example the economic growth or for that matter the GDP of China and India are much higher than Singapore, New Zealand and Belgium. But in terms of Economic Development or HDI it is vice-verse.

Having said that let me now look into the factors that influence the Economic Development of a country. Any text book on economy would reveal that access to capital, availability of natural resources, conditions of foreign trade, political system, economic policies/system adopted by the Government, availability of human resources including skills and technical know-how etc. are the factors that contribute towards the Economic Development of a country.

But here we are not talking about a country; we are only talking about an entity within the country. NPC is an entity created under the 13th amendment with limited powers. 13th amendment is intended to grant devolution of powers to provinces, but in reality it is delegation of powers. It has very limited financial resources. It depends on annual Government grant.

For example, if we look at the National Budget for the year 2015 the total Recurrent Expenditure of the Government is Rs. 1,547,910 million, out of which the allocation to all the nine provincial councils is Rs. 189,600 million which amounts to 12.24 percentage of the total expenditure. Similarly the total Capital Expenditure is Rs. 1,857,090 million, out of which the allocation to all the nine provincial councils is Rs. 34,077 which amounts to 1.83 percentage of the total expenditure.

What the NPC gets is only a share out of the allocation to all the provinces. What has been allocated to NPC for the year 2015 is Rs.15,123 million for recurrent expenditure and Rs. 5,288 million for capital expenditure. This sum is not granted as a lump sum; instead the amount to each type of expenditure is specified. Even the allocation to Capital Expenditure is categorized and the amount specified which is termed as “Provincial Specific Development Grant”. For example under the allocation to health department even the amount to be spent on buildings repair will be specified. The Provincial Council is only to decide the hospitals to which the repairs to be effected.

The Indian constitution provides for the Finance Commission to recommend the sharing of the revenue between the Centre and the States and amongst the States. Instead, the 13th amendment provides for the Finance Commission to recommend for the sharing amongst the provinces of the money allocated by the Government. Allocating the money to the Provincial councils is the sole discretion of the centre. This is one of the main flaws in the 13th amendment.

Before I come to the core issue, that is role of NPC in this endeavour, let me look at some prevailing conditions in the North. Politicians claim that there are about 40,000 war widows in the North alone. But according to the official NPC website there are only 7,235 war widows. In the G.C.E. (A/L) exam results, out of nine Provinces, it is in the 8th rank (Audience interrupted and said now it is in the 9th place). Every year about 18,000 students are sitting for G.C.E. (O/L) exam from the North out of which only about 60 % qualify for GCE (A/L), leaving about 8,000 students out of school. Similarly annually about 16,000 students sit for G.C.E. (A/L) exam and only about 10% enter the University. Out of the 16,000 students 60% are arts students, 20% are science students and 20% are commerce students

With all these limitations and prevailing conditions is it possible for the NPC to carry out Economic Development? My answer to this question is yes.

Some say because the Government didn’t permit the NPC to create Chief Ministers fund the NPC is unable to carryout development activities. It is not possible to carry out economic development by having a Chief Ministers fund. It could be used only for granting some social benefit and to showcase that we are helping people. It is similar to that of Presidents fund.

I would like to recall what I said at the beginning of my address. Economic Development is a policy intervention endeavour. The NPC can do it if they have the courage, wisdom and willingness.
The war has brought us immense sufferings, loss of life, destruction of property, untold hardships etc. At the same it has also done a good thing.

Today the population of the Northern Province is about 1.2 million. Closer to that number, about 800,000 Tamil migrants and their descendants are living in Western countries. Most of them are doing very well in their country of domicile.

I was living in London some years ago. One morning I saw in the Guardian news paper that a company owned by Sri Lanka Tamil has donated one million pounds for the election campaign of conservative party led by David Cameron. I am only citing this is an example.

Every one of us knows that the Diaspora was funding the war machinery earlier. How can we make use of them for the economic development of our region?

We have already created a fear psychosis that any investment in the North will be taken over by the Government. First of all the NPC has to take initiative to clear that fear psychosis.

Secondary, the NPC has to identify the projects for which investments are possible. For such endeavour it must have a data base. They don’t have a date base. As I said earlier they don’t have even a proper data on the war widows.

JAICA representatives met me sometime ago and asked me as to what they should do for the NPC. I suggested them to help the NPC to establish a data base. Data base is essential for economic planning.

As a next step, they should identify the projects for investment. A month ago Tamil Nadu Chief Minister conducted a seminar for investors. About 4,000 possible investors participated in the seminar. Her speech at the seminar was very inspiring. She said during the course of her speech that the Tamil Nadu Government has identified 217 projects for investment and already they have found investors for 84 projects and that she was looking for investors for the balance projects. Everything was on the mat for the investors to chose.

The NPC should embark on such mega drive. They should not confine only to inviting Diaspora for investment. They must aggressively campaign amongst diplomatic community and possible foreign investors. Chinese companies have recently signed an agreement for mega investment in Bihar due to high cost of labour in China.

There are no many Government regulations for investors to invest. The NPC should establish a facilitation office to assist the investors. There are 2,718 functional BOI approved companies in Sri Lanka. All these companies have followed the Government procedure.

Our people living in Western countries have no time to identify possible areas of investment and to go through the Government procedure. If the NPC could identify projects and take responsibility to do facilitation then they would consider investing.

In the meantime, NPC should also assess the man power requirement of varied categories for the projects identified and request the Govt. and private institutions to focus on producing such category of qualified people.

All what I have said could be done without spending any money. Under the NPC there are 31,027 employees, out of which 968 are at senior level. Why can’t the NPC make use of these 968 staff innovatively? What is needed is human endeavor. The NPC can achieve this if the available manpower and the resources are utilized in a creative and fruitful manner.

To achieve this we have to have cordial relationship with the Government, Diplomatic communities, International Agencies etc. The NPC has strained relationship with the Government and its relationship with the International Agencies, particularly with the UN is painful. In these circumstances how can the NPC move forward?

Thank you.

*S. Thavarajah, Leader of Opposition – Northern Provincial Council. Speech delivered at the Jaffna Managers Forum on the “Role of Northern Provincial Council (NPC) in the Economic Development of the North” on 1st November 2015.

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Latest comments

  • 5
    1

    Please talk first about your personal economic development. [Edited out]

  • 2
    2

    Thavarajah
    Thanks for posting some data on NPC:
    ”NPC has to identify the projects for which investments are possible. For such endeavour it must have a data base. They don’t have a date base. As I said earlier they don’t have even a proper data on the war widows.”

    • 1
      0

      1.Recently I was told by the Chief Minister’s office that the website is administered by the Governor’ssecretariat.
      So the choice of the number of war widows is that of the Governor’s sercretariat?

      2.Does any province other than NPC receive ”Provincial specific Development Grant” ?

      • 1
        0

        ”Delegation of power” = ”development” specified by the central govt destroys environment – go and see it in Karainagar:

        an unwanted Cultural Hall was built inside the rain-water collecting bund.

        • 0
          0

          Punitham,

          “an unwanted Cultural Hall was built inside the rain-water collecting bund.”

          Maybe the hall is the only place on Karainagar with good drinking water?

      • 0
        0

        So out of the allocation to the provinces, NPC receives
        i. 6.4% of the Capital Expenditure and
        ii. 8% of the Recurrent Expenditure

  • 6
    2

    Thavarajah
    You say there is a fear psychosis created among diaspora investors from investing in the North which may be correct, But how will the NPC be able to convince such investors when it is hampered by the government’s requirement to first comply with it’s own dictates like for instance the right to identify which project is best to be developed, how it is to be done etc. etc. The diaspora investors know that the NPC has no power to veto any such bad government decisions or plans and that is why they are wary of making investments.
    You are comparing the Tamil Nadu CM conducting a seminar for investors but do you sincerely believe that the NPC CM will be permitted to invite investors from among the foreign let alone Tamil diaspora to invest when they are perceived as anti national and unpatriotic? What safeguard is there for them or their capital for them to venture on a project thee in the North.

  • 3
    2

    Another avenue for attracting investors might be to seek them from within Sri Lanka – the other provinces. Believe you me, there are quite a few very wealthy Sri Lankans, who have the capacity to invest.

    I think the biggest disincentive for anyone to invest in the North, or for that matter in any other part of the island, is lack of political stability. When one minister contradicts what another from the same party says, it does not build confidence in the eyes of the investor.

    So if Wiggie, Sumanthiran and the TNA can speak with one voice, then the higher the potential for people taking them seriously. There are 2 ways that “stability” can be envisioned: within a single united Sri Lanka, or as a new country “Eazham”.

    Perhaps many in the diaspora are hoping and waiting for the latter to become reality before investing their dollars. I doubt that it’s realisitic at this point.

    In order to promote the former, the moderates of all SL political parties have to outdo the radicals who want to define the country as belonging to only one or the other ethnic group.

    So anything you can do to nurture and spread the word and actions of moderate politics is the best course of action to help the North’s economy.

  • 5
    0

    To Thavarajah’s ghost writer:

    I’m impressed with your writing skills and nice try to force Northern CM to focus on local economic development issues instead of political rights of people in North. We want both issues to be resolved.

    I guess, CM wants to focus on political rights of Tamils as the primary issue and economic development and all other issues are secondary in our pipe dreams.

    Since CM is a retired Chief Judge of Sri Lanka, who else knows the firsthand knowledge of rights of minorities in SL than CM?

    Nothing wrong with utilizing the asset that we have now and try to resolve the political issues of minorities than planning to build a rocket to land it on Mars!

    If your intent was to weaken CM then you selected a wrong guy to deliver your message to the people in North.

    We know a lot about his boss the thug Douglas and his past history.

    We don’t even know who this guy Thavarajah is or his past history. People are saying he is a grade 6 dropout and has criminal history.

    Not sure this guy even understood the subject matter that he was reading about. Sounds like the situations where MR was reading some well-prepared speeches that he had no idea what he was talking about!

    Next time give your scrips to someone other than losers from Douglas’s camp in North or Karuna’s camp in the East.

    We the general public deserve more than those thugs politically represent us. Until then no one would challenge your trouble maker CM of North or TNA in general.

    • 0
      0

      Alies,

      “I’m impressed with your writing skills”

      So am I. Would be nice to know who it is.

  • 4
    0

    The central government of Srilanka will not cooperate with NPC to allow foreign investors to invest capital in Northern Province. First of all when over 100 thousand army is still controlling the land and even some businesses, there will always be hesitation for foreigners to put capital in the north.You will not get foreign money till the army is out.

    But why cannot you Mr. Thavarajah, try to improve the science education in schools. Why cannot you do post school projects like IT and accounting classes. Why cannot you organize technical courses like automobile repairs,plumbing and carpentry which will bring employment to school drop outs.

    Do these essential things first before lecturing on economy.

    • 2
      0

      Ramesh,

      “The central government of Srilanka will not cooperate with NPC to allow foreign investors to invest capital in Northern Province. First of all when over 100 thousand army is still controlling the land and even some businesses, there will always be hesitation for foreigners to put capital in the north.You will not get foreign money till the army is out.”

      I believe that the Government very much wants FDI in all of the country including the Northern Province. Unfortunately foreigners will not invest in SL and even less in the Northern Province.

      “But why cannot you Mr. Thavarajah, try to improve the science education in schools. Why cannot you do post school projects like IT and accounting classes. Why cannot you organize technical courses like automobile repairs,plumbing and carpentry which will bring employment to school drop outs.”

      I don’t think that Mr Thavarajah can decide on education in the Northern Province. You should take this up with the provincial minister for education from the TNA.

      The many existing technical courses don’t manage to attract youngsters. Many are happily living on Diaspora remittances and the rest want to emigrate for fast money.

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