By 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?
*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.