{"id":47081,"date":"2015-08-16T14:44:22","date_gmt":"2015-08-16T21:44:22","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=47081"},"modified":"2015-08-16T14:44:22","modified_gmt":"2015-08-16T21:44:22","slug":"mega-projects-is-not-the-way-but-small-business-microcredit","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2015\/08\/16\/mega-projects-is-not-the-way-but-small-business-microcredit\/","title":{"rendered":"Mega Projects is not the way; but, Small Business (Microcredit)"},"content":{"rendered":"

Chanaka Bandarage<\/strong><\/em><\/span><\/h2>\n

Politicians love megaprojects. They know it is not their money that they spend. \u00a0In megaprojects, they often enrich themselves through massive commissions and other unethical ways. At the end of the megaproject, they revel in trying to obtain the credit for themselves, even if it was a failure.<\/p>\n

According to Professor Bent Flyvbjerg of University of Oxford, nine out of ten megaprojects in the world end up in failure. The biggest drawback in megaprojects is the cost overruns. In the US alone, about 65% of the megaprojects have failed (\u2018Infrastructure Intelligence\u2019, September 2014). In Sri Lanka, the biggest drawbacks are the waste, mismanagement and massive corruption.<\/p>\n

In Sri Lanka, we first experienced a megaproject in the then government\u2019s accelerated Mahaveli program. True, Mahaveli opened up thousands of new agricultural land and volumes of hydro power, but, it also caused severe environmental damage. Large swaths of fertile land (eg. rich fertile lands of Teldeniya) went under water and thousands of people were forcibly uprooted from their ancestral lands. Thanks to Mahaveli, the human \u2013 elephant conflict took an adverse upturn. Hundreds and thousands of virgin forests were cleared for the new settlers. The deforestation blocked ancient elephant corridors. Other wildlife too lost their habitats; they either became extinct or endangered. Veddah communities lost land that they had enjoyed from time immemorial. In some areas, due to the building of huge dams, the healthy Mahaveli almost ended up \u2018dead\u2019. The large, shark-like fish (some capable of growing to over 8 feet in length) that roamed Mahaveli are no more; they have disappeared forever.<\/p>\n

In the last ten years we have seen the emergence of megaprojects in Sri Lanka on an unprecedented scale* The Hambanthota Port (Rs 36,100 million), Mattala Airport (Rs 21,000 million), Sooriyawewa Cricket ground (Rs 4,000 million), the new expressways (Rs 70,000 million), Uma Oya project (Rs.76,316 million ) are just a few examples (*the author is unable to confirm the accuracy of the megaproject costs stated herein; the records were obtained from reputed sources).<\/p>\n

The then government was hell-bent on developing Hambanthota into a \u2018concrete jungle\u2019. Was it necessary to do that? They even wanted to hold the Commonwealth Games there after building an Olympic style stadium including an athletes\u2019\u2019 village, a modern swimming pool, basketball\/netball\/tennis and badminton courts, a velodrome, and a gymnasium!<\/p>\n

The question that needs to be asked is why do we not leave the \u2018sleepy\u2019 Hambanthota on its own; so that its authenticity and natural charm can be preserved (the place where Lenord Woolf\u2019s Silindu and his two daughters, Punchi Menika and Hinnihami \u2018lived\u2019). Hambanthota is a beautiful, rural location which is in very close proximity to Sri Lanka\u2019s large wildlife parks, Yala, Uda Walawe and Bundala. There is no need to create a \u2018new Colombo\u2019 in Hambanthota. We already have enough \u2018concrete jungles\u2019 in Sri Lanka.<\/p>\n

To create the new port in Hambanthota, one of Sri Lanka\u2019s most beautiful beaches was mercilessly dug up, thus that fabulous beach was denied to future generations forever.<\/p>\n

What the then government should have done was to expand the existing harbor in Galle (130 km from Hambanthota). Galle is much closer to the busiest east-west international shipping route (where more than 1,000 ships ply a day), than Hambanthota. Galle is a superb harbor built by the Dutch in the 17th century. Infrastructure and manpower for a world class port were already available there.<\/p>\n

The building of a second airport in Hambanthota was unnecessary. Any proper feasibility study would have revealed that such an airport was doomed to fail. What the then government should have done was to expand the current Katunayake airport. For this, land adjoining the airport, belonging to the SLBC, Air Force, CGR and private owners should have been acquired, after paying due compensation. Any developed country needs a modern, sophisticated airport located closely to its capital\/main city. In Sri Lanka, all energy and resources should have been utilised to develop Karunanayake, so that it could compete in equal terms with such world class airports as Singapore,\u00a0 Hong Kong, Bangkok and Kuala Lampur. \u00a0Spending money to build a new airport in remote Hambanthota was definitely a mistake. When Katunayake is unavailable, planes can land in Chennai or Bangalore \u2013 they are close enough international airports for the purpose of emergency landings.<\/p>\n

There was absolutely no necessity to spend Rs 4 billion to build a floodlit cricket stadium in Sooriyawewa, Hambanthota. Thanks to Sooriyawewa, the fine cricket stadium in Dambulla has almost become obsolete. On a per capita basis, Sri Lanka (still a 3rd world country) has more international cricket stadiums than any other ICC nation.<\/p>\n

When Mattala and Sooriyawewa were built, thousands of acres of virgin forests (connected to Yala, Bundala and Panama) were cleared \u2013 they were the former roaming grounds of the wild elephants and other wildlife. We hear reports how important wildlife such as elephants, peacocks, monkeys etc are being killed on a daily basis in this area, as those animals now have less space to roam. Elephants have died of electrocution as well.<\/p>\n

The Uma Oya project has already caused enormous health, hygiene and livelihood problems to sections of people in Uva, especially in Bandarawela, Badulla areas. Lots of drinking water wells and even some water falls have gone dry. True, Uma Oya will help to cultivate more land in Wellassa plus the generation of new hydroelectricity, but its adverse effects on the people and the environment (note the massive impending de-forestation) needs to be given high consideration.<\/p>\n

Despite certain environmental concerns and earlier frequent breakdowns, the megaproject, Norochchalai coal power station, is a success story. It currently provides 400 MW to the national grid. The government spent a massive Rs 134,100 million for the project, some say the end cost was three times more than the initial estimate. Let\u2019s hope that Sampur coal power station (500 MW) will also be successful.<\/p>\n

The previous government spent billions of rupees on new expressways. Today, not many vehicles ply on them; lots of people are unable to pay even the toll to use them. Sri Lanka is still largely an agrarian society where only about 20% of the population own a vehicle (excluding \u00a0the owners of three wheeler taxis). Building high speed motorways is not a must for Sri Lanka, just because many other countries have them.<\/p>\n

Tiny Sri Lanka is only of 65,600 sq km. What Sri Lanka requires is a well carpeted network of roads everywhere, including in rural areas. Preferably they should be dual track on the main highways. The burning transport problem in Sri Lanka is the lengthy traffic jams in major cities especially in Colombo and the dilapidated roads of the interior. Everyone knows that the bottlenecks created by the new Expressways have exacerbated Colombo\u2019s traffic congestion.<\/p>\n

These traffic jams are a major impediment for attracting foreign investment and tourism promotion. Instead of spending large amounts of money on expressways that extend to very remote areas like Hambanthota, the government should have given top priority to fixing the traffic problem in Colombo and other major cities like Kandy, Kurunegala etc (repeat, this is a major problem for Sri Lanka).<\/p>\n

To ease the huge Colombo traffic congestion during the working week, where applicable, the government should have erected more traffic lights, widened the streets, created new alternative roads, built more overhead bridges and even considered building underground road tunnels.<\/p>\n

Also, the interior village roads (and bridges) should have been upgraded. Most of these roads are not tarmacked and are in pathetic condition. When rural roads are improved, farmers will be able to sell their produce speedily and at a reasonable price (where trucks and lorries can reach the villages directly).<\/p>\n

Thanks to the Southern and Katunayake Expressways one could see how fertile rubber estates and paddy fields have been divided into two. As a result, the adverse impact on the economy must be huge. Large, dark swaths of land (due to lack of sunlight) that lie under these giant concrete structures are now unproductive and cannot be used for any purpose. They are an eyesore too. Contrary to what was anticipated, foreign tourists who travel to Galle prefer taking the Galle Road instead of the expressway. The former is more scenic, lively and refreshing (runs parallel to the coast). The roadside businesses, especially restaurants that operated on the Galle Road had a massive economic setback. On the expressways, one could see the carcasses of dead wildlife, especially alligators that get killed by vehicles, when they cross the expressways.<\/p>\n

The writer is not implying that these expressway projects were an entire waste of money, he states they were not the priority for the nation. Given the country\u2019s small size, high costs of these projects, and of course the serious damage to the environment; the government should have concentrated on micro development rather than macro development solely. For example, when the majority of the population still commute on jam packed rickety old buses and trains, where patients still sleep on fly infested floors in public hospitals, where school children lack desks and chairs in many remote schools and where sewer and garbage disposal in the main cities is a major environmental and health hazard (the list is endless), governments should have been wiser to identify these major problems and attended to them first, giving top, urgent priority. \u00a0What is important is that the governments must assist people directly, not doing things from the periphery. The governments must have the intellect and the capacity to understand the people\u2019s real needs and assist them directly. This is not a time to do experiments or waste valuable time and money.<\/p>\n

It is rumored that thanks to the Karunanayake Expressway, politicians (from both sides of the politics) grabbed and acquired valuable state land for themselves. Even the most precious Muthurajawela marshy land was not spared.<\/p>\n

The writer acknowledges that the Mathara \u00a0and Katunayake expressways are now built and though there are genuine environmental and other concerns, they do serve a purpose. He states it is not required to extend them beyond Mathara and Katunayake respectively, to remote areas where traffic congestion is not an issue. He believes given that work has already commenced on the Kandy expressway, that project should be carried out to the finish, if the environmental impact assessment for same is favourable. There is absolutely no need to build a Northern Expressway when vehicular traffic on the current A9, which is a well carpeted, modern road, is minimal.<\/p>\n

In Sri Lanka, the recent unsuccessful megaprojects, including some expressways, have not helped to bring down inflation, but, they have helped to increase inflation. Due to imposition of various taxes and duties, the cost of living for the people has skyrocketed. Some basic consumables are more expensive than those found in developed countries (eg. bread, fresh liquid milk and fresh fruits). The writer has come across people who are so poor that they are unable to feed their families with three meals a day.<\/p>\n

Thus, it is appropriate that we ask the question whether megaprojects have really helped Sri Lanka or not?<\/p>\n

The megaprojects have increased the country\u2019s foreign debt (as of 31 December 2009 Sri Lanka\u2019s external debt stood at US$19.45 billion \u2013 per Wikipedia<\/em>).<\/p>\n

Today Sri Lanka is one of the most debt ridden nations in the world (about 30 years ago it had almost zero foreign debt). True, it is thanks to the injection of foreign debt that the country\u2019s economy grew at about 6% per annum, but, it was an artificial growth of the GDP.<\/p>\n

No country can go on borrowing money from elsewhere, like what Sri Lanka has done in the past 10 years. About 90% of the country\u2019s earnings are spent on paying off the debts. Some economists have alarmed that Sri Lanka can face the same fate as Greece, and people can lose their life savings deposited in banks.<\/p>\n

The political parties that canvass for votes in the present general election promise creating new jobs if they are elected to power. This is very good. But, these new jobs should not be government jobs but private sector jobs. It is time that Sri Lanka starts creating \u2018small governments\u2019 and give every possible incentive for the private sector to flourish.<\/p>\n

Small businesses should be the engine room of the Sri Lankan economy. Sri Lankan people are so entrepreneurial, hardworking and determined. Given a small incentive, they will start new businesses and flourish. There should be no doubt about this. It is the new small businesses that will create new jobs and a prosperous Sri Lankan economy, nothing else.<\/p>\n

Giving incentive for small business can stop people from leaving the country looking for \u2018greener\u2019 pastures. At the moment about 300,000 people leave Sri Lanka every year to work in foreign lands. This must not be encouraged. People should be afforded opportunities to remain in the mother country, live around their families.<\/p>\n

It is very difficult for a person to obtain a personal loan from a bank today. This especially applies to poor people who cannot provide a collateral<\/a>, those who are unemployed and those who do not have a verifiable credit history<\/a>. For this, at least the future governments must intervene and start initiatives to provide people with microloans so that they can start their own businesses.<\/p>\n

For people who work in the public and private sector, the government must encourage state banks to provide low interest home loans (at the moment, the home loan interest rates are too high).<\/p>\n

In Sri Lanka even a startup capital of Rs 100,000 can make a big difference in a person\u2019s life – who wants to be their \u2018own boss\u2019. When the person has established good credibility, the microloan amounts can be gradually increased.<\/p>\n

What is important is that for the future governments to initiate projects, including through state banks to provide microloans to all eligible and deserving citizens (not just for the Samurdhi recipients). This should happen on a grand scale. The microloans need to be low, fixed rate interest loans, with no fees and charges attached. As stated before, these loans should \u00a0be for people who want to start\/expand their own small businesses.<\/p>\n

Microcredit is the best way of empowering women, thereby uplifting entire communities. Grameen Bank<\/a> founded in Bangladesh<\/a> in 1983 reports that the repayment success rates are between 95 and 98 percent. Grameen loans have been provided to people from buying a cell-phone to establish a profit making venture, to fishery, livestock, carpentry, masonry, tailoring, food preparation, cleaning, grocery store, typing services, IT related work and running passenger transport operations.<\/p>\n

The writer, a Lawyer, is the President of Sri Lanka Support Group (Global) (chanakab@hotmail.com)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Chanaka Bandarage Politicians love megaprojects. They know it is not their money that they spend. \u00a0In megaprojects, they often enrich themselves through massive commissions and other unethical ways. At the end of the megaproject, they revel in trying to obtain the credit for themselves, even if it was a failure. According to Professor Bent Flyvbjerg […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[88],"tags":[],"class_list":["post-47081","post","type-post","status-publish","format-standard","hentry","category-chanaka-bandarage"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/47081","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=47081"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/47081\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=47081"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=47081"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=47081"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}