Front Page

Front Page

No talks, no money: World Bank
By Feizal Samath
As the Sri Lankan government prepares to welcome a rush of donor aid from the Tokyo summit in June, the World Bank cautioned against expectations of heavy aid inflows saying disbursements would depend on the progress of peace talks.
"If the momentum (of the peace talks) stalls … if it goes backwards, the donors will react accordingly," noted Peter Harrold, country director of the World Bank office in Sri Lanka.

His comments, in an interview with The Sunday Times, were contrary to expectations by the government and sections of the public of an enthusiastic donor community pouring in funds into the battered northeast region without waiting for a permanent, negotiated settlement to evolve from ongoing peace talks.

"For donors on the bilateral side (much more than the multilateral side), it is the quality, depth and speed of the peace process that will determine the quantity and speed of delivery of the (aid) commitments," the World Bank country director noted, while adding however that it was necessary to invest now.

"I think we have learnt in many other conflicts that if you wait to do anything you might have to wait forever. Because if the benefits of peace don't start to flow in terms of improved economic prospects then it might increase the risks of a conflict breaking out again," he said.

But Mr. Harrold, who has worked in conflict zones with a peace process like Sierra Leone, pointed out that the support that had come in so far was not very large. Apart from the World Bank and the Asian Development Bank, there was very little money being spent in the north and the east, he said.

Mr. Harrold said the World Bank was opposed to double taxation in the north and had expressed these concerns to the LTTE. "They have assured us that projects financed by the World Bank which are to benefit the poor in the north, will not be subject to any tax."

There were instances in the case of bank contracts in the north where the bid document also contained a tax the contractor said he would have to pay the LTTE if he won the contract.

"This is not acceptable. Aid is goods and services for the people, not to finance governments or other organizations," Mr. Harrold said.
He said the system of finance in the north must be sorted out during the peace process otherwise it is bad for business and would create uncertainty.

Back to Front Page