Business Times

Sri Lankan estate sector deprived of full budgetary allocations

By M.Vamadevan (Former Secretary, Ministry of Estate Housing,Infrastructure and Community Development)

Since 1997, for over a decade, the focal point for the social development of the plantation community in the state administrative structure was the Ministry of Estate Infrastructure. With the re-naming of the Ministry of Nation Building and Estate Infrastructure (MNB&EID) as the Ministry of Economic Development in 2010, the Estate Infrastructure Division of that Ministry was abolished.

It is not intended here to discuss the reasons for these changes but it is suffice to say that these changes reflect the shift in the political bargaining power of the plantation community and government political and development strategy. Due to this change questions are being raised whether there had been any change in the financial allocation made in the Budget 2011 and, if so, what are its implications in the medium term. If there have been any negative effects due to this what are the alternatives available are some of the questions that need to be answered. Financial allocation generally refers to both capital and recurrent expenditures but here our focus is only on capital expenditure which means development expenditure. It is important to note that it is the government budgetary allocation that determined the pace and content of the social development that was taking place in the plantation sector.

It is a fairly well-known fact that the plantation community, due to historical and other reasons, has been living in isolation from the rest of the Sri Lankan society socially, economically and politically. Socially they were backward as they confined themselves to the Plantation Economic unit where basic needs were provided by the estate management though at a minimum level. Therefore they suffered from low level of education, unhygienic housing, poor health facilities and lack of cultural and recreation facilities. However, the availability of employment opportunities for the less educated youths of this community matched the demand for employment and thus the supply and demand for labour in the plantation labour market more or less remained equal while in the country as a whole there was a mismatch. This kept this community within the estates without any upward social mobility. Following independence in 1948, a majority of the members of this community were disenfranchised and made to become stateless. Without political representation for a period of almost a quarter century they became political orphans.

They could not participate fully in the post-independence development process that was taking place in the country in general and consequently, lagged behind other communities in the country in terms of various indicators of social development. This situation continued till about 1988 when attempts were made to restore their citizenship rights but only in 2003 it became a reality. Thus, mainstreaming the community so that it enjoys all the civil, economic and political rights has become the main demand of the community. It is needless to say that the government has a vital role in this regard. It would be important for the government to make heavy investments in the social development of this community in order for it to make good the relative deprivation it had experienced during the interim period. Therefore, one way of assessing government contribution to the social development of this community is to measure the quantum of financial allocations in the annual budgets for this purpose and the major thrust of the paper is to accomplish that.

When social development of the plantation community is considered it is important to note the establishment of the Plantation Housing and Social Welfare Trust (PHSWT) which is a tripartite entity representing Government, plantation management and workers. In 1992, when the management of the plantations was transferred to private companies, this Trust was formed for the purpose of implementing social welfare measures by incorporating the Social Welfare Divisions of JEDB and SPC. While the recurrent expenditure of the Trust was met from the contributions of the companies, capital/development expenditure had to depend on donor as well as domestic-funded projects.
The addition of a separate Division called the Estate Infrastructure to the existing Livestock Ministry in 1997 was another important milestone as far as government financial allocation is concerned.

This was the first instance where an institutional arrangement was introduced for the purpose of the social development of the Plantation Community. Although a separate Ministry of Plantation Industries existed the focus of this ministry was more on the side of production and related welfare aspects of the workers. Though the newly established Ministry was envisaged to be a coordinating Ministry, over a period of time, it obtained separate allocations from the budget for various sectoral programes and these programmes were implemented through the respective line Ministries like the Ministries of Health, Electricity Supply, Postal and Vocational Training. In addition, it implemented a SIDA-funded Education Project.

During the 2006-2010 period, the financial allocation and development initiatives in respect of social development were at their peak. While the financial provision for Housing, Infrastructure (Roads Water Supply and Electricity) were made under the Ministry of Nation Building and Estate Infrastructure Development, there were two other Cabinet Ministers Arumugam Thondaman and late P.Chandresekaran who covered the subjects of Youth Empowerment and Community Development respectively. In addition, there were six deputy Ministers from this community who were assigned to Ministries such as Education Health, Vocational Training, Postal, Justice and National Integration and thereby some development activities were initiated. To what extent they were effective is another matter that needs further examination. What is argued here is that they created ample space for the initiation of activities for the social development of the plantation community.

Current situation
Following the General Election in 2010, the Estate Infrastructure Division which was part of the MNB&EID was abolished. However, the Deputy Minister who covered the EID continues to serve in the Ministry of Economic Development. What are the implication of the abolition of this division to financial allocation for social development? A new Ministry called the Livestock and Rural Community Development (M/LRCD) has been assigned to A.Thondaman, although this ministry’s mandates doesn’t specifically cover the estate sector. It should, nevertheless, be noted that some of the functions of the defunct Ministries such as Community Development and Youth Empowerment have been amalgamated into this Ministry.

Under these circumstances, the main thrust of this paper is to discuss the quantum of financial allocation available in the 2011 Budget for the Social Development of the Plantation Community. An observable feature in the 2011 Budget is that both in terms of institutional structure as well as financial allocation there is no separate division as estate sector. Instead, a Provincial Development Initiative has been put forward under nine catchy titles. Six provincial development initiatives are relevant as far as the plantation sector is concerned:

1. Kandurate Udanaya (Central), 2. Pubudamu Wellasa (Uva), 3.Sabaragamuwa Arunalokana (Sabaragamuwa), 4 Ruhuna Udanaya.(South), 5. Wayamba pubuduwa (North Western ) and 6. Ran Aruna (Western). Under the votes of the Ministry of Economic Development, funds have been allocated on a sectoral basis for each of these programes. Therein for certain sectors funds have been earmarked for estates. Estate housing and estate schools are two areas for which specific allocation have been made. Under the Health Ministry vote there is a provision for the estate sector. However, in other Ministry votes there are no specific provisions for this sector. In M/LRCD there are two budget lines where one can infer that some amount could be earmarked for this sector as this falls within the definition of lagging area socio economic development and livelihood and basic facilities of the areas.

It should be noted that the provisions made under M/LRCD are not strictly for the estate sector only. Since the Ministry absorbed the functions of the Former Ministries of Community Development and Youth Empowerment which were focussing more on the estate sector during their existence it can be assumed that these provisions could be spent on the estate sector. If it is not, the total will get reduced.
The evidence available shows that there is a declining trend in the financial allocation as far as the clearly earmarked amount is concerned. At present, only in four Ministries specifically earmarked amounts are found. Of them, the housing sector needs some comments. In terms of identified priority housing needs are more and require huge amounts of funds.

This has been aptly recognised in the Government Policy Document-Mahinda Chinthana –Vision for the Future. It states that ‘One of my major goals is to make the Plantation community, a house-owning society. Accordingly, instead of the present ‘line rooms’, every plantation worker family will be proud of a new home with basic amenities by the year 2015.While a sum of Rs 5 billion will be allocated annually for this purpose as part of the contribution, foreign financing will also be utilised for this purpose.’ But in reality only Rs 481 million which is only 9.62 % of the pledged amount has been voted in the budget.

There are around 150,000 housing units to be built to meet the housing requirements. The amount agreed by the Government per housing unit is Rs 440,000. At this rate, the total fund requirement is Rs 66 billion. In order to accomplish the pledge given in the Mahinda Chinthana by 2015 annual fund requirement would be around Rs 13.2 billion. As per the Mahinda Chinthana, amount pledged is only Rs 5 billion. It means that Rs 8.2 billion has to be mobilised through other sources such as foreign assistance and self financing.

In terms of the government strategy, Rs 481 million has been allocated in the provincial development initiative such as Kandurate Udanata (Rs 243 million), Pubuduma Wellasa(Rs 128 million) and Sabaragamuwa Aranalokaya (Rs 110 million). No funds have been allocated in the votes of the Ministry of Housing although the Ministry has indicated a target of constructing 13000 estate housing units to be achieved during the period 2011-2013.

According to press reports, the Indian Government has earmarked certain housing units out of the 50000 houses promised for the Internally Displaced Persons in the North and East. The modalities of the construction of these houses are not yet known.

Given this scenario, the major question is how would the housing needs of the plantation community be met with the meagre provision of less than 10% of the pledged amount?

As observed earlier, the sector that received more government funds was the road sector. However, there is no specific provision for this sector. Under the Provincial development initiatives, for lagging area infrastructure development, Rs 1000 million has been provided. There are possibilities that from these provisions funds could be obtained for rehabilitation of roads. It is anticipated that this will be decided at the District Development Committee meetings. Except in Nuwara Eliya District where there is an adequate Parliamentary representation in the other 10 plantation districts there are no MPs from this community. Under these circumstances, to what extent the needs of the community will be taken into consideration by the decision-making authorities, remains a question to be answered.

While the government is adopting a strategy of focussing on provincial development initiatives, shifting from its earlier approach of focussing on Rural, Estate and Urban sectors, what are the options available to ensure adequate financial allocations fo the social development of the plantation community? As observed earlier, certain sectors such as Housing, Education and Health are clearly earmarked with funds although the provisions are inadequate. For the estate road sector there is no clear provision in the budget although possibilities exist to obtain funds for this sector. Of the funds provided under the M/LRCD Ministry how much will be earmarked for the estate sector remains a question.

In other line Ministries whose functions are closely associated with the social development there are no specific provisions for the estate sector. In this context, several Ministries could easily be identified. Ministries of Social Services, Child Development and Women Empowerment, Youth Affairs, Water Supply, Postal Services, National Integration, Sports, and Cultural Affairs are some of them. It is strongly suggested that there should be a budgetary line for the estate sector so that the provision could be protected. These Ministries usually prepare an Annual Implementation Plan (AIP) in which details the activities the location, time period, cost and implanting agencies will be given. If these AIPs are made available one may be able to gauge the amount that would go the Estate Sector. MPs from this community can get clarification on these matters at the Parliamentary Consultative Committee meetings of the relevant Ministries.

In the absence of the Estate Infrastructure Division, it is imperative that a coordinating mechanism is in place either in the Ministry of Economic Development or the Ministry of LRCD, the only Ministry under a Minister from the Plantation Community. This entity could collect details regarding programmes and projects that are initiated and implemented for the social development of the plantation community. At least this will facilitate the gathering of information at input level which will pave a way to monitor the progress of the programme and evaluate the outputs, results and their impacts. No one can be complacent that social development indicators are satisfactory and on par with that of other communities. Therefore, there is still a pressing need to address the social development-related issues of this community which government focussed attention on. The suggested coordination mechanism could play a vital role in this regard.

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