Sri Lanka turns to microfinance to rebuild war zone

COLOMBO, July 13 (Reuters) - Sri Lanka's government on Monday launched a $26 million microfinance loan programme to spur local agriculture and business in the former northern war zone, part of the president's plan to resettle 300,000 displaced people.

Dubbed the "Awakening North", the Central Bank said the 3 billion rupee ($26.12 million) loan plan will support "the resumption of economic activities in agriculture, livestock, fisheries, micro and small enterprises."

President Mahinda Rajapaksa has staked reconciling Sri Lanka after a 25-year war with the Tamil Tiger separatists on rebuilding the economy in the north and resettling the 300,000 members of the Tamil minority from there who are now in camps.

Analysts say he must swiftly resettle those people, demine the north and deliver a political package that the majority of Tamils -- and hardline elements from the Sinhalese ethnic majority in his ruling coalition -- will accept.

Under the loan plan, people can apply for loans of up 90 percent of 200,000 rupees for a maximum of five years' repayment, at an interest rate of 12 percent.

Private lenders Commercial Bank of Ceylon COMB.CM, Hatton National Bank HNB.CM, Seylan Bank and SANASA Development Bank, and state banks Bank of Ceylon and People's Bank will take part, the central bank statement said.

The banks will be refinanced at an interest rate of 6 percent on the funds the loan, the statement said. (Editing by Bryson Hull and Nick Macfie)

It will be nice to push that canal project between Sri Lanka and India, then built a massive port in Jaffna. It should bring a lot of traffic into Jaffna and inturn capital and investments.

if im right that canal project will spell doom for Colombo port since a lot of container traffic to india has to go around sri lanka and with the canal, they wouldnt have to.

if im right that canal project will spell doom for Colombo port since a lot of container traffic to india has to go around sri lanka and with the canal, they wouldnt have to.

I was never too sure about those claims of doom if the canal project is completed. Looking at the maps of shipping lanes, the dark red lines are the Europe-Asia shipping routes that pass through Sri Lanka. For them to go through a canal wouldn't make sense.

http://ebm.nceas.ucsb.edu/GlobalMarine/impacts/transformed/jpg/shipping.jpg

Of course, if Indian ports can provide significantly better services that ones in Sri Lanka, or if our ports are backed up and ships encounter delays, that could spell doom for Colombo. The sooner Hambanthota is up and CSPE is underway the better.

Sometime back when there was talk about the sethusamudram canal, I was really interested in the matter (in terms of environmental degradation) and had contacted several agencies as well as individuals regarding this. Apparently the EIA (Environment Impact Assessment) had been done with only Indian participation. The following points are excerpts from a letter sent by Hemantha Withanage,
Senior Environmental Scientist/ Executive Director, Centre for Environmental Justice to the Chairperson, Tamil Nadu Pollution Control Board.


• This area covers some best coral reefs which contribute to the both Sri Lankan and Indian biodiversity. This benefits fishermen of both countries to fishing in the Gulf of Mannar. Some reports suggest that 35% -70% of the fish stock for the Sri Lankan side comes from these coral reefs.

• According to the EIA there will be dredging of over 80 million m3 sand and clay. Although there are proposals to deposit this dredged material in the Bay of Bengal and to create some lands in Pumban Island the fine particles will be deposited on the coral can easily damage the reefs which will affect the biodiversity and the fishermen.

• Continues dredging during the operational phase will also create the same problems. Sri Lankan scientists are in the opinion that these fine particles can travel long distance and this dredging can affect not only the vicinity of the construction site but also in other areas.

• This EIA fails to study the impacts of the dumping of dredging material whether it deposits in the Bay of Bengal or in the Pumban Island.

• According to the EIA report, due to dredging the bottom flora and fauna on an area approximately 6 km2 along the canal alignment in Adams Bridge will be lost permanently. Although the EIA suggest that this loss is very insignificant compared to the total area of 10,500 km2 of the Gulf of Mannar Marine Biosphere Reserve, when consider the continues damage to the coral reefs from continuous dredging and by depositing the fine particles, this is very significant.

• This area is habitat to several species of whales, dolphins, turtles dugong and many other threatened species. Therefore serious investigation on the biodiversity in the area is very important.

• There are two circulations of water masses in the Bay of Bengal, the clockwise circulation of the south-west monsoon and the counter clockwise circulation of the north-east monsoon. Hydrological models shows that the sea water from Bay of Bengal or sea water from the western side does not cross over or hardly cross over due to the Adam’s bridge sand deposits.

• Sri Lankan scientist are in the opinion that the construction of the Ship Canal will damage this pattern and the changing of the water quality, water currents, temperature and possible arrival of alien species may affect the biodiversity.
• This may also affect the wave height and which could result beach erosion in the both countries.

• Dumping of oil and grease and the waste material along the Ship Canal can damage the biodiversity too. This can affect the fish stocks in the area. This is already a problem in the existing ship route around Sri Lanka.

• Shallow water level will increase the risk of accidents. Any oil spill can easily damage the sea bed and the coast due to the shallow nature of the bed. Navigation of oil tankers or ships contains chemical waste and material will increase the risk of damage. Sea turtle and many other species and the shallow water environment is highly vulnerable to oil spills. This aspect has not seriously considered in the EIA document.

• As mentioned under the mitigatory measures it will not be possible to ensure that ships navigating in this region do not use such paints and anticorrosive agents on ship bottom which one known to cause damage to marine organisms.

• We do not think the mitigatory measure mentioned in EIA which state “A pilot should be trained or environmental watcher will board the ship to watch marine animals viz. turtle, dolphins, sea cow etc. in the region and navigate the ship safely avoiding any damage to this fauna” is possible.

• The ship navigation route will affect the fishermen in the area. There will be strict security zone along the ship canal. Both Sri Lankan and Indian fishermen will be affected due to this new condition.

• To our knowledge there are no adequate research done by the Sri Lankan side due to the restrictions which resulted of the civil crisis in the area. Therefore Sri Lankan scientists do not hold adequate data to consider the impacts and suggest any mitigatory measures.

• As we see the EIA is a draft document. We strongly believe that no decision should be taken based on this document. The proposal does not contain alternative proposals which is a lacking in the EIA procedure.

• This does not include any risk assessment, a cost benefit analysis and a compensation package. Also this EIA does not contain a contingency plan and has not considered the worst case scenario. Therefore we believe that even the Indian citizens do not have adequate information to participate in a proper public hearing which is contrary to the principle 10 of Rio.


If anyone wants the EIA or other documentation regarding this matter please do give me a shout.