Sri Lanka: Can Poverty be the cause of Terrorism? - Eastern Model can deflect the LTTE cause

Harold Schiffman hfsclpp at
Sun Jun 29 12:41:38 UTC 2008

   Can Poverty be the cause of Terrorism? - Eastern Model can deflect the
LTTE cause [image:
   Friday, 27 June 2008

I like being an optimist given that most of my life has been in the world of
business. But my gurus have always said it's good to stop and take stock of
the reality. Go to the details behind the numbers and understand the

*The Reality – **Key indicators very low*

Sri Lanka has been grappling with the issue of poverty for decades.
Successive governments have been focusing on the top line where Sri Lanka
has a pretty picture to boast.  Way back in 1996 the overall poverty
indicator stood at 24.3% whilst in 2002 it moved down to a 19.2% and in 2007
it went down to magical mark of 15.2% which is commendable given that the
South Asian countries are at logger heads on how to manage poverty through
pro poor strategies, and in the recent past the mechanism of Inclusive
growth.  How ever I am going back to what my early life business gurus told
me- go behind the numbers and understand the insights. It's only then that
the reality can be seen.


As per the 2003/2004 Socio Economic indictors the access to pipe borne water
in the Northern Province is only 3.1% whilst in the East it records a 17.4%.
The National average stands at a high 30.8%. Even though we cannot be proud
of the National Performance the fact remains that for a majority of people
who live in the North and the East, life is not as comfortable as it is for
the people in the neighbouring regions. The *non* access to toilets which is
a stronger indicator of the quality of life of a household, the Northern
region is registering 14.4% and the East a staggering  29.2% whilst the
National average stands at a respectable 5.6% which gives us an idea of the
disparity that exists at a regional level even though the top line reflects
a healthy situation. Even though there has not been much studies done on the
implications of the social indicators on terrorism the insight is that these
factors create social tension that in turn can lead to conflicts. This can
end up in aggressive behaviour that can then result in extreme behaviour
like terrorism. This is my hypothesis.

If we move on to indicators which are related to income and health in the
North and the East, may be one can develop inferences on the root causes of
terrorism. As per the labour force survey of 2002, the labour force
participation number is at 50.3% nationally whilst in the North it drops to
33.8% and a 40.3% drop in the East which can be directly attributed to the
marked health gaps in these regions. 46% of the children below five years of
age in the North and the East are underweight compared to the 29% in the
rest of the country.  The percentage of babies born underweight in the
country is 18% but the reality is that in the North and the East it is as
high as 26%. These figures are worse in the districts like Batticaloa and
Vavuniya, where one –half of the children are under weight. A deduction that
can be made from these figures is the tension that exists within a family in
comparison to ones relations in the other parts of the country. A typical
family in such a state of deprivation can be easily coerced to extreme
behaviour based on strong ideological principles that can finally result in
making of a terrorist is my hypothesis.

*Poverty Terrorism Link?*

Even though there are counter arguments that countries that have an
intermediate range of rights experience a greater risk of terrorism, there
is no conclusive studies that have been done if its nurture of nature that
fosters terrorism in a country. Michael K. Moore the former head of the
World Trade Organization once said 'Poverty in all forms is the greatest
single threat to Peace, Security, Democracy, Human Rights and the
Environment' which to my mind is an indication of the possible relationships
that can exits. However, Alberto Abadie, Public Policy Professor at Harvard
University's Kennedy School of Government says 'Development aid is
important, but it is not clear that it is an effective tool for reducing
terrorism, at least not in the short run. He says more attention should be
given to political freedom because it correlates with terrorism, but in a
complicated way' which is an interesting point of view given the
developments we see in Sri Lanka on language policy and human rights.

*Poor Connectivity - isolation*

*Research says that isolation is the prime cause of un-socialized behaviour.
If we analyze the relevant indicators in Sri Lanka like access to
Electricity and Communication, the North and East once again emerges as a
deprived region. The connectivity through mobile and land phones is at a low
ebb of 10% in the North and 15% in the East as per the 2003/4 census.  Even
though the penetration of electricity is at a high 64% of the households in
the North and the East, the insight is that in remote areas of Kilinochchi,
Mannar and Mullativu the non availability of power can reach a dizzy height
of 90%. Which can give us an idea of the deprivation and isolation that
exists and the opportunity for idolism to be indoctrinated.*

*GDP focus –drives in equality *

>>From the above data, it is very clear that policy makers have over time
continuously focused on the investments which give the better return to GDP
and the result is the neglect of low resource, geographical areas like
Moneragala, Badulla and the Estate sector . In fact the recent household and
Expenditure Survey 2007 reports that the poverty head count in the Estate
sector has increased from 30 to 32 percent which to my mind is a very
dangerous situation from a deprivation point of view.

Regionally, this issue is glaring into our face with a 50 percent odd
contribution that is generated by the Western Province to the national GDP
whilst the North and East are contributing a mere 7%.

The growth of the service sector has led to a neglect of the agricultural
sector and the indications are of rural households getting into a poverty
trap given that Sri Lanka is essentially an agriculture driven economy from
a geographic point of view. The result of this investment strategy is what
we see in Sri Lanka now where we are facing severe challenges in the Tea,
Paddy and Coconut industry. In fact the overall productivity in the
agricultural sector has declined due to the age old agricultural practices
yet being followed. There are studies done globally that geography and
climate tend to have a strong relationship with terrorism by way of
providing a safe haven for training and hideouts for terrorism. The
geographic terrain in Mullativu is a classic example in Sri Lanka.

*Rest of the Country –  poverty drops to 15.2%*

On the other hand if we take the rest of the country research indicates the
overall poverty head count has dropped to 22.7 percent as against the
previous number of 28.8 percent which is encouraging. However, the 22.7
percent means that the number of people affected by poverty is 3-5 million
Sri Lankans. In addition the research also reveals that the non-poor, are
closely clustered just above the poverty line which means that the number of
poor is subject to sharp increases when slight changes in economic
conditions happen like a natural disaster or price increases. If we examine
closely the numbers further it reveals that in the rural and urban sectors
the headcount ratios are 25 and 8 percent respectively, which means that
poverty is essentially a rural phenomenon. If the line coefficient for
consumption inequality remains unchanged at the level of 2002 and growth
continuous at the same rate as it did in 2004 and 2005, poverty will fall by
more than 50% to 8.2% by 2015. If however, consumption inequality increases
– as it did in the last 10 years – poverty will fall to 14.8% from 26% in
1990/91 (World Bank, 2006) Further, urban poverty halved between 1990-91 and
2000, while rural poverty declined by less than 5 percentage points, and
poverty in the Estates increased by about 50 per cent making this sector the
poorest in the country. The latest poverty report launched by the World Bank
has revealed that in the Estate sector the poverty has increased to 30% in
2002 which is way above the 1990-91 levels.  However with the increasing
prices of Tea the thinking is that a stronger social welfare programme can
lead to the poverty level dropping.

Recent research reveals that the overall poverty levels have dropped down to
15.2% which means the pro poor approach of driving the economy is working on
this count. In fact it is the best in the Asian region. The challenge
however is that the levels of inequality can be greater.

*War in Colombo?*

Sometimes until disaster strikes on our door we never realize. With
terrorism reaching out to Colombo particularly against civilians, we now see
the emergence of public opinion in support of overtly waging war on the
LTTE. But the challenge for policy makers and the senior private sectors
heads is to analyze the root causes, like may be the key indicators like
poverty and see what initiatives can be done to correct this. US trade
representative Robert Zoellick recently spoke on the liberalization of
International Trade and there by drive poverty down. May be its time that
the private sector absorbs such strategies and focus on areas like the
Estate sector. The best case in point is the utilization of the FTA with
India and Sri Lanka on Tea, is below ten percent for the last three years
due to non trade barriers. May be if this benefit is made a reality Sri
Lanka could have stabilized the poverty head count in the Estate sector
without letting it decline.

*Eastern Model – Opportunity to deflect LTTE*

In the last one and half years I have heard many a rhetoric of strategies on
bringing Peace to Sri Lanka. In the last 25 years all this conceptualization
has not brought any results. I feel the best opportunity we have to deflect
the core cause of the LTTE leader of having a Tamil home land is if Sri
Lanka rallies behind the recently appointed Eastern Chief Minister. It will
be a classic case study to the world where a blue blooded ex combatant of a
terrorist organization has joined the democratic process and there by
becoming the Chief Minister of a geographical area. The challenge is the
pace at which the socialization process can happen where the new governance
structure can drive the key pivots like IDP resettlement successfully,
spruce up the economic development and practice a governance model with a
strong language policy that is acceptable to the area. It is up to every
citizen of Sri Lanka to shoulder this responsibility.

May be the key initiative that can create an enabling environment is the
launch of Development Banks, improve the connectivity of the villages, and
provide a better access to telecommunication so that rapidly the
agricultural and animal husbandry can be developed to improve the livelihood
opportunities. The launch of the Peace Collection – the range of products
from the North and the East,  SME's will add to the opportunities that have
been provided the people living in those areas. May be its up to us to help
strengthen the governance structure, and there by deflect the very purpose
and vision of the de facto state of the LTTE  - A mantra that has been
chanted across the world by LTTE supporters.

*International Perspective*

If Sri Lanka makes the Eastern model work we will see a major swing in
opinion of the International community where the current LTTE leadership is
also asked to follow suit - to may be replicate the Eastern Model. This can
be the turning point to my mind in this complex stage where there are many
ideologies emerging as the way out. The fact remains is that Sri Lanka
cannot afford a 150 billion expenditure on the war when the oil bill is
estimated to reach a 4 billion dollars this year which is more than the
combine annual turnover of the top two export revenue earners -Tea and

There are many other theories in this analysis if Poverty is the cause of
terrorism. Some arguments are that material conditions do not drive poverty
but it is a person's beliefs and values. However other studies reveal that
even a terrorist sleeps at night and it is the fundamentals that drive
extreme behaviour.  Russel Ackoff, Emeritus professor at Wharton School of
Business designed to promote private businesses role in combating terrorism
says 'The basic problem that spurs terrorism is mis - distribution of wealth
within a country. The challenge is that we don't understand how to close
that gap that makes matters worse"

Regarding the 9/11 attack in the US, politicians and policy experts drew a
quick correlation between Terrorism and Poverty. Much of the existing
academic literature state that poverty drives conflicts and this can lead to
terrorism with the administrative system in play. But our task at hand is
not to debate which school of thought is correct but in identifying the
golden opportunity at hand and chasing after this with passion and purpose –
which is making the Eastern model work.
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