newSRILANKA Team External Links 24 August 2009 143 views No Comment  Print This Post  Email This Post

- communities given equitable deal
Ceylon Biscuits, Hayleys and Keells to sign agreements  with communities

A United Nations agency believes Sri Lanka could end up being a role-model to other post-conflict nations in getting the private sector directly involved in rehabilitating and restoring economies; if all goes well.

The UNDP is facilitating partnerships between top Sri Lankan companies and local post-conflict communities aimed at providing fair equitable dividends within a profit oriented model.

John Keells, Hayleys and Ceylon Biscuits Limited are expected to enter into agreements with several communities in the East and North who have successfully formed into cooperative-style community-based organisations.

September…a big month…

“September is going to be a big month. We hope that several private sector companies, particularly Keells, Hayleys and Ceylon Biscuits will come forward to enter into agreements with communities in the East – and Jaffna in the North – who are already prepared to cater to the production needs of the companies in areas that have already been identified,” UNDP Country Director for Sri Lanka, Douglas Keh, said.

“We have also made it possible for these companies to establish links with the local government authorities and government agents in order to facilitate a ‘business-friendly’ environment in these post-conflict regions,” he told the Island Financial Review.

Not good enough…

There is no doubt the private sector has a key role to play in the development of the North and East, especially by establishing employment generating businesses in the agricultural, industrial and services sectors within the regions themselves.

There has been a resurgence of interest in the country’s business community to participate in the economic development of the East and eagerly wait for things to improve in the North.

However, to merely open up a factory or production centre, that would create much needed jobs, is not good enough.

The UNDP is working closely with the private sector, government authorities and the communities to push for a model it believes would work.

“Experience has shown that post-conflict recovery works best when businesses get involved on a for-profit basis. They no doubt have a responsibility to support the country’s recovery, but it should not be charity,” Keh said.

He said businesses must be allowed to go for profits believing it is a better model when resources are allocated and makes business and employment generation sustainable.

“However, what we are insisting on is that the communities be given an equitable fair deal. This is where corporate social responsibility (CSR) comes in. CSR is not about building a school in a remote village and then leaving. It is all about doing ethical business.

“Sri Lanka’s private sector could provide a powerful engine for Sri Lanka’s recovery if they can somehow incorporate CSR elements into their strategic planning and market outreach, on a for-profit basis,” Keh said.

“In other words, rather than expecting a 7 percent return on investment within 12 months, the companies would be ready to accept 6 percent in15 months, bearing in mind that the “suppliers” in this case may need some time to get up and running,” he said.

“In the long run, as long as the resettled communities get a fair deal, this is the most sustainable model for private sector involvement in Sri Lanka’s recovery.

Similarly, the companies should be ready to invest more in training and capacity building of the resettled communities in areas such as cultivation, storage, and ideally, higher-value chain sectors such as food processing. It has to be borne in mind that these are not your typical agricultural suppliers. But over time, they will be,” Keh said.

Keh said the key sectors that are immediately available with tremendous potential to reap economic gains for the communities—but need private sector participation to tap into markets—are the agriculture, fisheries, tourism and apparel sectors.

“The communities in the North and East have been suffering for decades. They don’t want to rely on international humanitarian support forever. They want to earn their own income. They want to be financially independent. They want to work. These sectors have the potential to provide the necessary employment that would help these communities rebuild themselves. Also, these sectors have a huge potential to grow,” he said.

Keh believes that in future, today’s resettled communities will be ready for engagement with the private sector in other, more advanced industrial sectors as well. This will, however, need to be facilitated through developments in education and ICT.

“Building a strong knowledge base in these communities which would lift them to another level in terms of more advanced industrial sectors is crucial but the immediate requirement is to build on what they are now capable of producing. These communities should be able to stand on their own feet and re-establish their identities first. Then we can start to think of up-market production niches such as ICT, small, solar power generation, and communications. ” Keh said.

Communication facilities are weak in these regions with many communities virtually cut off from the world.

Read more at Island

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