63176 DONORS AND PEACEBUILDING Part of the Sri Lanka Strategic Conflict Assessment 2005 2000 – 2005 Adam Burke and Anthea Mulakala VOLUME N. 2 0 SERIES SIX - PART DONORS AND PEACEBUILDING IN SRI LANKA 2000 - 2005 PART OF THE SRI LANKA STRATEGIC CONFLICT ASSESSMENT 2005 By Adam Burke and Anthea Mulakala The governments of the Netherlands, Sweden, and the United Kingdom, in collaboration with The Asia Foundation and the World Bank funded this project. The contents of the studies should not be construed as reflecting the views of the five funding agencies. © Copyright 2005 Netherlands Ministry of Foreign Affairs Swedish International Development Cooperation Agency The Asia Foundation Government of the United Kingdom of Great Britain and Northern Ireland World Bank For reproductions of this publication please contact: 3 1/A Rajakeeya Mawatha Colombo 7, Sri Lanka Phone: +94 11 2698356 Fax: +94 11 2698358 www.asiafoundation.org All rights reserved Printed in Sri Lanka 1 | Contents Contents Acknowledgements.............................................................................................................................................. | 2 About the Authors................................................................................................................................................. | 3 Acronyms............................................................................................................................................................... | 4 Executive Summary.............................................................................................................................................. | 5 Introduction............................................................................................................................................................ | 9 1. Aid to Sri Lanka, Past and Present............................................................................................................ | 11 Supporting State Development.................................................................................................................. | 11 Greater Sensitivity, More Varied Approaches......................................................................................... | 11 Conditionality in Sri Lanka - Changing the State..................................................................................... | 12 Working Outside the State - Different Approaches................................................................................ | 12 Growing Donor Awareness of Conflict..................................................................................................... | 12 2. Donors and Peacebuilding 2000-2005....................................................................................................... | 15 The War for Peace Period: Increasing Donor Disillusionment............................................................ | 15 Donors Get Comfortable with the UNP and LTTE................................................................................... | 16 From Center Stage Back to the Sidelines: Donors Face Their Limitations........................................ | 20 The Tsunami................................................................................................................................................... | 21 3. Key Trends Emerging................................................................................................................................... | 23 Broader Development Trends..................................................................................................................... | 23 Sri Lanka Specific Trends - Summary....................................................................................................... | 24 Integrating Conflict Sensitivity.................................................................................................................... | 24 Political Awareness...................................................................................................................................... | 25 Coordination and Long-term Engagement................................................................................................ | 28 4. Conclusions.................................................................................................................................................... | 29 Overview......................................................................................................................................................... | 29 Diplomacy, Politics, and Aid........................................................................................................................ | 30 Aid as a Catalyst for Change...................................................................................................................... | 30 Transformative Measures............................................................................................................................ | 30 Possible Steps............................................................................................................................................... | 31 Appendix: A Sample of Development Actors................................................................................................... | 35 Bibliography........................................................................................................................................................... | 45 Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 2 Acknowledgements All views expressed in this study are the authors' and do not represent those of the commissioning agencies, the facilitators of this study or those who were interviewed. We would nevertheless like to thank the following for their contributions to this study. Firstly, Nilan Fernando, Jonathan Goodhand, Bart Klem, Lisa Hedin, and Sheila Richards who provided feedback on earlier drafts of this report. Secondly, Alan Martin and Gina Genovese, who provided valuable editorial assistance. 3 | About the Authors About the Authors Adam Burke has worked in Sri Lanka regularly since1999. Initially through his role as a social development adviser with the British Department for International Development (DFID), and then as a consultant to different organizations, he has followed the approaches of a wide range of aid actors as Sri Lanka's conflict changed over time. Fields of engagement include policy analysis, especially on the links between conflict and aid, as well as design of major funding programs to support civil society's role in peacebuilding. More widely, he has worked with donors, United Nations (U.N.) agencies, and NGOs on development research, policy, and practice across Southeast and South Asia, focusing particularly on conflict-affected environments. Email: adamitobur@yahoo.com. Anthea Mulakala has worked in the development field in Canada, the Caribbean and South Asia for over 15 years. Her engagement in Sri Lanka extends back to 1991 when she managed a Canadian NGO support program. Since 2001, she has worked for DFID in Sri Lanka as a conflict adviser. She was involved in the implementation of the recommendations of the first Strategic Conflict Assessment (SCA1) and has worked as a core member of the donor community in Sri Lanka over the past five years. In late 2005 she will begin working for the World Bank in Indonesia on harmonizing donor efforts around government decentralization. Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 4 Acronyms ADB Asian Development Bank CFA Ceasefire Agreement CPA Centre for Policy Alternatives DACC Development Assistance Coordinating Committee DFID U.K. Department for International Development DWG Donor Working Group on the Peace Process EU European Union FLICT Facilitating Local Initiatives in Conflict Transformation GOSL Government of Sri Lanka GTZ Deutsche Gesellschaft für Technische Zusammenarbeit (German Technical Cooperation) IFI International Financial Institution JBIC Japanese Bank for International Cooperation JICA Japanese International Cooperation Agency JVP Janatha Vimukthi Peramuna (People's Liberation Front) LTTE Liberation Tigers of Tamil Eelam (Tamil Tigers) NERF North-East Reconstruction Fund NGO Non Government Organization ODA Overseas Development Assistance PA People's Alliance P-TOMS Post-Tsunami Operational Management Structure SCA Strategic Conflict Assessment SIDA Swedish International Development Agency SLFP Sri Lanka Freedom Party SLMM Sri Lanka Monitoring Mission TRO Tamil Rehabilitation Organization UPFA United People's Freedom Alliance UNDP United Nations Development Programme UNICEF United Nations Children and Education Fund UNHCR United Nations High Commissioner for Refugees UNF United National Front UNP United National Party USAID United States Agency for International Development 5 | Executive Summary Executive Summary CHANGING DONOR POSITIONS promote peace and encourage international involvement have facilitated approaches with a more explicit focus on This report is a contribution to a broader study entitled peacebuilding. In terms of sensitivity to conflict, the "Aid, Conflict and Peacebuilding in Sri Lanka" following donor trends have occurred since 2000: (Goodhand and Klem, 2005), which examines the peace z More specialist staff dedicated to conflict issues. process in Sri Lanka with a particular focus on international engagement. z Increased political awareness, enabling more nuanced engagement and understanding of the Donors have provided development assistance to Sri linkages between aid programs and conflict. Lanka for decades, although its significance in the z More and increasingly sensitive support for civil national economy is decreasing. Severe conflict has society. affected Sri Lanka since the early 1980s, although in z Increasing collaboration and shared analysis. more recent years a ceasefire has brought some degree of z More support to the conflict-affected North-East peace. region. Various donors - especially European bilateral z Increased engagement with the LTTE. organizations adopting newer ideas on aid provision z Increased awareness of conflict issues in mainstream globally - have become increasingly sensitive to conflict support. issues and how they relate to aid programming. Donors z Support for government - LTTE collaboration. have more relevant knowledge, are better able to work together on conflict, and are better at drawing links z Increased attention to "transformative" processes between the conflict and their own financial support. that aim to tackle underlying problems, especially if they coincide with an economic reform agenda. These shifts reflect first and foremost changing political These changes are not a response to a different paradigm circumstances in Sri Lanka. They also reflect shifting in which donors fundamentally alter their modes of patterns of aid provision globally, and a tendency among engagement--there has been no sea-change. Most factors some donors to consider the local political or social determining the shape of donor assistance remain the contexts as increasingly significant factors in aid same. allocation, especially in extreme conditions such as conflict. Smaller donors have shifted more than larger donors in this direction, although recognition of the AID'S LIMITED ROLE IN PEACEBUILDING importance of conflict reduction in achieving the aims of aid provision is increasing across the board. The notion that aid provision can in itself act as a significant catalyst or lever to promote peace in Sri A continuing ceasefire in Sri Lanka has made it possible Lanka may be seductive, but risks overlooking a set of to assist on the ground, and government measures to limiting factors: Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 6 z Most aid provision is dependent on diplomatic and IMPLICATIONS FOR DONORS' POLICY AND political considerations; aid agencies rarely have the PRACTICE scope to act independently, meaning that on-the- ground actions are less significant than wider trends Sri Lanka faces fundamental governance challenges, and or political developments. there will be continuing obstacles in the search for lasting peace. While donors may rarely be able to tackle z Aid agencies respond to internal incentives and such issues directly, they can still be involved priorities that are often geared toward ensuring productively. Donors can provide support in the search smooth disbursement of aid and efficient allocation for solutions to underlying problems, and help with of resources. This means that in many cases, more immediate issues relating to peacebuilding. Smaller common ground will be found only when a donors may have a comparative advantage in supporting conflict-aware approach eases resource transfers, as larger donors to work along these lines in fields where opposed to limiting expenditures or creating there are shared objectives. Our recommendations obstacles in the aid pipeline. include: z The aid organizations at the forefront of z Working toward greater donor understanding of peacebuilding approaches are financially background conditions and ways in which aid insignificant actors in the Sri Lankan economy. provision can be screened or evaluated in order to While this does not render them useless, and there "do no harm" and be better targeted to support are many valid exercises that they can engage in, conditions conducive to peacebuilding. This could their approaches will probably not become common involve the recruitment of higher-level Sri Lankan currency across the aid community in Sri Lanka. A staff. Also there should be further linkages between straightforward look at the ways in which the larger aid and diplomatic, commercial (and, on occasion donors work demonstrates that while aid can be military) ties, to encourage well grounded and made more conflict-aware, there are serious barriers cooperative approaches with a longer-term to a fully cooperative approach. perspective. z Most importantly, aid is not, for the most part, very z Considering withdrawal carefully: Donors looking effective as a vehicle for transformation. It is a to withdraw from Sri Lanka should factor into their relatively minor factor in the politics and mechanics calculations the amount they have invested in of conflict in Sri Lanka and in most other countries. building up a conflict-sensitive approach. This means that while aid can support dominant Withdrawal would waste this asset, and for smaller tendencies or political imperatives, it can rarely donors it would send no real signal to the change them. The viability of aid as a supporting government. factor in the peace process depends entirely on progress in the peace process itself. In most cases, z Seeing pragmatic common ground: Efforts should aid is the cart and not the horse. support positive aid provision where it can back government policy and help produce a tangible The drivers of change in Sri Lanka are political actors, peace dividend - in the North and in the South. Yet not donors. The international community is not without in terms of donor coordination, donors must influence, however. Donor countries can optimize their appreciate that consensus-based approaches may many types of engagement in Sri Lanka: trade, military, result in lowest-common-denominator strategies, security, diplomacy, and aid. Donors can provide a and should strive instead to make donor strengths variety of incentives and supportive measure for peace, more complementary. but these are generally not aid-related. 7 | Executive Summary z Supporting alternative channels for discussion, debate, and negotiation on conflict issues within Sri Lanka. z Focusing more strongly on domestic capacity- building--whether through projects, funding, or policy-based research initiatives--that is always within the framework of a sound institutional analysis to ensure that any capacity development initiatives are not constrained by structural factors. z Working to maintain pragmatic and appropriate contact with LTTE bodies. z Considering the resentment of the lack of attention to the South, and how to provide ways of addressing that shortfall. Rapid economic reform is likely to further derail the peace process, if it helps build perceptions that the poor Southern majority is being ignored. z Continuing to support the North-East even if a political settlement remains elusive. z Expanding civil society funding: this is already underway, but the trend whereby donors look more widely at a broader range of actors should be continued. z Engaging the diaspora: some donors have engaged the diaspora community and more efforts might be possible. 9 | Introduction Introduction This report is a contribution to a broader study entitled This report aims to provide useful and succinct "Aid, Conflict and Peacebuilding in Sri Lanka" information that can be used for the SCA2, and for (Goodhand and Klem, 2005), which examines the peace other purposes. All errors, omissions, or inaccuracies are process in Sri Lanka with a particular focus on the fault of the authors. international engagement. It is one of several contributing studies to the 2005 Sri Lanka Strategic Conflict Assessment (SCA2). Part One is a brief perspective on foreign assistance to Sri Lanka. Part Two delves more deeply into the period between 2000 and 2005 when donors became actively involved in the peace process. Using the results of interviews with donors and other research carried out in early 2005, Part Three considers the underlying motivations and incentives for donor action during this time. Part Three also examines the extent to which the analysis and recommendations of an earlier strategic conflict assessment in 2000 have been implemented and are still relevant. Finally it provides suggestions for future donor engagement. This report was compiled using information gathered through the authors' professional engagement in Sri Lanka dating back to 1991. Further interviews and a review of literature conducted in February 2005 provided updated and more detailed sources. The report is intended as a background study, alongside other background studies and additional work, to support the multi-donor Strategic Conflict Assessment (known as SCA2) conducted during 2005. The authors of this report participated in the earlier strategic conflict assessment conducted in 2000, and in the implementation of its recommendations. As such, this report presents a particular perspective on conflict in Sri Lanka, focusing on the role of donor assistance and provides an "insider" view of donor engagement with the Sri Lankan peace processes. 11 | Aid to Sri Lanka, Past and Present 1. Aid to Sri Lanka, Past and Present SUPPORTING STATE DEVELOPMENT massive integrated development program for Sri Lanka's interior that commenced in the 1970s. Donor support Donor assistance has supported the government of Sri made the scheme viable, but failed to integrate adequate Lanka for decades. However, Sri Lanka has never been social or political sensitivity. Resentment of the unequal heavily dependent on donor resources. In fact, since the access to the benefits of such state investments on the economy has grown while donor funding has remained part of minority (chiefly Tamil) populations fuelled constant or declined, aid represents a decreasing support for subsequent civil war. proportion of the national budget. Historically, donor funds have supported state-led GREATER SENSITIVITY, MORE VARIED development. Transfers to government for major APPROACHES projects, or occasionally for generalized budget support, have helped finance health, education, infrastructure, In the past two decades, many donor organizations have and other services. These steps have enabled Sri Lanka to become more aware of the political context within register impressive improvements in human which aid is provided. From the early 1970s, for development indicators. example, USAID began to promote decentralization within its programs of support in various countries. The top-down aid delivery model, as practiced in Sri Other bodies, including many European bilateral Lanka during the period immediately following donors, U.N. agencies, and the World Bank, increased independence, tended to support an already over- centralized state. Aid was provided to the central the level of social assessment and specialist staff engaged government, and negotiations over how funds were in looking at a wider body of issues in Sri Lanka and allocated occurred at a central level, arguably elsewhere. Broader aid discourse has promoted a wide undermining democratic processes and reducing range of solutions to perceived problems, including the government accountability to Sri Lankan citizens. A state promotion of gender equality and popular participation. that can receive funds centrally without having to ensure the cooperation of citizens, taxpayers, or local political Some donors promote such ideas as a priority, ahead of interests may have less need to listen to local opinion. more traditional development support to a central state. The centralized, technocratic "developmental state" that This is especially the case in a country like Sri Lanka, aid has tended to support in many countries may lack where past successes mean that mass poverty (as defined mechanisms or political processes to ensure just political for example in the Millennium Development Goals) has representation and a voice for ethnic or other minorities. largely been eliminated. While domestic factors are more significant than aid Yet newer development paradigms may also run into flows in determining the political make-up of Sri Lanka, problems, suffering from a lack of locally appropriate donor assistance-supported centralized structures and planning, lack of attention to local political factors, or a political systems marginalize certain groups within the failure to gain domestic participation in proposed plans. population. Perhaps the clearest example is donor Newer ways of working can simply lead to a new range support for the Mahaweli basin development scheme, a of externally driven initiatives. Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 12 More holistic approaches also make disbursement of WORKING OUTSIDE THE STATE - DIFFERENT large sums of money more challenging. While this is not APPROACHES much of a problem for donors whose budgets are limited, it is a real issue for bodies that need to spend at Aid has increasingly been provided outside government a rapid rate. For development banks, which need to mechanisms. In addition to "transformative" support to provide loans to sovereign governments, there are further promote change, international NGOs and a range of limits on what can be achieved. Loans must flow to domestic bodies have created alternative channels for central government, in large quantities. providing support in an effort to reach marginalized groups. Such support may aim to build the voices of marginalized groups in policy dialogue. A fear of CONDITIONALITY IN SRI LANKA - CHANGING THE corruption also encourages donor agencies - especially STATE the USAID - to avoid funding the government directly. An awareness that aid alone was often ineffective in Yet for some donors, especially those from Asia, the prime role of the state has not been questioned as it has bringing about economic growth encouraged donors to elsewhere. A host of factors contribute to this, including: attach conditions to their support. This enabled donors greater respect for non-intervention and national and governments to keep the funding pipeline flowing, sovereignty; a desire to avoid foreign interference given while attempting to use aid as a lever for reforms. As in experiences of colonialism, external communist other countries, the strings attached to aid for Sri Lanka agitation, proxy wars between superpowers, and became tighter in the 1970s, and starting in 1977, aid American pre-emptive action; positive experiences of was used to promote concerted liberalization of the Sri successful state-led development in East and Southeast Lankan economy. Asia; a weaker democratic tradition and greater respect for existing ruling elites; and less scrutiny of aid flows Starting in the late 1980s, donors widened their scope, from civil society domestically. Given that Asian donors recognizing that reform of government structures was are highly significant in Sri Lanka, this is important in required as well as economic liberalization. Repeated considering the shape of overall aid flows. efforts have been made to slim down the civil service, improve planning and budgetary mechanisms, and change the form or function of a range of line GROWING DONOR AWARENESS OF CONFLICT ministries. Finally, and most recently, a range of peace conditionalities has involved a more explicit focus on Through the 1990s, a range of donors became gradually conflict-related issues. more sensitive to conflict issues. The organizations that did so tended to be those more widely adopting newer Donors have adopted a range of terms such as ideas on aid provision. These were chiefly global trends, "transformative approaches," and "building drivers of reflected in programming in Sri Lanka and elsewhere. As change," to describe efforts to promote reforms of Sri Lanka emerged as a middle-income state (according government structures. In addition to both traditional to categories used in the World Bank's annual world projects and conditionality, they have also considered development reports and elsewhere), donors who were other ways of promoting change by supporting domestic increasingly focusing on poverty reduction became less constituencies likely to build pressure for the desired interested in disbursing funds to Sri Lanka. Some reforms, including civil groups, membership bilateral donors in particular were no longer spending organizations, media, and research bodies. substantial sums of money in the country or delivering large projects through state channels. Consequently, a 13 | Aid to Sri Lanka, Past and Present Figure One: Donor flows to Sri Lanka 2002-2003 Top Ten Donors of gross ODA (2002-3 average in U.S.$) 1. These are gross figures including both loans and grants. They do not include repayments Japan $249m of loans from the government of Sri Lanka to ADB $148m donor institutions. 2. Some donor contributions do not register in World Bank $146m these statistics (taken from the OECD DAC). IMF $27m These donors include: India (sizeable low- interest loans to GoSL), China, Saudi Arabia, Germany $25m Kuwait, and other Middle-Eastern Norway $25m governments. Netherlands $24m 3. From the government's perspective, European and North American donors are still less Sweden $19m significant than the small amounts below would indicate, given that much of their Korea $17m support is channelled to or through non- USA $16m governmental bodies. 2% 2% 2% 3% Japan 4% ADB 37% World Bank 4% IMF 4% Germany Norway Netherlands Korea USA 21% Sweden Source: OECD/DAC 21% good relationship with the government became less By 2000, some bilateral organizations were already essential. They were able to focus on the conflict while engaged in conflict-related issues as a core aspect of their still achieving their (reduced) annual aid disbursement work. Other donors, especially the largest three (Japan, objectives. For some countries, a fairly vocal Tamil the Asian Development Bank (ADB), and the World diaspora was another factor drawing donor agencies' Bank), demonstrated little recognition of civil war, or attention to the conflict. indeed of ethnicity in any respect, in their Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 14 documentation or programming. Often, it was not in avoided working in the North-East until the "war is the interests of some donors, or the government, to over." Although the World Bank has, in recent recognize issues that would complicate provision of years, begun to invest in the North-East, this has substantial funds. not affected the main portfolio of programs supported in the South, which are still in the main The Strategic Conflict Assessment of 20001 (SCA1) 'conflict blind'. summarized the general situation regarding donors in Sri (2) Agencies working in the North-East have been Lanka as follows: forced to become more cognisant of the links "There are basically three types of aid to Sri Lanka: between their programs and conflict. As a result they have adapted programs so that they can work (1) Conventional development assistance channelled more effectively in conflict by reducing conflict through government, with primary focuses on related risks and ensuring that aid does no harm. structural adjustment, liberalization, government International NGOs such as OXFAM and CARE reform, and infrastructure investment. have analysed their programs in relation to the (2) Humanitarian assistance provided to the North- conflict dynamics, while UNHCR, working in East, most of which comes out of separate, short- Jaffna, has avoided making heavy investments that term humanitarian budget lines and aims to address may be vulnerable to the ebb and flow of conflict. the social costs of the conflict. (3) There is a small group of bilateral donors who (3) A number of smaller bilateral donors, such as recognize the link between development and Norway, Canada, Netherlands, and Germany conflict and have an explicit focus of working on provide assistance to civil society organizations conflict. Norway, Canada, Netherlands, Germany, focusing on areas such as human rights, conflict Sweden, Switzerland, and the U.K. have all begun resolution, capacity building, and judicial reform." to identify programming opportunities for working (Goodhand 2000). on conflict. A range of initiatives have been funded in areas, such as human rights, poverty alleviation, The assessment continues: good governance, education and conflict resolution, which have an explicit focus on conflict. While "Broadly, donors have responded to conflict in three these initiatives are significant in terms of bringing ways: new ideas and lessons to the donor-government (1) The predominant approach has been to work table, in relation to the bulk of donor funding they around conflict i.e., conflict is a disruptive factor to are relatively small scale and unlikely to affect wider be avoided. Therefore donors avoid working in incentives systems and structures." conflict-affected areas and development aid is put on hold in the North-East. If a link between conflict and development is acknowledged, it is that conflict which is an impediment and can be removed with greater market openness and deregulation. The major donors such as Japan and ADB have taken this line, both of whom have 1 Unlike this assessment, the earlier Strategic Conflict Assessment undertaken in 2000 was not a multi-stakeholder exercise. It was a shorter and less inclusive process, undertaken at a time when military conflict was under way. However, it provides a starting point and remains a valid interpretation of events up to 2000, with a particular focus on donor assistance and conflict. 15 | Donors and Peacebuilding 2000-2005 2. Donors and Peacebuilding 2000-2005 In the five years following the first Strategic Conflict At that time, some bilateral donors attempted to raise Assessment of 2000, the political and institutional attention to the perceived inadvisability of providing contexts in Sri Lanka have challenged, tested, and called donor funds in an environment where conflict was both into question the extent to which donors in Sri Lanka can continuing and apparently damaging the economy of effectively support peace. This section analyses donor the island as a whole. While some donors were attitudes and practices over three defined periods that continuing in an environment of "business as usual," correspond with shifts in the political environment. It also and argued either that the government had a right to considers donor engagement with the Liberation Tigers of pursue a war against a terrorist non-state actor, or that Tamil Eelam (LTTE) and the impact of the tsunami on withdrawal of support would hardly help the situation, the international community's role. Lastly, it reflects on others were aiming to establish greater links between whether donor strategies over this five-year period have conflict and development assistance. A range of studies been effective in strengthening the prospects for peace. was supported, including the 2000 Strategic Conflict Assessment, with this aim in mind. Positions became polarized at times, as was seen at the Donor Forum in THE WAR FOR PEACE PERIOD: INCREASING Paris in December 2000, where some donors were DONOR DISILLUSIONMENT outspoken on the failure of government to promote peace in any meaningful way. As the Sri Lankan economy weakened in 2000 and 2001, military deadlock continued in the North. The By this point, a range of smaller donors was actively LTTE managed to inflict major casualties on the armed engaged in peacebuilding measures as a key aspect of forces and pursue terrorist tactics in the South. The their programs. Larger donors, including the ADB and spectacular attack on Sri Lanka's only international the World Bank, were focusing increasingly on links airport, near Colombo, made it still more apparent that with conflict in their documentation and in practice winning the war in order to create peace was an through various channels: programs in the North-East, impossible task, and damaged the economy widely. support for the government-led Relief, Rehabilitation and Reconciliation (3R) program, and occasional aims Over time, more small bilateral donors began to move to integrate ethnic issues into programming in the South their support away from the People Alliance (PA) or across the island, such as through the World Bank government. The numbers of donors joining the lead education sector reform program. However, the conflict shown by the Netherlands; Germany (through the still remained a secondary factor in the process of German Technical Cooperation, GTZ); Canada; and deciding on resource transfers from the development others in earlier years increased. Many NGOs also banks and Japan. Given that these donors represent responded to this shift. For the development banks and some 75-80% of donor funds, this is significant. the International Monetary Fund (IMF), economic stagnation was probably the primary basis for some Throughout this period, the PA government maintained withdrawal of support for government policies in 2000 the position that the conflict was an internal matter and and 2001. discouraged unsolicited engagement from the Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 16 international community. Donors were discouraged The CFA made provision for the Nordic countries to from proactively working on conflict or expressing establish the Sri Lanka Monitoring Mission (SLMM), political viewpoints. which continues its role to the present. The UNP encouraged donor coordination and DONORS GET COMFORTABLE WITH THE UNP AND harmonization during this period, albeit principally LTTE around their economic reform agenda. A Development Assistance Coordinating Committee (DACC) was The UNP electoral victory over the PA government in proposed in 2003 by the government to ensure December 2001 led to a wholesale change in the government lead on this effort. environment. The new government signed a ceasefire agreement with the LTTE in February 2002, launched Between late 2002 and early 2003, the government and peace talks soon after, and opened the doors for LTTE held six rounds of peace talks. The government international engagement and support. While the also pushed forward on developing its economic plan, previous PA government had maintained through the while the multilateral agencies (IFIs and the U.N.) led a 1990s that the conflict was an internal matter, the UNP needs assessment for reconstruction in the North-East. saw opportunities in internationalizing the peace In parallel with the formal peace talks, international process. Norway played the role of the official facilitator donor conferences were planned to mobilize and to the peace process and appointed a special envoy. leverage international support and financing. The Oslo During this period the UNP negotiated several trade conference in November 2002 built on the and security arrangements with strategic partners like the recommendations from the first two rounds of peace U.S. and India. Similarly, donors saw opportunities in talks, with donors endorsing the parties' commitment to engaging with a government willing to listen to donor human rights and other core principles; the new joint perspectives and in expressing themselves in ways that government-LTTE subcommittees; and the donors or diplomatic colleagues would find encouraging. establishment of a North-East Reconstruction Fund Added to this was the UNP government's economic (NERF). Further conferences were planned in co-chair policy program, which promoted rapid reform through capitals, leading to the final high profile Tokyo liberalization toward a greater role for the free market Conference on Reconstruction and Development of Sri and reduced state intervention. For a majority of donors, Lanka in June 2003. There, donors were expected to this policy portfolio was very close to the prescriptions pledge major funds toward a needs assessment of the that they themselves would have offered. North-East and the government's economic recovery plan (called "Regaining Sri Lanka"). Peace architecture (such as peace secretariats and the donor co-chair/conference mechanism) was rapidly put Another significant feature of this period was the in place and donors eager to play a constructive role international community's relationship with the LTTE. channelled support toward these bodies. Japan, who had The international community was consistent in its support previously treaded cautiously over political matters, for constructive engagement between the government and appointed a special envoy for the peace process and the LTTE, hoping it would lead to a negotiated political assumed the leading co-chair role. Other donors also settlement. Regarding their own relationship with the appointed special peace envoys and deployed countless LTTE, however, donor positions varied. The UNP missions to launch reconstruction programs in what was government's encouraging approach to international mistakenly perceived as a post-conflict environment. engagement with the LTTE provided space for donors to 17 | Donors and Peacebuilding 2000-2005 cultivate relationships with the Tigers. The ADB and the When access to the North-East improved (repairing of World Bank took a pragmatic approach, developing the A9 road and resumption of commercial flights), informal working arrangements with key LTTE donor traffic to the Vanni increased, as did meetings counterparts to ensure effective implementation of their with the LTTE. The LTTE expanded its infrastructure large-scale reconstruction projects in the North-East. The to deal with the international community with the LTTE regarded the international financial institutions creation of the Planning and Development Secretariat, a (IFI's) apolitical approach favorably because it brought peace secretariat, and even donor-friendly guesthouses resources to their areas. It was no surprise that the World and restaurants. Bank was the LTTE's custodian of choice for the NERF. The donor response following the ceasefire was in many UNICEF courageously attempted to tackle more prickly ways remarkable, given the absence of a political issues involving vulnerable children and underage settlement. In some respects they treated a no-war, no- recruits. Through an approach of constructive peace environment as though it were a post-conflict engagement and strategic partnership with LTTE- setting. Donors hoped that peace would create more sympathetic organizations like the TRO, UNICEF was opportunities for investment and development assistance able to get government and LTTE agreement to an in Sri Lanka, leading to a substantial peace dividend. Action Plan for Children Affected by War. Based on progress in the formal talks, donors increased short-term (2-3 year) budget allocations in anticipation For bilateral donors, engaging with armed non-state of the major reconstruction needs of the North-East. actors presented unfamiliar terrain. India and the U.S. Though many donors were aware that in post conflict took a harder line with the LTTE, reflecting their own situations major reconstruction spending is generally history with the organization (in the case of India), or required for 5 - 10 years after a peace agreement, donor domestic policy constraints restricting association with bureaucracies were operating on shorter time frames. terrorist organizations since the events of 9/11. Neither Their enthusiasm to support the peace process (and so country engaged directly with the LTTE. The U.S. has be associated with a peacebuilding success story), consistently insisted that the LTTE renounce terrorism combined with government encouragement, tended to in "word and deed" before any kind of recognition blind donors to the prevailing risks. would be forthcoming. Most other bilateral organizations adopted the constructive engagement Peace negotiations broke down in April 2003. Despite approach, directly and visibly engaging the LTTE in Sri this setback in the peace process, the two donor Lanka and abroad, providing a sympathetic hearing, and conferences planned for Washington (April 2003) and in some cases (Norway, Switzerland) providing funding Tokyo (June 2003) went ahead as scheduled. As a and support. Even countries that have proscribed the proscribed organization in the U.S., the LTTE was LTTE as a terrorist organization (the U.K., Australia, barred from participating in the Washington conference. and Canada) have chosen this approach. This "good They withdrew from the peace talks soon after. cop, bad cop" routine, whether by design or coincidence, kept the pressure on the LTTE to reform The Tokyo conference was well attended: participants on fundamental human rights issues, while still included the Sri Lankan Prime Minister, the Japanese encouraging their political transformation. Though Prime Minister, the Norwegian Foreign Minister, the approaches differed, the common interest among donors U.S. Deputy Secretary of State, and the President of the was to encourage the government and LTTE to work ADB. The LTTE did not participate however, arguing together toward a political solution based on power that the conference, like the Washington conference, sharing and federalism. undermined the basic principle of parity between parties Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 18 Figure Two: Main pledges made following Tokyo Conference, 2003 (U.S.$) Top Ten Donors of gross ODA (2002-3 average in U.S.$) Japan $1Billion ADB $1Billion World Bank $1Billion EU $293m USA $54m z These figures are a guide only, and cover pledges not disbursement. They may not be fully accurate, and are gross amounts. Net amounts would have to consider loan repayments as well as pledges that simply repeat past commitments. z Various donor contributions may not be recorded. z Sums pledged following the tsunami of December 2004 change the picture considerably. in the peace process. $4.5 billion was pledged overall, in Annex 1. However, the government accepted the 20% in the form of grants and the remaining 80% as conditionality overtones of the declaration, realizing that concessional loans (maturity over 30-40 years; most with they put more pressure on the LTTE than the a 10-year grace period; interest rate 1-1.5%). Adjusted government, and would not impede commitments to the on an annual basis, the $4.5 billion works out to be government's economic reform strategy. The government about $1.25 billion a year - compared to Sri Lanka's was involved in the final drafting of the declaration. The normal aid level of around $750 million a year. The government left Tokyo with their pockets full, donors left three largest pledges came from Japan, the ADB, and the Tokyo locked into a declaration that they were ill World Bank, with significant contributions from other prepared to implement. The LTTE were simply left out countries. (having chosen not to attend). The linkage between these funds and the peace process For the international community, the conference process was articulated in paragraph 18 of the Tokyo Conference and especially the Tokyo meeting were intended to Declaration (see Figure Three below). bolster and support a positive peace process. When the peace talks went off track in April 2003, the conferences The language of the Tokyo Declaration struck most continued, partly out of their own momentum as plans observers as donor conditionality rather than a looser had been made, but also because donors hoped and felt linkage. The former suggests "No aid unless peace," while confident that talks would resume soon. Though stalled the latter suggests, "If peace, then increased prospects and talks were a setback, donors were not prepared to opportunities for aid." There is a qualitative distinction abandon their support for peace and hoped the Tokyo between the two. The latter position was the actual conference would provide an incentive for parties to position of most donors while the former was the resume negotiations. unfortunate misinterpretation. The result: confusion and ambiguity as is evident from the contradictory views The six months following the Tokyo conference toward the Tokyo process expressed by individual donors confirmed the donors' predicament. Peace talks 19 | Donors and Peacebuilding 2000-2005 Figure Three: Paragraph 18, Tokyo Declaration Assistance by the donor community must be closely linked to substantial and parallel progress in the peace process towards fulfilment of the objectives agreed upon by the parties in Oslo. The Conference encourages the Government of Sri Lanka and the LTTE to enter into discussions as early as possible on a provisional administrative structure to manage the reconstruction and development aspects of the transition process. The process would need the expeditious development of a roadmap with clear milestones indicating the path towards a mutually acceptable final political solution. With this in view, the international community intends to review and monitor the progress of the peace process closely, with particular reference to objectives and milestones including: a. Full compliance with the cease-fire agreement by both parties. b. Effective delivery mechanisms relating to development activity in the NorthEast. c. Participation of a Muslim delegation as agreed in the declaration of the fourth session of peace talks in Thailand d. Parallel progress towards a final political settlement based on the principles of the Oslo Declaration. e. Solutions for those displaced due to the armed conflict. f. Effective promotion and protection of the human rights of all people. g. Effective inclusion of gender equity and equality in the peacebuilding, the conflict transformation and the reconstruction process, emphasizing an equitable representation of women in political fora and at other decision-making levels. h. Implementation of effective measures in accordance with the UNICEF-supported Action Plan to stop underage recruitment and to facilitate the release of underage recruits and their rehabilitation and reintegration into society. i. Rehabilitation of former combatants and civilians in the NorthEast, who have been disabled physically or psychologically due to the armed conflict. j. Agreement by the Government of Sri Lanka and the LTTE on a phased, balanced, and verifiable de- escalation, de-militarization and normalization process at an appropriate time in the context of arriving at a political settlement. In relation to monitoring and review paragraph 20 stated: "In view of the linkage between donor support and progress in the peace process, the international community will monitor and review the progress in the peace process. In implementing its own assistance programmes, the donor community intends to take into careful consideration the results of these periodic reviews." remained on ice, the NERF never evolved beyond a responses, with some donors holding off on their piece of paper, and there was little progress on agreeing assistance to the North-East while continuing their on administrative structures for the North-East. The assistance to the government for the South. An extreme ambiguity of the Tokyo Declaration led to ad hoc example was one donor's delay in financing the Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 20 reconstruction of Kilinochchi hospital because of a lack government had welcomed donor proposals, including of progress on peace. High level monitoring visits by much of the wording of the Tokyo agreement, the new special peace envoys and co-chair meetings offered government was less amenable. Aware of the statements that consistently condemned the human international community's tilt toward the UNP, the rights abuses by the LTTE and urged both sides to UFPA pursued a cooler strategy with donors. In return to the negotiating table, but had little impact. common with earlier PA-led governments, it resisted Political parties dangled the carrot offered by the Tokyo efforts by donors to form common positions and conference as a way of criticizing each other's approach rejected the perceived conditions of the Tokyo to the peace process. Donor confidence began to wane. Declaration. By 2004, the reality of Sri Lanka's fragile and FROM CENTER STAGE BACK TO THE SIDELINES: fragmented governance structure came to the forefront. DONORS FACE THEIR LIMITATIONS With the JVP advocating strongly against any federal solution with the LTTE; the Karuna-led LTTE split in The elections of April 2004 led to a solid defeat of the the east; continuing political rivalry between the UNP UNP and a return to a government headed by a UFPA and SLFP; stalled peace talks; and the NERF finally coalition (SLFP, JVP, and others). The defeat declared dead; donors were left scratching their heads as demonstrated the southern polity’s rejection of the UNP to how to direct their efforts at peacebuilding. economic reform package and their concessions to the LTTE in order to secure it. To ensure a sufficient In early 2004, heads of mission in Sri Lanka tasked a majority, the SLFP formed a coalition with the JVP and donor working group with revisiting the Tokyo JHU, who had made headway in the elections. These Declaration and developing a strategy for monitoring changes reduced government support for the progress on peace. The Donor Working Group on the internationalized peace process and put donors squarely Peace Process (DWG) was then formed, with widespread back into their pre-2001 box. Whereas the UNP representation from bilateral and multilateral agencies. Figure Four: Political differences: UNP vs. SLFP Issue UNP SLFP Donor involvement Encouraged donor interest, Donors at arms' length, conflict as internal matter in peace process international community at center stage International advisers within Marginalize those within international community government who are too outspoken or interfering Peace Agenda Economic issues as central factor to Political issues as central to peace peace Tokyo Declaration Agreed with declaration; were Rejection of the declaration, but not the promise involved in drafting of $4.5B Harmonization Some efforts on coordination Prefer direct bilateral agreements with individual donors 21 | Donors and Peacebuilding 2000-2005 Figure Five: How Donors are Perceived in Sri Lanka: Politics and Popular Opinion In general, while many in Sri Lanka welcome donor support, there is also a strong undertow of cynicism concerning the role and motives of foreign organizations. Media perceptions: too diverse to summarize succinctly, given differences between language groups, etc. The regular and harsh criticism of donors that was common while the conflict was in full sway has generally been more muted in recent years, possibly giving donors more room to operate. However, support for the role of donors and international bodies in the peace process diminished with the end of the UNP government. Populist politicians and other interests may use the media to promote independence from perceived foreign interference. Recent protests against supposed neo-colonialism on the part of the World Bank, following a misquote attributed to the country director and cited in the media, show how donor agencies can form part of populist domestic political agendas. Civil bodies: Many civil society leaders have views that differ from the limited number of Colombo-based bodies who broadly supported the "principled" approach to aid delivery emerging from Tokyo. Non-English speaking bodies are likely to be more critical of donors, and less supportive of international involvement in the peace process. They are less likely to support approaches based on human rights or other international ideals. One implication may be that donors need to canvas a wider cross-section of opinion, rather than a narrower set of like-minded institutions. The DWG adopted an approach that encouraged shared The first report produced on April 30, 2005 reported analysis, provided regular robust information for generally that the trend toward peace was negative and is collective or individual donor assessment, but left consistent with the findings of SCA2. decisions on aid allocation and conditionality up to the discretion of individual donors. This approach won the support of a wider range of donors, some of who had THE TSUNAMI felt constrained by the conditionalities of the Tokyo Declaration. A scenario-planning exercise for donors The wave that struck countries bordering the Indian was held in July 2004 that identified significant factors Ocean on December 26, 2004 killed some 30,000 affecting progress on peace in Sri Lanka. The factors people in Sri Lanka, and left a far greater number went beyond the narrow indicators of the Tokyo homeless. It affected areas along the coast in the North, Declaration to include issues such as political East, and South, in both government and LTTE- fragmentation, economic growth or decline, and social controlled areas. In the immediate aftermath, and cultural values - all of which had altered the cooperation between government and LTTE bodies was dynamics of peace over the previous three years. unprecedented. However, after only a short period, this Interestingly, the international community--particularly initial spirit of cooperation waned and the process of donors--was not identified as a critical factor. A local building a meaningful shared body to support organization, Centre for Policy Alternatives, was hired to reconstruction has become entangled in political provide quarterly reports analyzing trends against these bargaining. critical factors with the aim of helping donors make The huge flows of aid offered to Sri Lanka following the more informed programming and financing decisions. tsunami have given the government greater room to Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 22 maneuver and an opportunity to press ahead with its somewhat of a surprise for donors who remember the plans. Some donors feel that it reduces still further the endless negotiations over NERF that ultimately failed. scope to promote the principles outlined in Tokyo. Though a practical mechanism for tsunami There was now a willingness to provide support among reconstruction, the international community recognizes donors who had previously been reluctant to do so, that the P-TOMS is one of the few positive indicators of given the lack of adherence to Tokyo "principles." For progress on peace in recent times. If it successfully example, the U.K. offered to pay a proportion of Sri proceeds from agreement to implementation (always a Lanka's debts to multilateral institutions following the challenge in Sri Lanka), it may provide an opportunity tsunami, in a gesture that is likely to amount to for dispirited donors to re-engage in the peace process. considerably more than the U.K.'s annual bilateral aid However, donors must be careful to heed the lessons of budget for the country. their previously overzealous enthusiasm over the peace process and not jump into the driver's seat. The P- Prior to the tsunami, most donors felt that they had TOMS provides a long awaited vehicle, but as limited influence in Sri Lanka. With the influx of experience and history suggest, the road to success will enormous sums of unconditional tsunami relief and be rocky. reconstruction funds and the added bonus of debt relief, Sri Lanka (and especially the government) is awash with money and the power these funds bring. Any opportunity the international community had to exert leverage through these funds in support of conflict resolution or peacebuilding principles has been effectively missed. Furthermore, the stronger positions that some donors were pondering prior to the tsunami may prove more difficult to pursue in the present context. One aspect of the international community's role in the situation has been to advocate balance, equity, and conflict sensitivity, particularly since there is an overlap between conflict-affected areas and tsunami-affected areas. A set of guiding principles for tsunami response, developed collaboratively with government, civil society, and donors, provides a common framework around which donors can harmonize their efforts. One significant positive outcome of the tsunami disaster is the establishment of the Post-Tsunami Operational Management Structure (P-TOMS), a mechanism that allows representatives from the government, LTTE, and the Muslim community to decide jointly on priorities for post-tsunami reconstruction in the affected areas of the North-East. It is supported by a multi-donor trust fund. The successful signing of the P-TOMS was 23 | Key Trends Emerging 3. Key Trends Emerging This section builds on the findings of research carried of multilateral agencies); this is influenced by out by the authors in early 2005. Based on key broader relations with the recipient government, informant interviews, unpublished donor and NGO including historical legacies, voices of the recipient reports, group discussions, and personal experience, the country diaspora in donor nations, trading interests, authors appraise how donors are engaging in and geo-strategic objectives; peacebuilding. In spite of the fluctuations in the political z Technical approaches favored by in-house dynamics in Sri Lanka and the resulting changes in specialists, consultants, etc.; donor behavior, there have been some consistent trends z The practicalities of transferring significant levels of in donor practice during the five-year period since the resources and an incentive to ensure smooth flows initial strategic conflict assessment. of aid. For lending institutions, the imperative is to provide large, reliable, and easily transferable government loans. BROADER DEVELOPMENT TRENDS Global Policies Implemented Locally Donor policies toward Sri Lanka have generally been driven by international interests and agendas as much as, Donor organizations may be informed by technical staff or more than, by the needs and concerns of the country on the ground, but policymaking is rarely a bottom-up itself. As a relatively small country to which donors process. Cooperative in-country efforts (such as the dedicate few in-country staff, this tendency is even more Donor Working Group in Sri Lanka) can have a pronounced than in a larger state such as Indonesia or significant impact on local working practices, but is Bangladesh, where large aid offices have been unlikely to affect the over-riding policy-based priorities of established, and national dialogue is more dominant. most donors. In Sri Lanka, the factors influencing most donors' policies are largely driven by agency-specific Donor Bureaucracies imperatives and agendas. Categorization of Sri Lanka as a middle-income country and one likely to achieve the Each donor body works differently. Each has its own Millennium Development Goals places it as a lower specific procedures, modes of providing aid, priorities, priority country for some bilateral donors who have a and decision-making processes; and the motivations of commitment to the poorest countries. This, and the lack individuals working in donor institutions tend to be of progress toward peace, has led to the possible departure based more around internal incentive structures than the external working environment in the country of or scaling back of some smaller donor programs. operation. For the larger donors, a key imperative involves ensuring a strong "pipeline" of aid projects that Outcomes of 9/11 disburses money smoothly and effectively according to set policy. Factors influencing this policy vary, but The events of 9/11 have affected development policies generally depend on: by placing increased emphasis on issues of global z Political involvement from the government of the security and counter-terrorism. This has had an impact donor agency (or from dominant nations in the case on the way some donors engage with the LTTE. It has Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 24 also led to the creation of special reconstruction and To summarize the responses of donors over the last five stabilization programs and units within some donor years in these fields: where changes in Sri Lanka and countries (e.g., the U.S. and the U.K.) that focus on donor policy shifts have enabled greater engagement in failed and fragile states. Even before 9/11, donor staff conflict related issues, there has been some progress. and academic consultants who focus on conflicts were Overall, aid provision to Sri Lanka has become more attracted to Sri Lanka as a potentially successful conflict-sensitive since the SCA of 2000. With the experiment in liberal peacebuilding. changing domestic and international dialogue concerning Sri Lanka, donors are now far more able to Increased Emphasis on Coordination and Harmonization work on conflict-related issues. In practical terms, the continuing ceasefire makes it possible to assist on the This affects mostly EU donors. It means people have ground. But these changes are not indicative of a more desire to spend time and attention focusing on paradigm shift in which donors have fundamentally working together. The irony of this development is that altered their methods of engagement: there has been no while it represents a global trend in donor "best sea change. Most factors determining the substance of practices," it is resisted by the Sri Lankan government. donor assistance remain the same. SRI LANKA-SPECIFIC TRENDS-SUMMARY INTEGRATING CONFLICT SENSITIVITY The 2000 assessment suggests that: "Aid is only one of a Many donors have made considerable progress number of instruments that can be applied to support regarding this issue. Some bilateral agencies have done such a process and, in relation to diplomatic so to such an extent that peacebuilding is their main interventions, it may be a rather blunt instrument with priority. U.N. agencies such as UNICEF have also limited leverage. Therefore, aid may complement engaged productively in the North-East and on conflict political processes happening on the ground, but it is issues more widely, in step with a global move toward unlikely to be a leading edge in a peacebuilding process. recognizing child rights as an overarching priority. For Ultimately, these questions have to be addressed by others, the response has been more instrumental-an political and civil actors within Sri Lanka making increasing awareness that conflict needs to be taken into decisions about their definitions of peace, social justice account and that it has a real impact on projects and and future development" (p. 105). This is a reflection programs. This is a positive if more limited change. that is still valid today. Aid has not generally targeted the fundamental or The assessment goes on to state that "conflict blind" underlying problems that generated conflict in the first development is a problem: "Aid can follow the fault place. However, as a result of increasing analytical work, lines of conflict and inadvertently increase political, donors are more aware of the underlying causes and economic, and social exclusion." It then proposes four drivers of conflict. Although a "transformative" fields of engagement: approach to tackling background conditions has not z Integration of conflict sensitivity gained much ground, this enhanced understanding has provided for some useful interventions. Whether these z A politically informed approach have made an impact on the ground is a matter of z Comprehensive and coordinated strategy interest, although concerted evaluation is beyond the z Long-term strategic engagement scope of this study. 25 | Key Trends Emerging Figure Six: North East Housing Reconstruction Programme NEHRP (North East Housing Reconstruction Programme) is a GoSL/World Bank project aiming to provide conflict-affected families with improved and affordable housing units. It will entail a cash grant paid in four installments to vulnerable families to help reconstruct their houses. In addition, the technical assistance provided under this program will help meet the long-term housing needs in the North-East through improved construction standards, strengthened housing finance options, enhanced private sector involvement in housing construction, and streamlined mechanisms to resolve property disputes. Northeast Coastal Community Development Project: This ADB project, approved in mid-December 2004, is a $26 million, four-year loan targeting three eastern districts. Under a standard poverty/vulnerability index, Tamil populations would have emerged as the principle beneficiaries (given their status as the poorest groups). In order to avoid an allocation that might have led to tension, given the lack of inclusion of other ethnic groups, the vulnerability index was amended to address diversity issues. Subsequent re-design allowed for support to other (chiefly Muslim) groups, with the majority of funds still going to the poorest communities. Large donors like the ADB and Japan now consider POLITICAL AWARENESS issues of equity in monitoring and appraisal of projects. This is a departure from earlier practices. Other smaller Engaging with the peace process has improved donors' donors try to align all of their assistance around knowledge both of the dynamics of the conflict and of peacebuilding priorities. shorter-term political imperatives. Specialist staff, cooperative efforts, and learning exercises such as the Some donors - the ADB, the U.K., and Switzerland for scenario planning process of 2004 have increased example - have created new posts. This makes a knowledge and understanding across a wider range of considerable difference in their ability to engage in issues actors. Whereas in 2000, the number of engaged donor on the ground, and to generate common positions. It staff that understood the political dynamics of conflict may also have an impact on diplomatic initiatives, as in Sri Lanka was limited, a greater number of informed specialist staff might improve institutional knowledge actors are now engaged. Closer links with some civil and understanding of the complexities of the conflict. society bodies has also helped, although there is still room for improvement in that area. More Support to the North-East However, this increased awareness is limited. The larger Although the frozen peace talks mean that no interim donors may not see political issues as relevant, or may see authority has emerged, many donors have found ways of them as fields that an external actor has no right to engage working in the North-East. These methods generally in. For the larger donors, objectives are broadly the same build on existing mechanisms, with donors operating as before: economic growth and poverty reduction. Many either through international NGOs, U.N. agencies, or would not share the sentiments of the 2000 analysis when government departments. Recognizing the role played by it states that donors should use aid to leverage domestic the LTTE and its partners in the North-East, most donors political shifts so that background conditions are operating in these areas have found creative and effective addressed. There has been some instrumental engagement means of ensuring LTTE cooperation and consultation. where conflict issues are perceived to have the potential to damage the realization of other objectives, but this is not Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 26 Figure Seven: Civil Society Support FLICT: Facilitating Local Initiatives in Conflict Transformation is a joint GTZ (Germany) and DFID (U.K.) financed project. The overall goal is to strengthen - through a countrywide approach - incentives for conflict transformation in Sri Lanka by encouraging and supporting civil society to play a more effective and influential role in contributing toward a lasting and positive peace. FLICT expects to achieve this through local initiatives and strengthening organizations' capacities. The FLICT project concentrates its efforts on different focus areas: Media and information transfer for building peace Strengthening democratic space in the North-East Policy reforms and their implementation for a pluralistic society Other focus areas are linked to longer-term issues. Crucial issues are the support of "good local governance," "multi-ethnic towns as focal points for integration," "a positive role of youth," "academia's role in the peace process," and "conflict transformation by different organizations in civil society." The implementation of FLICT started in 2003 and should be seen as a process. Throughout the duration of the project, FLICT will develop a network of partners-strengthening and engaging a body of intermediaries with local initiatives in the medium and long term. FLICT also includes authorities and private sector organizations in its work. too different from "working around the conflict," as More and Increasingly Sensitive Support for Civil Society described in the 2000 analysis. A range of donors support civil bodies working on Donor support for economic liberalization may conflict related issues. Various donors have made a demonstrate a long-standing lack of political conscious effort to move beyond support for an elite understanding. Given the patronage-based structures of Sri group of NGOs in Colombo, and find indigenous Lankan political systems, a rapid liberalization program is bodies that might be able to build a more general challenging - it attacks vested interests and undermines groundswell of support for peace. The U.K., Germany, grassroots support. While many may agree that Sri Lanka the U.S., U.N. bodies, and various other donors are needs reforms, the sequencing of these reforms is a careful engaged in this work. The World Bank has also done political balancing act. Some argue that donor promotion some exploration in this area. In some places - of rapid change under the UNP government undermined Switzerland for example - civil groups within the grassroots support for the peace process. While a peace diaspora community are also involved. Yet some feel that dividend was promised, the reality for many in the South civil society support in general still tends to be carried was rising prices as subsidies were removed. Given that out clumsily, reaching just a few high profile groups. popular southern support is essential for the peace process, this may have been short-sighted. Indeed, the numbers of Increased Engagement with the LTTE votes won by the JVP and still more extremist Sinhala groups in the South in the 2001 election effectively dealt a Donors have a range of positions on working with the massive blow to the peace process. LTTE or other groups, and support for development actions is carefully appraised. Organizations have, 27 | Key Trends Emerging however, found a variety of ways to bring international promote fundamental governance changes. The aim of experience to the LTTE and other bodies in the North- this is to change the structures and political systems that East, with the aim of presenting peaceful and human form part of the background of the conflict: a sense of rights-based examples. Many of these initiatives have injustice at the perceived unequal treatment of the been politically sensitive, and have involved concerted minority population. Skewed resource allocation, diplomatic rather than technical donor attention. The language, and education policy, etc., will arguably not mainly European donors have pursued an approach of disappear until there is pronounced institutional change. "constructive engagement" with the LTTE that has Additionally, a sustainable peace may hinge upon provided opportunities for regular dialogue on program decentralization processes, given the need to find some and policy issues. These steps are controversial and it is form of local power-sharing structure. However, while too soon to judge overall impact, but it is unlikely that some donors maintain such aims, others - especially the disengagement would have a more positive impact on largest three donors (Japan, the ADB, and the World welfare or peacebuilding. Aid programs may provide Bank) - do not build the bulk of their support around valuable diplomatic support when carefully applied with them. Given the financial dominance of these three, the open support from all sides. The ADB and the World greater part of donor assistance to Sri Lanka is not Bank take a more pragmatic approach to relations with designed to promote such changes. There is some the LTTE. Because IFI projects bring valuable resources evidence of change, however, as donors like the ADB and development to the North-East and LTTE and the World Bank try to work more closely with cooperation is necessary for smooth implementation, provincial and local administrations, particularly in the both the banks and the LTTE recognize the importance North-East. Though financing is still agreed upon and of a consultative relationship. managed with the central authorities, there is increasing recognition among the IFIs that effective Support for GoSL-LTTE Collaboration implementation requires governance reforms. While donors have steered clear of involvement in the substance of direct negotiations between the GoSL and Risk-taking LTTE, they have sought to support and encourage A desire to support a peace process has increased the practical collaboration between the parties at other levels range of high-risk and potentially high-exposure around particular issues or development programs. The initiatives. Whereas donors preferred to keep a low most recent example is the P-TOMS. International profile in the past, more recently they have on occasion support, patience, and strategically targeted assistance responded quickly to the peace process, driven by the will be critical for the success of P-TOMS. The incentive to contribute to, and be associated with, a international community will have observer status potentially successful outcome. within the P-TOMS structure. The mechanism also provides an opportunity for donors to support capacity The donor harmonization that seemed possible during development and collaboration among key actors around the UNP government may have given individual donors essential service provision. This could lead to positive the confidence to take risks, knowing that their policies development and political outcomes. would be supported or shared by other agencies. An SLFP government, which discourages harmonization Some Increased Attention to "Transformative" Processes and is more sensitive about donor actions, may restrict risk-taking behavior. Some donors feel that mainstream development support to the government of Sri Lanka should be used to Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 28 Figure Eight: UNICEF and Common Planning UNICEF launched a common approach to address the needs of vulnerable children in the North-East through an Action Plan for Children Affected by War, agreed to by the LTTE and the government in late 2000/early 2001. The suspension of peace talks halted common work, but UNICEF managed to secure signatures of both sides nonetheless. However, suspension of talks meant that there was no mechanism for discussing or solving arising problems. UNICEF pioneered approaches that promoted interchange between the two sides, and managed to broker the only human rights agreement. UNICEF still practices "shuttle dialogue." There is still space through provincial structures for interchange between the two sides, on education policy for example, but work on some of the key issues, notably on child soldiers, has been hard going. COORDINATION AND LONG-TERM ENGAGEMENT of the long-term nature of peacebuilding efforts in Sri Lanka, in practice, donor timeframes are still driven by There have been improvements in coordination. These short-term cycles of planning and financing. The are in some cases limited to the same range of small expected departure of some bilateral agencies exacerbates European donors, but not entirely so. Generally, donor the situation. It is noticeable that the agencies able to collaboration and information sharing in Sri Lanka have work effectively in the North-East have tended to be improved greatly in the past five years. These efforts those with a long track record of engagement. One relate both to a more explicit acceptance by donors to could argue that perhaps donors have aimed too high in address conflict issues as part of their core business and targeting their assistance. Given the slow pace of also to international directives around aid effectiveness progress on peace in Sri Lanka, resources geared to the and harmonization. Some benefits include joint work political-peace agenda are high risk and unlikely to be between multilaterals (the U.N., the ADB, and the disbursed according to donor timeframes. More World Bank) and bilaterals (GTZ, the Netherlands, and pragmatic targeting of assistance over a longer timeframe DFID) on selected projects, and the common positions may be a better option. developed in Tokyo in 2003. Joint planning exercises have also helped improve the general intelligence of the donor community. Donors collaborate on common positions to take with GoSL and LTTE, engage in shared analytical exercises such as SCA2, and increasingly co-finance peacebuilding support. Examples include the UNICEF Action Plan (see boxes). The World Bank has also established a donor coordination trust fund that supports activities such as this SCA, as well as other harmonization initiatives with government. The 2000 SCA comments: "The crux of the problem is that short-term thinking, short-term mandates, and short-term funding are being used to confront entrenched and long-term problems and needs." This is still predominantly the case. While donor analytical work has contributed to a more widespread acceptance 29 | Conclusions 4. Conclusions OVERVIEW issue, with aid disbursement and economic reform as central concerns. The U.S. position involves broader In Sri Lanka, donors have shifted in approach since security dimensions, which lead it to take a tougher 2000. Donors are far more aware of conflict-related conditional stance with the LTTE. These dynamics have issues, more able to work together on conflict, and not changed significantly since the previous conflict better at drawing links between the conflict and their assessment in 2000. own financial support. Disagreements persist over whether aid can be a lever for peacebuilding. While the "big three" could have better integrated conflict as a central concern within their programs of Donor policies have varied, partly in response to support, smaller "European" donors could perhaps have changing political circumstances in Sri Lanka and partly acted at times with more understanding of the realities because of shifting patterns of aid provision globally. of aid provision. The notion that aid provision can act as Smaller donors have shifted more than larger donors, a significant catalyst or lever to promote peace in Sri although recognition of the centrality of conflict to aid Lanka is interesting, but perhaps overlooks a set of provision and the need to consider the links are limiting factors: increasing across the board. z Most aid provision is dependent on diplomatic and political considerations; aid agencies rarely have the Although every donor is different, there are three broad scope to act independently, meaning that on-the- categories of donors that emerge from an analysis of aid ground actions are less significant than wider trends in Sri Lanka: 1) the "big three" of Japan, the ADB, and or political developments. While many bilateral aid the World Bank; 2) the U.S.; 3) most of the rest, agencies do link effectively with diplomatic consisting chiefly of European bilateral donors. Agencies structures, this is not a universal rule. And for all not included in these groups are aligned somewhere agencies, aid is provided for a range of reasons. close to these actors, with the U.N. agencies and z Aid agencies respond to internal incentives and Western donors tending toward the European priorities that are often geared toward ensuring perspective, and Asian donors tending toward the "big smooth disbursement of aid and efficient allocation three" position. There are, of course, many shades of of resources. This means that in many cases, subtlety and contradiction within this crude description, common ground will be found only when a which should not be used to imply that the situation is conflict-aware approach eases resource transfers, as polarized: all donors have much in common with each opposed to limiting expenditures or creating other, especially given the massive aid flows arriving for obstacles in the aid pipeline. support and reconstruction following the tsunami of z The aid organizations at the forefront of December 2004. peacebuilding approaches are financially Put simply, the European tendency is to attempt to use insignificant actors in the Sri Lankan economy. While this does not render them useless, and there aid directly to promote and support peacebuilding in a are many valid exercises that they can engage in, range of ways. Meanwhile, the "big three" tendency is to their approaches will probably not become common consider conflict as an important, but not overriding, Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 30 currency across the aid community in Sri Lanka. A AID AS A CATALYST FOR CHANGE straightforward look at the ways in which the larger donors work demonstrates that while aid can be In the aftermath of the Tokyo Declaration, donors have made more conflict-aware, there are serious barriers come to the general consensus that while aid can benefit to a fully cooperative approach. peace, it cannot be used as a lever or catalyst for peace. z Most importantly, aid is not, for the most part, very If this is the only positive outcome of the Tokyo process, effective as a vehicle for transformation. It is a then it was an experience well endured. Aid is not a relatively minor issue in the politics and mechanics blunt instrument that can be used to drive peace. The of conflict in Sri Lanka and in most other countries. drivers of change in Sri Lanka are political actors, not This means that while aid can support dominant donors. While political actors have used aid as a lever in tendencies or political imperatives, it can rarely their own political interests, donors must not mistake change them. The viability of aid as a supporting this clever manipulation for influence. This is not to say factor to the peace process depends entirely on that the international community is without influence. progress in the peace process itself. In most cases, Donor countries must optimize the many types of aid is the cart and not the horse. engagement that they bring to Sri Lanka: trade, military, security, diplomacy, and aid. Donors can provide a variety of incentives and supportive measures for peace, DIPLOMACY, POLITICS, AND AID but these are generally not aid related. An increased political awareness on the part of aid actors has enabled more nuanced engagement and TRANSFORMATIVE MEASURES understanding of the linkages between aid programs and conflict. Better informed experts have ensured that a Donor involvement in studying peace and conflict in Sri range of aid agencies aims to work more intelligently. Lanka has led to increased awareness among some Recent experience links prospects for peace with donors of many of Sri Lanka's deep-seated problems in prospects for greater donor involvement. terms of political structures, social fabric, and cultural trends. Many of the proposed solutions to these These donors recognize the pragmatic reality of aid provision as a political act, and have aimed to use problems - decentralization, political reform, multi- assistance for valuable ends. Political engagement with ethnic representation, etc. - have weak or contested aid flows is not always beneficial, however. A close domestic purchase and appear at present unlikely to alliance of aid donors with the previous UNP-led make much headway. The key issue - political government may have made it harder to engage with the marginalization of minority groups - is not likely to be current government. While understanding political tackled in the near future. This has led to a degree of realities of aid provision and Sri Lanka, aid agencies despondency on the part of some donors. need to take a long-term view. While political awareness is important and linkages between aid and a range of Donor involvement in peacebuilding can create other international issues may be pragmatically valuable, expectations of rapid change. Post-conflict environments a long-term approach is needed. This means better often create scope for structural adaptations that would analyzing and understanding the difference between the not otherwise be possible. Recent examples include East structures and dynamics of the conflict in Sri Lanka and Timor and Cambodia. A less extreme case would be realizing that a positive change in the dynamics may not Indonesia following the fall of Suharto, creating scope necessarily lead to much needed structural change. for reform including decentralization and democratization. However, there is no such state of flux 31 | Conclusions in Sri Lanka. While the dynamics of conflict over the While donors may rarely be able to tackle such issues past five years have been fluid, the underlying structures directly, they can still be involved productively. Donors remain largely intact. Political, economic, or social can support the search for solutions to underlying change is consequently less feasible; radical problems, and help with more immediate problems transformations are unlikely given the stability and related to peacebuilding. Examples of potentially fruitful continuity across the South. engagement already exist. While this background study does not have the scope to evaluate specific programs, It is rare for donor agencies to have the capacity to and it is in any case very challenging to draw linkages successfully challenge domestic political or social between cause and effect, some comments and proposals obstacles. Indeed, it is rare for donors to be as aware of follow: these problems as many of them are in Sri Lanka. While international support can help in myriad ways, the Better Analysis solutions to such difficulties are likely to be found internally. z Factoring in the influence of geopolitical factors on the key actors in Sri Lanka. This suggests a better Some donors are still trying to support "transformative" understanding of the role of India and even China in approaches. But the only field where the major donors regional political and economic affairs. Aid donors are aiming to do so in a committed way is in economic should pursue a more inclusive approach with these reform. While there is some discussion and open analysis key actors. of the underlying factors behind the conflict, large aid z Working toward greater donor understanding of bureaucracies tend to promote technocratic solutions background conditions and the ways that aid supportive of government policies similar to those used provision can be screened or evaluated in order to "do across the globe. General awareness of such issues is no harm" and be better targeted to do some good. fairly limited, and incentives are generally against action Cooperative efforts among donors can contribute to to address underlying political or social problems. There this aim, but should not be an overriding objective. are no quick wins. z Building better understanding of Sri Lankan politics, However, there are nuances within this picture. Some society, and economics within donor bodies, especially major loans deal fairly sensitively with on-the-ground through the recruitment of higher-level Sri Lankan problems and with background inequalities or the scope staff. for transformative measures. There is the potential to z Building alternative channels for discussion, debate, find ways of engaging on these issues, and to encourage and negotiation on conflict issues within Sri Lanka. government and LTTE support for such efforts to build Use analysis--of the political economy, the conflict, a more responsive, multi-ethnic state. At the very least, and the institutional environment--both as a vehicle projects should reflect awareness of the breakdown of for donors to work together and to inform potential beneficiaries along ethnic lines. programming choices. Types of Aid POSSIBLE STEPS z Focusing more on domestic capacity building, Sri Lanka faces fundamental governance challenges that whether through projects, funding, or policy-based are intractable in the short term, such that there will be research initiatives, (but always within the framework continuing obstacles in the search for lasting peace. of a sound institutional analysis) to ensure that any Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 32 capacity development initiatives are not constrained spending in the North-East, rather than criticizing by structural factors. An immediate opportunity is spending in the South); supporting positive aid capacity building through the P-TOMS, enabling provision where it will help produce a tangible peace local governance actors to manage tsunami dividend - in the North and in the South. reconstruction. z Continued linkage between aid and diplomatic (or z Working to maintain contact with LTTE bodies, on occasion military) ties, to encourage grounded pragmatically and appropriately. This varies between and cooperative approaches, but with a longer-term donors - no one solution is right. perspective. Capitalize on the complementary roles of z Considering the resentment at the lack of attention to development, political, and military departments. For the South, and how to address that shortfall. Rapid example, political or diplomatic leverage may be economic reform is likely to further derail the peace more effective than aid in influencing national process if it helps build perceptions that the poor policies. southern majority is being ignored. z Donors thinking about withdrawing from Sri Lanka z Continuing to support the North-East. Overcoming should consider the amount they have invested in the challenges posed by interim authorities and building up a conflict-sensitive approach. Withdrawal decentralized structures would be desirable, but it may would waste this asset, and for smaller donors--given be a long time coming. In the interim, there are the limited amounts involved as a percentage of aid proven methods of engagement that all sides are flows--would send no real signal to government. A content with. Given that such engagement can more conflict sensitive approach may be to shift gears promote conditions for peace by opening up the rather than exit. This would entail less emphasis on North-East to national and international expertise, an assertive policy-influencing role with key political efforts should continue to strengthen interdependency actors, and increased emphasis on working with and promote an array of local bodies. Smaller donors others to tackle background conditions, address the with more sensitivity to local level issues may be able social costs of conflict, and build constituencies for to partner with larger funders in order to assist in peace. Increased joint efforts, secondments and silent sensitive programming in the North-East. partnerships could reduce transaction costs for smaller bilateral donors without the potentially z Expanding civil society funding: this is already under negative impacts of pursuing a total exit strategy. way, but donors should continue to look more widely at a broader range of actors. z Recognize the differences between individual donors and groups of donors. Appreciate that consensus- z Engaging the diaspora: some donors have engaged the based approaches may result in lowest common diaspora community in efforts to increase denominator strategies. Strive for better understanding and reduce support for extremism. It is complementarity of donor strengths, incentives and not clear whether this has succeeded, but continued resources. The "good cop, bad cop" strategy with the efforts might be helpful. LTTE is one example of how donors have used their different positions to engage with the LTTE without Harmonization, Coordination, Complementarity compromising principles. Bilateral partners should z Pragmatic common ground: finding areas where also think beyond the "aid basket" when considering there is both government interest in pushing through what they can contribute to Sri Lanka. reforms and large donor interest in pursuing work that will support peacebuilding (e.g. promoting The ability to implement such work depends on maintaining good relations with all sides. Within the 33 | Conclusions context of a "do no harm" approach, there does seem to be scope for engaging in a variety of ways. None will bring about a radical shift in short-term peacebuilding or longer term background conditions, but such an impact is probably in any case unrealistic. Smaller, helpful steps are still possible and should form a part of donor assistance. Smaller donors may have a comparative advantage in supporting larger donors, where there is common ground, to work along these lines. The past five years have reaffirmed the validity of the recommendations of SCA1. Despite dynamic swings in the peace process, structurally the underpinnings of the Sri Lanka conflict have not transformed dramatically. In their desire to support peace, donors must continue to recognize that any significant shift will be internally and not externally driven. While development aid may provide a means for supporting this shift when it happens, it will not be the catalyst for it. 35 | Appendix Appendix: A Sample of Development Actors The following section covers some of the actors involved z Feels that donors should have fewer "legitimizing" in development assistance to Sri Lanka. It is not a linkages with LTTE; such linkages have "absolutely complete list, and only provides some information, since no impact on LTTE's transgressions." Donors need there is insufficient space for a more comprehensive to distance themselves more from them and refuse assessment. Some donors are not covered simply for lack to approach TRO; instead, they should work of time. With each actor, points are divided into some through mainstream government structures in or all of these sub-headings: programs/policies; which the LTTE can continue to practice in and perspectives on aid and conflict; perspectives on donors, engage with; recognition that, in practice, Tokyo, and subsequent common indicators; tsunami; government agents are very close to LTTE in comments. Kilinochchi and Mullaitivu. GOVERNMENT PEACE SECRETARIAT Views on Donors Perspectives on Aid and Conflict z Strong opposition to common donor positions. z Recognizes that military solution is nonviable. But More comfortable with standard individual donor maintains austere line on LTTE as a terrorist body. projects than with pooled funds, in the North-East z India is emerging as a significant donor as well as a or elsewhere. Welcomes support to the North-East, diplomatic force. There is recognition that different through channels that have been proven to work donors have different approaches. including NGO or U.N. delivery, as well as use of government structures. Does not promote z Government is strongly promoting unified "transformative" approaches in the South, although solutions, integrating economies in the North and there may be scope in selected fields. South, and promoting investment and interdependence. z Hopes tsunami will still lead to common Tokyo and Subsequent Common Indicators implementation mechanisms. z Strong perception that benchmarks are "totally z National Council for Economic Development inappropriate, arbitrary, and artificial." Glad they includes sub-committees that donors can be did not hold. involved in. North East Donor Coordinattion Cluster (one subcommittee) deals with North-East. z In terms of donors support to transform structures, LTTE PEACE SECRETARIAT there should be scope to make some progress. Perspectives on Aid and Conflict Projects can be more innovative in terms of z Encouraged by efforts on the part of the World connecting different parts of the country. For Bank and the ADB to work in the North-East. example, the Mahaweli Project should have helped the North. There should be opportunities in certain z Breaks down donors as follows: EU bilaterals, India, areas to help with reforms. China, Japan, and the USA. India, Japan, and Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 36 China collectively represent over 80% of funds welcoming engagement in international best promised. Multilateral banks are also important. practices, also holds a strong line on maintaining Recognizes that EU bilaterals are not overly control, whether contested domestically or significant financially, but development of common challenged by international bodies such as donors. positions has a useful impact - especially given the EU's role as co-chair. Comments z The LTTE are content with the different ways that z With current alignments, the LTTE may feel it has donors can provide support. The U.S., for example, more to gain from a Western international stance on can work through NGOs, keeping awareness of "principles" than the current government (in agreed guiding principles; Japan has been asked by contrast with the situation under the previous UNP the LTTE to ensure equitable allocation of funds government). This may make it challenging for along ethnic/religious lines in all of its programs. Western donors to secure the government z With India, low-interest loans to the government cooperation necessary for successful interventions. are provided: it is not certain that any expectations of equity are placed on the loans. JAPAN z With China, planned investment in 16 harbors will need to address ethnic issues. Programs/policies z Donor forums and common donor positions are z Has been the largest donor to Sri Lanka for many welcomed; but in reality are less significant than years. Bulk of funding through JBIC (concessional individual aspirations of key players. loans); considerable amounts also through JICA (technical cooperation grants). Tokyo and Subsequent Common Indicators z Traditionally strong relationship with the government, in Sri Lanka and elsewhere. Aid z Generally supportive of what is termed "EU" donor priorities are set through internal discussions and position (referring to common positions taken by a consultations with the government; engages in a range of bilaterals). At one level, expresses support process of "anticipatory bargaining," or discussions for principle frameworks, donor coordination with government to determine aid flows along efforts, and wider application of international commonly agreed objectives. Subsequent need to human rights law, and sees the government as trying disburse and coordinate the spending of many to avoid these EU principles. Yet at another level, is loans, which is quite time consuming. resistant to such "foreign interference." z Supportive of continuing ceasefire; regards aid flows Views on Donors as important to maintain support for a peace process. States that if there were a return to war, z More supportive of all donors than might be they would reconsider the value of support. But expected. Appears to send mixed messages about the currently, still wishes to support a process that value of "principled" approaches advocated by many continues to hold, despite recent lack of progress. bilaterals. Is willing to consider a variety of mechanisms to support development in the North- z Works in the North-East, often through U.N. East; this means that the political deadlock on an programs. In the North-East especially, they interim authority does not necessarily need to hold carefully examine equity and distribution of aid up development assistance to the North-East. While along ethnic-religious lines as an important part of 37 | Appendix project appraisal. This is a change from the situation z Does not support processes that might lead to pre-ceasefire, when such issues were not considered. conditionality and associated stipulations: Views This change reflects awareness of the need to reduce these as unnecessary and unwelcome. tension. It is clearly stated by Japan at the 2003 Tokyo meeting that: "the 'peace dividend' should be Comments evenly distributed, taking into account the balance z The Japanese approach, along with that of major between the north-eastern part and the southern constituencies within multilateral banks (and most part of the country, and the equally sensitive significantly within Sri Lanka), does not perceive balance between Sinhalese, Tamils, and Muslims." societal transformation as a role for aid. Such z Japan has less experience of integrating concepts are more prevalent with Western donors transformative issues (i.e., promotion of and civil society than elsewhere; additionally, such fundamental governance changes relating to change is regarded by many as counterproductive peacebuilding) into aid support. This is of potential conditionality or external Western impositions on interest but not a basis of current project domestic structures. More practically, ideas of formulation or policy. transformation through more nuanced aid provision limit disbursement capacity and slow down project Conflict Sensitive Approach cycle management. z Japan provides more support to the North-East, z The Japanese development model is different from often through U.N. programs. Japan aims to contemporary Western approaches: strong emphasis carefully examine equity and distribution of aid on state-led development with capitalist economy, along ethnic-religious lines as an important part of but also with heavy investment in human project appraisal. This is a change from the situation development, infrastructure, and other redistributive pre-ceasefire, when such issues were not significantly measures such as land reform, as appropriate. This is considered. not always compatible with approaches that place far greater stress on human rights, participation, Tokyo and Subsequent Common Indicators political change, and improved governance rather than top-down support. z Role in political peace process: facilitated the 2003 Tokyo meeting, further quarterly monitoring visits from senior envoy. ASIAN DEVELOPMENT BANK z Participation in DWG and Tokyo Declaration was Programs/policies reluctant; accepts loose principles but not a framework or set of restrictions on aid provision. z The aim to support Sri Lanka by disbursing funds Paragraph 18 of the Tokyo Declaration should be in a timely fashion, board members that are broadly seen as positive efforts to encourage a good supportive of government in the first instance, and background environment for the peace process, an approach that prioritizes economic or rather than conditionality of any kind. Efforts to engineering-based solutions, means that use background principles to formulate guidelines peacebuilding issues do not fall naturally into the leading to indicators will not work effectively and ADB's line of work. However, the ADB has a strong are not welcomed. Simple principles for engagement record of offering support rapidly in post-conflict are welcomed, however. environments. In Sri Lanka, it has been able to work increasingly in the North-East; following the Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 38 CFA, the ADB rapidly offered support and sought USA (USAID) practical ways of providing assistance in the North- Programs/Policies East. z Through their democracy, governance and conflict z Informally, conflict understanding/awareness is programs, the U.S. is involved in a range of growing, as well as an awareness of the links initiatives. Following three "tracks" of the process- between project success and maintaining peace both political, diplomatic, and aid approaches: Track One in Colombo and the head office in Manila. There is through co-chair mechanism; Track Two through increasing attention to equity and ethnicity related engaging in parallel political/civil society processes; issues, with growing focus on ethnic balance and Track Three through support for civil initiatives. transparency as a key aspect of poverty analysis. The ADB has also been able to work increasingly in the z Involved in a range of initiatives: "One Text North-East following the Ceasefire Agreement. A initiative" to bring second-tier political players into conflict specialist, seconded from a bilateral, works discussions; local government support through The in the Colombo Resident Mission Asia Foundation; people's forums in a range of z The Northeast Coastal Community Development locations; annual peace perception surveys, etc. Project, approved in mid-December 2004, is a $26 z Future initiatives: Possible direct support (through million, four-year loan targeting three Eastern U.S. NGOs) to enhance political party awareness of provinces. Under a standard poverty/vulnerability peacebuilding issues; possible work with civil bodies index, Tamil populations would have emerged as like trade unions, etc.; possible work on youth and the principle beneficiaries (given their status as the civic education. poorest groups). In order to avoid an allocation that z The U.S. has: 1) a clear understanding of the might have led to tension given the lack of political challenges involved, 2) awareness of the inclusion of other ethnic groups, the vulnerability index was amended to address diversity issues. need for transformative approaches and governance- Subsequent redesign allowed for support to other related issues in the South, and 3) the organizational (chiefly Muslim) groups, with the majority of funds capacity to engage accordingly. still going to the poorest communities. z Awareness of a range of second-order conflicts that z NECORD - an earlier project now being extended - could arise in future years: complexities of Muslim also aims to track ethnicity issues in monitoring and political engagement and issues of attacks on evaluation. Christian churches in the South. Common Indicators Perspectives on Aid and Conflict z Overall disbursement and project approval is not z There is a perception that major donors have at linked to progress toward peace. But projects do least adopted conflict awareness rhetoric, and have have a phrase commenting that disbursement could some understanding of the need to look carefully at be linked to the peace process. equitable distribution of resources. But there is less direct acknowledgement of governance-related issues Tsunami that form the basis of the reasons for conflict. z The tsunami has led to a large allocation of nearly $150 million dollars. The ADB conflict specialist Tsunami (on secondment from a bilateral) has been asked to z Post-tsunami reconstruction support is unlikely to look at conflict-related aspects of the loan. be conflict-sensitive and, in any case, government 39 | Appendix can select from a wide range of donors if objections gender equality, HIV/AIDS, and environmental are raised. Flow of reconstruction funds is likely to concerns are mainstreamed. exacerbate "patronage" networks that are not equitable and could well enhance tensions. Common Indicators z Sida subscribes to paragraph 18 of the Tokyo Comment Declaration. The clauses are interpreted as "If peace, z There is programmatic support for multiple actors then increased prospects and opportunities for aid," engaging with a range of issues, generally through rather than as "No aid unless peace." civil society bodies of different descriptions. But this z Sida has been an active promoter and participant of is tempered by recognition of the LTTE as a the Donor Working Group in the efforts by donors terrorist body, and a global environment that to find common indicators in monitoring the peace encourages support for government rather than process and supporting development in Sri Lanka. non-state actors. z Sida supports harmonization and alignment of support together with the IFIs and like-minded SWEDEN (Sida) donors. Sida prefers sector cooperation reflected through core funding and increased harmonization, Programs/Policies even in peace and tsunami related interventions (for z Sida has been working in Sri Lanka since 1958. example: core support to UNICEF's Country Plan; z Integration of conflict into programming began in the ADB on infrastructure development - especially earnest in 1998. Prior to that, there were programs roads in conflict and tsunami affected areas; the in conflict areas, and peacebuilding was a focus of World Bank on their Education Sector some NGO/civil society support, but it did not Development Credit in the area of social cohesion; occupy the central position of the country strategy and, together with the Netherlands Embassy and that it now has. Danish Development Cooperation, support to the Peace and Development Fund managed by CHA). z Sweden has had, and continues to have, bilateral development cooperation agreements with the government for over 20 years. Conflict Sensitivity z Since 1998 there has been a two-pronged approach z Conflict is viewed in a broader light than merely the to Sida support: 1) Peace, Democracy, and Human ethnic conflict in the country, and is inclusive of all Rights and 2) Pro-poor economic development. potential conflicts (for example, religious conflict and buffer zone issues). Hence, Sida actively z The embassy in Colombo is fully delegated with a promotes a "do no harm" approach. country plan, annually approved by the Asia Department. The embassy has the right to steer z Conflict sensitivity is essential, but should also be funds and enter into agreements with the GoSL and balanced in support to the North-East and South. civil society organizations in keeping with the country plan. UNICEF z The internal Local Project Appraisal Committee ensures the quality of projects/ programs/sector Programs/policies support and also ensures that cross cutting issues z UNICEF has been working in the North-East for a such as democratic governance, conflict sensitivity, long time. Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 40 z A 2002 DFID/SIDA evaluation recommended that U.N. involvement and allegations of major a more integrated management structure provide a transgressions of agreements. uniform countrywide approach. This enabled work with similar government structures island-wide, reducing the amount of NGO engagement. UNDP z This reorganization and the ceasefire enabled Programs/policies UNICEF to engage in policy issues relating to z Institutional change: UNDP has shifted children. Originally through an Action Plan for considerably in last 3-4 years. Previously, traditional Children, agreed to by the LTTE and GoSL in late development issues rather than conflict were seen as 2002/early 2003, a common approach was the key priority among most staff members in the launched. The suspension of peace talks suspended Sri Lanka office. Now, staff are prioritizing a more common working, but UNICEF managed to secure conflict-aware and engaged approach. Newer staff signatures of both sides. However, suspension of are often conflict-focused, leading to more capacity talks meant that there was no mechanism for to engage. This reflects a global shift in UNDP discussing or solving arising problems. thinking as well as changes in the Sri Lanka office. z UNICEF pioneered approaches that promoted z The intergovernmental role of UNDP does create interchange between the two sides and managed to limits on actions, especially with the current broker the only human rights agreement. UNICEF government. Support tends to have to flow through still practices "shuttle dialogue." There is still space the government, but that does not rule out some through provincial structures for interchange valuable work. They have to navigate carefully and between the two sides, on education policy, for work quietly; they do not have scope to take on example; but work on some key issues, notably on broad agendas, nor the mandate to engage the child soldiers, has been hard going. LTTE as an equal partner. Others - for example, GTZ - can work more flexibly. More widely, Common Indicators UNDP is open to a wider range of civil society, z Benchmarks on progress toward peace as an government, and other bodies than they were in the incentive. These have not been put into practice; past. the only funds that have been withheld have been as z Peace Secretariat: Supported peace secretariats on a result of economic, not peace-related, issues. both sides of the conflict. Also linked Muslims into the process, before the establishment of a Muslim Perspectives on Aid secretariat. This was a slow process, but perseverance led to some success. z In the North-East, there are still options for engagement. These options have involved z Other work includes small grants through peace interchange with all parties for decades, and can secretariats, including grants to non-Tamil local continue in this manner. Donors can work in the bodies in the North-East. This is regarded as a North-East if they wish - there are mechanisms. successful, if small, effort to promote democratic process and pluralism in the North. z Without peace talks, and more recently with the LTTE split in the East, the likelihood of concerted z Process: the U.N., after the CFA, was involved in demobilization is slim. This has an impact on issues early needs assessments. The UNP government such as child soldiers - a key topic, given senior requested U.N. involvement in the social and economic aspects of peacebuilding and 41 | Appendix reconstruction. After the CFA, the UNDP was Common Indicators involved with the prime minister's office unit in z Post-Tokyo development of principles is seen by efforts to take forward reconciliation/reconstruction. many observers as conditionality. This was unrolled in local government offices (at z Aid has not become part of a wider process. the district level, etc.) as well as centrally, and folded into the 3Rs ministry with the change of z A "transformative" approach to address underlying government. The UNDP has been responsible for problems and set up pluralistic representative the "human development" aspects of common structures on all sides along the lines of the assessments, including gender, local capacity principles agreed to in Tokyo has not been building, etc. promoted by either side, or by the major donors. z Scenario planning exercise of 2004: aiming to Common Indicators answer questions of what peace would look like, what principles would be viable, and what are the z Indicators stemming from principles are of mixed drivers of peace. Concluded that bilaterals are less value. They can be beneficial as an exercise for some influential than thought. bilateral organizations; but as a wider exercise, it does not have enough leverage or ownership. Perspectives on Aid z Donors have had increasing dialogue with all sides, GERMANY (GTZ) but with different routes and motivations. Yet there Programs/policies are still open doors to working collaboratively with z GTZ programs: as with many other bilaterals, larger donors. conflict transformation justifies GTZ presence in an z The LTTE, as well as the government, is unwilling otherwise middle-income nation. Programs link to compromise on anything that bridges a gap with conflict across the board. between aid and political issues. z Economic promotion work through micro-finance z "Regaining Sri Lanka" document: very close to and vocational training/regional economic previous UNP government policy. promotion: employs "do no harm" principles. z Donor meetings: good coordination, but high costs. z Projects in conflict areas: has maintained a presence Perceived by others as self-interested. It could be for some time, engaging with all stakeholders - is replaced with more direct engagement between Sri now trying to build capacity by increasing its Lankan bodies and donors. outsourcing. Involves higher-level, on-the-ground z More domestic capacity building within projects engagement. would help by questioning the conventional project z Projects on conflict transformation: support to the delivery model and finding alternative working Berghof Foundation’s work, FLICT civil society methods. program, and the Education for Social Cohesion program. Tsunami z Aid-diplomacy linkages more complex for Germany z Tsunami needs assessments, lessons of previous than many countries, given GTZ's independent assessments of how to work in the North-East etc., status as well as ministerial divide between aid have not been taken fully into account. operations and diplomatic operations. Donors and Peacebuilding in Sri Lanka 2000 - 2005 | 42 SWITZERLAND U.K. (DFID) Programs/policies Programs/policies z Switzerland has no real development program. z Like many other bilaterals, conflict is the main Previously, they had only a small program with justification for engagement in Sri Lanka, given some school reconstruction in Jaffna. Since 2002, their middle-income status. There is some pressure they have been involved in study tours by the to keep a presence given the large Sri Lankan LTTE, GoSL, parliamentarians, and the media to community in the U.K., but overall there is little study federalism in Switzerland. desire to disburse, and therefore only a small z Switzerland has had a new post as Adviser for program of support. Pressure to spend is also Peacebuilding since 2003, who focuses on human reduced by hands-off management, including security, peacebuilding, and human rights. passing funds to other bodies for use - U.N. agencies (UNICEF, UNHCR), other donors (for z The Swiss provide support to the Berghof example, GTZ on civil society support), and NGOs Foundation for peacebuilding related work. Support (Oxfam, Save the Children). also was provided to the "One Text Initiative," along with USAID. z The Sri Lanka aid program has undergone major changes from the late 1990s to 2005. It is now z Switzerland has regular contact with the LTTE. The focused entirely on peacebuilding and governance Tamil expatriate community in Switzerland is quite priorities. The diplomatic position has also shifted, prominent. The Swiss are conducting work with the as peacebuilding receives enhanced priority in Sri diaspora in Switzerland and encouraging insight Lanka and around the world. The aid program's into Sri Lankan affairs through stimulating debates focus on peacebuilding may have both been and exchanges. influenced by and contributed to this shift. z The concern that aid flows might spoil the peace z Changing internal capacities has enabled process is widely held. engagement: Like various other bilaterals in Sri Lanka, dedicated peacebuilding staff has enabled a Common Indicators program to develop around peacebuilding issues. z Scenario planning: Clingendael facilitated a process z Globally, a stronger and more integrated that developed 20 issues most relevant to the conflict/humanitarian section in London has conflict. increased capacity to provide policy and practical z A like-minded approach can lead to joint statements support; better linkages between the U.K. that produce a common diplomatic stance of government departments also exist. GCPP - the strength. There is a common desire to ensure even- Global Conflict Prevention Pool - is one basis of handedness, and an intelligent donor response is interdepartmental cooperation. It has enabled a positive. Conditionality: valid on issues of human better collective approach. It is thought that this rights - for example, child soldiers. approach has worked better in Sri Lanka than anywhere else where it has been implemented by Tsunami the U.K. government. z Since the tsunami there has been a major Swiss z Restructuring of Assistance: There are plans to Development Cooperation presence. restructure U.K. provision of support to peacebuilding within Sri Lanka over the next year. This will involve replacing a distinct DFID presence 43 | Appendix with an enhanced joint political and development z A presence in the North-East, through NGOs or section dedicated to peacebuilding. otherwise, gradually results in shifting attitudes in some areas. Common Indicators z DFID has never advocated conditionality as a Common Indicators means of supporting peace. It did encourage efforts z Principled approach also came from the elite to support the negotiating parties in achieving their intellectual Colombo-based Sri Lankan civil society, agreed principles. DFID encourages common not just donors. approaches, trying to gain support for common z Principles based on Paragraphs 17 and 18 of the approaches from other, larger donors. They also Tokyo Declaration were not meant to be support a range of partnerships including conditional; they were intended as a political secondments, support to trust funds, etc. As with declaration. However, the perception of other European bilaterals, prioritization of donor conditionality stuck and was not countered. coordination has led to such approaches in Sri z The common assessment being planned by CPA Lanka. with donor funding should provide a basis for z This prioritization of donor partnerships may reduce donors to use at will. involvement of Sri Lankan institutions in programs. z Donor working groups are very time-intensive. This covers staffing, capacity building, etc. z DFID encourages shared analysis and joint approaches among donors where possible. NETHERLANDS Programs/policies z Joint diplomatic and aid operations. z Conflict has been firmly on the Dutch aid agenda since the early-mid 1990s. z Involvement of the Clingendael Institute for many years has provided analysis on conflict in Sri Lanka. z More recently, the Dutch have promoted joint working processes. z The Dutch are planning to withdraw from Sri Lanka. Current program of support totals approximately Euros 10m. The funds are earmarked for environmental work with GoSL and the ADB, peacebuilding with civil society, the Consortium of Humanitarian Agencies, and the NECORD (ADB) project. There is also some work with chambers of commerce. 45 | Bibliography Bibliography Goodhand, J. (2001) Aid, Conflict, and Peacebuilding in Sri Lanka, The Conflict, Security and Development Group, London. Goodhand, J., Klem B., et al. "Aid, Conflict, and Peacebuilding in Sri Lanka, 2000-2005." A report prepared for the governments of the Netherlands, Sweden and the U.K., The Asia Foundation, and the World Bank. DONORS AND PEACEBUILDING 2000 – 2005 Award winning photographs by Annuruddha Lokuhapuarachchi, Dominic Sansoni and Gemunu Amarasinghe