Who Got the Money?

Pawns of Peace – Evaluation of Norwegian Peace Efforts in Sri Lanka 1997-2009


What follows are some extracts from the report of the evaluation of Norwegian peace efforts in Sri Lanka commissioned by the Norwegian government. This article deals with the disbursement of money by the Norwegians in Sri Lanka during their period of peace mediation.

Economic development and donor involvement were closely connected to the conflict in Sri Lanka, partly because donor policies and programmes inadvertently contributed to political instability and inter-ethnic tensions. Several bilateral donors including Norway became engaged in conflict-related issues as a core aspect of their work. In a few cases, funding to Sri Lanka was also reduced. Prior to 1998, however, Japan, the Asian Development Bank and the World Bank which together provided some 70% of the aid funds, continued to regard the war in Sri Lanka as an internal problem and chose to leave it out of the negotiations on development assistance.

Their main concerns were the slow progress in privatization and other economic reforms, poor implementation of projects funded by them, and the excessive budget deficit. In practice, their aid policies amounted to support for the government’s political and military strategy in Colombo and the exclusion of the north-east from major development programmes.

The signing of the Ceasefire Agreement by the Wickremesinghe government and the LTTE received strong support from the donor community. In some respects Sri Lanka was treated as a post-conflict setting and from 2002 to 2003, the amount of aid increased by 89% according to the World Bank. Foreign aid was seen as a crucial factor in the peace process, both to create a tangible ‘peace dividend’ that would ensure popular support for the peace process, and to revive the economy and help the government to implement its economic reform agenda.

When the Ceasefire Agreement came into force, the government and the LTTE chose to prioritize development and reconstruction over conflict resolution. The government believed that economic development, supported by substantial amounts of foreign aid, would create a peace dividend which would in turn shift the priorities of the LTTE from political to economic matters. The latter raised humanitarian issues and reconstruction of the north-east as a condition for substantive talks, also because they saw it as a means of increasing their legitimacy, furthering their state building agenda and solidifying structures that had emerged during the war.

At the donor conference in Tokyo in June 2003, the pledged amount of US$ 4.5 billion was made conditional on ‘substantial and parallel progress in the peace process’. However, by then the LTTE had already withdrawn from the process. The rather vague conditionalities of the Tokyo declaration led to ad hoc responses, with some donors withholding aid while others continued their assistance through the government. As it turned out, conditionalities or the incentives for increased aid did not have the desired outcome. There were no mechanisms for ensuring compliance. Instead, emphasis on global security and counter-terrorism led to a change of attitude among several donors towards the LTTE, and the Tokyo declaration was subsequently undermined by the larger donors who did not want to attach political or conflict related conditions to their assistance to the government.

At the local level, the distribution of humanitarian aid and the contradictory interests in relation to reconstruction added tension as well. Post-tsunami aid was distributed in a context of patrimonial politics, further complicated by the LTTE state-building project in the north-east. Aid therefore became embroiled in political and military agendas, and frequently catalysed local disputes which interacted with larger-scale conflicts. International NGOs were criticized for their lack of coordination and competition and while much valuable assistance was provided, it proved impossible to avoid unequal treatment and the politicization of humanitarian issues.

Thus much of the assistance to the war-affected areas was caught up in the politics of the peace process and had the effects of undermining confidence in the process and eroding trust between the two sides. Rather than providing an incentive to cooperate, additional resources created more conflict over how to use them. The effect was accentuated by the Wickremesinghe government’s implementation of wide-ranging economic reform which was supported by the donors (particularly the international financial institutions) but backfired as the government introduced a number of unpopular measures such as changing labour laws to make it easier to hire and fire workers; enacting a new law to reduce the number of recipients of poverty alleviation programmes; and announcing plans to reduce the public service by 30%.

In its fight against such measures, the opposition focused on the role of the international community, which was accused of backing reforms that only benefited the privileged.

In effect then, the ‘peace through development’ strategy largely undermined the peace effort. Also, aid conditionality did not work the way it was intended. While this is generally the case, particularly when there are no agreed benchmarks that come out of a peace settlement, in Sri Lanka it was compounded by the fact that the country is not heavily aid-dependent, that the donors became increasingly divided, and the rising importance of donors like China, which did not demand political conditions for their support. Furthermore, with the massive influx of poorly coordinated tsunami related aid with no peace-related strings attached, the debate about conditionalities became meaningless. In 2009, an OECD/DAC evaluation of donor-supported activities in Sri Lanka concluded that ‘peacebuilding programmes seem to have had modest, if any, impact’.

How did Norway adapt its aid programme to the requirements of the peace process and the changes that took place during the period under review?

First, it should be noted that an evaluation of the Norwegian aid programme to Sri Lanka in 1987 recommended that the bulk of Norwegian assistance be discontinued because the government was seen to hold major responsibility for an escalation of the conflict and very serious human rights violations. During the following years, there were increasing concerns, also in the Norwegian National Assembly, that aid relieved the government of expenditure on relief and development, allowing it to-concentrate its own resources on military operations. However, no major changes were made to the aid programme, which was deemed successful in terms of its development impact. Along with commodity assistance and import support, integrated rural development (mainly in the south) played a dominant role in the Norwegian assistance programme.

As part of Norwegian efforts to contribute to a peaceful solution, it was decided in 1997 to upgrade the annual consultations on development cooperation and to include talks on political developments. On several occasions, the Norwegian delegation was led by a State Secretary. It was also decided to develop new guidelines for development cooperation. The guidelines (adopted in 1998) confirmed that Sri Lanka would continue to be a priority country for long-term development cooperation; that all future cooperation would be organized in a coherent manner and that all new cooperation proposals would be reviewed on the basis of their contribution to a cessation of the conflict, to reconciliation and to the search for a lasting peace . As part of this, Norway decided to put greater emphasis on cooperation with the north and east. However, activities would also continue in the dominantly Sinhalese areas, partly to ensure that Norway would be regarded as unbiased by the government as well as the public opinion.

Following the Ceasefire Agreement, the first round of talks and the de-proscription of the LTTE by the Sri Lankan government in 2002, Norway increased its aid allocation and efforts to link development cooperation to the peace process were accelerated. In 1999, the overall Norwegian aid contribution to Sri Lanka had totaled some NOK 109 million (about US$ 13 million 313) . By 2003, it had almost doubled, in line with the agreement to provide significant additional resources in the case of progress towards peace. Following the tsunami in December 2004, Norwegian aid was again doubled (NOK 430 million; about US$ 62 million) and humanitarian assistance became an important element in the programme. In 2004-2005, Norway was the fifth largest donor in Sri Lanka and the third largest bilateral donor (after Japan(after Japan, the Asian Development Bank, the World Bank, and Germany). In total, Norway disbursed NOK 2.5 billion (about US$ 320 million) to Sri Lanka during 1997 -2009.

While Norwegian funds were disbursed to approximately 240 different partners during the period under review (1997-2009), the most important partners in terms of aid volume were Norwegian NGOs (largely because of the tsunami) and the Sri Lankan government, followed by Sri Lankan civil society organizations. The two pillars of Norwegian cooperation during the period under consideration were (a) peace/reconciliation, and (b) economic development (with a focus on support for the private sector and employment creation).

Norway actively used aid funds to galvanize support for the peace process including the Norwegian facilitation, particularly after the Ceasefire Agreement. As noted by one senior Norwegian official ‘the entire aid handling was harmonized with the needs of the peace process’. This included funding of the Sri Lanka Monitoring Mission, mine clearance, the peace talks as well as other costs incurred as part of the peace process (travel, meetings, etc.). Norway also provided initial funding for the government’s Secretariat for Coordinating the Peace Process (SCOPP) and helped fund the Peace Secretariat of the LTTE (2003) and, later, the Muslim Peace Secretariat (2004). The proportion of Norwegian resources allocated to ‘peace, democracy and human rights’ rose from 10.5% in 1997 to 37.7% in 2004. Allocations for all other purposes declined in relative terms. In fact, the share of Norwegian money allocated for peace building purposes was considerably higher as funding e.g. for Norwegian NGOs (resettlement, reconstruction, capacity building, de-mining) and some local civil society organizations was provided through other channels.

What also stands out in the Norwegian portfolio is the substantial support for peace building efforts of various sorts through civil society organizations. As was the case with other mostly European donors, the Norwegians envisaged civil society playing a supportive role, by broadening societal engagement and popular support for the peace process, addressing conflict issues and promoting bottom-up pressures for political reforms. In addition, Norway felt the need to establish and strengthen contacts with influential politicians and important civil society institutions with a view to generating support for Norway’s role.

During 2001-2004, NOK 210 million (about US$ 28 million) was allocated to mostly non-governmental Sri Lankan partners in the area of ‘peace building, rehabilitation and reconciliation. This includes projects on training and institutional capacity building; awareness creation; mobilizing people/campaigns and dialogue; policy influence; national integration; human rights and good governance; rehabilitation and reconstruction; and mine clearance. For the period under review, ten organizations received altogether more than NOK 200 million. The Foundation for Co-Existence led by Kumar Rupesinghe received the most funding, NOK 35 million (about USD 6 million) during 2004-2008. Also the Milinda Morogoda Institute (MMIPE), led by the former Minister of Economic Reforms, Science and Technology was a large recipient of Norwegian aid for the purpose of ‘humanitarian defining’ during 2003-2009. The Indian NGOs Horizon and Sarvatra and MMIPE together received more than NOK 60 million, but the larger share of these funds went to Horizon and Sarvatra. While most of these partners received support for peace building purposes, Norway also provided substantial funding for non-governmental organizations with a broader developmental mandate like Sarvodya, Sewalanka, the Sareeram Sri Lanka National Foundation, and the Hambantota District Chamber of Commerce.

Other important partners were the One-Text Initiative, the National Anti-War Front (also led by Rupesinghe), the National Peace Council, Centre for Policy Alternatives, the Forum of Federations, and the People’s Peace Front. Funding was also provided to the LTTE affiliated organisation Tamil Rehabilitation Organisation (TRO). Efforts to link aid to the peace process entailed many small projects with a wide range of actors, and in 2004, at least 22 civil society organizations received Norwegian support, including four that worked specifically with women’s groups.

Norwegian NGOs were also important partners, particularly after the tsunami. FORUT and Redd Bama (Norwegian Save the Children) have worked in Sri Lanka for several decades. Norwegian People’s Aid started their activities with the peace process, primarily doing mine clearance but then becoming involved in other activities after the tsunami. The Norwegian Refugee Council played an important role in handling administrative and personnel matters for the deployment of the SLMM, and Norwegian Red Cross, Utviklingsfondet, Strommestiftelsen, Caritas Norway and CARE Norway also became increasingly engaged after the tsunami. Altogether, these nine Norwegian NGO received NOK 804 million for their activities in Sri Lanka during 1999-2009.

While NGO representatives played a role in the very early phase of the Norwegian peace engagement (particularly Ame Fjortoft), and while some of the NGO projects were encouraged by MFA for ‘strategic reasons’, none of them were directly involved in the peace process when it started officially. However, they were invited to occasional meetings in the embassy and the foreign ministry in Oslo and when it became difficult for Norwegian diplomats to access the north, some of them also played important roles in providing information about local developments. A Sri Lanka NGO network was established in Norway and the dialogue with the ministry was generally positive and fruitful

Regarding Norwegian support for Sri Lankan civil society organizations, it can be viewed as a flexible response to new opportunities. Yet it also created its own set of problems, not least the perception in Sri Lankan society that the Norwegians were dispersing largesse in order to buy peace with limited monitoring or accountability.

There have been moments in Sri Lankan history when the political activism of civil society organizations has achieved success in influencing political reforms. However, in all cases there was correspondence between their interventions and campaigns or policy changes led by political parties or regimes in power. In Sri Lankan politics, which is highly centralized and structured around patron-client relations, ‘the Most effective organizations were those that were directly supported by the government or political parties’ In the first year or so following the signing of the CFA, there was a rapid growth in peace activities funded by donors and the Wickremesinghe government was largely supportive of such efforts.

Several organizations supported by Norway received money for advocacy work, to ‘create awareness’, and to run campaigns or workshops in support of the peace process. As long as this had the support of the government, Norwegian and other foreign donor funding boosted the work and profile of several organizations. But particularly after the presidential elections in 2005, the political wind changed, and internationally backed civil society activism in pursuit of peace largely collapsed without achieving its long-term objectives.

This was aggravated by the controversies over post-tsunami aid. Many donors and civil society organizations became preoccupied with meeting the dire needs of the tsunami- affected populations and several organizations took on tasks beyond their original mandates, often beyond their capacity and competence as well. The influx of numerous international NGO and foreign funding agencies created an overly crowded aid environment with a growing number of incidents of NGO malpractice or corruption. These incidents increased public concerns about the motives and practices of NG0s, which were picked up and exploited by the nationalist political parties.

Donors’ close relations with a small group of Colombo-based NGO weakened the popular legitimacy of civil society and fuelled Sinhala nationalist concerns about the influence of international actors on political affairs in Sri Lanka. Particularly after 2005, there was a major backlash against civil society, accusations were directed against the ‘peace mudalalis/ (peace vendors) that had been closely associated with the peace process and received foreign funding. ‘Peace’ became a word to avoid.

Such drastic changes posed a major challenge for Norwegian civil society support. Norway continued to fund the NGOs that had received support since the start of the peace process. This included support for initiatives that came to be seen as working against the government. One example is Norwegian support for the National Anti-War Front. Direct funding to LTTE structures, such as the LTTE Peace Secretariat, also met with hostile reactions among Sinhala nationalists. Norway tried to respond to these criticisms by reaching beyond Colombo, for example by funding the establishment of a Buddhist academy in Kandy (2009), and supporting the reconstruction of Buddhist temples destroyed by the tsunami on the south coast. The inauguration of the temples was attended by Erik Solheim and conveyed a message that Norway was providing support to Sinhala Buddhist communities and had positive relations with Buddhist monks. While these initiatives may have improved Norway’s image among those in the south who were aware of it, others felt that such initiatives were ‘superficial and seen as a calculated effort to buy support’.

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