1.1 Area and People
1.2 Regional Economy
1.3 Development Potential
1.4 Policy Framework
1.5 Programmes and Projects and Financing
1.1 Area and People
The Eastern Province, comprising the Districts of Trincomalee, Batticaloa and Ampara, covers an area of around 10,000 square kilometres or about 15% of the total land area of the country (Table 1). The landscape is varied, with paddy fields, forests, scrublands, wetlands and lagoons being predominant. The population of the Province is about 1.5 million or about 7.8 % of the national population figure. It is expected to increase to 1.8 million by 2010 and 2.1 million by 2015. The gender distribution of the population is 46.4% male to 53.6% female. The annual population growth rate was 2.2% in 2005.
Table 1.1 Area and Population of Eastern Province by District
1.2 Regional Economy
The Provincial economy is mainly based on the region’s rich endowment of natural resources, including forests, agricultural land, wetlands, lagoons, bays and attractive beaches. The large number of ancient water bodies, scattered over the entire landscape of the Eastern Province, suggests the existence of an advanced agricultural economy from ancient times. Paddy is the main agricultural crop. During the pre-colonial era, the region produced about two-thirds of the country’s paddy output and was popularly known as the “Granary of the Island”. There are 124 major irrigation schemes in the Province, including 43 settlement schemes, providing irrigation water for 134,726 hectares of land. Livestock farming is another traditional economic pursuit in the Province.
In 2005, the total GDP at current factor cost of the Eastern Province was Rs. 100,457 million. This is about 4.8% of the national GDP. The contributions to the provincial GDP by the Agriculture, Industry and Service sectors were 28%, 25% and 47% respectively in 2005. The above information with regard to the regional GDP has been virtually the same over the last five years. The unemployment rate currently stands at 8.4% of the work force.
The respective contributions of agriculture, industry and services to the Provincial GDP in 2005 were 28%, 25% and 47% (Figure 1).
With respect to urban areas, towns and service centres, these are currently mainly restricted to the coastal belt. The centres have limited connectivity mechanisms among themselves and with their hinterlands. The centres provide most of the earned-income employment opportunities in the region as they contain most of the market-based economic activities.
1.3 Development Potential
The economy of the Eastern Province has the potential to diversify, to increase the unit value of its products and to achieve high growth. Much of this potential will be based on the Province’s rich endowment of natural resources and the opportunities for economic advancement that they present. These endowments include:
- Trincomalee Port which can become a major commercial and industrial hub for the South Asian region.
- Large stretches of beautiful beaches, calm seas and wildlife and ecological conservation areas, which together with numerous important cultural and historical sites that can support a vibrant tourism industry.
- Potentially very productive agricultural crop land with low population density that can be developed for high intensity and highly productive agricultural enterprises through improved investments in irrigation water and water management and other practices.
- Livestock and fisheries resources that can be developed substantially through the development of additional infrastructure and services, and can supplement incomes from agriculture and other trade and commercial activities.
It is expected that through carefully crafted regional development policies and programmes, the real GDP of the region can be raised from Rs. 44,700 million in 2003 to Rs. 118,700 million by 2010. At the same time, the unemployment rate can be cut from the current level of 8.4% to 5% in 2010.
The economy of the region has been greatly affected by the civil conflict and also lately by the 2004 Boxing Day Tsunami Disaster. These tragic disasters contributed to loss of life, displacement and/or migration of people, damage to natural as well as man-made resources and infrastructure, disruption of services and loss of livelihoods. The revival of the Eastern region economy is pre-dedicated upon the immediate restoration of fundamental social and economic stability and basic livelihoods in the area. This will be the foundation for the launching of sustainable economic revival and eventual full-fledged development.
1.4 Policy Framework
Strategy
The basic strategy for the development of the Eastern Province during the coming three years comprises three overlapping areas of focus:
- First, restoring and guaranteeing socio-economic and personal stability and safety to the people and communities of the Region through resettlement of displaced persons, building reconciliation, and consolidating the capacities and fundamental rights and responsibilities all people and institutions.
- Second, revitalizing basic livelihoods through revival and expansion of the productive sectors and the regional economy.
- Third, improving economic infrastructure, strengthening social infrastructure and fostering social services and development of human settlements and improving the internal and internal connectivity of the Region.
The immediate priority objective for the Eastern Province is to protect and resettle the displaced community and to provide them with the necessary resources and amenities for basic livelihoods restoration. Returning IDPs and refugees will be facilitated to voluntarily resettle in their original homes or any alternative area of their choice. The success of the resettlement effort will depend heavily on the maintenance of a conflict free environment where all community members, including the returning IDPs and refugees can live in harmony.
The achievement of these short-run objectives will lay the ground for effective participation of the people of Eastern Province in the reconstruction and development of the region’s economic, physical and social infrastructure with the objective of assuring sustained long term development in the East.
Short and Medium Term Objectives: One to Three Years
In the short to medium term period the overarching objective is to develop the East as a hospitable and attractive place in which to live, visit and do business and work. As such, we must create an environment where people can live in peace and harmony and pursue livelihoods of their choice, in a way that will permit rapid social and economic development.
The specific objectives of the short to medium-term period include:
- Relief, resettlement, rehabilitation and reconciliation among and between displaced persons and host communities with special attention to vulnerable groups such as demobilized ex-combatants, war handicapped, widows, orphan children returned IDPS and refugees, etc.,.
- Restoration and development of livelihoods together with the establishment of basic infrastructure and restoration of services to the communities.
- Establishment of sound governance administration and service delivery arrangements
- Laying the groundwork for long-term socio-economic development of the Province through development of the productive, infrastructure, services and other sectors.
1.5 Programmes and Projects and Financing
Sector wise strategies programmes and projects to develop the Eastern Province are summarised in a table at the beginning of this Report, while the details of strategies and programmes and projects are contained in the ensuing Chapters. Annex 1 gives a consolidated outline of the Detailed Investment Plan for the reconstruction and development of the Eastern Province. Although the plan period covers the years 2007 to 2010, since the allocation has already been made for the year 2007, effectively it covers a three year period. The total investment for the planned period has been estimated at Rs.197,219 million. In addition, a number of NGOs have indicated that they will provide around Rs. 2,961 million to be channelled in various sectors and programmes.
Table 1.2 Summary of Investment Plan by Main Sectors / Programmes
Table 1.3 gives the anticipated division of financing sources between Government of Sri Lanka, Foreign Assistance and private investment. Private sector contribution is especially identified for Development of Tourism Zones, Individual House Building (with bank loans), and the development of Trincomalee Market. NGO financing (Rs. 2,961 mn.) which could not be broken-down by sector is over and above these amounts.
Table 1.3 Expected Method of Financing
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- Resettlement of IDPs
- Productive Sectors
- Economic Infrastructure
- Social Infrastructure
- Human Settlements
- Public Institutions
- Investment Plan
