Over the years Sri Lanka has come under increasing criticism from donor representatives and members of the aid profession in general over the clear lack of progress that successive governments have made in development and poverty alleviation programmes.
Mieko Nishimizu, Vice President for the World Bank's operations in South Asia Region when summing up the Paris Aid forum in late 2001 spoke of the increasing, "sense of frustration among donors," at the "disconnect," or "gap between official policy and commitment on the one hand and, on the other, the voices on the ground in Sri Lanka."
The People's Alliance (PA) government at the time was urged to act with "an utmost sense of urgency," and reminded both of the "rising cost of war," and of the other challenges facing Sri Lanka: "to build efficient institutions that have legitimacy for all citizens, and to pursue quality growth with equity and social harmony."
The sense of disquiet amongst donors that in addition to the strains caused by the war, Sri Lanka's economy was hampered by inefficient and unaccountable institutions was also voiced at a 2003 aid conference at the Sri Lanka Economists' Association.
The Sri Lanka representative of the Asian Development Bank was quoted by the Sunday Times as saying, "because of an inefficient bureaucracy, the people are not getting services (in the north) even if allocations have been made."
His views were echoed by the country representatives of the World Bank and the International Monetary Fund who located the cause of Sri Lanka's development difficulties in, "political interference, massive government bureaucracy, weak decision-making processes and a lack of commitment."
The sense of frustration expressed by the donors stems from the fact that while Sri Lanka receives a significant amount of aid every year, it does not get translated to concrete projects on the ground that yield visible and sustained improvements in the lives of Sri Lanka's most vulnerable and improvised people.
The diagnosis that the institutions are inefficient and susceptible to political interference suggests that administrative work is not being completed at a rapid enough pace and that projects are often chosen on political considerations rather than objective economic analysis.
Although both these criticisms are applicable to the Sri Lankan bureaucracy they do not capture the most important mechanism that blocks the efficient and equitable distribution of development aid.
The real obstacle that prevents aid from reaching the people who need it most is the rampant clientilism that has become a pervasive feature of Sri Lankan political life.
Important parts of the Sri Lankan state are now the domain of patron client networks that distribute everything from public sector appointments, licenses for export and import and contracts from public sector co-operations to private enterprises.
The pervasiveness of these networks and their ability to capture such large parts of the state's resources is a consequence of their implication in the very logic of political competition.
In large areas of the Sri Lankan political mainstream, the mobilisation of political support and the basis of political loyalty depends on the ability of the political patron to capture and distribute goods such as teaching appointments, jobs in the state cooperations, development funds and investment projects.
The unapologetic spending spree of public sector appointments and subsidies that Sri Lankan governments initiate before elections is just the most visible and sensationalist edge of a myriad of clientilist networks that lie beneath the Sri Lankan mainstream political class.
Given that patron client networks are the most important mechanism through which the state's normal resources are distributed, it is not surprising that they also capture and divert development aid.
Perhaps the clearest example of the capture and consumption of development funds by cleintilist networks was the ill fated Northern Development Ministry headed by the leader of the Eelam People's Democratic Party (EPDP), Douglas Devananda.
A close ally of President Chandrika Kumaratunga and a key supporter of her 'war for peace' strategy, Devananda was rewarded for his loyalty with the portfolio.
The funds and resources allocated for the ministry were then used by Devananda and the EPDP in an attempt to build a political support base both for himself and, by extension, for the President's strategy of politically marginalizing the LTTE amongst the Jaffna populace.
Devananda used the ministry pay for his cadres by putting them on the ministry's payroll, and to recruit fresh cadres for his party by offering well paid jobs in his ministry.
Whilst this diversion of funds was common knowledge amongst the Tamil residents, it was only brought to the attention of the donor community when the then country representative of the World Bank, Dr. Mariana Todorova visited the Jaffna peninsula in September 2001.
Dr. Todorova noted that although the payroll had significantly expanded, no clear development projects or project beneficiaries could be identified.
"About 1,500 youths have been recruited as development assistants by the Ministry of Northern Development at a monthly allowance of Rs 3,000 per person. They are said to have been given skills training, but their roles and responsibilities were not clear…It is not clear what they are doing. Really no focused development work [has taken place]," she was quoted by the Sunday Leader newspaper as saying.
In addition to the development funding that was allocated to the Ministry of Northern Development, other development aid going to the conflict areas was also being diverted and consumed by patron client networks.
The island wide Samurdhi poverty reduction programme, a much coveted ministry in Sri Lanka's cabinet, also came in for criticism by Dr. Todorova.
"The government programme for poverty reduction needs to improve its targeting and effectiveness in Jaffna. Despite the presence of 440 odd Samurdhi officials, Samurdhi recipients were not identified while meeting so many communities in the district."
The wholesale capture of state institutions by patron client networks has meant that Sri Lanka's generous aid budgets have simply provided greater spoils for clientilist competition rather than providing the basis for sustained poverty alleviation programmes.
The mushrooming projects and local non-governmental organisations (NGOs) that have prospered from development funding indicates that 'development jobs' are now even more lucrative than the once sought after public sector jobs.
The disjunction between the proliferation of lucrative projects and the actual delivery of services was noted by Mr. Peter Harold, then the country representative of the World Bank, when speaking at the Sri Lanka Economists Association: "a vast amount of the funds to the south hasn't been utilised for the people's benefits. The money is spent on bureaucracy and project offices."
Mr. Harold urged the government to concentrate on the most important projects arguing, "if this happens probably half the project portfolio would have to be cancelled … (such is the waste)," he said, adding however that these are hard decisions because "comfortable" (project) jobs would have to be axed.
Although the international donor community is finally turning its attention to the problem of Sri Lanka's institutional weakness, their diagnosis of inefficiency and political interference passes over the real source of the problem, clientilism and the subsequent politicisation of the state's institutions.
The inefficiency and indifference to development objectives are easily explained once it is understood that many of the relatively well paid employees see their salaries as the rewards of being well placed within a particular patron's network rather than the result of merit and commitment.
Given this reality it is clear that if development funding is channelled through existing bureaucratic structures, it will inevitably be consumed by established clientilistic networks.
The wholesale politicisation and capture of Sri Lanka's public institutions by such networks, means that aid has to be channelled through new administrative structures, outside the control of Sri Lanka's bureaucracy if it is to be effective.
Unless this reality is acknowledged by both donors and the Sri Lankan government, the can be little doubt that the future aid conferences will also be foreshadowed by criticisms of 'disconnect,' 'inefficiency' and 'political interference.'
The unedited original article was published in Tamil Guardian on June 18, 2003