Program Description
USAID's Office of Transition Initiatives (USAID/OTI) program in Sri Lanka assists in generating greater support for a negotiated peace settlement to end the long-standing conflict. To accomplish this aim, USAID/OTI's three objectives are to:

• Demonstrate tangible benefits of peace;
• Increase the exchange of accurate, balanced information on peace issues; and
• Reduce or prevent incidents of violence in conflict-prone communities.

Based on these objectives, USAID/OTI provides grants that:

• Support positive interaction among diverse groups of people;
• Promote participatory decision-making at the community level;
• Improve livelihoods; and
• Facilitate the flow of accurate information from multiple viewpoints.

Working with local NGOs, informal community groups, media entities, and local government officials, USAID/OTI identifies and supports critical initiatives that will move the country further along the continuum from war to peace. Development Alternatives, Inc. (DAI) implements the $3.5 million small grants program and manages USAID/OTI offices in Colombo, Trincomalee, and Ampara. Since program start-up in March 2003, USAID/OTI has cleared 133 small grants worth approximately $3.2 million.

Country Situation

The April 2 national general election - precipitated by the President's dissolution of Parliament in February - resulted in a new government without a simple majority in Parliament. The Election Commissioner called the poll one of the most free and fair in decades, with more than 75 percent of registered voters casting their ballots, and few reports of violence and malpractice outside of the north, where an alarming amount of vote rigging was reported by monitors. Under Sri Lanka's proportional representation system, President Chandrika Kumaratunga's United People's Freedom Alliance (UPFA), an awkward partnership between her Sri Lankan Freedom Party and the Marxist-Sinhalese nationalist Janatha Vimukthi Peramuna (JVP), secured 105 seats in the 225-member Parliament, with Prime Minister Ranil Wickremasinghe's United National Front (UNF) coalition securing 82 seats. The subsequent contest for Speaker of the House, however, demonstrated how balanced the respective power bases really are when parties not permanently aligned to either coalition come into play: On April 22, in the first session of Parliament, the opposition UNF-backed candidate won by a single vote in a controversial second vote. This followed an unprecedented deadlock in which one parliamentarian's ballot was disallowed.

From a regional perspective, the outcome of elections strengthened the LTTE's hand in pushing forward their Interim Self-Governing Authority proposal submitted to the former government last November. The LTTE-backed Tamil National Alliance (TNA) secured 22 seats in the north and east -- the highest number for any Tamil party since 1977. The election outcome also signaled strong southern support for Sinhalese-nationalist ideology. The south voted overwhelmingly for the JVP and gave an unexpectedly strong showing for the even more strident Jathika Hela Urumaya (JHU) party which put nine Buddhist monks into Parliament. These results gave reason for Tamils to question the majority Sinhalese community's interest in a negotiated settlement. The success of both these parties was considered a clear protest vote against both the former Prime Minister's United National Party and the SLFP, which have dominated Sri Lankan politics since independence in 1948. Key members of the international donor community, meanwhile, reminded the new government that disbursement of $4.5 billion in aid pledged at the June 2003 Tokyo Conference remained contingent upon demonstrated progress towards a negotiated settlement.

The war of words between rival factions of the LTTE erupted into short-lived armed conflict on April 9 when forces sent by the northern-based military command exchanged mortar and machine-gun fire with loyalists of the eastern-based breakaway commander Karuna. Although the fighting near the border of the Trincomalee and Batticaloa districts displaced several thousand civilians, it resulted in the deaths of less than a dozen fighters from both sides. The displaced also quickly returned home. Karuna is reported to have left the east, destroying some of his military machine en route, though his precise whereabouts remains uncertain. Movements of northern-based LTTE troops through government-controlled territory along the eastern coast continue to stretch the capacity of the Scandinavian-staffed Sri Lanka Monitoring Mission, charged with ensuring adherence to terms of the ceasefire, and has prompted government troops and police to heighten security and surveillance measures in the region. The LTTE has expressed concern over the shooting deaths of several cadres in government-controlled areas within Batticaloa District during the last week of April.

As the month drew to a close, preparations for resumption of peace talks were underway with Norway's role as facilitator reaffirmed both by the LTTE and the new government, to the chagrin of the JVP. Key elements of the Sri Lankan government were welcoming a more up front, proactive involvement by the Indian government, though it appeared that the latter preferred the low profile it had been keeping in the process.

USAID/OTI Highlights

A. Narrative Summary

Overview: Due to the parliamentary elections, a two-day national holiday that shut down government departments for one full week, and the security repercussions in the east related to the LTTE split, OTI Sri Lanka was challenged in April to maintain the implementation and programming pace of previous months. Nonetheless, OTI staff developed seven new grants while beginning implementation of eight others. Considerable progress was also made toward finalizing a comprehensive monitoring and evaluation plan to help assess the cumulative impact of OTI-supported activities in Sri Lanka.

Several of these activities, programmed out of the OTI/Colombo office, focused on the promotion of a peace agenda during the run-up to and following the elections. OTI funded a national newspaper and billboard campaign that brought to a wider audience the voices of local people participating in a series of sixteen community-based dialogues on peace, democracy and good governance. OTI also supported an independent documentary company to capture on video the process and outcomes of these dialogues in a series of four, half-hour television programs broadcast nationwide. In the Northwest Province, where three weeks after the national polls the first in a series of regional elections were held, OTI supported an information campaign for an electorate that traditionally has one of the highest rates of poll-related violence in the country. Through door-to-door distribution of literature promoting free, fair and non-violent elections, coupled with a household survey on attitudes towards voting and violence, a local NGO hoped to set the tone for peaceful provincial council elections to be held elsewhere on the island in May.

Movements of the OTI/Ampara office staff northward to Batticaloa District as well as to remote areas within the Ampara District were restricted due to the security repercussions of the LTTE split. OTI focused on implementation of existing grants, including the handover of fishing and farming equipment to fourteen community-based cooperative societies. Through close collaboration with the U.S. Embassy's Public Affairs Office, these events received significant press coverage in both the print and broadcast media, allowing OTI to amplify the impact of the "peace dividend" theme underlying its livelihood support.

Tools, training and enhanced opportunities for productive employment was also the focus of three grants developed by the OTI/Trincomalee office during April. One of these activities will support a seven-day enterprise development training for Muslim and Tamil youth from Muttur, a region south of Trincomalee town where inter-ethnic tensions have traditionally been high. If the pilot for twenty-five youth is successful, OTI will support an additional five rounds with new trainees, carefully selected based on potential impact for improved community relations. A second grant will support the establishment of a business academy affiliated with the Trincomalee Chamber of Commerce, providing courses offering nationally recognized certification in business English, accounting and marketing, among others. The business community in the east, like the north, is keen to ensure that local residents have the skills and credentials to compete for the jobs that are likely to follow investment in a post-conflict setting. The third activity under development will provide materials to expand an English and computer training academy for multi-ethnic youth through a consensus decision-making approach that will strengthen bonds among the beneficiaries who have volunteered their labor on the project.

B. Grant Activity Summary - USAID/OTI Sri Lanka

Program Category	Approved Grants	Total
Community Impact Projects	47	$1,482,128
Livelihoods	37	$ 907,645
Media and Information	27	$ 512,343
Conflict Mitigation	22	$ 331,919
TOTAL	133	$3,223,192

C. Indicators of Success

OTI partnered with the Southern Province Health Service Authority to reconstruct one rural health center and provide medical equipment and furniture to nine others in the flood-affected Deniyaya-Kotapola region. Nearly 30,000 Sinhalese, Tamil and Muslim people receiving health care and advice from these ten centers will benefit from this grant. A group of multi-ethnic youth whose volunteer labor has been catalytic in the restoration of flood-damaged housing in the area also contributed to this project. "Tamils are always looked down upon around here," said Mr. Jeykanth, a member of the Young Tamil-Sinhala Organization. "The USAID housing project brought us together as one family. Working as a team, we achieved what in the beginning seemed impossible." Bus drivers offered free transport and neighboring families provided refreshments to the volunteers as well as sixty local women of different ethnicities who, inspired by the commitment of the youth, volunteered to clear the construction site. Trustees of nearby Buddhist and Hindu temples, meanwhile, shared the responsibility of safeguarding building materials. The chief technical officer on the project commented, "The Pallegama construction was instrumental in cementing local community relationships."

OTI supplied agricultural machinery to ten farmer organizations in the Siyambalanduwa Division of the Moneragala District, along the southeast border, to increase productivity and incomes in a region where farmers have been repeatedly displaced during twenty years of war and more recently affected by severe drought. The new equipment, which will be shared among members of each society on a reduced fee basis, will eliminate high rental costs and increase cultivation on previously abandoned lands. The Sri Lankan Department of Agriculture and CARE have agreed to provide the farmers with training on equipment use and financial management.

Muslim and Tamil women brought together for self-employment training skills as part of an earlier OTI activity continue to seek opportunities to mingle despite obstacles to doing so. Typically reluctant to travel into the ethnically homogenous community of another group, these women met in a neutral location for their OTI-funded training through the Social Service Educational Development Organization (SSEDO). After that positive experience, they are using their own funds and coming up with new reasons to meet. Recently, the head of SSEDO brought all of the young women on a peace pilgrimage to Trincomalee town. Among the locations they visited were places of worship significant to Hindus and Buddhists. Because many of the women had never been to Trinco town before, their enthusiasm was tremendous. By many reports, the newly-formed friendships among the young women are flourishing.

NEXT STEPS/IMMEDIATE PRIORITIES

In May USAID/OTI Sri Lanka will:

• Continue to monitor closely the fluid political environment following national and provincial elections, as well as the security implications of the LTTE split, to ensure continued relevance of OTI Sri Lanka's country strategy;
  
  
• Operationalize a more targeted media and information strategy taking into account the above developments, along with the imminent start of a peace-related communications initiative with core funding expected from the World Bank;
  
  
• Finalize implementation plans for effective monitoring and evaluation of the OTI country program, including the scope of work for a full-time monitoring and evaluation specialist;
  
  
• Fill staff vacancies in Trincomalee and Colombo, plus further plan for several new positions in light of increased funding.

For further information, please contact:

In Sri Lanka: Justin Sherman, Sri Lanka Country Representative, jsherman@usaid.gov
In Washington, D.C.: Rachel Wax, Asia and Near East Program Manager, 202-712-1243, rwax@usaid.gov