Comparative Study

of
South Asian Countries for Rural Development

Submitted to:
Mr. Fazal-ur-Rehman

Submitted by:
Mr. Faheem Akbar
Mr. Sher Afzal
Mr. Zaibullah Khan

International Institute of Islamic Economics

International Islamic University
Islamabad
 Table of contents

AKNOWLEDGEMENT 04
PREFACE 05
Chapter I
• Introduction 06
• Problem statement 06
• Purpose statement 06
• Methodology 06
Chapter II
• Brief Introduction of South Asian Countries 07
• Afghanistan 07
• Bhutan 08
• Bangladesh 08
• India 09
• Maldives 10
• Nepal 11
• Pakistan 12
• Sri Lanka 13

Chapter III

• Basic Facts 13
• Agricultural Performance in the South Asian Countries 15
• Improvement in Health Sector 16
• Adult Mortality Rate 17
• Trends in Rural Urban Disparity in Child mortality rate 18
• Access to safe Drinking water 19
• Improvement in Education Sector 20
• Status of Poverty Reduction 23
• Selected Country (Sri Lanka) 25

Comparative Study of South Asian Countries for Rural Development 2

Chapter IV Successful Rural Development Programmes of Sri Lanka
• Development of Rural Agriculture & Productivity 26
• Colonization Schemes 26
• Green Revolutionary Intervention 26
• Social Welfare Strategy 27
• DDC Strategy in Two Legged Development Process (1970-77) 28
• Private Sector Dominated Market Economy Strategy 30
• Janasaviya Programme - (People’s Strength Programme) 31
• Samurdhi Programme - prosperity through poverty alleviation 32
• Income Transfer Component
33
• Social Security/Insurance Component 34
• Social Animation and Credit 35
• Samurdhi Bank System and Micro Finance 35
• Community Infrastructure Development Component 37
• Current Poverty Position in Sri Lanka 38
Conclusion 40
Bibliography 41

Comparative Study of South Asian Countries for Rural Development 3

 List of Tables

• Table 1: Basic Facts about South Asian Countries 18

• Table 2: Growth in per Capita Income, Share of Agriculture 20
in GDP, and Agricultural Workforce
• Table 3: Agricultural Output and Productivity in 20
SAARC Countries
• Table 4: Access to Safe Drinking Water: 24
• Table 5: Improvement in Education Sector 25
• Table 6: Adult literacy rate 15 and above) 26
• Table 7: Trends in Educational Indicators 1995-2005 27
• Table 8: Improvement in Poverty in South Asian Countries 28
• Table 9: Community Infrastructure Development Component 41
• Table 10: Public Expenditure on Rural Development and Social 42
Service

List of Figures

• Figure 1: Improvements in Health Sector 22

• Figure 2: Adult Mortality Rate: 22
• Figure 3: Trends in Rural Urban Disparity in Child 23
• Figure 4: Expenditure of Social Services in South Asia 43

Comparative Study of South Asian Countries for Rural Development 4

 AKNOWLEDGEMENT

In the name of ALLAH the praise worthy, the passionate whose blessing made
it possible to complete this task. We are highly indebted to our research supervisor Sir
Fazal- ur- Rahman whose sage counseling, appropriate guidelines, expert advice and
timely suggestions enabled us to materialize this time stretched research project.

We are highly thankful to Mr Amir Mustafa Research Officer SAARC Human

Resource Development Center for his technical cooperation and for supplying useful
data.

We are highly thankful to all those who guide us and provide us every possible
help. We also thankful to all our colleagues and friend for their frequent encouraging
words.

Comparative Study of South Asian Countries for Rural Development 5

 PREFACE

In south Asia about seventy percent population lives in rural areas where the
incidence of poverty is high. Agricultural wage earners, small and marginal farmers
and casual workers engaged in non-agricultural activities constitute the bulk of the
rural poor. The high incidence of poverty is a matter of great concern. South Asian
economies are mainly agricultural dependent, therefore, survival of the majority of
rural population is on farm and non-farm activities. Realizing the importance of rural
areas in socio-economic development and poverty reduction, South Asian countries,
in the last few year have given foremost attention to its development by intervening in
the farm and non-farm development activities such as development of rural
infrastructure (physical and social), market for land, agricultural labor and inputs to
raise agricultural productivity.
In this study we will try to comparatively analyze the South Asian countries
with respect to rural development. The first section provides profile of South Asian
counties. In the next section South Asian countries excluding Afghanistan are
critically analyzed regarding their in agriculture, education, health and poverty
elevation, access to safe drinking water, and trends in rural urban disparity in child
mortality rate. This analysis is based on data for the last ten year on above mentioned
indicators.
In the last section the most developed country regarding rural development
will be highlighted on the basis of education, health, poverty alleviation and rural
development. The programs and policies implemented by the model country through
which the country was able to achieve the high rate of rural development will explain
in detail.

Chapter 1
Introduction:
Comparative Study of South Asian Countries for Rural Development 6
 In South Asia 70 percent of the population are lives in rural areas with high
incidence of poverty. Agriculture wages earners, small and marginal farmers and
casual workers engaged in non-agricultural activities constitute the bulk of the rural
poor. Low skills small land holdings, unemployment/underemployment and low
productivity are main hurdles in Rural Development. Particularly, poor education base
and lack of vocational skill perpetuate poverty and regular income of the majority of
poor household. This study will try to find successful Rural. The successful program
will be discussed in later section.

2) Problem statement
To explore the model country in respect of rural development in South Asia
3) Purpose statement
The basic need is to explore the model country in south Asian regarding rural
development and to explain the measure taken by that particular country for rural
development and other countries may fallow these measures to speed up rural
development in their own country.
4) Methodology
For this study secondary data is collected from different sources including
world development report, SAARC poverty profile and government publications.

Comparative Study of South Asian Countries for Rural Development 7

 Chapter 2
Brief Introduction of South Asian Countries
South Asia
The current resurgence of interest in rural development in South Asia clearly stems
from its close connection with rural poverty, which is perceived as the region’s
overarching development issue. The region accounts for over 43 per cent of the
world’s poverty in income terms. Despite the progress achieved in reducing the
prevalence of income poverty in South Asian countries, the proportion of people still
living in poverty and their absolute numbers remain exceedingly high. About one
third to almost one half of the rural population is poor in all except Maldives (22 per
cent). Based on national estimates in 1993/1994, about 80 per cent of India’s 300
million poor reside in rural areas. In Maldives, a country comprised of 1200 islands,
the outer atolls account for 85 per cent of the income poor. In Nepal, the poverty rate
in rural areas (44 per cent) in 1995/1996 was almost double the rate in urban areas (23
per cent). As is well known, income poverty tells only a part of the story. Other
indicators paint a grimmer picture. For example, the UNDP Human Development
Index (HDI) rates South Asia lower than all regions other than sub-Saharan Africa in
terms of average achievements in basic human development. In addition, the poor in
many parts of South Asia are subject to acute vulnerable to disease, crop failures,
labour market fluctuations, domestic violence, natural disasters, floods and cyclones.
These natural and man-made hazards exacerbate their sense of insecurity and, singly
or together, can extend the tentacles of poverty to larger numbers of people or push
those already poor deeper into the quagmire of poverty.

1. Afghanistan.

Afghanistan is bordered to the west by Iran, to the north by Turkmenistan, Uzbekistan

and Tajikistan and to the east and south by China and Pakistan.

Its topography is dominated by a complex of irregular highlands which increases in

height from the west to the east (where peaks over 22,965 feet or 7000 metres are
found) and form part of the Hindu Kush. Almost half of the country lies at about
2,000 metres or more above sea level. Afghanistan constitutes a major watershed with

Comparative Study of South Asian Countries for Rural Development 8

the Oxus (Amu-Darya) rising on the north side of the Hindu Kush and flowing into
central Asia, whereas on the south side several rivers form tributaries of the Indus.
The climate is of an arid steppe type with dry summers and cold winters. Water
supplies vary widely within Afghanistan. Although some areas regularly receive
heavy snowfall in winter, there has been widespread drought in recent years.

Country in Brief

Area: 251,740 square miles (652,000 sq km)

Population: estimated to be 28.7 million (UN) with an estimated total of 2 million
refugees in Pakistan and 800,000 in Iran (UNHCR)
Capital City: Kabul, population estimated to be 4 million (Deputy Mayor of Kabul
December 2002). Other main cities are Herat, Jalalabad, Kandahar and Mazar-e
Sharif.
People: The population comprises numerous ethnic groups, the major ones being
Pashtuns, Tajiks, Hazaras, Uzbeks, Chahar Aimaks and Turkmen.
Language: Dari (related to Farsi) and Pashto
Religion: Islam, 84% of whom are Sunni Muslim
Currency Afghani
Basic Economic Facts

GDP: US$6.3 billion in 2007/8. Per capita GDP has increased from US$200 to
US$348 since 2002. (UNAMA, June 2008)
Growth Rate: Real GDP growth has averaged 14.8% in the last six years. The
inflation rate was 4.8% in 2006/7. Despite ongoing security problems, Afghanistan
has been able to sustain a strong economic growth rate, ranging from 26% in 2002/3
to 14% in 2005/6. The growth rate slowed in 2006/7 due to drought, but is expected to
pick up pace again this year, remaining above the average for post-conflict, land-
locked countries. (UNAMA, June 2008)
Principal industries: Textiles, fruit and nuts, furniture, shoes, fertiliser, hand woven
carpets, cement, natural gas, coal and copper
Major trading partners: Exports to Pakistan, the EU, India, Russia and the United
Arab Emirates; imports from Pakistan, Japan, Kenya, South Korea, India and
Turkmenistan
Exchange rate: 70 Afghanis = 1GBP (xe.com January 2009)
Comparative Study of South Asian Countries for Rural Development 9
2. Bhutan

Geography

Bhutan is a landlocked country situated in the Himalayas between China and India.
The terrain is mostly mountainous with some fertile valleys. The southern border with
India is at an elevation of a few hundred feet. The northern border with China (Tibet)
is at heights of over twenty thousand feet. The climate varies between tropical in the
southern plains to cool winters and hot summers in the central valleys with severe
winters and cool summers in the high Himalayas.

Country in Brief

Area: 38,394 sq km (2008)

Population: 658,888 (UN sponsored census in May 2007). 33.1% of the population
are under the age of 15yrs. 69.1% of the population live in rural areas and 30.9% in
urban areas (2005)
Capital City: Thimphu

People: Three main ethnic groups: Tibeto-Mongoloid mainly in the North and West,
Burmo-Mongoloid mainly in the East and Indo-Aryan (Nepalese) in the South.
Language(s): Dzongkha is the official language. There are some 14 other languages
spoken including Nepalese dialects. English is very widely spoken and is the language
of education.
Religion(s): Mahayana Buddhist 75%, Indian- and Nepalese-influenced Hinduism
25%

Currency: ngultrum (BTN). The Ngultrum is at par with the Indian Rupee.
Major political parties: People’s Democratic Party, Druk Phuensum Tshogpa
(National Harmony Party). Since the election in March 2008 the DPT forms the
Government.
Government: Constitutional Monarchy with bicameral Parliament consisting of the
National Council (25 members) and the National Assembly (47 members) elected by
universal suffrage from 47 constituencies. Parliamentary elections are held every 5

Comparative Study of South Asian Countries for Rural Development 10

years.
Basic Economic Facts

GDP:Nu.41,443Million=approxUSD900,935,000(2006)
GDPGrowth:8.5%(NationalStatisticalBureau2006)
GDI Growth: 23.6% (2006) (due mainly to increased hydropower production)
Major Industries: Hydroelectricity generation, Agriculture, Forestry, Tourism
Major trading partners: Exports - India and Bangladesh; Imports – India, Thailand,
Japan, China, US, UK
Aid & development: The Government of India finances nearly three-fifths of
Bhutan's budget expenditures. Bilateral aid programmes are operated by Denmark,
Japan, Switzerland, the Netherlands, Austria, and the European Union, and the United
Nations Development Programme (UNDP) maintains an in-country office.
Exchange rate: £1 Pound Sterling (GBP) = Nu71.27 Bhutanese ngultrum (BTN).
The value of the ngultrum is pegged at 1 Indian rupee. (March 2009)

3. Bangladesh

Bangladesh has roughly the same land area as England and Wales. It is enclosed by
Indian territory except for a short south-eastern frontier with Burma and borders the
Bay of Bengal in the south. The alluvial plain of the Ganges-Brahmaputra river
system - the largest delta in the world, forms most of the country; water flow is
second only to that of the Amazon. To the east of the delta lie the Chittagong Hill
Tracts. Flooding is normal and life has adapted to take account of this but
occasionally excessive flooding, as in 1988, 1998, and 2004 caused widespread
destruction and loss of life. Bangladesh remains vulnerable to natural disasters and to
the impact of climate change. Arable land is extremely fertile. Bangladesh's principal
natural resource is natural gas.

Country in Brief

Area: 144,000 sq km (55,599 sq miles)

Population: 135 million (2003 estimate)
Capital City: Dhaka, 11 million (2005 estimate)
People: Bengalis (98%), and small numbers of tribes people.
Comparative Study of South Asian Countries for Rural Development 11
Languages: Bangla, and some tribal languages. English quite widely spoken by those
with education.
Religion(s): Islam (89%), Hinduism (10%). Buddhists and Christians make up about
1% of the population
Currency: Taka
Basic Economic Facts

GDP:US$50,929million(BangladeshBank2003)
GDPperhead:US$381
GDPGrowth:5.3% for 2003(forecast for 2005 is 5%)
ConsumerPriceInflation: 6.1 %( 2004)
Principal Exports: Garments account for 80% of Bangladesh’s exports to the UK.
Seafood is also a significant Bangladesh export. Almost 10% of Bangladesh’s world-
wide exports go to the UK.
Aid & development: The Department for International Development (DFID) has one
of its largest programmes in Bangladesh. On current plans, the UK expects to spend
£114 million in the year to 31 March 2008.

4. India

India forms a natural sub-continent with the Himalayas to the north. The Arabian Sea
and the Bay of Bengal, which are sections of the Indian Ocean, lie to the west and east
respectively. India's neighbours are China (Tibet), Bhutan and Nepal to the north,
Pakistan to the north-west, and Burma to the north-east. To the east, almost
surrounded by India, is Bangladesh. Near India's southern tip, across the Palk Strait, is
Sri Lanka.

India has 28 states with constitutionally defined powers of government. The states
vary greatly in size, population and development. Each state has a Governor
appointed by the President for 5 years, a legislature elected for 5 years, and a Council
of Ministers headed by a Chief Minister. Each state has its own legislative, executive
and judicial machinery, corresponding to that of the Indian Union.

Country in Brief

Comparative Study of South Asian Countries for Rural Development 12

Area: 3,287,623msq km (1,269,219 sq miles)
Population:1,136,000,000(Sept2007est)
CapitalCity:NewDelhi

Languages: The official language of India is Hindi, written in the Devanagari script
and spoken by some 30% of the population as a first language. Since 1965 English
has been recognised as an 'associated language'. In addition there are 18 main and
regional languages recognised for adoption as official state languages.
Religions: India is a secular state and freedom of religion is protected under the
Constitution. The main religious groups are Hindus (81.3%), Muslims (12%),
Christians (2.3%), Sikhs (1.9%).
Currency: Rupee
Basic Economic Facts

GDP: : $1,090 billion (2007)

GDP per head: $714 per head (2006)
Annual Growth: 8.4% (2005-2006)
Inflation: 5.6% (2006 est.)
Major Industries: Textiles, chemicals, food processing, steel, transportation
equipment, cement, mining, petroleum, machinery, software, gems and jewellery,
leather manufactures.

5. Maldives

The Republic of Maldives, lying about 420 miles south west of Sri Lanka, consists of
a chain of 26 natural coral atolls comprising some 1,190 islands. 200 of these islands
are inhabited, 87 are designated tourist islands, and 20 are industrial islands. The
islands are small: the capital Malé is an area of under 2 square kilometres, and the
highest point above sea level in the Maldives is 2.4m.

Maldives was seriously affected by the tsunami on 26 December which killed 83

people and virtually destroyed 14 inhabited islands, three of which have been
permanently abandoned. 5% of the population lost their homes, 12,000 people were
displaced, 8% of the fishing fleet sustained damaged, and a quarter of the resort
islands closed for repairs. The International Monetary Fund, which recently approved

Comparative Study of South Asian Countries for Rural Development 13

US$6.3 million in emergency assistance for the Maldives, estimates that net losses to
the balance of payments will be US$160 million in 2005, and that total reconstruction
costs will be almost 50% of the GDP.

Country in Brief

Area: 90,000 sq km (only 1% land)

Population: 400,000 (2004 estimate)
Capital City: Malé (population approx 80,000 )
People:Ethnically homogenous, Maldivians have South Indian, Sinhalese and Arab
roots.
Languages: Dhivehi, though English is widely spoken on resort islands and in Malé
Religion(s):100% Islam (Sunni Muslims). It is illegal to publicly practice any other
religion.
Currency: Rufiyaa, divided into 100 larees
Basic Economic Facts

GDP: US$715 Million (2004)

GDP per head: US$2,509 (2004)
GDP growth: Prior to the tsunami this was predicted to be 6%, following the tsunami
the 2005 forecast is 1%.
Average Inflation: 6.8% (2005 forecast)
Major Industries: Tourism (32.6% of GDP) and Transport & Communications
(16.4% of GDP)
Major trading partners: USA, Sri Lanka, Thailand, Japan, UK, Singapore, United
Arab Emirates, India, and Malaysia.
Total exports: US$152 million (2003)
Total imports: US$470 million (2003)
Exchange rate: 12.8 Rufiyaa = 1 US$, 24.6 Rufiyaa = £1 Sterling (March 2005)

6. Nepal
Nepal covers approximately 147,000 sq km, stretching 800km from east to west and
90 to 230km from north to south. Nepal is land-locked between China (including the
Chinese autonomous region of Tibet) and India. Nepal has three geographic regions;

Comparative Study of South Asian Countries for Rural Development 14

the mountainous Himalayan belt (including 8 of the 10 highest mountain peaks in the
world), the hill region and the plains region. Nepal contains the greatest altitude
variation on earth, from the lowland Terai, at almost sea-level to Mount Everest at
8848 metres. Nepal is divided into five development regions and seventy-five
districts.
Country in Brief

Area: Approximately 147,000 sq km, stretching 800km from east to west and from 90
to 230km north to south.
Population: An estimated 29.5 million (July 2008 est.). Annual rate of growth of
2.5%
Capital city: Kathmandu. Population of about 800,000 in the city itself. Believed to
be approximately 1.5m in the fertile Kathmandu valley
Peoples: Indigenous peoples include Gurung, Limbu, Newar, Rai, Sherpa, Tamang
and Tharu with diverse smaller groups. Major caste groups are the Brahmans and
Chhetris. Large numbers of Indians and some Tibetans make their home in the
country.
Language(s): Nepali 58% (official language), Newari 3%, mainly in Kathmandu.
Tibeto- Burman languages (20%) mainly in the hill areas, and Indian languages (20%)
mainly in the Terai areas bordering India. Nepal has over 30 Languages and dozens of
dialects.
Religion(s): Officially 90% Hindu, 8% Buddhist and 2% Muslim – but these figures
are thought misleading. Hinduism and Buddhism overlap considerably in Nepal.
Other estimates also suggest that there are some 400,000 Christians in the country.
Currency: Nepalese Rupee (NPR) which is pegged to the Indian Rupee.

Economy
GDP: US$12.62 billion (2007-08) (Economic Survey 2008).
GDP per head: US$470 (Economic Survey 2008) 3 out of 10 people live on less than
a $1 a day.
Annual growth: 5.56% (2007-08) - (Economic Survey 2008).
Inflation: 14.5% in Mid November 2008 (Nepal Rastra Bank).
Major industries: Tourism, carpet, textile, small rice, jute, sugar and oilseed mills,

Comparative Study of South Asian Countries for Rural Development 15

cigarettes, cement and brick production.
Major trading partners: India 63%, US, China and Germany.

7. Pakistan

Pakistan is about three-and-a-half times the size of the UK. It shares borders with 4
countries: India to the east, China to the north east, Iran to the south west and
Afghanistan along the western and northern boundaries. Pakistan's coastline on the
Arabian Sea is 1,064 km long. The climate can be roughly split into 3 seasons: cool
(October through February), hot (March through June), and wet (July through
September). There are, however, significant regional variations.

Pakistan is divided into 4 provinces: Balochistan, North West Frontier Province

(NWFP), Punjab and Sindh. Pakistan-administered Kashmir is known in Pakistan as
Azad Jammu and Kashmir (AJK).

Country Facts

Area:803,940sqkm(499,545sqmiles)
CapitalCity:Islamabad
Population:162.4million
Populationbelowpovertyline:40%(2000estimate)
Literacy rate: Male: 61.7% / Female: 35.2% / Total: 48.7%
Official languages: English and Urdu
Languages spoken: Punjabi, Sindhi, Pashtun, Urdu, Balochi, English and many other
local languages
Religions: Islam (97%), Hinduism, Christianity and others (3%)
Currency: Rupee
Basic Economic Information:

GNP (FY 2007 - 2008): Rs.5822.1 billion

GDP (FY 2007 - 2008): Rs.5926.0 billion
GDP Growth Rate (FY 2007 - 2008) 5.8%
Inflation (July 2007 – June 2008) 10.3%
Major Industries: Cotton yarn and thread, raw cotton, cotton fabrics, rice (EIU data)
Comparative Study of South Asian Countries for Rural Development 16
Major Trading Partners: USA, Japan, Germany, UK, Italy
Major Foreign Investors: USA, UK, UAE and Norway
Average Exchange rate (14 January 2009): £1 = 116.02 PKR (Pakistan Rupee)
US$1 = 79.14

2.8 Sri Lanka

The Democratic Socialist Republic of Sri-Lanka, the most picturesque tropical Island
in the Asian region has a total area of about 25,300 sq. miles (66,000 sq. km.) with an
estimated population of around 20 million. The population has been growing at a moderate
rate of 1.2% per annum. Three quarter of the population lives in rural areas with the influx to
urban metropolitan areas being relatively modest. Ethnically 72% are Sinhala, 18% are Tamils
by birth Sri-Lankan and Indian origin and 7% are moors. Nearly 70% are still engaged in
agricultural and labour intensive plural income earning activities.

Based on rainfall pattern, the Island can be divided into two major zones: the wet zone
(average annual rain fall of 75-100 inches) in the southwest quadrant, and the Dry Zone
(average annual rainfall of 35-75 inches) covering the rest of the Island and 64% of the area.
A narrow transitional band between the dry and wet zone is sometimes referred to as the
Intermediate zone. About three quarters of the population resides in the wet zone.

Comparative Study of South Asian Countries for Rural Development 17

 Chapter III

Basic Facts about South Asian Countries

Most of the South Asian Countries are suffering from acute poverty. In most
countries, poverty is predominantly a rural phenomenon and a large population lives
in the rural areas. Limited employment opportunities poor skill and educational level
are the macro-factors underlying low economic performance. Macro-economic
stability and economic growth received priority along with targeted programmes for
poverty alleviation. As an issue, poverty alleviation remained a part of rural
development and gradually occupied the central place in the development agenda.
Table 1:

Country Land area Population Population below national poverty line (%,
(’000 sq. (millions) 2007 latest year)
Total(% Rural) Rural Urban Total
km)
Bangladesh 144 140.7.37(73) 53.0 36.6 49.8
Bhutan 0.6 … 27.1
India 3288 1112.67(71) 30.2 24.7 28.6
Maldives .3004(69) .195 … 15.5
Nepal 147 27.06 (84) 44.0 23.0 42.0
Pakistan 796 156.8 (70) 35.9 24.2 32.6
Sri Lanka 66 19.09 (76) 27.0 15.0 25.0

In terms of adult literacy, the South Asian counties are much behind than rest of the
world even from South East and East Asian. This is also true in relation to net
secondary enrollment, children reaching grade five, and the proportion of tertiary
students in science and technology.

Health sector remains largely neglected, which generally receives between one and
two per cent of GDP. Some countries have done very well in terms of access to
improved sanitation, while others (i.e. Nepal, and Bangladesh) have done rather
poorly. These countries have generally done quite well ranging from 73 per cent to 95
per cent in relation to sustainable access of the population to an improved water
source. However, in respect of both water and sanitation, there are problems in most
countries, arising as a result of increase in population, pollution caused by

Comparative Study of South Asian Countries for Rural Development 18

industrialisation, overuse of some of the water sources including aquifers, and
continuing exclusion of segments of population from equitable access to these
facilities.

About 60 per cent of the total population of these counties is rural. On the other hand,
the urban expansion in many of the countries has not been so much as a result of
planned urbanization. A major reason for the urban expansion has been rural to urban
migration, inspired by both push and pulls factors. In fact, the urban expansion has
often been rather unplanned giving size to severe stresses on urban services such as
electricity, transportation, education, health, water supply, etc. Rural development is,
therefore, essential in order to enable the rural population to improve their living
conditions, which will also discourage rural to urban migration, thereby facilitating
planned urban development.

3.1Agricultural Performance in the South Asian Countries

In the World Bank classification, the South Asian Countries are counted as
low-income or lower-middle income economies. The per capita income growth rate
from 1992 to 2001 was mixed in the South Asian Countries. Nepal made small
progress (1.6% per annum). Bangladesh, India and Sri Lanka registered per capita
income growth rate between 3 and 6 per cent per annum.
Faster growth in the overall GDP and per capita income was generally
associated with declining proportions of income in agriculture. Similar tendencies
could be observed in the share of the workforce employed in agriculture, which
declined in most cases, more prominently in the more dynamic economies. For the
South Asian countries agriculture has remained significant and is likely to continue to
be so in the coming years in terms of contribution to GDP and as a source of
employment.

Table 2: Growth in per Capita Income, Share of Agriculture in GDP, and

Agricultural Workforce
Comparative Study of South Asian Countries for Rural Development 19
Country Share of agriculture in GDP Economically active
population in agriculture (%)
1990 1995 2007 1990 Latest year, as
available
Bangladesh 38.3 26.38 22.1 68.5 63 (1996)
Bhutan -- - 47 - -
India 31.6 28.24 19 66.5 67 (1995)
Maldives --- - 11(1998) - -
Nepal 62.4 40.48 40 91.7 79 (1999)
Pakistan 25.7 26.14 17.0 49.5 47 (1999)
Sri Lanka 21.4 23.01 17.5 39.9 42 (1998)
Source: CIRDAP, Rural Development Report, and SAARC Statistical Data Book for
Agricultural Research and Development (2007)

3.2Agricultural Output and Productivity in SAARC countries

Table 3:
Countries Crop Food Livestock Cereal Yield Agricultural
Production Production Production value added
Index Index Index per worker
(1995)$
1992 2002- 1992 2002- 1992 2002- 1993 2003 1992 2002-
-94 04 -94 04 -94 04 -95 -05 -94 04
Bangladesh 74. 104.7 74.0 104.6 80.2 103.2 2572 3533 251 309
8
Bhutan - - - - -
India 84.5 100.0 80.8 102.5 74.5 110.5 2,104 2,391 362 391
Maldives - - - - -
Nepal 75.2 111.2 77.2 109.4 82.4 107.3 1,841 2,284 191 208
Pakistan 80.3 102.5 77.3 106.0 75.6 109.1 1,946 2,438 603 688
Srilanka 89.4 98.8 94.4 100.0 107.5 109.9 2,993 3,428 713 743
Source: SAARC Statistical Data Book for Agricultural Research and Development
(2007)

From the about table we can see that the agricultural valued added per worker is more
in Sri Lank followed by Pakistan and India..

3.2 Improvements in Health Sector

Over the past ten year, South Asia has made some progress in improving
certain areas of health. The overall life expectancy has increased and adult mortality

Comparative Study of South Asian Countries for Rural Development 20

as well as child mortality rate has declined. Access to safe water has also improved
considerable the progress however has been slow and uneven across geographical
areas. Moreover in some of the critical areas such as malnutrition, particularly among
children, the progress has not been satisfactory.

The life expectancy at birth varies from Sri Lanka is 74 to Nepal 62. The
superior performance of Sri Lanka in terms of health is inevitably the result of the
strong and continued political commitment of successive government to improving
the welfare of the people studies have identified four major factors contributing to the
impressive performance of Sri Lanka in terms of health. First the people of Sri Lanka
have universal access to free public health care through an extensive network of state
hospitals, health facilities and health services; secondly there is the presence of a
parallel private health sector which the eased congestion and resource constraints in
the public health sector; third educational attainment has been high among population
and fourth extensive poverty alleviation and social welfare programs have served
reduce the depth and severity of poverty. Sri Lank has given special emphasis to
health and poverty reduction in the rural areas.

Figure.1

Comparative Study of South Asian Countries for Rural Development 21

Source: Human Development in South Asia (2007)

3.2.1 Adult Mortality Rate:

South Asia has one of the highest adult mortality rate in the world after Sub_Saharan
Africa. Over the past ten year however, South Asia has made some progress in
reducing its adult mortality from 232 in 1995 to 194 per 1000 in 2005. The adult
mortally of Nepal is the highest of 235 and lowest of Sri Lanka 103.
Figure. 2

Source: Human Development in South Asia(2007)

3.2.2 Trends in Rural Urban Disparity in Child Mortality Rate in South Asia:

Comparative Study of South Asian Countries for Rural Development 22

Infant and child mortality rates in South Asia are typically higher amongst low
income groups, particularly these residing in rural areas and among female children. It
is important to look at trends in these disparities to see how South Asia has progressed
in terms of narrowing them down. Rural/urban disparity in infant and child mortality
is particularly high in Nepal followed by India and Pakistan. These differences have
however narrowed down over the past ten years with the highest absolute reduction
observed in Bangladesh.

Figure. 3

Source: Human Development in South Asia (2007)

3.2.3 Access to safe Drinking water:

South Asia's sanitation coverage is among the lowest in the world at 37 per cent,
about the same as the Sub-Saharan Africa, but with twice as many people without the
facility as in Sub-Saharan Africa. About 929 million South Asians who live without
any toilet facilities represent more than a third of the world's total. Although the
growth rate of providing improved sanitation is among the highest in the world and
the coverage has been more than doubled, from 18 per cent in 1990 to 37 per cent in
2004, it started from such low levels that the pace will have to be accelerated. In this
sector too Sri Lanka is leading from the front with Bhutan at second number.

Comparative Study of South Asian Countries for Rural Development 23

Table 4:

3.4 Improvement in Education Sector

South Asia has performed well in term of improving many educational indicators over
the past ten years.: Adult literacy rate has increased from 49 per cent in 1995 to 58 per
cent in 2004, net primary enrolment has gone up from61 per cent in 1995 to 87 per
cent in 2005, pupil teacher ration has come down from 60 in 1995 to 41 in 2004; out
of school children has been reduced from 50 million in 1995 to 13 million in 2004;
and drop out rate from primary schools have come down from 43 per cent in 19910
-1995 to 14 per cent in 2004.

Comparative Study of South Asian Countries for Rural Development 24

Despite the progress achieved in these important indicators, South Asia continues to
be stuck at the lowest round in terms of education among all other regions including
Sub – Saharan Africa. It continues to be the most illiterate region in the world
containing around 379million illiterate adults – the highest absolute number amongst
all regions in the world. Its adult literacy rate of 58 per cent is even lower than of Sub
Table 5:

Source: A Review of South Asia's Performance over a Ten-year period (2007)

Comparative Study of South Asian Countries for Rural Development 25

– Saharan Africa. And despite achieving a seemingly remarkable performance in
ter5ms of reducing the total number of out of school children over the pas ten years,
two South Asian countries; India and Pakistan enjoy there distinction of containing
one of the highest number of out off school children in the world (with 6.5 million in
Pakistan and 45 m million in India )
In terms of the performance of individual countries over the past ten year figure 2.11
shows that all South Asian Countries have progressed towards increasing their literacy
rates. Compared to other countries the performance of Nepal in terms of increasing its
literacy rate has been the most impressive. Starting from the lowest literacy rate of 28
pr cent tin 1995, Nepal has bee bale to increase its literacy rate to 49 per cent at
present achieving an annual percentage cane of 6.3 per cent over the past tern years.
In terms of gross enrolment ratios the performance of South Asian countries has been
mixed with some countries such with some countries such a s India and Bangladesh
showing a discernible increase whereas other countries reflecting a stagnation or even
a downward slide.

Table 6: Adult Literacy Rate (%age 15 and above)

Year India Pakistan Bangladesh Nepal Sri Lanka Bhutan Maldevs
2000 57 43 41 42 92 47 97
2001 58 44 41 43 92 47 97
2002 61 42 41 44 92 47 97
2003 61 49 41 49 90 47 97
2004 61 59 41 49 91 47 96
Source: Human Development in South Asia 2007

The above table shows that Maldives has the highest adult literacy rate and Sri Lanka
has 91 apart from these two countries the rest of the countries have less then 70% of
adult literacy rate.

Trends in Educational Indicators 1995-2005.

Table 7:
Country Adult Combined Pupil- Illiterate Drop Out
Comparative Study of South Asian Countries for Rural Development 26
 Literacy gross teacher adults rate
enrolment ration
ratio
1995 2004 1995 2004 1995 2004 1995 2004 1995 2004
India 61 55 62 64 40 291 292 41 22
52
Pakistan 38 50 41 38 38 38 19 50 52 30
Bandladesh 38 41 37 57 71 51 45 54 53 35
Sri Lanka 28 49 56 57 39 40 9 9 48 24
Bhutan 42 47 31 33 31 31 0.60 0.43 17 2
Maldives 93 96 71 69 31 20 0.010 0.007 7 8
Source MHHDC, 1997, 1998, and 2007a: UNDP 1998a and 2006; UNESCO 2004, 2005 and 2006; UNICEF 1997 and
World Bank 2006 f and 2007

3.5 Improvement in Poverty in South Asian Countries

Poverty is of very high concern for all the South Asian Countries the overall level of
poverty specially is rural areas is very as show in bellow given table 27% of the
population of South Asian Counties is living under poverty the poverty level in
Bangladesh is the highest for the year 20005. Sri Lanka has made a tremendous
development by reducing the poverty level from 32 in 1996 to 14 in the year 2005.
pepal has also reduced the poverty level to 28 from 52, Pakistan has also shown some
improvements by reducing the poverty from 41% in 1995 to 25% in the year 2005.

Table 8:
Country Population in Population in Gini Coficient
Poverty Poverty
(Total) (Rural)
1995 2006 1995 2006 1995 2006
Bangladesh 25.1 19.5 24.6 17.9 0.43 0.47
Bhutan 36.3(2000 31.7(04 17.0 4.2 0.34 0.42
) )
Comparative Study of South Asian Countries for Rural Development 27
India 35.0 27.5 35.0 28.3 0.24 0.37
Maldives 43.0 21.0 50.0 -
Nepal 42.0 30.8 44.0 34.6 0.37 -
Pakistan 29.8 30.9 33.1 28.1 0.40 -
Sri Lanka 25.0 25.0 27.0 24.7 0.48 0.48(2002)
Source: Human Development in South Asia 2007 P. 25

Modal Country (Sri Lanka):

On the basis of above analysis we can select Sri Lanka as the best example country
for rural development in South Asia because Sri Lanka has made a great deal of
progress in rural development sectors. We can declare this country as the model
country for Rural Development in South Asia. Some the steps taken by Sri Lanka for
the improvement of rural development are discussed in the next chapter.

Comparative Study of South Asian Countries for Rural Development 28

 Chapter 4

In Asia 70 percent population lives in rural areas where the incidence of poverty is
high. Rural development is the approach to increase the degree of participation of the
rural people in the development process to improve their leaving standard. South
Asian countries have made some progress in rural development and have designed
rural development programs but unfortunately they cannot implement these programs
Sri Lanka is the county which is able to properly implement rural development
programs some of these programs are listed bellow.
Development of Rural Agriculture & Productivity

1. Colonization Schemes
With the purpose of improving rural agriculture, policy makers together with
planners thought that rehabilitation of ancient tank network is an urgent need.
Accordingly priority was given to supply waters in two hundreds of abandoned tanks
and cultivate every possible peace of land hitherto neglected due to lack of water. In
addition to the provision of water to the dry zone peasantry and new lands to the
farmers who irrigated from wet zone, they were provided with a package of
supporting services such as credit subsidized inputs, health and educational facilities.
Rural reservoirs namely Gal Oya, Minneriya, Thabbowa, Kaudulla are few striking
examples to be cited in this regard. The families who migrated from both Dry and Wet
zones had settled under new colonization schemes and were said to have enjoyed
multiple benefits and increased incomes through paddy cultivation. But in course of
time second generation in such colonization scheme was confronted with problems
such as fragmentation of lands and low income by uneconomical farm units. In
consequence, most farmers were trapped by middlemen and moneylenders.

2. Green Revolutionary Intervention

During late sixties and seventies, policy makers together with relevant
professionals further conceived that the objective of rural development could be
achieved largely through river valley development schemes and increase of
agricultural productivity. But the strategy used was different from that of previous
period.
In order to realize the task, huge river diversion schemes (eg. Mahaweli) were
Comparative Study of South Asian Countries for Rural Development 29
implemented. At the same time a technical package comprised of High Yielding
Varieties, Fertilizer, Pesticides, Insecticides and Farm Mechanization were introduced
under popular movement called “Green Revolution”. Then Sri Lanka has been called
as a typical Asian paragon where the prescribed package was extensively adopted.
The living standard of the poor, particularly of indigent farmers has expected to be
advanced as the resultant benefits are gradually trickled down to them. But in course
of time it was ascertained that with the increase of crop production multiple
challenges unforeseen have come forefront in the national discussion agenda of
Poverty and Agriculture. Few striking among those challenges are given below.

• High cost of production, particularly incurred in paddy/rice cultivation

• Cost related farmer indebtedness
• Deterioration of natural soil condition and micro ecosystems
• Disappearance of indigenous traditional knowledge
Even in the midst of such problems, paddy production has increased from an
annual average of 1415 M. Tons in 1970-1977 to 2109 M. Tons in 1977-1984. This
production increase was accompanied by not only the increased acreage cultivated but
also by increased yield of 2397 Kgs. per hectare to 2968 Kgs per hectare during the
respective periods.

Social Welfare Strategy

The concept of welfare state and re-distributive justice fashioned the political
thinking of all prominent political parties at the time Ceylon (Sri Lanka) emerged as
an independent nation. The welfare oriented social policies were driven by electoral
policies. Programmes thus implemented included free food subsidy scheme, free
Education scheme and free Medical care services. During the early years of
independence, when resource availability was abundant the governments provided
social welfare benefits universally. However, as the population increased, successive
governments were compelled to curtail the universally targeted provision of free and
rationed food. But free education and free medical facilities further continued in
universal manner.

Sri-Lanka recognized food as an essential entry point to poverty alleviation as

far back as 1942 when the food subsidy scheme was introduced to cover the whole
Comparative Study of South Asian Countries for Rural Development 30
country. Initially only rice was subsidized. Gradually, subsidies were extended to
other food items except sugar. The objective of subsidizing the cost of food was to
control inflation by keeping the cost of living down.

Due to the scarcity of budgetary allocation the policy of providing subsidized

food commodities to the population as a whole underwent significant change in 1972.
when an income criterion was introduced to determine eligibility to benefit from the
policy. Accordingly, those families whose monthly income does not exceed SLR. 700
were the target group. The beneficiary family received a maximum subsidy of about
SLR 250 per month. In addition those who do not have access to electricity were also
entitled to monthly kerosene stamps worth of SLR. 28. In 1978 this exercise resulted
in continuing the food subsidy to about 50% of the total population who were
declared themselves as poor. However, the food stamp scheme is disadvantageous to
the beneficiaries as the real value of this income supplement gets eroded with rising
food prices.

DDC Strategy in Two Legged Development Process (1970-77)

Looking back to 1970-77 was one of the most difficult periods in the post
independence history in Sri Lanka. The United Front Government, which came into
power in 1970, had to deal with crisis emanating from both domestic and external
factors. There were on the one hand the youth (JVP) insurgency of 1971, increasing
state intervention in the economy culminating in the land reforms of 1972 and 75 and
the political crisis leading to the break-up of the United Front in 1975. On the other
hand, there was the global economic crisis triggered by the petroleum price hike of
1973 and commodity shortages, which led to severe foreign exchange controls and
rationing. Moreover, in the 70’s unemployment and underemployment had reached
serious proportions that ca1led for a reappraisal of the country’s development policies.
It was basically in the above background of shortage of foreign exchange and
capital and scarcities of commodities in general on the one hand and serious problem
of unemployment and underemployment on the other hand, that the need for a dual or
a two-legged development process was conceived. Two legged development model is
a process in which the modern large scale projects at macro-level is accompanied by
small-scale local projects at micro levels.
Comparative Study of South Asian Countries for Rural Development 31
 The Five Year Plan (1972-76) included this dual development process in its
planning strategy. While supporting a macro investment plan based on modern, large-
scale projects, the plan needed to improve the production and productivity of the
small producer, the rural sector and the informal sector. In general that is to upgrade
the hitherto neglected strata of the society, the unemployed, the urban and rural poor,
the landless labourers, the wage earner and the small peasant and to correct the
serious gap which has arisen between the needs of the people and exploited resources.
The principal instrument used in the five-year plan for promoting the second leg
of development in the dual strategy was the Divisional Development Councils (DDC)
which were conceived as decentralized units of planning at local levels.
The membership of a DDC had a dual character, having consisted of
government officials engaged in development work at regional level as well as
representatives of people’s organizations such as Cooperative Societies, Agricultural
Productivity Committee and Rural Development Societies.
By September 1976 about 150 DDCs were in operation (one in each electoral
district) and they had formulated nearly 1700 small scale development projects
covering agriculture, light industry, fisheries, livestock and infrastructure. All of them
were in operation employment over 25,000 persons. All projects were cooperative
enterprises managed by members themselves. While the government provided most of
the fixed capital, banks loaned the working capital. In the original DDC plan there
was an intention to increase the number of projects up to 2800 investing Rs. 1,882
million and generating 81,000 employment opportunities. Calculated average capital-
labour ratio was around Rs. 2000.
In practice, however, the DDC experiment did not prove a. success as a viable
development strategy, although there were many success stories in the array of
thousands projects. Amidst variety of reasons, mostly affected for the lacks of success
is related to two key areas.
• Methods used in organization and implementation
• Change of government policies

Most of the Small-Scale Projects that came under the DDC Prograrnmes were
import substitution types, which had a ready market under the import contract
regime. In the post ‘77 import liberalization regime, most of the projects lacked its
ability to face the enhanced flow of competitive imported goods. There were some
Comparative Study of South Asian Countries for Rural Development 32
 projects which were badly conceived and designed: some were badly located and
implemented. Managerial weaknesses, constraints formed in cooperative
organization and politicization of decision making and other problems were
responsible for such failure.
In the post ‘77 situation no attempt was made to carry out a hard evaluation and
to draw lessons to improve on and build on the DDC programmes. Instead, the
experiment was totally abandoned as being of little relevance to liberalized market
economy. A concept of second leg of development practice in the mainstream
development thinking and practice, in the first ten years, followed by the ‘77
economic reforms, was neglected.

Private Sector Dominated Market Economy Strategy

World Bank — IMF supported economic reform package and Structural
Adjustment Policies [SAP] as internationally known, dominated the mainstream
development scene during three years. The main focus of development policy was to
transform the economy from a state controlled and dominated one to a private sector
dominated market economy with a strong outwards (export) orientation.

In the first budget of the UNP government in 1977 the above said reform
programme was announced. It consisted of a package of fundamental policy changes,
designed to facilitate the long term transformation of the economy. The most
important of these are,
• Unification of the change rate
• Liberalization of imports
• Abolition of price controls on most commodities
• Elimination of public sector import monopoLy
• Reduction of poor relief subsidies and income transfers
• Shift resources from consumption to investment through saving
investment friendly tax reforms.
It is now well known that the momentum generated by the economic reforms
were more or less confined to the initial few years of economic liberalization and the
momentum not only failed sustain in the later years but also that by later eighties
social and economic crisis of serious proportions emerged in the country.

Comparative Study of South Asian Countries for Rural Development 33

 The rate of economic growth had declined unemployment, which had declined
in the early 80’s had started escalating. It was evidence of growing income
inequalities and income concentration in a few hands. As already mentioned, high
inflation had eroded the purchasing power of food stamps. It was against the above
socio-economic background that special measures began to be considered for purpose
of ‘Poverty Alleviation’ and ‘Safety nets’ for the poor and vulnerable to be able to go
through the structural adjustments in the mainstream market economy.

Janasaviya Programme - JP (People’s Strength Programme)

The well-known Janasaviya Programme was offered to the electorate as the

central item of the poverty redressed package. During 1989-94, JP became the lead
programme in the second leg of the development strategies of the government.
JP is considered undoubtedly as an outstanding innovative landmark in the
history of poverty alleviation in Sri-Lanka. It was said to be largely inspired by many
excellent empirical exercises executed in the second leg development strategy in both
local and abroad contexts, but far outside mainstream development at that time, that it
is relatively unknown and unfamiliar. Among the innovative cases of bottom-up and
‘putting the last first’ style taken into consideration in formulating Janasaviya.

The objective of the JP was to cover all poor households enrolled in the food
stamp programme that had seen their benefits eroded in real terms over the years due
to inflation. Under the programme each poor family received a monthly grant of SLR.
2,500 for 24 months. The grant was in two parts:

• SLR 1,458 for the purchase of a specific basket of consumer items, mainly food
stuffs, of which SLR 458 would be saved in a state bank in accordance with the
household wish.

• The balance of SLR 1,042 was to be deposited with a State bank until it had
accumulated to the sum of SLR 25,000 within a two year period. This saving
should be made available as capital or as collateral for a loan to be invested in
an income generating activity.

Comparative Study of South Asian Countries for Rural Development 34

 In addition to the above consumption plus saving subsidy element support
services were made available to assist the families concerned to improve the
livelihood through self-sufficient efforts. Therefore, JP was directly linked to training
cum production programme where beneficiaries were required to work 20 days in a
month in their own production activities or attend in a place of training to qualify to
receive the benefits. The activities, thus, would be asset creation and improving the
human capital through training activities. Those who did not participate in such
activities on a regular basis were removed from the JP. More than 421,000 families
were benefited from JP in its 4 round operation from 1989 to 1993.
The implementation of the JSP was ultimately aimed at achieving self-
sustaining development among the poor that was initiated and supported through their
own efforts. However, a number of evaluations of the first and second round
operations revealed despite huge outlay and involvement of the entire state machinery,
the implementation of the JP strategy still kept 90% of the beneficiaries in poverty
with very little chance of what they get out of it and in addition left them more
exploited than before. Based on that experience, the JP was replaced by the Samurdhi
Programme in 1995.

Samurdhi Programme - SP (The prosperity through poverty alleviation)

With the introduction of SP, a number of auxiliary welfare programmes which
were in operation for sometime (e.g. Janasaviya Programme, Food Stamp Programme
and School mid-day Programme) have been discontinued. SP is the new national
endeavorer for poverty alleviation within an open/free economic policy framework.
Though the SP was initiated by the previous Peoples Alliance Government in 1995,
the successive UNP government which came into power in 2002 was also in
consensus for the continuation of the same.
The SP covers 1.8 million poor families dispersed in the entire country instead
of stage-by-stage operation manner by JP except few Districts in the Northern
Province due to civil unrest. The main thrust of the poverty reduction strategy as
embodied in the SP is to ensure the participation of the poor in the production process.
The main objectives of the SP are to,
(a) Expand opportunities for income enhancement and self-employment.

(b) Organize youth, women and other disadvantaged people into groups and
Comparative Study of South Asian Countries for Rural Development 35
 encourage them to participate in decision making in the development process
at the grass-root level.
(c) Assist persons to develop their talents and strengthen their asset bases through
productive employment.
(d) Establish and maintain productive assets to create additional wage employment
opportunities at the rural level.
(e) Safe guards the poor providing social welfare assistance.

The breaking of the vicious circle of poverty is believed not to be done in

fragmented piece meal manner and required a holistic approach. Inter related priority
areas of action in the SP are elaborated below:
01. Income transfer through consumption support
02. Social security/Insurance
03. Social animation and credit
04. Infrastructure development
05. Shelter for the poor
06. Market intervention
01. Income Transfer Component
This component provides consumption support to 52% of the entire population
of the country consisting of 1.8 million families estimated to he at the bottom of the
income scale. The beneficiaries are eligible to receive a monthly income transfer
payment of SLR. 1,000 at the highest to SLR.140 at the lowest, depending on
household income and number of members in the family. The hard-core poor families
consisted of 5 or more members and earn about SLR 700 per month are eligible to
have a direct income transfer of SLR. 1,000 per month. The single number family is
entitled to monthly payment of SL Rs. 140. Thus, the immediate intention of this
programme is to raise income of the poorest families to about SLR. 1,700 per month
and with the additional income that could arise from the self employment activities.
The stamps or coupons received by the poor family are categorized into different
purposes. For instance, the family consisting of 4 members with a monthly income of
SLR. 1,000 is entitled to enjoy SLR. 700 income transfer payment in the following
manner.
Purpose Worth in SL Rs.
• Purchase of food stuffs 300
Comparative Study of South Asian Countries for Rural Development 36
 • For encashment 260
• Compulsory saving 100
• Social security premium 30
• Housing Lottery fund 10

Thus, it is to be seen that the direct income transfer scheme in the SP was
designed to achieve multiple purposes, which are very useful to the indigents as
follows:
a) Increase purchasing power for consumption
b) Materialize capital formation for investment and anti-indebtedness
c) Increase coping capacity at calamities
d) Improve housing conditions

The current annual outlay incurred for the direct income transfer scheme by the
government is around SLR. 12 Billion.
With the substitution of SP for JP, the programme has become more impressive
mix of new development activities of welfare and more participatory. The main
device, which has used to make welfare objective was the forcible diversion of a part
of income transfer/supplement into two collective development funds, namely social
security fund, housing development lottery fund and into household based saving
reserves under the scheme of individual compulsory savings.
The diversion technique’ thus adopted has considerably affected to bring
changes in the minds of beneficiaries to relieve them from welfare subsidy
dependence syndrome into the culture of collective values and saving habits.

02.Social Security/Insurance Component

The social security scheme operating under Samurdhi Social Security Trust
Fund, established in 1997, provide social insurance coverage to the poor. It aimed at
providing wide range of benefits to subscribe poor families in the events of social
calamity, distress arid crisis. At present 1.4 million poor families are reported to have
had membership in the fund. The poor households contributed SLR. 30 per month
against which they can claim insurance compensations for death of a family member
(SLR. 5,000) once per year, marriage of household (SLR. 3,000) and family member
(SLR. 1,000) once per year, birth of a first child (SLR. 2,000) and second child (SLR.
Comparative Study of South Asian Countries for Rural Development 37
1,000) and for sicknesses (up to SLR. 1,500 at the rate of SLR. 50 per day for
hospitalization per year).
The surplus accumulated in the fund is used firstly for multiple welfare
programmes aimed at female headed family development and secondly educational
scholarships for poor children etc.

03.Social Animation and Credit

The main strategy used in the second leg of development that emerged in the
late 80’s has been labeled as ‘social animation’, which is a central element in the
methodology of participatory development. Social animation is basically a process of
assisting the poor to improve their livelihood through organized initiatives undertaken
by the poor themselves. In other words it is a methodology of preparing people for a
process of self-reliant development.
The general experience is that people will begin to take initiatives when they
become more aware and conscious, see opportunities of change, develop confidence
in their abilities to create change and could gain access to the necessary resources.
Initiation of a social animation programme in a given community requires the
services of trained field workers who will interact with people to stimulate them, help
raise their development consciousness, and facilitate those development initiatives. As
in the absence of so called trained personnel the government had decided to recruit
25,000 unemployed youths as Samurdhi Development Officers (community
animators) and 2000 University graduates as Managers to overview the process.
The general nature of the development process that has unfolded through the
intervention of such development catalysts could be summarized under following
headings.

(a) Development Consciousness

(b) Group Formation
(c) Mobilizing own resources (Funds)
(d) Accessing resources from outside
(e) Graduation to micro enterprise development.

Under the SP organized groups of members have mobilized their own resources
as first step in a process of building a resource base to support their development
Comparative Study of South Asian Countries for Rural Development 38
actions.

As the fund crows in size, members will have access to a resource pool from
which they could borrow to finance some of their credit needs such as illness in the
family, meet consumption gaps in the face of income short falls, school requisites for
children and purchase of inputs etc.. A group fund often serves as a buffer to protect
consumption needs in the face of crises and as an instrument to meet contingencies.

The second larger organization next to five-member group is Samurdhi Society,

which is funded, in small villages. The village is a geographical unit where various
socio-economic forces are in operation and an easy meeting place for the poor.
Samurdhi Society meets every fortnight.

All Samurdhi groups in the village are organized in the society. This allows
space for fortnightly discussions on the programme of work of the small group.
Further, loan applications submitted to the hank union have to he openly discussed
and approved by the society.

Third larger organization next to Samuurdhi Society is ‘Samurdhi Bank Union’.

It forms a network of finance institutions reserved for the poor. One bank union is
instituted for about 30 villages. Membership in a bank is around l,500 - 2,500.
According to present experience after 5 or 6 years, this membership will be sufficient
to maintain a stall of 6 members in the bank. With the bank union system getting
stronger, the poor will be able to free itself from the disadvantageous links with the
money lender and other conventional finance institutions.

Instead of the conventional assets and personal guarantee system, Sarnurdhi

bank unions release loans on the trust of the group of five people. Here, action is
guided by the vision from small loan to big loan and continuous loans. This method
helps to the poor community to shift from a relief culture to a credit culture.

Samurdhi Bank System and Micro Finance

In the process of family empowerment programme capital formation with and

Comparative Study of South Asian Countries for Rural Development 39
for the poor is given an utmost priority. Network of banks aimed at provision of
capital for enlarging investment capacity of poor is envisaged to he evolved.
Considering the immediacy and decisiveness of capital investment, Samurdhi
movement has given highest priority to this micro finance strategy.

The Samurdhi Bank Programme or the long-term credit programme that relies
on the innovative technique developed by alternative micro finance institutions both
local and abroad
04. Community Infrastructure Development Component
This component consists of a series of efforts aimed at community development
through investments in economic and social infrastructure projects such as small-scale
Drinking water wells, roads, culverts, Bank buildings, Marketing stalls, Fisheries
auction centers, tanks bunds, Sluices and water supply Schemes. This intervention is
expected to create an environment conducive to sustained and improved income
generating activities in the villages where the poor people are thickly concentrated.
Statistics related to above component are explicated below.
Table 9:
Total Value
Total No of Total No. Total
of No of
Year Investment of Projects value (Rs.
Community Beneficiaries
(Rs. Mn) Completed Mn)
Contribution
2000 428.03 6,069 100.20 528.23 1,526,556
2001 171.76 2,243 45.00 216.76 636,444
2002 16.02 197 4.01 20.03 69,745
2003 182.27 3,531 139.59 321.86 946,172
2004 295.83 13,190 71.87 367.70 1,538,390
2005
517.20 13,875 182.50 699.70 1,608,393
(Expected)
Total 1,611.11 39,105 543.17 2,154.28 6,325,700

Conclusion

Comparison of the South Asian Countries shows that rural development in the
courtiers is still not in better condition. South Asian countries are still facing the
problems of poverty, low literacy and poor health conditions. Efforts made by these

Comparative Study of South Asian Countries for Rural Development 40

countries have been failed because they where not able to implement the rural
development schemes properly.
Sri Lanka is the country which has made a reasonable development in most of
these areas. Sri Lanka is spending 17 percent of its GDP on rural development and
agriculture while Bangladesh and Pakistan are spending less than 10 percent of its
GDP on rural development.
Sri Lanka has succeeded in achieving more 90 percent adult literacy due to more
emphasis on this area and by spending 24.99 percent of GDP on education while the
Pakistan and India the adult literacy rate around 60 percent, the reason for this is
giving less importance to these sectors Pakistan is spending 10.15 and Bangladesh is
spending 9.87 on education. Similarly Adult mortality rate Sri Lanka is 104 lowest in
South Asia and life expectance 74 highest in South Asia. Sri Lanka was able to
achieve these because of spending more on health; they spend 13.69 percent of its
GDP on health. This sector was almost abandoned by other South Asian countries
Bangladesh spend 1.95 on held and Pakistan spends 2.71 on health.

These figures reveal that Sri Lanka has developed its rural by spending more
on rural development, education, health and poverty alleviations and if the other
countries want same results they have to follow Sri Lanka and most increase the share
of health, education, poverty alleviation and rural development.

Comparative Study of South Asian Countries for Rural Development 41

 Bibliography

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Development I SAARC Countries. SAARC Agricultural Centre, Daka,
Bangladesh 403p.
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