Regional Rural Development Project (RRDP) Kandy, Sri Lanka

BMZ Evaluation REpoRts 006

Country Case Study – “Regional Rural Development Project (RRDP) Kandy, Sri Lanka” summary Ex-post Evaluation – sustainability of Regional Rural Development programmes (RRD) Country Case Study “Regional Rural Development Project Kandy, Sri Lanka” Country Case Study “Regional Rural Development Project Kandy, Sri Lanka”

Preface

This study was commissioned by the BMZ (Divi- obtain a “local perspective”. altogether the key sion for Evaluation of Development Cooperation). objectives of the evaluation were: It is an independent evaluation which was carried out by the “Centre for Poverty Reduction, l the widening and deepening of our under- CEPA“ in Colombo, Sri Lanka in 2003/2004 standing of the outcome and long-term by the consultants Sunil Bastian, Neranjana impact of German cooperation projects Gunetilleke, Azra Jafferjee, and Nireka Weera- and of the underlying conditions for success; tung. The views and opinions expressed in the l the introduction of a different vantage report do not necessarily correspond to those of point for the analysis of the outputs, out- the BMZ. However, a comment by the BMZ can be come and impact of German cooperation found at the end of the summary. projects by charging local research institutions and/or consultants with the actual The present document is part of a series of four evaluation work; and ex-post evaluations on Regional Rural Devel- l the further refinement of the ex-post evalu- opment Programmes in Indonesia, Sri Lanka, ation methodology. Tanzania and Zambia which were implemented between the 1970s and the 1990s. The evaluation in addition to the four country case studies a syn- itself was carried out in 2003 and 2004 applying thesis report is available (see inner cover page for specific questions and methods. One character- contact details). istic of the evaluation is that the BMZ commissioned professional local consultants, in order to Division for Evaluation of Development Cooperation Country Case Study “Regional Rural Development Project Kandy, Sri Lanka”

Summary of Evaluation

The views presented in this study are opinions 2. Methodology of the study held by the independent external experts. The methodology adopted for the study varies 1. Background and objectives from typical in-project evaluations. The evaluation focuses exclusively on impact, that is, what In recent years there have been increasing calls has changed owing to the RRDP’s thirteen years for development cooperation, and in this case, of implementation and what lessons can be German development cooperation to justify its learnt for development planning and practice. investments in terms of impact on the ground. Of less interest is whether the goals and objec- Following this the German Federal Ministry for tives set out by the RRDP have been achieved. Economic Cooperation and Development (BMZ) In that sense, this evaluation has a strong policy launched a series of evaluations on the long-term and learning orientation and the methodology impact of its aid. The first series of such evalua- adopted for the study is reflective of this. tions involved 32 completed projects and the second series, initiated in 2003, involves four com- This methodology can be broadly termed as the pleted Integrated Rural Development Projects. “funnel approach”, which has been applied by the BMZ in its first series of evaluations. CEPA uses The BMZ-supported Regional Rural Development this approach as its starting point, but adapts it to Programme (RRDP), located in the Kandy district suit the context in which it is applied and in a way of Sri Lanka and implemented from 1987 to 2000 that can best bring out policy lessons. by the German Technical Cooperation (GTZ), was chosen as one of the case studies and the Centre Briefly described, the funnel approach first looks for Poverty Analysis (CEPA), was contracted by the at changes in the immediate and broader project BMZ to undertake the evaluation over the period environment and then tries to establish linkages September to December 2003. between such changes and the project interventions. The immediate environment is the Kandy The objective of the evaluation as articulated in district while the broader environment would the BMZ terms of reference is, include the provincial and even the national level.

“The independent, external assessment of The practical application of this methodology the impact, relevance and sustainability comprised a four-step process. The first step of the long-term development activities identifies the basic fields of investigation. These within the framework of IRDPs and the fields, while linked to the overall work of the underlying conditions for success.” RRDP, are not primarily determined by it. They are selected on the basis of their insightful value, Given the ex-post nature of the evaluation, the im- i.e., their ability to provide clues as to the essence pact is assessed in terms of ultimately “what remains of the impact, relevance and sustainability of the on the ground” and what we can learn from it for RRDP, the interests of the BMZ and the views of future project planning and implementation. Hence, the study team. The second step elaborates these emphasis is laid on the policy orientation of findings fields of investigation through a “context review” and the recommendations to be derived from them. of changes and trends in the particular field, Country Case Study “Regional Rural Development Project Kandy, Sri Lanka”

using secondary literature and data. On the basis focuses on the very micro level, down to impact of this review, the third step specifies a number on individual households. of key research questions or focus areas for study that guide the field research. While the first step concentrated on identifying fields within the 3. Context review projects spatial context, the fourth step looked at important fields of investigation at the macro The context review of component one provides an level, outside the spatial context of the project. overview of the policy and institutional framework Here, overarching policy issues relevant to the within which the RRDP operated. The focus is on context of IRDPs and issues of the time. A similar what the BMZ terms of reference calls the “overall context review and elaboration of research areas policy framework(s) of Sri Lanka, including frame- takes place in step four. works for sectoral and regional development”.

The outcome of this four-step framework was the The review shows that The RRDP existed at a time selection of three basic fields of investigation which of significant reform of the structures of the Sri form the basis of the evaluation and are referred to Lankan state. Specifically, the most important as the main study components. They are: reforms that took place during this period were the establishment of provincial councils and divisional a) policy and Institutional arrangements for secretariats. These reforms had a far-reaching decentralised development impact on the state structure. In other words the b) Enterprise promotion in facilitating decen- RRDP had to carry out its task of institutional tralised development development of sub-national units in the context c) village development as an enabling factor of these reforms. The two broad areas of reforms for decentralised development. involved reforms at the level of districts and subdis- tricts and the establishment of provincial councils. The first component is selected as it formed the The reforms at the district and sub-district level core of the philosophy of IRDPs, that of decen- involved the setting up of district and divisional tralised development. Moreover, support to the development councils which were prompted by administrative and institutional apparatus was the 1971 insurgency and a reaction by the Centre a major objective of the RRDP. Component two, as a way of re-establishing control over the regions enterprise promotion in facilitating decentralise through development. The establishment of the development, was selected since Kandy, being the provincial councils was a direct outcome of the ‘second capital’ of Sri Lanka, is logically placed to aggravation of the ethnic conflict in the early 1980s, be a hub of business activity. Whether this is the when under pressure from India, Sri Lanka agreed case is discussed in the report, but the importance to devolve power to the provinces. of the topic is nonetheless relevant for the Kandy district, and as will be seen, was also to become a Following from this review, the major fieldwork major feature of the RRDP. The third component, phase of the study places the work of the RRDP that of village development as an enabling factor in the context of the overall policy framework, to for decentralised development, was identified arrive at the impact, relevance and sustainability because of its direct poverty relevance on the of the institution development efforts under- smallest unit of analysis – that of the village and taken by the project. household. Hence, while component one focuses on more macro and meso level issues and com- The context review of socio-economic trends ponent two on the meso level, component three in the Kandy district shows that despite good Country Case Study “Regional Rural Development Project Kandy, Sri Lanka”

achievement on social indicators (access to 4. Project overview electricity, safe sanitation, good housing qual- ity), Kandy reports relatively sluggish rates of From the point of view of the RRDP, the project economic growth. According to data for the mid spanned four phases during its 13 year implemen- 1990s, Kandy ranked almost at the bottom of tation period. It began halfway during the period the list of districts in GDP growth. This is mostly of IRDPs, which commenced in Sri Lanka in 1975 attributed to lack of growth in areas outside the with the Kalutara IRDP and ended with the onset city of Kandy, with the growth impetus concen- of the Regional Economic Advancement Pro- trated in the city. In particular, some surveys show grammes in the late 1990s. The RRDP followed the that agriculture, which still predominates in the concept of regional rural development developed Kandy district, records very low levels of produc- by GTZ/BMZ, which was guided by four principles. tivity, even in comparison to Nuwara Eliya and They were poverty orientation, sustainability, Matale, the other two districts of the Central Prov- target group orientation and participation. These ince. Given this backdrop, the focus of the village principles were embodied during the four phases development component is to assess the impact of the RRDP, namely orientation, innovation, con- of the RRDP interventions in boosting productiv- solidation and dissemination. ity and incomes of its targeted rural poor. The report provides a background of the major The review of trends on enterprise development focus and activities of the concept as designed shows that the Kandy district in the last decade by GTZ/BMZ. However, the evaluation focuses has not experienced a significant increase in its findings on the three main study compo- employment, despite considerable entrepre- nents, which cut across these phases. Village neurial activity, as revealed by the increase in the development activities were the focus of project number of enterprises. The first half of the 1990s attention during its first two phases, when it con- was relatively favourable for enterprises and centrated on the five divisions of Pathahewaheta, production and sales were high, according to the Udadumbara, Medadumbara and Gangaihala findings of a number of research studies. They Korale. Subsequently, from the third phase also indicate that this was also translated into a onwards the project increasingly turned its atten- higher level of investment between 1996 -1998. tion towards enterprise development and private However, the end of the decade saw a downturn, sector promotion which took a regional charac- attributed primarily to external economic factors. ter, spanning the entire Kandy district. Employee turnover was high throughout the period, as revealed by the Enterprise Survey. The institutional development component cut across the entirety of the project phase, although The enterprise development component places with a different character. Early activities at insti- the impact of the RRDPs approach to enterprise tution development were concentrated at the development and private sector promotion divisional level with a focus on imparting tools within this framework. It looks at the viability and for participatory development planning. Later, sustainability of these efforts, the efficacy of pro- the regional planning orientation of this compo- moting primarily micro and small enterprises in nent took over with efforts concentrated on the the Kandy district as a means of poverty reduction provincial planning unit and heavy emphasis and the contribution of the RRDP to the impact on development geographical (regional) infor- (positive/negative) of enterprise/private sector mation systems. promotion within the Kandy district. Country Case Study “Regional Rural Development Project Kandy, Sri Lanka”

5. Main conclusions and lessons learnt through which the project wanted to achieve this objective. This specific strategy was to depend on The findings of the three study components focus institutional development as a principal means on the three aspects of impact, relevance and sus- through which these development goals could be tainability, which are outlined in the BMZ terms achieved. In other words, the underlying assump- of reference. The findings and lessons learnt, pre- tion of this development idea was that more sented in Chapter six are summarised below. than anything else, it was the lack of institutions with certain characteristics and that implement The RRDP was implemented from 1987 to 2000, projects through certain methods, that explain a turbulent period in Sri Lanka’s political history. the conditions of the poor people. On the one hand, the aspirations of the Tamil ethnic minority in the North East expressed in The institutional development component of armed conflict challenged the structure of the the project comprised three analytical concepts central government and sparked off various as identified in the study, namely instituting experimental attempts at decentralization. participatory development methods at the vil- On the other hand, the militancy of extremist lage and divisional level, strengthening regional youth forces in the south galvanized the govern- development through support to the provincial ment towards efforts to achieve broadbased council and the promotion of regional economic development and poverty reduction in the rural growth through private sector development. hinterland of the country. Kandy, the fourth populous district of the island, with low per capita The efforts at instituting participatory methods at GDP levels, high levels of income poverty and a the local level left a number of tools and methods declining agrarian base was deemed appropriate for more efficient planning and GIS based meth- for the kind of intervention that an integrated ods with a proportion of counterparts who were development project could offer. trained under the project. The most significant and sustainable impact of these efforts was at the However, the kind of financing available could level of the individual officers who use their new- not lead to a large-scale project with a wide geo- found skills in varying degrees and intensities. graphical spread, as was the case with many other The use of resources produced by the project such IRDPs implemented elsewhere in the country. as maps and divisional profiles are still evident in Thus, the project, stressing “regional” over “inte- the offices of some divisional secretariats. grated”, was limited to five divisional secretariat divisions for much of its lifetime with institu- Beyond the individual, however, in institutional tional development as its major concern. This terms there has been very little sustainable already constrained the project, operating as it impact. While the tools and techniques remained was, within a political system that depended on with a handful of isolated enthusiasts who distributing benefits to as large a constituency continued to practice them whenever they have as possible. The reservations expressed by both the opportunity to do so this did not necessarily the political and administrative hierarchy of the make a dent in the way the institutions to which district towards the RRDP has to be understood in these individuals are attached currently carry this context. out planning or decision-making. What goes on as planning in the divisional secretariats is still a What distinguishes the RRDP is not so much its list of activities with poor problem analysis and a broad objective of ameliorating the conditions vision for the division. of the poor but the specific means or the strategy Country Case Study “Regional Rural Development Project Kandy, Sri Lanka”

The strong feeling that participatory procedures RRDP shift fitted in with a process of change that were really meant only for investments brought was already going on within the RDD. in by the project and the difficulty of following the cumbersome planning techniques that were In terms of institutionalising enterprise promo- introduced in the context of the workload faced tion, the Provincial Enterprise Promotion Centre by the DS’s, were cited as explanations. The rele- (PEPC) was an institutional failure. However, it left vance of the RRDP efforts to institutionalise par- behind an embryonic network of private sector ticipatory planning methods at the local admin- institutions, which are currently more aware of istrative levels was found wanting and points to their role in regional development, as well as an insufficient appreciation of the administrative a need for unity to accomplish goals over and setup and mandate of this sub-district unit. In above personal agendas. It has to be stated that other words, it was understood as merely an agency other donors besides the RRDP also contributed to administering development, which it is not. this development. However, this network, as yet, has tenuous links with the individual micro, small Thus, by and large, the project was not successful and medium enterprises that the project sought in institutionalising planning methods within the to improve. While the CICCP, which had been DS divisions in which it operated. The lack of insti- courted to take over the mandate of the PEPC, tutionalisation of the RRDP efforts to strengthen has so far been unable to do so, an unintended regional development through support to impact is that some state institutions and NGOs the provincial council was also evident. This is have taken on some of the envisaged functions of most evident in the way the GIS-based regional the PEPC. The RRDP has also contributed to pri- information system is currently used. While the vate-public sector cooperation within the district database is appreciated, no government institu- by involving both sectors including the Board of tion has allocated resources to update it in a Directors of the PEPC in its development activi- sustainable manner. More importantly, the RIS, ties. Private sector representatives now sit on which was envisioned to provide spatial planning state development committees and are consulted data for regional economic promotion, enterprise on regional economic development issues. The planning and marketing, is barely used by the public sector accepts that the private sector has private sector or policy makers. In other words, a role to play, although there are doubts as to its the setting up of the RIS has not influenced the capacity to fulfil this role, especially in the Kandy overall capacity for planning within the provin- district. cial planning unit. What is most remarkable is that despite the col- In terms of what has been ‘left behind’ in the lapse of the majority of those enterprises most promotion of regional economy, in policy terms, appear to have expanded and continue to thrive the impact was more significant. The project today, although they are unable to sustain the developed close links with the RDD and substan- same spurts of growth that they experienced soon tively influenced the emergence of the regional after RRDP support. They have also, on average, at economic advancement programme concept least doubled the number of employees from the with a number of key players within the Ministry. period of initial support. The poverty reduction It thereby provided an impetus for the acceptance impact of this employment creation remain dif- of enterprise promotion and private sector par- ficult to gauge. ticipation as part of rural development. It has to be said, nonetheless, that part of the success with In terms of village development, the RRDP the RDD has to be attributed to the fact that the appears to have mixed results. Where most Country Case Study “Regional Rural Development Project Kandy, Sri Lanka”

resources were utilised – i.e. livelihood (income) for instance with milk collection, group processes improvement, very few projects initiated by the had a higher survival rate. In one site where the project have survived. This is especially true for dairy industry flourished, thanks to the linkages the group livelihood / enterprise projects of the mentioned above, the dairy group expanded in to 1990 -1996 period. Most livestock and fruit crop an umbrella association for the division. However, cultivation projects also failed as income genera- such instances were few owing to the survival tion prospects for individual households. The rate of many activities. In the area of group main- only exception, to some extent, is dairy farming. tenance of infrastructure, a classic community Around a third of beneficiaries organized around level activity, the findings show farmer organi- milk collection societies initiated by the project sations are active and take responsibility for are considered as successfully engaging in dairy maintenance of minor irrigation schemes, which production and all claimed better knowledge of is rather because of to an age-old tradition than dairy farming because of the project. project-supported processes. Similarly, the minor maintenance of roads and footpaths is done Economic infrastructure development at the through “shramanda” according to traditional village level was identified as the most successful village practice, although maintenance funds set part of this component. On one hand, roads and up by the project have long disappeared. When it irrigation structures initiated by the project are came to the selection of activities to support, the still surviving and have had a positive impact project went through the ritual of participatory on accessibility, connectivity and decreasing planning and identification. Nonetheless, it has transaction costs in the case of the former and to be questioned as to whether in these instances agricultural productivity in the case of the latter. participation becomes an orthodoxy (in spite of On the other hand, most village-level institutions it being a guiding principle for GTZ in its support envisaged to maintain this infrastructure are not for regional development). The fact that well existing or functioning. This is particularly true networked villages in the Kandy district are well- for roads, where sections are in states of disre- versed in communicating their needs through pair with communities lacking organizational petitions and other political processes might structures for raising resources for rehabilitation. question whether the ritual of participation can In the case of irrigation infrastructure, existing sometimes be done away with. farmer organizations appear to maintain these, depending on participation rates and the impor- With its small budget and technical input orien- tance of cultivation in their means of livelihood. tation, the RRDP primarily aimed at instituting Nevertheless, in terms of impact on the ground, efficient planning processes at the administrative literally, village level infrastructure development level. All indications are that it did not accom- is assessed by the study to have had the more plish this goal. However, it did have a number sustainable impact, not least because it matched of trickle-down impacts with multiplier effects, with village level priorities and concerns. some of them unintended. The introduction of planning tools and a regional information system Applying the concept of instituting participa- had a positive impact on a number of individual tory approaches at the village level, the findings professionals, who continue to put into practice show that while the project applied the ‘group the knowledge they had acquired. The project approach’ to its income generating activities, the also played a pivotal role in the expansion and resilience of group survival was highly related growth of the majority of enterprises it supported to the fortunes of the activity. In instances where in the latter “consolidation phase”. In addition, group formation was central to the enterprise, it contributed to generating the embryo of a net- 10 Country Case Study “Regional Rural Development Project Kandy, Sri Lanka”

work of private sector organisations within the perhaps it could have identified inputs that could district and in facilitating private-public sector have had a greater impact. cooperation. In particular, change was directed at individuals Finally, at village level the positive impact of the within institutions rather than the institutions project includes an improved dairy industry and themselves. This might have worked if the indi- economic infrastructure such as roads and paths, vidual professionals selected were key players which have made a substantial difference to the with sufficient power to change the status quo. lives of beneficiaries. It is plausible that these However, most capacity building of the project interventions did contribute to the overall reduc- was at the level of middle and junior officials who tion of poverty witnessed within the district in had very little voice in how the institutions were the last decade. However, it is difficult to gauge run. Creating a number of competent profession- how significant this contribution was or whether als within the hierarchical and highly politicised households would have improved more if more state institutional structures is not sufficient to members had migrated, rather than stayed in create change at the level of the institution. More the district. Perhaps the RRDP’s greatest impact often than not, it creates frustrated individuals was at the national level, in placing the agenda of who are on the lookout for better opportunities private sector participation squarely within rural elsewhere. An unintended impact might be pri- development. vate / NGO sector development.

Although the project intended to be different, 6. Lessons learnt somehow, from other integrated projects, the result of all the participatory planning was In conceptualising the RRDP emphasis was support for the same types of activities as under- placed on improved planning and institutional taken by all other projects, eg. infrastructure development without a proper understanding of development at village level (typically roads/ foot- the history and nature of institutional structures paths and canals/ anicuts) and income genera- at regional / provincial, district and divisional lev- tion activities, primarily within the agriculture/ els. It concentrated on instituting participatory livestock sector. Thus, in addition to the lack of development methods at village and divisional institutional sustainability of the planning tools, levels and in supporting the provincial council to the mere use of participatory planning tools did strengthen regional development. not guarantee that the projects were viable. Thus, most livelihood activities and group enterprises The idea to set up a GIS system was a narrow and identified by beneficiaries did not necessarily technocratic interpretation of strengthening have a higher chance of survival. It may be stated regional development capacities. In deciding on in the defence of the RRDP, the this is an experi- this approach there was very little understanding ence that not limited to it but is endemic to many of the provincial council system as a whole. The a development project, not least its sister IRDPs. provincial council was a very new institution. In order to improve its planning capacity it needed For most of its lifetime, the project focused on a wide range of inputs such as the ability to make five “poorest” divisions with potential for deve- use of its powers under the 13th Amendment, to lopment. However, within these divisions, the negotiate its rights with the Centre and to inno- project engaged in a multitude of activities. Given vate within the powers given to it. If the project the state of development of those divisions, the had viewed regional planning in this wider sense, project might have achieved more if it focused Country Case Study “Regional Rural Development Project Kandy, Sri Lanka” 11

simply on what proved most successful after the interests that operate in the institutional context. pilot phase, such as economic infrastructure, i.e. The general learnt is that if what is initiated by the improving the enabling conditions for produc- project dovetails with the processes taking place tion and livelihood. in the context there is a greater chance of it being sustained, because it matches with the interests of The project concept changed towards enterprise the Sri Lankan stakeholders, which, in the case of promotion and growth centres in the mid 1990s. the institutional development component, is the However, this design change, which included Sri Lankan state. another institutional component the PEPC, came far too late for its impact to be sustainable. While The other glaring lesson learnt is pitfalls with flexibility in the design of projects is important and regard to that lie in technical assistance projects. projects need to be steered towards new directions The RRDP, being as it were a predominantly ‘tech- if they do not realise their intended objectives, it is nical assistance project’, came with limited fund- also necessary, as some private sector representa- ing in comparison with its sister IRDPs, but was tives pointed out, to stay with a concept and see it designed with a large proportion of the budget through. The PEPC in that sense was a baby who allocation going towards long and short-term had to grow much too fast. Moreover, in the design expatriate technical expertise. This created con- of the PEPC an institutional analysis of the relations siderable misapprehension and laid the project among the potential stakeholders, what type of open to unhelpful criticism and antagonism from structure and location would be viable in the long- its counterparts and other interested observers. term and what kind of gestation period would be A project of this size needed to ensure that there required, i.e. the adequate groundwork necessary was sufficient balance between resources allocat- for a sustainable institution, was not carried out at ed for expertise and project activities and between the time of its conceptualisation. expatriate and local expertise. Moreover, it is inevitable that being an IRDP, the RRDP lent itself An important lesson learned from the success- to comparison with other ‘capital intensive’ ful institutional collaboration with the RDD IRDPs, especially the neighbouring Nuwara Eliya was that when project interventions fit in with and Badulla IRDPs, unfair though this might be. something that the Sri Lankan counterpart has already begun or a process that is already taking The critical issue, however, is not the extent of place in the larger context there is a chance for the technical assistance budget or the presence sustainability. of expatriate specialists, but the ownership of the initiatives by the stakeholders in Sri Lanka. This, As could be clearly seen from the RRDP’s efforts, together with explicit strategies for internalising institutional development is a complex and diffi- these skills within Sri Lankan organizations, could cult task. It needs the capacity to get to grips with have gone a long way in achieving long-term a complex set of factors, it must try to see what sustainability of the RRDPs technical support type of interventions the project can provide in towards institutional development. the overall context, the ability to negotiate with many stakeholders and a long-term commit- At the implementation level, the RRDP activities ment to a slow process of change, irrespective of were undertaken mostly at the divisional level. whether it is a state or private sector institution. The RRDP interacted with divisional level administrative officers as well as representatives of rel- What emerges is the crucial importance of paying evant line ministries such as agriculture, livestock greater attention to the political and economic development and industrial development. While 12 Country Case Study “Regional Rural Development Project Kandy, Sri Lanka”

working directly at the divisional level helped primary goal of the project and the means shifted to cut down on bureaucratic red tape, it appears from institutional development to enterprise that the project did not quite take into account development, more attention needed to have how the divisional level was linked to the district been paid to employment creation. and provincial levels and failed to develop a good working relationship at the district level with at The good relations developed by members of least one key line ministry, namely, agriculture. the project team with key actors in the RDD While the project informed the district level demonstrates the level of influence the RRDP offices of its activities, the fact that the district managed to have in changing the contours of level office was not consulted about the selection rural development nationally. However, it also of activities within that sector created unneces- shows the dilemma the project faced in reconcil- sary ill will. ing the differences in perspectives between the more professional national officials and the more Insufficient monitoring, especially of impact, was politicised provincial officials. done of livelihood activities, group enterprises and infrastructure development during the first Finally, the role of “culture” in development coop- two phases. If inprocess impact monitoring had eration cannot be understated. While not explic- been conducted, the project could have nar- itly addressed in this evaluation, largely because rowed its focus of intervention to viable sectors it necessitates a specialised methodology to do and changed direction faster. While monitoring justice to such a topic, the influence of cultural improved during the last two phases, clients factors in facilitating or inhibiting development whose enterprises expanded exponentially cooperation remains omnipresent. The issue was pointed out that it was insufficient to identify highlighted in the dialogue workshop held to dis- the potential of their enterprises to be large cuss the findings of the evaluation and a potential employers and to provide them with the neces- recommendation would be to pay more explicit sary guidance and support to create and cater to attention of this “grey” area. a larger workforce. As poverty reduction was the Country Case Study “Regional Rural Development Project Kandy, Sri Lanka” 13

Comment of BMZ

Generally speaking the findings of the report appear to be plausible. The aim of the evaluation, to obtain Sri Lankan views by employing local consultants, has been achieved. According to local colleagues, the consultants conducted the evaluation in a professional way and the report highlights a number of important findings.

Nevertheless, there is a tendency in the report to underestimate the general conditions, activities and impact of the project. First of all, the difficult and constantly changing political situation requires a particularly sensitive and relatively “neutral” approach – which was achieved. Secondly, because of consultation with the government and local authorities they had more of an influence on the kind of support than is acknowledged in the report. Thirdly, there are a number of activities and impacts (introduction of planning methods, contributions to developing micro-finance systems, capacity building) which were not adequately taken into account and acknowledged by the consultants – possibly because of the shortness of the time available for the evaluation. Imprint

Editor Federal Ministry for Economic Cooperation and Development Division of Development Education and Information

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Final editing Steffen Beitz

Responsible Michaela Zintl

As of July 2005

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