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American International Journal of Research in Humanities, Arts and Social Sciences

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ISSN (Print): 2328-3734, ISSN (Online): 2328-3696, ISSN (CD-ROM): 2328-3688 AIJRHASS is a refereed, indexed, peer-reviewed, multidisciplinary and open access journal published by International Association of Scientific Innovation and Research (IASIR), USA (An Association Unifying the Sciences, Engineering, and Applied Research)

Lessons from Natural Disasters, A Case Study Based on Rehabilitation and Re-establishment of Tsunami affected Small and Medium-scale Enterprises (SMEs) in Sri Lanka 1

Prof. S.W.S.B. Dasanayaka, 2 Dr Gayan Wedawatta Dept. of Management of Technology, Faculty of Engineering University of Moratuwa, Moratuwa, Sri Lanka 2 Engineering Systems and Management, School of Engineering and Applied Science Aston Triangle, Birmingham, B4 7ET, UK 1

Abstract: The main objective of this paper is to identify some of key issues encountered by Tsunami affected SMEs in the process of rehabilitation and re-establishment in Sri Lanka. Second objective is to assess how far these affected industries are received various benefits and supports from various bodies such as government, private sector, donors and NGOs to get back into business. Final objective is to recommend some policies and strategies to develop this Tsunami affected SMEs in self-sustaining manner within a certain time period. The main data base for this research is obtained from the Industrial Development Board conducted survey covering 4,389 Tsunami affected Micro and SMEs. In addition to this various state organizations and NGOs based information sources used. This paper identify main issues related to Tsunami affected SMEs ranging from basic infrastructure provision up to finance, marketing, machinery, technology, training, product identification/development and etc. Actually this shows no any significant difference from issues faced by normal SMEs and Tsunami affected SMEs in addition to a sudden disaster (tidal wave). Therefore these issues can be generalized as issues relevant to SMEs in Sri Lanka as a whole. However, under the flood and rain of local and foreign assistance, most are pledges and promises, still Tsunami affected SMEs got a little support and assistance to recover and no any records can be found where these colossal amount of foreign assistance received gone. Finally this paper recommends various types of business incubator centers and entrepreneurial enhancing skill programmes for the revamping of Tsunami affected SMEs in addition to normal disaster risk management plan. Keywords: Tsunami, Small and Medium Scale Enterprises; SMEs, Re-establishment, Rehabilitation, Entrepreneurship and Technological innovation. I. Background With the devastation caused by the Tsunami, Sri Lanka is one of the main countries to be affected by the force of the tidal waves and flooding caused by the worst earth quake in the last 40 years. The Tsunami tidal wave struck Sri Lanka on 26thDecember 2004, has devastated the enterprises consisting of thriving industry sector and other commercial sectors in the coastal areas of the country. Micro, small and medium-size enterprise sector plays an important role in the national economy through generation of employments, contributing to the growth of GDP, embarking on innovations and stimulating of other economic activities in Sri Lanka. This sector is said to be the backbone of Sri Lanka as the developing nation. So the development of this sector is paramount important for Sri Lanka irrespective of their level of development. This is even more important to Sri Lanka as a developing country where poverty and unemployment are the persisting problems in those economies. II. Tsunami affected Enterprises in Sri Lanka There were number of enterprises approximately 6,000 units engaged in providing of services and manufacturing of products located in the coastal areas island-wide affected by the tsunami tidal wave disaster on 26th December 2004. Presently, the government, non governmental organizations, private and other public sector organizations are carrying on the multidisciplinary functions to rebuild the nation and usher in prosperity for every body affected by the tsunami tidal wave disaster. Those multidisciplinary functions are mainly focusing on the enhancement of social. Education and living standards like the basic utility and information for the people who lived in the coastal areas island-wide affected by the tsunami tidal wave disaster. Those are the District of Ampara, Batticaloa, Colombo, Galle, Gampaha, Hambantota, Jaffna, Kalutara, Matara, Mulative and

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Trincomalee. To extend the multidisciplinary function focused up to now there is an urgent necessity to revamp the enterprises affected in the above coastal areas island-wide not only for enhancement of their living standards but also for re-generation of their income to survive & growth as a nation. III. Research Issues and Objectives The Tsunami tidal wave on 24thDecember 2004, totally affected the enterprises located in the coastal areas island-wide, while destroying the infrastructure, utilities, fixed assets, and killing & injuring their skilled employees, and crippling their income. All their tools, equipment and machinery were destroyed beyond repairs. By now the most of entrepreneurs are spending miserable lives with the loss mentality and have to depend on the government subsidy. Their entire request is to rehabilitate and re-establish enterprise immediately. Therefore, there is a necessity to relief the damage and to revamp the affected micro, small, medium and large enterprises as soon as possible. This research study disclosed the ways and means to address the issues with effective national cooperation and solidarity. The following issues forced the research study and survey:  Knowing the extent of the damage caused was essential to plan the revamping of affected enterprises  No proper records were available on the damaged industries  It was necessity to know the different industries existed in these areas, product sectors and employment levels etc.  How to strengthen entrepreneurial and technological capability levels  How to rebuild infrastructure and utility to re-establish and relocate enterprises To address the above research issues this study was designed to evaluate the damage caused by Tsunami disaster and requirement to rehabilitate and re-establish Tsunami affected SMEs in Sri Lanka specially pertaining to a sample of 4,389 SMEs covered in the survey with the following objectives:  To identify key issues in this Tsunami affected SMEs in Sri Lanka which are currently in rehabilitation or re-establishment process  To assess how far these affected industries are receiving various benefits and supports from various bodies such as government, private sector, donors and NGOs to get back in to business  To recommend policies and strategies to develop this Tsunami affected SMEs to self-sustaining industrial sector within a short period IV. Situational Analysis There are number of organizations involving in revamping of Tsunami affected Micro and SMEs in Sri Lanka. The United Nations Development Programme (UNDP), Technonet Asia, The Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL), Japan International Cooperation Agency (JICA), the Industrial Development Board of Ceylon (IDB) and the Ministry of Rural Industries and Self-Employment Promotion are some of organizations among the key players in the present context. As the short term plan IDB under the Ministry of Rural Industries and Self-Employment Promotion launched its rehabilitation and re-establishment programme for Tsunami affected Micro and SMEs in Sri Lanka by providing capital goods like tools, equipment, machinery, and some raw materials at the average rate of rupees 15,000.00 for each affected micro enterprises totally covering of 3,000 units island-wide. In addition to that they have provided counseling & consulting services, business management & entrepreneurship development facility, technical training & skill development facility and appropriate technology to start up those enterprises. Furthermore, IDB signed several agreements like the memorandum of Agreements (MoA) and the memorandum of understanding (MoU) with UNDP, Technonet Asia and JICA to precede the same in order to revamp the rest of SMEs, especially providing tools, equipment and machinery worth from Rs. 15,000.00 to 50,000.00 with other facility focus on their business development services and capacity building facility etc. In the present scenario some of the main programmes conducted to the rehabilitation and reestablishment of Tsunami affected Micro and SMEs in Sri Lanka are as follows:  Micro Enterprise Development (MED) Project – initiated by UNDP/IDB  Compressed Earth Brick Making Enterprises for Tsunami affected areas – initiated by UNDP/CBO/IDB  UNDP Fast Track Programme for Tsunami affected Industries – initiated by UNDP/Technonet Asia/IDB  Back to Business Programme for Tsunami affected Enterprises – initiated by FCCISL  The Project for the Rehabilitation & Re-establishment of Tsunami Affected Micro Industries in Sri Lanka – initiated by JICA/POs/IDB  Credit Facility under Tsunami Special Emergency Credit Programme – initiated by the National Development Trust Fund (NDTF) and Susahana Loan Scheme – initiated through Public & Private Banks.

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V. Enterprise Survey and Limitation The survey for the Tsunami affected enterprises conducted by the Industrial Development Board of Ceylon (IDB) covered 4,389 number of enterprises during the period from 11 – 24 January 2005 in the districts of Ampara, Batticaloa, Colombo, Galle, Gampaha, Hambantota, Jaffna, Kalutara, Matara, Mullativu and Trincomalee, identified the affected areas, affected entrepreneurs/enterprises and extend of damage, and requirements to be supported for the rehabilitation and re-establishment of their enterprises/business. The objectives for conducting the questionnaire survey for the affected enterprises by tsunami tidal wave disaster were as follows:  To estimate the damage  To provide proper technology, training, skill development and assistance  To relocate enterprises  To re-establish enterprises  To ensure the appropriation of funds and materials for rehabilitation and re-establishment programme  To ensure that relief measures were directed to the affected enterprises by identifying their needs and requirements The survey was limited to the enterprises engaged in manufacturing of products and providing of services in the coastal areas affected by tsunami tidal wave disaster, in accordance with the information collected and disclosed through discussion and interviews with the industrialists/entrepreneurs in the rehabilitation camps, neighbours and independent observations in the enterprises visited during the survey study. A questionnaire for survey study has been designed for collecting information to estimate damage and requirement in order to revamp affected enterprises. It contains five areas covering general situation to requirements. Those are:  Basic Information  Details of Enterprise  Gross Investment and Credit facility  Assessment of Damage  Re-starting the Enterprise and Minimum Requirements  Services to be re-established in parallel Table 1: Affected Enterprise Distribution by Location Province

District

Western

Eastern

Southern

Northern

Colombo Kalutara Gampaha Ampara Batticaloa Trincomalee Galle Matara Hambantota Jaffna Mulative

Total

Micro 149 90 06 422 191 145 537 516 321 40 176 2,593

No. of Enterprise Small Medium Large 182 02 06 197 11 04 15 02 04 121 03 03 112 00 00 131 05 04 347 21 24 328 12 05 178 13 02 32 04 00 27 01 00 1,670 74 52

Total 339 302 27 549 303 285 929 861 514 76 204 4,389

The data collected from questionnaire survey study was stratified according to suitable enterprise classification; location and size of enterprise. There are different criterions used in different organizations to classify the size of enterprise in Sri Lanka. Having considered various classifications adopted by different organizations in Sri Lanka, the officials of the Industrial Development Board of Ceylon (IDB) agreed to classify the size of enterprise based on the total investment, and can be represented as follows. Table 2: Size of Enterprise Size of Enterprise 1. Micro 2. Small 3. Medium 4. Large

Total Investment (Rs) Less than 100,000.00 From 100,000 to 4,000,000.00 From 4,000,000.00 to 10,000,000.00 More than 10,000,000.00

Table 3: Previous Industry Situation (Pre-Tsunami disaster) – By District District 1. Ampara 2. Batticaloa 3. Colombo 4. Galle 5. Gampaha

No. of Industries 549 303 339 929 27

No. of Employees/Employers Male Female Total 967 436 1,4003 398 291 689 783 132 915 1,846 3,025 4,871 351 523 874

Total Investment (Rs.) 132,368,575 35,824,000 251,106,600 106,280,958 97,260,012

Total Credit Facility Obtained (Rs.) 933,241 256,500 209,284,550 143,055,940 8,700,000

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6. Hambantota 7. Jaffna 8. Kalutara 9. Matara 10. Mullativu 11. Trincomalee Total

514 76 302 861 204 285 4,389

645 231 705 1,448 260 694 8,328

915 62 266 1,813 189 253 7,905

1,550 293 971 3,261 449 947 16,233

241,207,160 47,001,650 262,023,810 355,305,860 19,309,500 664,049,760 3,168,266,507

51,718,947 527,500 18,252,300 28,754,350 30,000 39,676,400 501,189,728

Figure 1: Tsunami affected districts & industries situation map

Jaffna 76

N Mullativu 204

Trincomalee 285

Batticaloa 303

Gampaha 27 Ampara 549

Colombo 339 Kalutara 302 Galle 929

Hambantota 514

Matara 861

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Table 4: Previous Industry Situation (Pre-Tsunami disaster) – By Product/Sub Sector No. of Industries

Product/Sub Sector 1. Food, Beverages and Tobacco Products 2. Textile and Wearing Apparel 3. Leather Products 4. Wood and Wooden Products 5. Coir Based Products 6. Chemical Based Products and Pharmaceuticals 7. Rubber and Plastic Products 8. Non Metallic Mineral Products 9. Fabricated Metal Products 10. Agriculture and Ornamental Fishery 11. Paper and Paper Products 12. Handicrafts 13. Gem and Jewellery 14. Trading, Business and Services 15. Manufactured Products not elsewhere specified Total

544

No. of Employees/Employers Male Female Total 1,695 747 2,442

Total Investment (Rs.) 654,798,300

Total Credit Facility Obtained (Rs.)

962 72 502 921 21

898 238 1,693 311 74

3,049 104 88 2,705 41

3,947 342 1,781 3,016 115

350,541,745 88,200,532 384,358,150 111,518,098 26,599,000

45,846,171 20,692,000 222,456,900 2,425,980 1,621,000

24 128 319 47 17 106 164 528 34

177 284 1,181 149 59 62 169 1,282 56

161 68 63 10 33 192 4 626 14

338 352 1,244 159 92 854 173 1,908 70

23,550,000 66,814,250 897,133,748 28,410,000 13,350,500 17,182,004 29,902,500 447,870,030 27,977,650

6,968,600 4,488,000 65,372,600 429,500 250,000 807,723 1,602,450 17,215,264 2,326,800

4,389

8,328

7,905

16,233

3,168,206,507

501,189,728

108,686,740

Table 5: Tsunami affected employees/employers – By District District

No. of Industries

1. Ampara 2. Batticaloa 3. Colombo 4. Galle 5. Gampaha 6. Hambantota 7. Jaffna 8. Kalutara 9. Matara 10. Mullativu 11. Trincomalee Total

549 303 339 929 27 514 76 302 861 204 285 4,389

No. of Employees/Employers Dead or Missing Male Female Total 6 4 10 0 0 0 0 0 0 9 35 44 0 1 1 7 20 27 1 3 4 0 1 1 8 30 38 10 7 176 9 13 22 50 114 164

No. of Employees/Employers Injured (Minor & Major) Male Female Total 8 14 22 0 0 0 1 4 5 13 15 28 0 0 0 5 14 19 5 1 6 0 3 3 1 8 9 12 10 22 15 11 26 60 80 140

Table 6: Tsunami affected employees/employers – By Product/Sub Sector Product/Sub Sector

No. of Industries

1. Food, Beverages and Tobacco Products 2. Textile and Wearing Apparel 3. Leather Products 4. Wood and Wooden Products 5. Coir Based Products 6. Chemical Based Products and Pharmaceuticals 7. Rubber and Plastic Products 8. Non Metallic Mineral Products 9. Fabricated Metal Products 10. Agriculture and Ornamental Fishery 11. Paper and Paper Products 12. Handicrafts 13. Gem and Jewellery 14. Trading, Business and Services 15. Manufactured Products not elsewhere specified Total

544 962 72 502 921 21 24 128 319 47 17 106 164 528 34 4,389

No. of Employees/Employers Dead or Missing Male Female Total 20 17 37 10 36 46 3 0 3 3 6 9 4 45 49 0 0 0 0 0 0 0 0 0 4 1 5 0 0 0 0 0 0 0 1 1 0 0 0 4 8 12 2 0 2 50 114 164

No. of Employees/Employers Injured (Minor & Major) Male Female Total 8 31 39 12 11 23 1 0 1 7 12 19 14 10 24 1 0 1 0 0 0 1 3 4 1 3 4 0 0 0 0 0 0 3 2 5 2 0 2 10 8 18 0 0 0 60 80 140

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Table 7: Total Damage and Loss of Tsunami affected industries – By District Total Damage and Loss (Rs.) District

Tools, Equipment & Machinery

1. Ampara 2. Batticaloa 3. Colombo 4. Galle 5. Gampaha 6. Hambantota 7. Jaffna 8. Kalutara 9. Matara 10. Mullativu 11. Trincomalee Total

Raw Materials

Semi-finished & Finished Goods

Vehicles

Other

28,696,600 15,691,500 28,841,750 217,182,080 2,964,000 55,291,660 10,028,100 28,815,100 105,897,550 10,214,500 61,906,500

16,058,150 4,551,200 18,349,750 143,290,008 3,137,950 45,765,150 11,567,500 37,801,800 58,449,235 3,413,500 45,192,500

17,549,500 1,332,200 12,137,000 93,160,355 1,009,150 17,190,150 6,105,000 17,776,750 27,222,870 2,244,000 144,460,900

2,197,000 124,000 3,414,000 29,477,080 2,860,000 7,288,000 3,309,000 10,785,500 8,132,000 1,509,500 3,002,000

140,000 364,000 1,700,000 21,221,700 239,500 4,143,300 1,004,950 4,793,000 1,603,600 1,117,000 358,000

565,529,340

387,576,743

340,187,875

72,098,080

36,685,050

Table 8: Total Damage and Loss of Tsunami affected industries – By Product/Sub Sector Total Damage and Loss (Rs.) Product/Sub Sector 1. Food, Beverages and Tobacco Products 2. Textile and Wearing Apparel 3. Leather Products 4. Wood and Wooden Products 5. Coir Based Products 6. Chemical Based Products and Pharmaceuticals 7. Rubber and Plastic Products 8. Non Metallic Mineral Products 9. Fabricated Metal Products 10. Agriculture and Ornamental Fishery 11. Paper and Paper Products 12. Handicrafts 13. Gem and Jewellery 14. Trading, Business and Services 15. Manufactured Products not elsewhere specified Total

Tools, Equipment & Machinery 115,587,550

Raw Materials 58,257,350

Semi-finished & Finished Goods 31,823,970

Vehicles 14,553,000

Other 6,320,950

73,176,950 13,824,200 55,138,750 15,276,730 1,889,000

62,928,138 7,390,500 79,295,900 10,432,725 4,820,000

42,621,975 17,799,800 23,722,650 2,877,080 7,097,000

9,110,000 575,000 10,054,500 463,580 1,510,000

3,676,000 6,088,200 1,813,000 877,600 825,000

5,417,000 8,621,000 111,065,710 16,634,500

2,691,500 4,942,200 71,520,800 889,000

3,030,000 3,858,800 164,646,950 1,936,500

50,000 4,357,000 18,244,500 1,225,000

5,000 240,000 7,522,500 170,000

1,267,500 6,191,650 10,002,500 129,480,550 1,955,750

2,876,500 2,737,050 4,002,000 72,621,680 2,171,400

2,530,500 13,140,150 1,657,000 22,252,600 1,192,900

125,000 4,189,000 135,000 7,484,500 22,000

150,000 168,800 270,000 8,537,000 21,000

565,529,340

387,576,743

340,187,875

72,098,080

36,685,050

Table 9: Total Damage Area of Tsunami affected industries – By District District 1. Ampara 2. Batticaloa 3. Colombo 4. Galle 5. Gampaha 6. Hambantota 7. Jaffna 8. Kalutara 9. Matara 10. Mullativu 11. Trincomalee Total

Industrial/Building Area (Sq. ft.) 549,281 118,622 68,104 617,887 924 254,459 34,612 2,619,259 472,457 290,965 287,949 5,314,519

Land Area (Sq. ft.) 10,800 0 19,294 42,865 0 94,820 0 5,842 1,588 0 143,372 318,581

Table 10: Total Damage Area of Tsunami affected industries – By Product/Sub Sector Product/Sub Sector 1. Food, Beverages and Tobacco Products 2. Textile and Wearing Apparel AIJRHASS 14-305; © 2014, AIJRHASS All Rights Reserved

Industrial/Building Area (Sq. ft.) 1,010,444 472,437

Land Area (Sq. ft.) 143,224 15,752 Page 6

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3. Leather Products 4. Wood and Wooden Products 5. Coir Based Products 6. Chemical Based Products and Pharmaceuticals 7. Rubber and Plastic Products 8. Non Metallic Mineral Products 9. Fabricated Metal Products 10. Agriculture and Ornamental Fishery 11. Paper and Paper Products 12. Handicrafts 13. Gem and Jewelry 14. Trading, Business and Services 15. Manufactured Products not elsewhere specified Total

235,396 410,348 197,224 7,155 15,416 1,281,545 391,621 38,405 6,070 77,701 48,171 313,832 808,748 5,134,519

0 18,916 61,760 400 0 33,040 3,224 1,088 0 24,000 0 17,177 0 318,581

VI. Methodology Implemented This research study based on the questionnaire survey instrument and sample framework designed to identify the damage and requirement of Tsunami affected enterprises in order to their recovery, rehabilitation and reestablishment. For that purpose focused on the following key activities:  Searched literature and websites to obtain secondary data and information  Visited affected Industries & SMEs  Interviewed and discussed with relevant stakeholders involving and undergoing rehabilitation and re-establishment work from Tsunami effect  Participated for meetings and seminars conducted for the rehabilitation works VII. Analysis of Findings Under that research study the following key issues and survey findings measure the minimum requirement to rehabilitate and re-establish industries affected by Tsunami tidal wave: Table 11: Minimum Requirements to Rehabilitate & Re-establish Industries – By District Minimum Requirements (Rs.) District

1. Ampara 2. Batticaloa 3. Colombo 4. Galle 5. Gampaha 6. Hambantota 7. Jaffna 8. Kalutara 9. Matara 10. Mullativu 11. Trincomalee Total

Infrastructure 10,804,000 2,095,500 10,574,250 19,900,7833 72,000 16,529,500 8,748,000 28,537,640 27,512,700 3,406,000 16,511,700

Tools, Equipment & Machinery

323,799,123

Consultancy

18,109,800 9,545,000 17,735,500 198,275,683 2,133,000 42,277,110 9,465,800 25,229,840 76,614,700 9,629,000 45,155,000

Working Capital 3,287,600 1,805,500 12,774,050 82,995,913 1,815,300 15,611,000 19,114,000 14,717,040 27,293,850 2,440,500 180,576,500

Others

Total

210,000 67,500 120,000 4,483,000 0 503,800 50,000 871,190 416,700 110,000 60,000

0 40,000 302,500 6,193,500 500 1,619,900 818,500 731,340 1,798,200 1,264,500 936,000

32,411,400 13,553,500 41,506,300 490,955,929 4,020,800 76,541,310 38,196,300 70,087,050 133,636,150 16,850,000 243,239,200

454,170,433

362,431,253

6,892,190

13,704,940

1,160,997,939

Table 12: Minimum Requirements to Rehabilitate & Re-establish Enterprises By Product/Sub Sector Product/Sub Sector 1. Food, Beverages and Tobacco Products 2. Textile and Wearing Apparel 3. Leather Products 4. Wood and Wooden Products 5. Coir Based Products 6. Chemical Based Products and Pharmaceuticals 7. Rubber and Plastic Products 8. Non Metallic Mineral Products 9. Fabricated Metal Products 10. Agriculture and Ornamental Fishery

Infrastructure 99,064,667

Tools, Equipment & Machinery 97,478,717

56,973,366 11,203,200 32,069,400 8,344,940 8,322,500

Minimum Requirements (Rs.) Working Capital Consultancy

Others

Total

37,510,267

1,713,000

2,033,500

237,800,151

52,662,766 29,621,150 45,645,400 10,753,440 4,102,000

26,140,916 13,861,950 23,067,500 6,952,240 4,619,600

462,700 444,750 464,900 392,740 170,000

1,678,200 154,900 1,105,900 143,840 20,000

137,917,948 55,285,950 102,353,100 26,587,200 17,059,100

1,886,000 7,534,500

8,180,000 7,605,500

1,589,000 4,319,500

58,000 235,500

5,000 2,092,000

11,718,000 21,787,000

34,205,700 2,140,000

85,859,110 6,369,500

186,402,000 1,684,500

1,038,500 35,000

2,104,500 0

309,609,810 10,229,000

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11. Paper and Paper Products 12. Handicrafts 13. Gem and Jewellery 14. Trading, Business and Services 15. Manufactured Products not elsewhere specified Total

1,475,000 2,495,100 2,034,000 55,525,750

1,640,000 5,036,100 6,835,000 91,230,250

1,395,000 1,936,100 1,485,000 50,126,180

55,000 24,100 0 1,782,000

0 159,100 25,000 4,182,000

4,565,000 9,650,500 10,379,000 202,846,180

525,000

1,326,500

1,341,500

16,000

1,000

3,210,000

323,799,123

454,170,433

362,431,253

6,892,190

13,704,940

1,160.997.939

Based on the findings of the affected enterprise survey, it discloses the following issues:  Need for technology, training & skill development  Requirement of tools, equipment & machinery  Need for utilities & infrastructure development to relocate and Re-establish industries  Need for financial facilities like fixed capital and working capital  Need for community development in coastal areas  To rectify the damage to the infrastructure in the coastal areas  Ensure the appropriation of funds and materials to distribute among industries affected by Tsunami tidal wave Therefore, there is a need to establish national solidarity base on the above multidisciplinary functions to be fulfilled in order to assist and grant immediate relief to industries in all affected areas island-wide in the relocation of their businesses/ industries. VIII. Model and Plan of Recovery, Rehabilitation and Re-establishment of Tsunami affected SMEs in Sri Lanka The Model and Plan of Recovery, Rehabilitation and Re-establishment of Tsunami affected SMEs in Sri Lanka (Figure 2) revealed the necessity of integrating the national development programmes and other multidisciplinary functions focused up to now in order to recover, rehabilitate and re-establish of Tsunami affected Micro and SMEs in Sri Lanka. In addition to the above basic aspects the following key functions to be taken in to account:  Establishment of APEX body with Task Force to rebuild the SMEs  Setting up of coordinating committees in each divisional secretariat divisions to assist and implement rehabilitation & re-establishment programmes of Tsunami affected SMES  Aware the stakeholders and beneficiaries under proper guidance and consultancy IX. Policies and Strategies To understand the emergency of rehabilitation and re-establishment of Tsunami affected SMEs it would be helpful to have a brief description of the policy and strategy adopted by the relevant organizations engaged in the rehabilitation & re-establishment process and relevant works. Recognizing that rehabilitation and re-establishment of Tsunami affected SMEs is a complex process, the government acted as an initiator, promoter and supporter in this process. To facilitate the re-establishment and rehabilitation for Micro and SMEs came in to scene through a series of policy measures focusing on the revitalizing coastal area’s economic development. In regard to the Tsunami what is immediately evident is that there was no pre-disaster phase that focused on anticipating the events structuring response and laying a framework for recovery. Therefore, there is a necessity for advisory and capacity building support on policy design. The policy presents the following key objectives: identification and classification of industry sub sectors; utilization of technological & investment facility; skills, practices and infrastructure; SME – Large Enterprise partnership, creating new SMEs; SMEs supports including clusters etc. and the policy has given special focus to the entrepreneurial & enterprise development as their prominent services domain. A. Strategy One of the primary challenges of revamping Micro & SMEs is the lack of assets and materials to work with. Under those projects with relevant organizations have contributed to the recovery of the micro enterprise sector through a holistic, integrated approach to address immediate needs as well as shorter and medium–term needs in a sustainable manner. In addition to that and to fulfill the objective of rehabilitation & re-establishment Tsunami affected SMEs further need longer-term plans with relevant policy and strategy in a sustainable manner. The strategy focused on:  Immediate relief of entrepreneurs/industrialists affected by the Tsunami  Capitalize on the opportunity to strengthen the capacity and skills of entrepreneur/industrialist  Incubator process and centralize incubator office set up  Common Technical/Product set up and requirement  Promotion Initiative, Information/Database, Consultant, Networking etc.  Disaster Management & Mitigation

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Figure 2: Model and Plan of Recovery, Rehabilitation and Re-establishment of Tsunami affected SMEs in Sri Lanka External Factors

Internal Factors Analysis of Survey Results

Tsunami Affected Micro and SMEs Ongoing Development Programmes and Present Situation

Availability of Resources, Funds Donated & Allocation of Funds

Selection & Verification of the affected SMEs

Selection & Verification of the Pilot Projects

Assessment of Entrepreneurial & Technological Capability Level

Total Damage of Micro & SMEs

Rehabilitation & Reestablishment Programmes

Follow up, Monitor, Feedback and Evaluation

Minimum Requirements to Rehabilitate & Re-establishment

Policies & Strategies

While the first task of these projects is to rehabilitate and re-establish the economic and social situation of entrepreneurs in the coastal areas, by replacing of totally damaged equipment, tools and machinery, it is also necessary to view the disaster as an opportunity for industrial development activity. By the end of the project, up to thousand entrepreneurs will be trained, counseled and prepared for better operational management and marketing facility. This will enhance the income of the entrepreneurs and the families of employees affected by the Tsunami disaster.

X. The proposed National Enterprise Development Policy for the Tsunami affected Micro and SMEs in Sri Lanka The government of Sri Lanka would identify the micro, small and medium enterprise sector and relevant enterprise development service sector as an essential component in the national economic development and it is committed to provide quantitative and qualitative essential facility and support to Tsunami affected micro, small and medium enterprises both in enterprise development service providers and public industrial sector, through a network of state and private industrial organizations. The relevant ministries are responsible for establishment and enactment of essential and relevant legislation and also for providing technical and managerial guidelines for rehabilitation and re-establishment of affected enterprises in compliance with accepted industrial and environmental standards. The proposed policy for the enterprise development services; shall AIJRHASS 14-305; ÂŠ 2014, AIJRHASS All Rights Reserved

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Be within the overall economic policy; Cover all industry-related enterprises in both state and private sectors; (including organizations to be established for public enterprise development services)  Have sound legislative support to monitor and regulate the activities pertaining to rehabilitation and reestablishment of Tsunami affected enterprises  Encourage achievement and maintenance of industrial & environmental standards, accepted nationally and internationally;  Provide a framework for equitable, sustainable, cost effective, accessible, reliable and valid enterprise development, rehabilitation and re-establishment support for the Tsunami affected Micro & SMEs  Promote entrepreneurial & technological skills & development and training facility XI. Conclusion and Recommendation In accordance with the issues addressed and the above survey findings the following long-term solutions can be recommended:  Setting up of Incubation Centres and Industrial Parks/Estates  Transfer Appropriate Technology & Technology Upgrading  Providing Industrial Management & Entrepreneurship Development Facility  Conducting Technical Training & Skill Development Programmes  Providing Market Development & Market Linking Facility to gain the lost markets  Providing Counseling & Consultancy Services to enhance mentality of the victimized industrialists by the unexpected incident.  Procurement of Tools, Equipment and Machinery in order to distribute capital goods among the affected industries In addition to the above, Project Implementation, Performance Monitoring and Follow up Activities will be carried out for a two year period. The survey study recommends the following policies to be planned and strategies to be implemented in the context of recovery, rehabilitation and re-establishment of Tsunami affected SMEs Sri Lanka:  Identify and recommend Tsunami affected sectors and sub sectors with potential for value addition, employment creation, and export for promotion and support  Establish a revolving loan fund  Strengthen the public sector performance and governance by enhancing their capability levels.  Imposing a buffer Zone with the development of infrastructure and utility for SMEs  Establish a Task Force to Rehabilitation and reconstruction of Tsunami affected SMEs in Sri Lanka  Aware and strengthen of public sector about disaster management and its issues References [1]. [2]. [3]. [4]. [5]. [6]. [7]. [8]. [9].

Annual Publications. Department of Census and Statistics, 2003/2004 Annual Report. Central Bank of Sri Lanka, 2004 Memorandum of Agreement (MoA): The Project for the Rehabilitation & Re-establishment of Tsunami Affected Micro Industries in Sri Lanka, 18th December 2005 Micro Enterprise Development (MED) Project for Tsunami Affected Industries in Sri Lanka: Project Proposal – Industrial Development Board of Ceylon (IDB), Ministry of Small and Rural Industries, August 2005 National Strategy for Small and Medium Enterprise Sector Development in Sri Lanka. White Paper, 2002 Perera, P.V.V.U. Technology Issues for Small and Medium Enterprises (SMEs) in Sri Lanka, 2005 Project Proposal & Master Plan for Rehabilitation & Re-establishment of Tsunami Affected Industries in Sri Lanka, 2005 Survey Report on Tsunami Affected Industries, 2005 United Nations Development Programme: Special Unit for South – South Cooperation, South – South Grants Project, 1st December 2005

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