The broad objective of LIRNEasia is to bring evidence to the policy process and thereby improve it. The means by which we achieve this objective range from directly taking evidence to the policy process, through advocacy and dissemination, to building up policy intellectuals. We never quite thought that the means would extend to actually placing researchers within the supreme legislative body of a country, but with the entry of Dr Harsha de Silva to the Parliament of Sri Lanka representing the United National Front, the principal opposition party, this too has happened.

We warmly congratulate Harsha and wish him the very best in continuing to improve policy discourse in Sri Lanka by bringing evidence to bear on the important questions that face our country.

Harsha has been an exemplary policy intellectual, though much of his policy advocacy has occurred outside the framework of his work as LIRNEasia’s Lead Economist. He had the greatest impact in contributing to the shifting of the frame for discussing inflation in Sri Lanka from the misguided focus on imported inflation to one that correctly places the actions of the Central Bank and the now commonly understood term, money printing, at the center. His persistence paid off; his words made into the discussions of the Monetary Board. He was called names, but the Central Bank corrected itself.

Harsha’s interventions, along with those of Fuss Budget in LBO, served the country well. In particular business and the asset-poor benefited. While LIRNEasia would like to take credit for this stunning achievement, it cannot. Harsha did it in his spare time. Macro economics falls outside the remit of LIRNEasia, however broadly defined.

His next great achievement was in advancing the understanding of the role of information in agricultural markets and contributing to well-designed applications that mobilize ICTs, especially the now almost ubiquitous mobiles, to reduce the frictions that characterize the agricultural value chains.

Here, LIRNEasia has played a role, but we cannot claim credit for getting Harsha started on this path, or even for the majority of the work. He started investigating the functioning of a specialized agricultural market, the market for tea, back around 2000, before LIRNEasia had even been thought about. He was responsible for one of the successful pilot projects funded under the eSri Lanka initiative, in 2003.

This was the beginning of Govi Gnana Seva (GGS), centered on the Dedicated Economic Center in Dambulla, the country’s largest wholesale market for agricultural produce. ICTA was very pleased with the success of the project, especially when it received the highest evaluation. But the funding did not continue. Harsha kept the project going, paying the salaries of the workers out of his own pocket and twisting the arms of companies and organizations to assist with some of the technical functions. While the project could not be continued at the previous levels, the basic data collection continued, with GGS becoming the source of daily price reports given out by Sirasa FM and being even picked up for free by government organizations.

It was at this point that LIRNEasia entered the picture, funding some exploratory research on transaction and information costs in agri-markets in the Dambulla area. The research got written up, people started citing Harsha in papers and proposals, and appointing Harsha to international research advisory boards and such. Now some of the key ideas developed in this stream of research are being incorporated into the design of commercial services. Another great achievement of Harsha the policy intellectual.

But the work of a policy intellectual is never done. The UNF manifesto included a section on the necessity for forward contracts and better market design in agriculture. Without question, the policy debate has to be shifted from the easy focus on spot markets to forward markets. We know that Harsha will use the bully pulpit afforded by his seat in Parliament to advance the debate on improving agricultural value chains and ensuring that the people who grow our food do not remain in poverty. Inflation is creeping up again and Harsha’s informed voice is still needed on the macro-economic front.

We wish Harsha well and look forward to continuing our mutually supportive relationship. I hope he will consent to continue as our part-time lead economist.

We congratulate the Leader of the Opposition on his decision to include professionals such as Dr Harsha de Silva and Mr Eran Wickramaratne (the founding Chair of the ICT Agency and a key proponent of the eSri Lanka initiative) in the National List, honoring the intent of the Constitution. We urge the President and the ruling party to draw upon their considerable knowledge and experience to solve the pressing problems besetting our people.

Rohan Samarajiva, Chair and CEO of LIRNEasia
Cape Town, 21 April 2010

The VGKs were to be in areas where traffic patterns allowed for sustainability. Just because people live in villages, it does not mean that they never come to market or that their children do not go to school or tuition classes in rural nodal points. Careful studies were commissioned to identify places where there would be enough foot traffic to make telecenters sustainable. All this was thrown to the wind and telecenters were given to temples primarily at the behest of the President. Obviously, they are unsustainable. No amount of assistance from the computer technician at the local Vidatha center is going to bring foot traffic to fundamentally unsustainable locations. That answer given by the Minister in the interview linked here is a non sequitur. A technician can keep the computers operational, he/she can’t bring customers. And the Minister seems to thinks that charging fees increases the digital divide and that not charging fees and having the center close down narrows it. He makes no mention of the vouchers that were designed and implemented under e Sri Lanka to address the issue without making the centers unsustainable.

Sadly, Professor Vitarana repeats falsehoods and lies by omission. Now we are compelled to blame the former man of science. He is, we now understand, a common or garden politician who cares nothing for evidence.

If he wants evidence, there is plenty. You see, we do not give up hope. All he has to do is get a list of VGKs and Nenasalas from ICTA and check their locations to see who is serving urban areas and who is serving rural. The vouchers were operational, the last time we asked. All he has to do is ask.

Here are the summarised results from the telecenter operator survey done by LIRNEasia at the weCan workshop in October 2008. Sample was not representative, but large enough to get a general idea about the telecenter operations in Sri Lanka.

Out of a total of 147 operators surveyed, the bulk, 101 were from Nenasalas, the 500 odd telecenter network created under the World Bank funded e-Sri Lanka programme. 10 were from Sarvodaya multi-purpose telecenters and 6 from others (eg. public libraries) 30 have not specified the type of the telecenter.

Do telecenters in Sri Lanka make money? Yes. They report an average monthly income of Rs. 22,119. (=USD 201) This is associated with a relatively large standard deviation of Rs. 21,714 (= USD 197) indicating a variation within a wide range. Not a surprise since some telecenters are running at a loss (presumably temporarily) and few reporting a monthly income of over Rs. 100,000 (= USD 900).

However, providing Internet services ranked only third among telecenter income components (16%). The key sources of income are education and training (43%) and providing fax, photocopy and printing series (21%). They also make money from VoIP (4.5%), bill payments (2.5%) telephone calls (2.5%) selling other goods (2%) and VCD/DVD rentals (1%).

Asked for the preferred income profile, the results were not too different. They still want 33% income from training, 21% from fax photocopy and print services and 17% from Internet services. Is this an indication of being more realistic or less ambitious? You decide.

Average monthly expenditure of a telecenter is Rs. 15,837. (USD 144) This may not reflect the real costs as the Internet charges for Nenasalas are borne by ICT Agency from the money comes from e-Sri Lanka programme. Salaries is the highest cost component (39%). Then comes electricity (25%). About 10% each for telephone and rent.

On average basis a telecenter has 5 PCs and employs four staff members – two permanent, two temporary. Correlation between the income and the permanent staff strength was 0.56; the income and the number of PCs, 0.62.

Do telecenters make a profit? Yes, but perhaps may not in real terms. They record a monthly average profit of Rs. 6,735 (=USD 61) with a large standard deviation of Rs. 9,504 (=USD 86). This indicates the loss incurred by some of them. This is again without considering the cost of the communication link. (The monthly average cost of a 2 Mbps business broadband connection is USD 46 in Colombo. This might be slightly high in rural areas.)

Telecenters operators are rewarded in different ways. Only 33% are salaried. 22% receive a share of profits. 13% receive an allowanced based on performance. 32% receive no personal income. How they prefer to be rewarded? 51% wants a monthly salary; 26% a share of profits and 18% a performance based allowance. Doesn’t sound too entrepreneurial but in Sri Lanka culture job security plays an important role.