Promoting advancement of vulnerable persons and enterprise

The Northern Province of Sri Lanka with a population of 1.143 million has faced disproportionate challenges to socio-economic development and growth as a direct consequence of the 30-year civil conflict. Despite significant development efforts since the end of the war, the province remains the poorest region in the country. While there are indications of improvement in the region’s poverty status, the prevalence of acute poverty in certain pocket areas as well as among certain vulnerable population groups indicate that development efforts have not been equitable. With the onset of COVID-19 and the subsequent economic crisis in Sri Lanka, there is an ever-pressing need for the advancement of vulnerable communities, particularly engaged in agriculture sector and micro-small-medium enterprises (MSMEs). Within this context, the proposed PAVE (Promoting Advancement of Vulnerable Persons and Enterprises) project is highly relevant and a timely intervention to uplift the vulnerable communities in the North. The project will build on the ILO’s project Local Empowerment for Economic Development and Reconciliation (LEED+) project, supported by the Government of Norway and DFAT, which has been successful in going beyond the traditional livelihoods approach and looking at broader market systems. Six agricultural and fishery value chains with high potential were identified followed by an in-depth assessment of the same to design market-led interventions. The flexibility of the project approach also allowed it to revise its value chain portfolio to tap new market opportunities and favourable policy environment. Consequently, LEED+ successfully intervened in groundnut, maize, chilli, black gram and coconut husk value chains under the agriculture sector and sea cucumber under the fishery sector. Through the identification of promising value chains as entry points to promote economic growth, the project has forged partnerships with leading private companies within the value chains to adopt and adapt inclusive business models that not only benefit the suppliers-producers but also strengthen their own supply chains. The fundamental principle of the business models is such that these are owned by the partner companies by making investments in the form of creating provision of inputs, technical know-how and technology for its suppliers-producers. LEED+ financed part of the initial investments made by the partner companies as a risk-sharing mechanism and to help them adopt the models. The piloting of the models proved the investments commercially viable, while the partner companies managed to source higher amount of products, of better quality, through a secured supply channel and a growing supplier base. On the other hand, suppliers-producers received better technical advisory services, inputs and technology to become more productive and efficient and thereby experienced an increased income. These incentive driven models, therefore, offer a win-win proposition for all, thus making the impact both sustainable and scalable. As the partner companies own the business models and maintain their investments in the north, they are independent of LEED+ support and are very likely to continue their operation beyond the project period. The LEED+ approach is sought to be anchored at relevant government institutions for scale-up and replication, not only in the North, but beyond the Northern Province. This presents, an opportunity for a follow-up project aimed at economic development for the most vulnerable sections of the population in the North during a critical time in Sri Lanka, especially by leveraging and capitalising on the learnings of LEED+ as a strategy to address economic recovery and reconstruction.

Project symbol

LKA/22/01/NOR

Admin unit

CO-Colombo

Start date

10/11/2022

End date

31/12/2025

Total allocation

1854778

Total expenditure

Status

Active

1730625

Development Partners

Norway, Ministry of Foreign Affairs

Country/Countries

Sri Lanka

Outcomes

Outcome 4: Sustainable enterprises for inclusive growth and decent work