Economic sustainability: Sri Lankan villages after the 2005 tsunami

* Economic sustainability; provide financial motivation for continued growth over time. Empower people by improving their economic or social status.

You may remember the Indian Ocean Tsunami that struck in December 2005, killing tens of thousands and devastating communities in many countries. Sri Lanka was hit especially hard. In the months that followed many organizations, and many individuals, sent money and other forms of aid to Sri Lanka.

When the Tsunami hit, I was in my first year of business school (in America). Early in the spring semester, when we got back from winter break, a group of students got together, and started brainstorming how we could help. Our school was known for entrepreneurship, and being business students, we thought about it from an economic perspective. Most of the donations going in were earmarked for disaster relief –food, medical supplies, etc. A little bit was flagged for the rebuilding of certain pieces of infrastructure, like hospitals and schools. But as we looked into it, we learned that historically, as the world’s attention to a particular natural disaster fades, so do the donations, and many people in poorer countries like Sri Lanka are faced with long-term economic hardship that they can’t recover from, due to the destruction of their personal homes and businesses. Natural disasters often devastate the local economies. So all this aid’s coming in to help with the immediate problems, but not much to deal with the longer-term effects.

My classmates and I were learning about entrepreneurship, so we ended up deciding the way we wanted to contribute was to go to Sri Lanka and work with entrepreneurs (and potential entrepreneurs) to help them set up new businesses, or recover their old ones. It was a way to apply what we’d been learning hands-on, while providing what we hoped would be longer-term benefits than what most of the aid was being used for.

It took us a year to get it planned out and find funding, but in the winter of 2006, I and 6 other students went there and spent 10 days, partnering with a local nonprofit to provide entrepreneurial consulting at a small village on the coast, that had been devastated by the tsunami a year prior.

The village was called Seenigama. We divided into three teams.

The first team worked with the local brush factory, a relatively large business in the village, employing about 10 locals depending on the demand. My classmates used cost analysis and industrial engineering techniques to improve the efficiency of the operation and scale up production.

The second team worked with the local store owners. Several families in the village ran small general stores out of their homes; basically, when they went into the nearest city to buy supplies like rice, spices, etc, they would buy in bulk, then sell in smaller amounts to their neighbors. This team ended up helping them form a coop, and teaching business accounting skills. This helped the store owners to figure out which items and methods created the most value, and gave them visibility into some items that were actually losing them money

The final team, which I was a part of, worked on two projects over the course of the visit. The first part was in renovating a small store that the nonprofit organization ran, selling the handicrafts of local villagers to tourists that drove past on the way to nearby beaches. The second half was creating a plan for a new business in the village, where the villagers could sustainably farm and harvest reeds that were a versatile raw material used in local crafts, and which were currently just foraged in small amounts at a time.

It was an amazing experience, and I have many stories about what happened in our time there that I'll save for another time. But the important thing was, everyone involved knew that this was important. Many villagers had lost their homes and means of production in the tsunami, and employment options were few and far between. While our three teams didn't directly save lives or build schools, we helped improve what few economic opportunities there were. We, the nonprofit we partnered with, and the villagers all knew that the key to long-term recovery would have to be grounded in sustainable economics, not short-term financial aid.

Edit: here's a bit more about the effort: http://www.unconditionalcompassion.org/sub/BabsonAccount.php