Shaping a dream in Sri Lanka. Government loans, overseas aid, and the `village reawakening' movement allow thousands to leave shanties for sturdier dwellings

RATNASIRI PEIRIS, a Sinhalese carpenter, lives with his wife and four children in a house with barren cement walls. His living room has almost no furniture. Mr. Peiris walks around the room uneasily, as if unsure about his surroundings.

``This is a very big thing for us who lived in shanties before,'' says the 35-year old Peiris, speaking through an interpreter. ``We thought we would have to live in shanties forever.''

Mr. Peiris's new home is one of 152 such houses in a newly established colony known as Jayagathpura about 10 miles south of Colombo. It represents the fulfilment of a wish for countless others for whom building a new house was, and may still be, no more than a dream.

The country has been torn by violent ethnic strife between the majority Buddhist Sinhalese and minority Tamils for four years. Nontheless, the Sri Lankan government's housing program is transforming parts of the island's landscape in a positive way.

Since the National Housing Development Authority (NHDA) began its comprehensive project in 1984, at least 200,000 houses have either been constructed or upgraded with money from both the public and private sectors.

Despite economic advances in the early '80s, many agree that a project of this magnitude is sorely needed. A developing country, Sri Lanka has a largely agricultural economy, with a per capita income of $372 (in 1985).

The bulk of the country's nearly 17 million people live in substandard houses. According to a 1981 survey, only 41.8 percent of Sri Lanka's 2.8 million houses were considered permanent homes - built with durable materials like cement and wood. The rest are either improvised (palm-thatched walls and roofs) or semi-permanent.

NHDA provides loans, materials, and technical resources. The program, known as the ``million houses'' program, focuses on low-income housing schemes made possible by loans that range from $220 for rural areas to $440 for urban sites. The government grants land leases, usually for nominal fees.

``These are very small amounts, but it encourages people to generate their own resources to build houses which are ten times the loan value,'' says W.D. Ailapperuma, NHDA chairman. In 1981, the United States Agency for International Development (USAID) provided $100 million to help finance projects. Other agencies such as the International Fund for Agricultural Development have plans to lend money as well.

Visually, the impact of the program is dramatic. In Suwabubudugama, a secluded 35-acre hamlet about 22 miles south of Colombo, the new houses are literally rising out of the old, thatched homes. In almost every case, people depended on community efforts for labor and relied on indigenous materials like sun-dried brick to reduce costs.

A 49-year old woman, Daslina Fernando, tore down a two-room semi-permanent structure and, with a 6,500 rupee loan ($226), doubled the size of her old house using some of the old materials. For labor, she relied on the village's seva wanita (women's council), the main community organization. It mobilized voluntary workers in return for food and tea.

One such volunteer was applying a smooth finish to the brick and mortar walls which went in place of the thatched walls. Instead of the thatched roof went an asbestos sheet which, though hotter under Sri Lanka's tropical sun, is much sturdier.

Mrs. Fernando's husband died while the house was in progress, but a 22-year old daughter, a garment factory worker, is repaying the 10-year loan. A new kitchen has yet to be built, however, and Fernando is worried she may not be able to repay the extra amount needed.

The seva wanita president, Anuma Jayasingha, also availed herself of a $250 loan from NHDA, then used $140 from family savings to build a two-bedroom house with a new kitchen and a spacious living room in place of her two-room house. But the tiled roof caved in and she had to borrow another $250 from NHDA.

In the villages, the success of the program owes much to the concept of sarvodaya, loosely translated as ``village reawakening,'' a mass movement emphasizing development through self-help and community spirit. Over 600 villages out of the country's total of 25,000 have so far been affected.

``From the Sri Lankans' point of view, this isn't just a housing program. It's a self-help program that flows out of the sarvodaya movement,'' says Jeremy Hagger, a USAID housing officer.

In urban settlements like Jayagath Pura (``Victorious Town''), strict housing regulations and the lack of indigenous materials raise construction costs considerably.

Ratnasiri Peiris's new house cost $1,400 to complete, only a third of which was borrowed from NHDA, to be repaid over 15 years. The rest he borrowed from relatives.

Peiris' chief concern now is how to make the repayments. Peiris, who makes about $35 a month as a self-employed carpenter, says he is happy to have the new house, but is worried about being burdened with debt. Meanwhile, he and his family squat on the floor until Peiris has enough time and money to invest in furniture.

Within the capital city of Colombo, the changes are even more drastic in some shanty settlements like Siridhama Mawatha. There, people are crammed into illegal shanties of about 100 to 200 square feet in size in an area next to a municipal garbage site.

Last year, NHDA shifted about half the settlement's population to live in new blocks of row houses at a nearby site. The existing settlement is scheduled to be completely rehabilitated.

According to a housing officer, most of the inhabitants will have difficulty repaying the loans and may even default on the loans. But, somehow or other, he says, ``they'll manage.''

Housing for low-income groups was one of the key programs that helped put the government of President Junius Jayewardene in power in 1977. The previous government, under Sirimao Bandaranaike, hadn't accomplished much in that field.

The initiative was taken up by Prime Minister Ranasinghe Premadasa, who in 1980 proposed that the United Nations declare 1987 the ``International Year of Shelter for the Homeless.'' Housing projects actually began back in 1977 when the government became directly involved in constructing 100,000 homes over a five-year period.

But the costs proved exorbitant. At its peak, the project took up 11 percent of total public investments (about $28 million a year) says Mr. Ailapperuma, NHDA chairman. ``We aimed to fill the immediate need, especially in the urban areas, but it was too costly, the scale was limited by our capacity to build, and people had no say in the construction of their homes.''

Hence the shift to a loan program designed to stimulate self-help.

The present program is nationwide in coverage, actively implemented in the north and east, where Tamil insurgents had long been fighting for greater political autonomy. Out of the far-reaching loan schemes emerged village-level rural credit systems, where money is lent by thrift and credit cooperative societies.

``The program has come a long way in 10 years,'' notes USAID's Mr. Hagger. ``It's granting small loans to a great number of people through innovative means.''

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