Cash for Recovery - Feasibility Study on a Capital-Based Income Generation Scheme for Tsunami-Affected Households in Trincomalee District, Sri Lanka

The Government of Sri Lanka (GoSL) has provided tsunami-affected households with unconditional cash transfers of Rs200 ($2) per person per week throughout 2005. The same households received World Food Programme (WFP) food rations worth Rs130 per person per week. The GoSL also provides conditional capital transfers to families whose houses have been destroyed or damaged. At the same time, aid agencies implement cash-for-work (CfW) programmes and livelihood recovery programmes. In-kind grants to replace lost income-earning assets, and to a lesser extent conditional cash grants, combined with training are the main instruments used to support livelihood rehabilitation.
In 2006 the GoSL cash transfers and the WFP food rations were discontinued. For poor households that have not yet recovered this will create a shock. In order to compensate for the loss of transfer income they will have to rely on finding employment in the labour market, on CfW programmes and on self-employment. Given that the labour market is recovering and that aid agencies offer numerous programmes supporting self-employment, it can be assumed that tsunami-affected households with unemployed or underemployed human capital, will in some way be able to earn sufficient income to meet their basic needs.