Reduce poverty in Sri Lanka..............!
Reduce poverty in Sri Lanka..............!
Reduce poverty in Sri Lanka..............!
Poverty
Poverty is one of the issues that has been discussed globally for decades. Poverty is one of the driving forces of inequality in the world and an obstacle to individual and social development.
Poverty is defined as a state in which an individual is unable to meet even the minimum standard of living (Rusasatana Team, 2002). That is, it refers to a state in which a person does not have enough income to meet even the minimum needs necessary for survival. Poverty prevents a person from living a long, healthy life, maintaining a decent standard of living, independence, self-respect and being respected by others ( 1993).It is noteworthy that poverty has a major impact on the social welfare and economic development of a country.
Accordingly, understanding poverty and its socio-economic impacts is of utmost importance today.Sri Lanka has been declared a middle-income country. Public expenditure on social services has fallen to one percent of GDP and this has created widespread inequality. Poverty, therefore, remains a significant issue but needs to be understood from a holistic perspective that considers factors such as people’s abilities, private and social assets, leisure time (or lack thereof), and access to social participation and security.
However, most media outlets view poverty in terms of economic deprivation. A broader understanding of poverty includes democracy, good governance, the rule of law, freedom of expression, and media freedom, which enable people to meet their full potential.
There is no single approach to describing poverty, and there is no single indicator to measure it. Poverty is a complex phenomenon with multiple dimensions.
Researchers use four main approaches to defining, measuring, and monitoring poverty. They are the financial approach, the capability approach, the social exclusion approach, and the participation approach.
The financial approach
focuses on the economic dimensions of risk, such as income and expenditure. It is well-known for its aspect of poverty.
• The capabilities approach,
introduced by Indian economist and Nobel laureate Amatya Sen, focuses on what is needed for a good life. Does an individual have the life he values? Can he achieve a basic level of capabilities in terms of health, education, environment, and empowerment? If not, poverty is understood as the denial of the capabilities for a life lived.
• The social exclusion approach
identifies some people as socially marginalized and excluded. As a result, they are completely excluded from policymaking, civil, social and cultural life.
• The participatory approach
is based on people's opinions and is therefore subjective.
Types of Poverty
1. Absolute Poverty
Absolute poverty is the state of not having enough income to meet even the basic needs, including food items that provide very little calorie value.
Absolute poverty is the state of not being able to meet basic needs such as food, safe drinking water, housing, health services, education and information. It depends not only on income but also on access to social services. In fact, there is a lot of interest in reducing this poverty worldwide. Absolute poverty is defined in terms of absolute income distribution. When absolute poverty is present, malnutrition, infant mortality, illiteracy increase and life expectancy decreases
1. Relative poverty
Relative poverty is a condition in which the average living conditions prevailing in a society cannot be maintained. In calculating relative poverty, the average expenditure of the society is taken into account. The idea is that every society has this poverty because not everyone in a society has the same income. Some people may have a lower income than others in the society. However, since their income is higher than the poverty line, they are not considered to be in absolute poverty. In practice, not much attention is paid to reducing this poverty.
1. Rural poverty
This occurs in villages with a population of less than 50,000. This poverty is caused by low employment, limited services, poor support for the disabled, and lack of quality educational opportunities.
2. Urban poverty
This occurs in cities with a population of more than 50,000. Challenges faced by the urban poor include health, lack of adequate housing, and social security.
Poverty Trends in Sri Lanka
The World Bank’s report on Sri Lanka reveals that poverty has increased over the past four years. Poverty has increased from 11 percent in 2019 to nearly 26 percent in 2024. This means that more than a quarter of Sri Lanka’s population lives in poverty.
High inflation, wage losses, falling incomes, unemployment and falling remittances have pushed households into poverty.
The report notes that nearly 60 percent of Sri Lankan households have seen their incomes fall, with many facing food insecurity, malnutrition and stunting, the report notes.
The report also indicates that labor market trends in Sri Lanka have been affected by widespread closures of small and medium enterprises. The labor force participation rate in the urban sector fell to 45.2 percent in the third quarter of 2023 from 52.3 percent in 2019. Youth unemployment, especially among mature youth (25-29 years old), rose to 17.7 percent between the second and third quarters of 2023.
A report by the Census and Statistics Department of Sri Lanka (CDS) said that the minimum monthly expenditure for an individual living in Sri Lanka has increased by 144 percent since 2019. This amount is calculated based on the amount needed to meet basic monthly needs.
In 2019, the basic expenditure for an individual was Rs. 6,966 (23). This hunger-proof amount has now increased to Rs. 17,014 per month.
Poverty Reduction Measures of the Past Government.
Sri Lanka’s commendable progress in poverty reduction appears to have been hampered by the spread of the disease, in parallel with the widening of already widespread inequality. As a result of the multifaceted poverty reduction initiatives of successive governments and their efforts to generate inclusive growth, Sri Lanka has made significant progress in poverty reduction over the past two and a half decades.
According to the official poverty line developed by the Department of Census and Statistics based on the 2002 Household Income and Expenditure Survey, the per capita poverty headcount index declined from 28.8 percent in 1995-1996 to 3.2 percent in the 2019 survey round. The latest update of the official poverty line using household income and expenditure survey data for 2012-2013 showed that the decline in poverty was similar, but the share of the population living below the poverty line was 14.3 percent in 2019. Accordingly, according to the updated poverty line, approximately 3.04 million individuals are living below the poverty line.
This is approximately 4.4 times higher than the number of people previously estimated to be living below the poverty line in 2002.
The latest poverty data from the Department of Census and Statistics, based on the 2019 Household Income and Expenditure Survey, reveals that approximately one in six Sri Lankans is poor in multiple forms and that 42 percent experience poverty according to weighted indicators.
Accordingly, the national multidimensional headcount poverty rates were relatively high in urban areas at 16.6 percent and in plantation areas at 51.3 percent. People in the plantation sector experienced the highest levels of poverty. Among the districts, the lowest indicators of
multidimensional poverty were observed in Colombo (3.5 percent) and Gampaha (5.1 percent), while the highest was observed in Nuwara Eliya (44.2 percent).
Although there are significant disparities between districts, the proportion of people living in poverty across all categories is highest in Colombo and Gampaha districts due to the generally high population density in urban areas.
This highlights that a significant portion of the population was living in poverty even before the COVID-19 pandemic. Due to the persistence of the pandemic and the disruptions it has caused, a ‘new poverty’ segment of the population at risk of poverty may have emerged in recent years.
Despite the limited fiscal space and challenging economic conditions, the government and the central bank, with due regard for the potential for worsening poverty outcomes and inequality, continued to focus on mitigating the severe impacts of the pandemic on vulnerable segments of the population through unprecedented fiscal and monetary stimulus packages.
While such measures have mitigated the impact of the pandemic on the financial and nutritional status of the population to some extent, other pre-pandemic inequalities related to access to health and education infrastructure as well as household assets may have constrained the current and future productivity potential of the household sector.
The government needs to move forward with effective and targeted policy initiatives to prevent any further damage to the housing sector from the lingering impacts of the COVID-19 pandemic, and it is essential that comprehensive and up-to-date poverty-related data sets are made available by relevant institutions in a timely manner.
The government has implemented various social protection measures targeting vulnerable segments of the population with a view to alleviating the financial burden of livelihood losses arising from the COVID-19 pandemic.
The government has continued to expand existing assistance programmes for the needy segments of society for the second consecutive year, with due regard to the disproportionate impact of the COVID-19 pandemic.
Accordingly, the government provided Rs. 5,000 assistance to vulnerable households in two rounds during the third wave of the pandemic, in April and June 2021. Thus, an amount of Rs. 14.1 billion was distributed among 2.8 million eligible households in April 2021, followed by a second round of Rs. 8.2 billion among 1.7 million households in June 2021.
Many households, including Samurdhi beneficiaries, low-income and vulnerable families, elderly, differently-abled and kidney patients, benefited from this program.
In addition, the government also provided a cash assistance of Rs. 2,000 per family, effective from August 2021, targeting families who have lost their livelihood but are not receiving assistance from any of the government's existing cash assistance programs. Accordingly, a total of Rs. 12.0 billion was distributed under this program.
The Government is committed to continuing to implement all existing safety net programmes during the year as they have worked to protect the economic well-being of vulnerable segments of the population.
During the year, the Department of Samurdhi Development disbursed Rs. 51.6 billion to 1.8 million beneficiary families under the ongoing Samurdhi Relief Programme. The Samurdhi Department has also undertaken various programmes targeting livelihood, community and entrepreneurship development with the aim of creating ‘safety nets’ that enable households to lift themselves out of poverty.
The government has continued the breakfast programme for pre-school children and introduced the ‘Take Home’ programme in lieu of school meals under the National School Feeding Programme, while also providing a nutritional allowance of Rs. 20,000 to young mothers. These programmes are implemented by the State Ministry of Women and CChild Development, Pre-Primary and Primary Education, School Infrastructure and Educational Services.
These initiatives are expected to play a key role in maintaining the nutritional status of young children and new mothers amidst the challenges faced by the needy households due to the pandemic.
Considering the disproportionate increase and the rapid impact of the COVID-19 pandemic on the poor, the Samurdhi assistance per beneficiary family was further increased by a resolution to increase by approximately 28 percent from February 2022, as proposed in the Budget 2022. Accordingly, the family unit assistance of Rs. 3,500, Rs. 2,500 and Rs. 1,500 per family was increased to Rs. 4,500, Rs. 3,200 and Rs. 1,900 per family respectively.
While the expansion of various safety nets is expected to support Sri Lanka in making significant progress in poverty reduction and mitigate the impact of the COVID-19 pandemic on vulnerable segments of society, effective targeting of such mechanisms and developments, including new initiatives not considered in the government’s budget, is essential to ensure effectiveness and sustainable outcomes. In recent years, there have been concerns that assistance programs such as Samurdhi have been less effective in poverty reduction due to poor targeting.
Current government poverty reduction measures:
• Aswasuma Welfare Scheme:
“Aswasuma” scheme aims to improve the livelihood of the people by providing financial assistance to them as per the poverty line.
• Small and Medium Enterprises
The Central Bank continues to provide official financing through the following credit schemes to promote small and medium enterprises with high potential and potential.
Saubhagya
Smallholder Plantation Entrepreneurship Development Programme
Working Capital Loan Scheme for Tea Factories
• Microfinance'
To increase household income and improve the livelihood of low-income household units by providing loans for starting or improving income-generating activities following the process of community integration and skill development.
Poverty Alleviation Microfinance Project Revolving Fund
Poverty Alleviation Microfinance Project II Revolving Fund
Taruna Thiriya (National Agricultural Development Programme).
• Scholarship Schemes:
Efforts are being made to provide scholarships to school students, reduce the cost of education and improve the quality of education.
• Agriculture and Animal Husbandry
To increase the production of essential food items and ensure food security and food security, the Department continues to provide loans under the following major schemes:
New All-inclusive Rural Loan Scheme
Tea Development Programme Revolving Fund
Commercial Dairy Development Loan Scheme
These loan schemes and loan sub-schemes are funded by the Government of Sri Lanka, the Central Bank of Sri Lanka, donor agencies and participating financial institutions.
Reduce poverty in Sri Lanka..............!
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