A ticket balance

Tuesday, 24 November 2020 00:54 - - {{hitsCtrl.values.hits}}

One point that has been underscored numerous times during recent Budget analysis was the effort taken by the Government to shift focus onto investment as the bedrock of Sri Lanka’s growth. But there is still a dire need to manage public finances in a way that will provide support to millions of poor or risk more people being left behind due to COVID-19.

Recently Trade Minister Wimal Weerawansa was roundly criticised for his statement in Parliament suggesting that a family could live on Rs. 5,000 for two weeks. His comment brought to mind a similar lapse by Minister Bandula Gunawardena some time ago where he said Rs. 3,000 would be enough. These sort of lapses on the part of public representatives is both insensitive and dangerous because it seeks to dismiss or disregard the serious livelihood challenges faced by a majority of Sri Lankans.

While the official poverty rate in Sri Lanka is low, the majority of children live in families that are struggling financially, and 36% of children are living in families with a per person expenditure of less than Rs. 278 a day. As many as 74% live in families with a per person expenditure of less than Rs. 506 per day.

The data is part of a new UNICEF Sri Lanka report, which recommends the establishment of a Universal Child Benefit (UCB) mechanism as a vital step to reduce the poverty and vulnerability faced by families and children in Sri Lanka, which for many has been exacerbated by the COVID-19 pandemic.

Produced with support from the European Union (EU) the ‘Investing in the Future: A Universal Child Benefit for Sri Lanka’s children’ report has been released to mark the 31st anniversary of the Convention of the Rights of the Child (CRC), celebrated globally on 20 November as World Children’s Day.

The report outlines options for providing all children with a monthly benefit at a relatively low cost to the country, thus making it financially feasible for Sri Lanka, while having a significant impact on child well-being and on the nation’s overall development.

Among the findings, the report notes that while Sri Lanka has made considerable progress in improving the lives of its children over decades, there are still large disparities in how children are faring depending on where they live or their family conditions.

For over 70% of Sri Lankan households, food comprises more than 40% of their total expenditure, limiting the capacity to invest in their children. Wasting affects 15% of children under the age of five years, which places Sri Lanka in the 10 worst countries on this indicator in the world. Stunting and wasting affect children across the welfare distribution, reflecting the fact that most families are living on limited incomes.

The COVID-19 crisis has likely exacerbated these challenges, as many families have lost all or part of their income, cut down on the number and quality of meals, depleted their savings and resorted to pawning and selling assets to generate income. This situation will continue into much of next year with income recovery likely to be slow despite all the proposals listed out in Budget 2021.

The only way the Government can meet these challenges is by creating fiscal space to invest in more social welfare, which will require a tricky macroeconomic balancing act.