Monday, 20 October 2014 00:00
-
- {{hitsCtrl.values.hits}}
With an election on the horizon, President Mahinda Rajapaksa will launch the sixth phase of the ‘Divi Neguma’ program today under his brother’s Economic Development Ministry. It is expected to be launched in grand style, with Economic Development Minister Basil Rajapaksa joining the program from Katana, while 2.5 million families in 23,000 Grama Seva divisions throughout the country will also participate.
Under the sixth phase, seed packets containing seven varieties of food crops will be distributed among 2.5 million families in this crop season. Each family will be provided with seven varieties of vegetable seeds, nine vegetable plants and a fruit sapling. In addition 2.5 million coconut saplings will also be distributed, among much else according to reports.
The first phase of Divi Neguma was launched in March 2011, aiming to revive and strengthen the economy by raising family incomes. The scope of the program, at least on the surface, is impressive, but its impact on the ground together with heavy politicisation of social care raises questions of efficacy.
According to the Household Income & Expenditure Survey 2012/13 report, Rs. 40,887 is needed by an average family in Sri Lanka to meet their monthly household expenses while an urban household with less than four family members needs Rs. 59,001. If one goes by the Central Bank which puts per capita income at $ 3,000, a monthly income of Rs. 32,500 is allowed.
Yet, the new report has stated the average per capita income is Rs. 11,932 per month. More than 50% of Sri Lanka’s households make an income of less than Rs. 35,000 and while these could be supplemented by migrant worker remittances, it shows a deepening level of inequality. The Gini coefficient, which is used to measure the distribution of a nation’s wealth, is near the five point mark, underscoring the high levels of inequality.
On the surface, Sri Lanka has achieved good growth with poverty at single digit levels. But this is in contrast to the Government’s own poverty alleviation progams. At present the Government estimates 500,000 families are on Samurdhi and this is excluding the north and east while 43% of Colombo’s population alone live in shanties.
Despite strong economic growth, there is concern formal sector employment is showing very little growth while Sri Lanka’s informal sector continues to be large. A phenomenon of jobless growth has been observed by local think tanks. This means that the country’s employment growth is not really coming from the formal sector and this is a concern because it leads to the question as to whether economic growth is creating enough quality jobs.
Underemployment is a significant problem in Sri Lanka and not only does inequality undermine sustainable growth, but it also means that the technological transition to a knowledge economy is not happening in Sri Lanka. Though unemployment numbers continue to be low, it is doubtful if crucial industrial and technologically-advanced job creation is happening.
Continued trimming of Budget allocation on public spending including health and education also worsens the situation. Perhaps the time has come to evaluate Sri Lanka’s poverty barometers on a more holistic level, removed from the backdrop of politically-motivated programs and handouts. This would require significant maturation of thought from both the policymaker and public as decades of elections have been won on the backs of handout promises. Ultimately these programs have to feed into greater economic sustainability or they will only be a waste of public funds and a stopgap measure that will leave poverty undented.
