Monday May 13, 2024
Monday May 13, 2024
Wednesday, 23 August 2023 02:00 - - {{hitsCtrl.values.hits}}
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The continuing deterioration of the Sri Lankan economy
Sri Lanka's political decisions and policies defy logic and reason and basic understanding of the working of institutions and economies. This has caused prodigious policy failures which are at the heart of the recent discontent among the masses. All economic and social rights in Sri Lanka, notably poverty, right to food security, education and healthcare have been seriously affected, especially, since 2021. The most recent estimate is that 7 million people are poor in Sri Lanka. More than 7.5 million (33 % of the total number of families) face acute food insecurity (FAO), getting into 79th place in the severely food insecure list. In 2019, we were in 66th place and clearly food insecurity increased during the last four years (2019-2023). Food insecurity is more likely to increase because of the negative growth rate of GDP in 2023.
The major drought that has affected the nation currently can further exacerbate poverty and food security. We lost much of the potential for human capital gains. Only 14% of Grade 3 students acquired minimum competency in literacy and only 15 % in numeracy.
The health sector is in the doldrums. According to the Health Ministry, 43 % of children below five years are malnourished. Many patients die in hospitals due to lack of proper medication. The recent deaths and abuse of medication is Sri Lanka’s shame. Dengue control has failed and in June and July, 2023, nearly 50,000 patients were admitted to hospitals at an enormous cost. The dengue problem worsened due to the failure to integrate different disciplinary perspectives into a holistic framework to provide sustainable dengue control (see Gamini Herath, The dengue menace in Sri Lanka; Can Sri Lankan politicians ever get this right, Daily FT 2017).
In the next section, I focus mostly on poverty alleviation and the failure of poverty alleviation projects in Sri Lanka.
Poverty in Sri Lanka
The poverty level in Sri Lanka doubled from 13.1 % to 25 % between 2021 and 2022 and 2.5 million more people are expected to join the ranks of the poor this year(Faris Hadad-Zervos, World Bank 2023) . The World Bank estimates that 5.7 % of the population lives less than 10 % above the poverty line and a further 5.6 % between 10 and 20 % above the poverty line. Poverty exacted a heavy toll on the poor and the vulnerable because the Government failed to address the needs of the poor who are trying to protect their crops from animals, obtain the needed agricultural inputs at reasonable prices, quality and quantity and sell their crops at reasonable prices and send children to school. The poor are at greatest risk from environmental damage, droughts, floods, climate change and competition for resources. Poverty is affected by a number of factors as given below:
The poor definitions of poverty and development
Sri Lanka's many poverty alleviation programs failed because poverty alleviation reflects the total lack of correct understanding of the nature of poverty and the concept of economic development. Poverty is an enforced lack of socially perceived necessities forced onto people, but not chosen by them. Clearer and more transparent definitions of poverty are essential for policy that puts poverty reduction at its centre.
Monetary approaches dominate as poverty reduction mechanisms (E.g. Samurdhi, Aswesuma, etc). The capability approach, social exclusion and participatory approaches are also used as other definitions. Similarly, the $2.9 per day used by the World Bank to measure poverty is also misleading. Poverty should embody a multitude of factors (physical, economics, social, and psychological) which must be integrated in any effective poverty alleviation program. Lack of adequate food, shelter, education, and health and vulnerability to ill health, economic dislocation, and natural disasters are important factors determining poverty. The poor suffer from ill treatment by state institutions (agriculture, irrigation, water departments, land and forestry, health, etc) and hence are powerless to influence key decisions that affect their lives (World Bank 2000). Poverty is linked to freedom. It is “living without fundamental freedoms of actions and choice that makes life better-off” (Sen in World Bank 2000). If freedom is lacking, poverty can never be resolved.
Why “Aswesuma and “Samurdhi” failed in Sri Lanka
The poverty elimination programs have failed in Sri Lanka as decades long experience on poverty alleviation shows. Poverty elimination programs such as “Samurdhi” and “Aswesuma” were never clearly defined and achievements were dubious. The failure of the most recent Aswesuma welfare program and Samurdhi occurred due to blatant political weaponisation of these programs, selection bias and elimination of many beneficiaries. Our development objectives must be multi-objective and income should not be the only metric. Can someone define “Aswesuma” except that it is a hurriedly cobbled together political program to deliver funds. Many beneficiaries protested against not selecting deserving candidates, which would deprive the poor of a vital stream of income. Millions protested on the streets and 968,000 appeals and 17,500 objections were received to reassess Aswesuma. As many as 1,280,000 families receiving Samurdhi have applied for Aswesuma, of which 887,653 have qualified. It was decided by the Cabinet of Ministers to extend the Samurdhi allowance to 393,094 families who are not qualified but receiving Samurdhi. The failure is crystal clear. Now both programs are used and it is chaotic to say the least. Obviously, the poverty affected population was not selected correctly. Samurdhi did the same thing and many people were left out. If correct definitions and criteria were used, the same poverty groups will be selected. Many of the poor fell between these two stools. Studies in Peru and India show that nearly half the population identified as poor using monetary poverty was not in the capability poverty group. Thus, the definition of poverty is important and we should know what we are aiming at.
The existing Samurdhi program has a broad mandate of lifting people out of poverty but Aswesuma will direct cash transfers to deserving people without a third party. People throng at banks to open accounts to receive Aswesuma and stay in long queues, sometimes for several days. Only administrative changes have been introduced and there is no innovation here in Aswesuma. Samurdhi pays through the Samurdhi bank and Aswesuma pays through a different channel. Recently, a person in the queue had fallen dead, reminiscent of petrol queues in the past.
Clearly, these ad hoc processes of moving people from one program to another and vice versa is evidence that Aswesuma programs have no proper thinking or well-established objectives. It is changed for the sake of change with only some administrative changes in the payment system. No innovative changes are observed in Aswesuma and it would simply entrench more people in chronic poverty. Aswesuma was launched by President Ranil Wickremesinghe to create an entrepreneurial state instead of a welfare state but Aswesuma would only create dependence. Which element in Aswesuma can generate entrepreneurial talent among the population, I cannot see any. Poverty would never be resolved with these puerile political exercises unless they are changed into a new vision through innovation and in-depth analysis by internationally acclaimed experts on poverty and development.
There are many Sri Lankan academics well versed on these issues. Poverty elimination requires a multi-objective approach but Aswesuma is not multi-objective because access to basic infrastructure and services, improved nutrition, schooling and healthcare for children, human capital development and productivity growth were not explicitly incorporated. Countries that have reduced poverty focused investments on people, through provision of health, education and social protection. As Sri Lanka strives towards eliminating poverty by 2030, people-centred investments will be the key towards improving the livelihoods of the marginalised and disadvantaged segments of society.
Sri Lanka is a signatory to the Sustainable Development Goals (SDGs). There are 17 SDGs but the most important, SDG1 and 2 are providing basic human rights (no poverty and no hunger), and building human capabilities (health and education for all) SDGs 3 and 4 to eliminate poverty and hunger and achieving health and education for all. This required less than 2 % of the average GDP of developing countries in the region, between 2016-2030 (ESCAP). Countries that succeeded in reducing poverty through social protection, designed and implemented universal programs instead of poverty-targeting ones. Clearly, it is not spending money but how we spend money is the critical issue.
Any poverty elimination program must enhance social empowerment through the creation of skilled professionals. For the poor and vulnerable families, access to education and healthcare are important routes out of poverty. Empowering women economically by investing in women’s economic empowerment leads to greater equality, poverty reduction and inclusive economic growth. Women make enormous contributions to economies, whether in businesses, on farms, as entrepreneurs or employees, or by doing unpaid care work at home.
Agriculture and natural resources are crucial for pro-poor growth. Disasters can slow poverty reduction and hunger alleviation, especially those who depend on agricultural activities, making them highly vulnerable to climate change and can cause income losses in the future. The hundreds of farmers protesting now, especially in the South, reflect serious neglect of investment in the environment, forestry and water sectors decades ago. For example, are we learning from the current water crisis in Udawalawe and Samanalawewa? Did we not know that climate change (CC) is real, and 30 years ago other countries were making investments to minimise the impact of CC. Climate change can affect the extreme poor disproportionately because about 80 % live in rural areas and depend on agricultural activities. CC can exacerbate existing inequalities and amplify risk and deprivation for these most vulnerable families including children.
The intersection between the Covid pandemic and the intensifying climate crisis can increase fresh water scarcity making it a critical national security issue. With the food affordability crisis spreading, urgent investment in resilient and sustainable food systems where the poor live, are needed. Unless these are firmly embodied in Aswesuma, we are basically pouring money into a bottomless pit. Poverty will remain even by year 2048 and Ranil’s developed state by 2048 is simply a myth.
Critical decisions are made by politicians, most of whom have no legitimacy in people’s eyes. Our elected representatives bring no vision, skills, or sophistication into the political process. They are intellectually-immature but make decisions which can make some groups better off than others creating inequalities. Inequality causes poverty. A nation ruled by a bunch of semi-literate or illiterate Ministers is the biggest obstacle to national progress and why Sri Lanka remains a developing country with continuing penury.
Freedom as development
According to Amartya Sen from Harvard University, who won the 1998 Nobel prize, freedom is both the primary objective of development, and the principal means of development. According to Sen, development is enhanced by democracy and the protection of human rights, especially, freedom of the press. Development is “the enhancement of freedoms that allow people to lead lives that they have but in Sri Lanka, freedom of the press, democracy, human rights, regular elections have been pushed into oblivion. Freedom implies what people can achieve (their capabilities) For Sen, “capability deprivation” is a better measure of poverty than low income.
Clearly, sustainability of poverty programs cannot be achieved. Sri Lankan politicians however, see freedom as a problem for political stability and development. They adopt repressive interventions to stifle freedom.
East Asia provided social opportunities in the form of schooling, basic health care, basic land reform, and microcredit which succeeded the individual entrepreneurs to enter the market and do away with programs like Samurdhi and Aswesuma which are being continued for more than five decades in Sri Lanka with no significant elimination of poverty. Cultural freedoms should be embraced as basic human rights and as necessities for the development of the increasingly diverse societies in Sri Lanka.
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Poor democratic governance and poverty alleviation in Sri Lanka
Development works well in true democracies where integrity of politicians is unquestioned. Recently, in Singapore, the Minister of Transport was removed by the Prime Minister and the Speaker resigned for some misdemeanours. In the USA, the 64-year-old Mike Pence, Vice-president of the US under Donald Trump, told supporters that Mr. Trump demanded him to choose "between him and the constitution; I chose the constitution”. The Federal prosecutors charged Donald Trump who faces 37 charges relating to retention of highly sensitive reports on nuclear warfare. Former Prime Minister of Britain – Boris Johnson – resigned his seat in Parliament on finding him guilty of lying about breaking Covid rules at No 10 Downing Street during the lockdown in Britain. Just two days ago, the Minister for Justice in New Zealand resigned when caught for drunken driving. The former Prime Minister of Malaysia, has been jailed for twelve years for embezzlement of public funds. Imran Khan, rightly or wrongly, has been jailed for three years in Pakistan.
Incidents of corruption and misbehavior by Sri Lankan politicians are legion. The Health Minister of Sri Lanka Keheliya Rambuwella is under scathing criticism for many deaths caused due to importation of substandard drugs. He fell from the balcony of a Melbourne hotel a few years ago and the Sri Lankan Government had to spend nearly ten million rupees of people’s money for his hospital bills in Melbourne. The very same person did not pay Rs. 11 million of electricity bills to the Government. His son, who was drunk, walked into the cockpit of a British Airways plane and the excuse by this nincompoop Minister was that his son sleep walks. Yet, our politicians vociferously espouse their capabilities to resurrect the country’s health.
Minister Bandula Gunawardena, another nincompoop, recently removed a “karanda” tree in the night. The tree was under protection. He then planted 200 karanda trees of some dubious genus in Kataragama. This is how Bandula Gunawardena conceptualised biodiversity and environmental conservation. Recently, a Member of the Government, Ali Sabry smuggled 3.5 kgs of gold from Dubai. He was fined Rs. 7.5 million and the next day he was in Parliament voting on important legislation. Recently the Minister openly abused an officer managing the phosphate mine in Eppawala and requested the officer’s interdiction. The Eppawala phosphate mine is a treasure trove for agriculture and the best use of such resources is critical.
The Minister of Education used the rudest language to attack a female member of the Opposition. Many people now call him the “kunuharapacharya”, an apt description indeed. This is our Education Minister. Think of many murderers and those who are convicted for bribery in the Sri Lankan Parliament. We have foreign citizens as Ministers in the Sri Lankan Parliament. I can cite many more examples and if I were to compile all of them into a chronicle, it would be larger than the “Mahavamsa”. This will be our heritage.
President Ranil Wickeremesinghe violated rules at will, spurned court decisions and cancelled local elections. Yet he wants the country to become a developed nation by 2048, making a mockery of Sri Lankan development.
Press Freedom, Democracy and Poverty
The link between democracy, press freedom and development has been well articulated by several studies, including from The World Bank and the United Nations. These studies show that the more freedom the journalists have, the greater the control over corruption, and the greater the focus of resources on priority development issues (BBC Worldwide, 16 January 2008). Our politicians attempt to restrict freedom of choice because they believe excessive freedom can precipitate violence which can threaten political harmony. But the Sri Lanka youth have passed their political puberty and would not believe in such monstrosities.
Freedom of expression is fundamental to diverse cultural expression, creativity, and innovation. Expanding social freedoms by providing educational opportunities (especially among women) can increase income and reduce infant mortality. Similarly, economic freedom leads to faster income growth, which in turn provides the resources necessary for education, health care, and similar goods. Environmentalists consider 'sustainable development as freedom,' the achievement of the greatest possible level of freedom without restricting the access of future generations to these same freedoms. Sri Lanka's behaviour is not consistent with the SDGs (sustainable development goals) of the UN. Press freedom and the right to information have a direct relevance to achieving Goal 16, specifically target 10, as it envisages the protection of the right to access information, and journalists’ safety. Open societies protect press freedom crucial to sustainable development, generating new ideas, including the formation and scrutiny of values. It is argued that famines do not occur in functioning democracies with freedom of the press.
Conclusion
An important question is how to deal with multidimensionality because individual well-being manifests itself in multiple dimensions. Deprivation of poverty includes material aspects of life, social, cultural and political aspects. Poverty can be measured in terms of resources (the monetary approach) or in terms of the freedom to live the life one values. The monetary approach assumes that monetary metrics either captures the essence of deprivation, or proxies all other deprivations. According to Sen, welfare assessment cannot be presented correctly in the form of a single index. Aggregation depends on whether and how the severity of deprivation in each of the basic dimensions should be included.
Poverty has long-term consequences (e.g. child malnutrition as revealed by low height for age, social exclusion such as race). We need to examine the concept of lifetime poverty to identify how many individuals are chronically poor throughout their lives and critical decisions led to lifetime poverty. Sri Lanka is not clear about transitory poverty or lifetime poverty. They are not the same and need different strategies to mitigate them.
Poverty research is dominated by counting and surveying the poor instead of uncovering the structural causes. We should be critical of our own approaches to poverty where the poor are considered as mere objects. We need the whole range of poverty research, and academia and should not wait until the poor come to us and start to speak out. Politicians must listen to them more carefully. We must not relegate the past to history. We must learn from the wisdom in “aragalaya”.
The failure of the most recent Aswesuma welfare program and Samurdhi occurred due to blatant political weaponisation of these programs, selection bias and elimination of many beneficiaries. Our development objectives must be multi-objective and income should not be the only metric. Can someone define “Aswesuma” except that it is a hurriedly cobbled together political program to deliver funds.