The level of poverty increases with the (rising) level of corruption in any country, , according to a highly respected Sri Lankan economist.
Prof A D V De S Indraratna, President, Sri Lanka Economic Association (SLEA) made these comments while moderating the Open Forum on "Poverty in Sri Lanka: Strengthening Current Strategies" organized by SLEA in collaboration with Friedrich Ebert Stiftung Foundation (SESF) and held in Colombo recently. The audience with a diverse representation of various organizations and individuals raised their eyebrows on the reliability of government data and statistics that are relied upon on for various assumptions like per capita income, poverty line and inflation.
Referring to some of the statements made by Dr B M S Batagoda, Director General, National Planning (in an earlier presentation), C Maliyedda, a retired public servant said that there is a large number of infrastructure projects on the pretext of eliminating poverty, but he said that according to his thinking there appears to be no correlation between infrastructure development and poverty reduction, but the situation in this way would be worse in reducing poverty.
He said that these investments would reduce opportunities for the poor and appear that there is no poverty in the country, benefiting only a few rich. Prof Indraratna said that the poverty line which was 23% in 1995 now stands at 8.9% according to government statistics, but he said that it all depends how poverty is defined. It is true that there is development, but, he said that this development is not found in rural areas and they find much poverty in the rural sector that is not reflected in Colombo and in urban areas. He said that there is the indication that per capita income in Sri Lanka is above $2,000. There is also the view that around 40% of the population are getting less than a $2 a day while there are also a large number of people who are getting less than one dollar a day, indicating that there is much poverty, despite the statistics of the government. He questioned as to what extent development relates to poverty.
Ms Bettina Meier, Resident Representative, FESF inaugurating the Open Forum said that according to Mahatma Gandhi, poverty is the worst form of violence and it is an issue that deserves to be looked at over and over again.
She said that though poverty is measured in monetary terms, it is more than low income such as lack of access to basic services, lack of livelihood, social exclusion and vulnerability also the other facets of poverty as they deprive people of opportunities.
She said that Sri Lanka's economy has seen a rapid growth since the end of the war. There are investments, tourism is rising, and roads and infrastructure progressing. She said that the poverty line could be defined as minimum expenditure per person per month to fulfill basic needs and in 2010 it was estimated at around Rs 3,100 per person per month at a national level. Ms Meier said that she could not fathom as to how exactly the poverty line is being calculated and what exactly the term 'basic needs' actually is referred to.
She said, "As a lay person I am asking myself how can one have a decent life with a monthly expenditure of Rs 3,100? Given the prices of basic food, transport, education needs, is this figure enough to cover basic needs?"
On declining poverty, she said that some people are benefited by the economic growth, but she said that while some are getting richer, others appear to be getting poorer. She said the increase in food prices affect the poor adding that according to World Bank's Food Price Watch, between June 2010 and December 2010 alone the price of wheat has increased by 31% in Sri Lanka and the price of rice has increased by 12% during the same period. Speaking of the poor, she pointed out that there are 89,000 war widows in Sri Lanka and most of them have no income whatsoever. Speaking of malnutrition in Sri Lanka, Ms Meier said that one out of five children are born with low birth weight and about 29% of children under five are reported to be underweight, rising as high as 37.4% in some deprived districts, especially in the plantation sector.
She said that more than 1.6 million people are benefiting from the Samurdhi programme and overall the welfare system has proven to be very effective. Sri Lanka is way ahead in terms of human development in comparison to neighbouring countries. Dr Batagoda said that the main strategies of the government are to create a more conducive environment for investment; integrating into the global economy through five hubs; empowering the rural economy; diversification and growth of regional economies; urban -rural connectivity; revitalizing the agriculture sector; expanding production, efficiency and quality of domestic industries; globally competitive industrial sector; meeting energy needs of the country; knowledge-based economy; strategic reorientation of state owned enterprises; environmentally friendly urban development and sports economy.
He said the Poverty Reduction Strategy of the country requires a policy shift from cash transfers to support for building an assets base. However, in order to provide the basic consumption needs of the poor households, welfare transfer programmes have to be continued at a certain level. Considering these facts the Government has adopted a two-pronged strategy towards social protection. During the discussion time many questions were raised about how the basket for the poor has been computed at and there was a strong call for its revision, conforming to the prevailing price increases.