SL’s poor not just poor but destitute and barely managing to survive
On February 2, Finance Minister Ravi Karunanayake signed a gazette bringing the Welfare Benefits Act (WBA) into effect from February 15. The Act, passed in 2002 by a previous incarnation of the current regime, provides a “legal framework for the payment of all welfare relief benefits”.
The WBA contemplates a comprehensive national institutional structure to channel all welfare-related payments and transfers. A 5-member Welfare Benefits Board chaired by a Commissioner of Welfare Benefits will sit at the apex of this structure.
The structure envisaged by the Act also includes Selection Committees to oversee entry as well as exit of beneficiaries into schemes and an appeals mechanism. The broad powers of the Welfare Benefits include investing “any surplus monies of the Board in such investments, as the Board considers prudent.”
The WBA itself does not deal with the actual schemes, levels of benefits or conditionalities; regulations with respect to these being left to the concerned minister. While the Finance Minister gazetted the law, it is not clear under which ministry its implementation and effectively the system itself will remain?
Social protection: A right or a request?
Under the WBA all those desirous of accessing welfare benefits need to make an application through the Grama Niladhari. It is not clear when this phase will be initiated but it appears that the onus is on those who need assistance to seek it. The Act spells out no obligations on Selection Committees or frontline public servants to pro-actively identify and recruit all those in need of assistance.
Interestingly, Section 22 of the Act provides for recovery from officers in case of incorrect payments arising from any failures on their part. However, there are no consequences for errors of exclusion, raising accountability concerns. Seeking assistance under the Act would entail completing a detailed information schedule—not outlined in the Act itself—regarding various social and economic parameters relating to the applicant.
The question is whether the schedule contains reference to a wide range of determinants of poverty. Can it capture the household’s exposure to a range of shocks, whether forced relocation without compensation in Colombo or the experience of war-related displacement and return?
How would war-related traumas be accounted for? How sensitive would the schedule be to exposure or vulnerability to disasters? Or, how does it account for erosion and accretion in access to common property or shared natural resources?
We simply do not know the answer to any of these questions.
Reforms, yes but in what direction?
The enforcement of the WBA, 14 years after its passage, is a step towards consolidating all the different welfare schemes and transfers. Backed by the World Bank, the ‘reforms’ eventually envisage the integration of around 39 welfare programmes across 11 central ministries.
The crucial question is whether the most far-reaching ‘reforms’ of the social welfare and protection system does not merit a much wider political discussion as to their direction and substance? What do welfare ‘reforms’ mean in a context of rising inequality—a prominent feature of post-war Sri Lanka?
It is not just a question of how these ‘reforms’ will account for the poor but also the large number of poor or ‘near-poor’. In 2013, pushing the poverty line up by 10 per cent implied an additional 800,000 Sri Lankans being classified as poor. The World Bank’s most recent research finds over 40 per cent of the population living on less than 225 rupees per person per day, i.e., at risk of falling into poverty.
What all this underlines is that those below the poverty line tend to be not just poor, but in fact destitute and barely managing to survive. Then there is the question of the concentration of poverty in the post-war north and east, the up-country and in areas like Monaragala. How are all these realities being accounted for by these ‘reforms’? What does targeting mean in this context?
The same Minister who gazetted the WBA into force, essentially disparaged Sri Lanka’s history of public provisioning and welfare in his most recent Budget Speech. Are these ‘reforms’ part of the “drastic reforms to all sectors” he said were needed to “remove various barriers in the economy which disrupt the smooth operation of free markets”?
Fundamentally, what is the goal of these ‘reforms’—a social protection system that is more efficient or one that is more just? The two are not antithetical but what is prioritised will shape both processes and outcomes, affecting lives of vulnerable communities.
Yes, there is much that can and must be improved about Sri Lanka’s social protection system. For the moment though there are too many unknowns about the ‘reforms’; those who matter the most, the people, also know the least.
(This is a first in a Business Times series by the Centre for Poverty Analysis (CEPA) looking at poverty-related policy interventions in Sri Lanka)