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Finance Ministry to review social protection programmes; consultants to be recruited
View(s):The Finance Ministry is to recruit consultants to study Sri Lanka’s social protection programme–which includes pensions, employment, health and other welfare benefits–and to make recommendations for a new policy.
The assignments include a US$ 40,000 (Rs 6.2mn) contract for a comprehensive assessment of existing social protection structures; a US$ 25,000 (Rs 4mn) commission for the development of a strategy to take beneficiaries off welfare programmes; and another US$ 25,000 task to develop a disaster recovery plan.
All three components are part of a total US$ 75mn (Rs 11bn) World Bank-funded loan signed in 2016 to develop a system that better manages selection, administration and payments to beneficiaries of welfare programmes. The Social Safety Nets Project (SSNP) will help the Government develop a single registry of citizens and it will contain information on families and economies.
“The idea is to assess the existing system and to come up with a new policy,” said Welfare Benefits Board Chairman S. Rannuge, who heads the project. “Existing welfare programmes are fragmented and there is no cohesion. We are not sure if the right persons are receiving benefits. On the other hand, some have no access to welfare packages and are waiting for years to get benefits. It has to be studied whether this is due to systemic, financial or other errors.”
Also under the project, a “unified social registry” containing data on current and former programme beneficiaries and new applicants is now being developed by the Information and Communication Technology Agency (ICTA).
It has long been pointed out that Sri Lanka’s social protection schemes are fragmented. There are more than 30 welfare programmes operated by 11 ministries without centralisation. There is no digital record and, therefore, no coordination, monitoring or evaluation. The World Bank has found that, although programme costs have risen over time, fewer of the poorest households are now covered. As part of the project, data in the registry will be updated periodically, and records will be reviewed to ensure that only eligible beneficiaries remain. To prevent fraudulent applications, each individual will be identified in the registry using biometric technology.
The terms of reference for the consultancies explain that households now potentially receive benefits from several ministries, provincial councils and other related institutions. “The degree of duplication is not known, due to deficiencies in both systems and policies,” it states. The largest consultancy will be awarded to a company while the other two will be to individual experts. Some of the areas the comprehensive assessment will focus on include income cash transfers, in-kind programmes and assistance such as cooked meals, textbooks and transport subsidies for students as well as methods for coping with disasters, droughts and floods.
Also to be covered are social security programmes such as pensions, disability, and survivor and health coverage. Another key area which has proved politically sensitive is labour protection. A 2007 World Bank study found that, “Sri Lanka’s labour market institutions provide excessive job protection for formal sector workers”. It concluded that the country’s severance pay system is “one of the most restrictive severance pay systems in the world”. For example, a Sri Lankan worker with 20 years of experience is awarded by a severance pay of 39 monthly wages versus average of 16 in other Asian countries and six in OECD countries, it said.
The study put forward as a policy option the reduction of “excessive job security for formal sector workers” saying it will not only enhance productivity but also improve job prospects for vulnerable groups.