Reforms slash poverty in Sri Lanka's western province, bad policies worsen it elsewhere
Economic reforms has slashed poverty in Sri Lanka's western province while backward policies that kept agriculture stagnant in rural areas were trapping people in poverty, researchers have found.
Poverty in the western province fell from 19 to 11 percent between 1991 and 2002, with the region growing at twice or three times the rate of other provinces, which were largely based on agriculture.
The researchers also found that growth in inequality was lowest in the Western province, calling into question a popular opinion put forward by some critics of economic growth.
"Western province also experienced the smallest increase in inequality, which is similar to the kind of lesson we have learnt elsewhere," Ambar Narayan, a World Bank economist who co-authored the report said a workshop in Colombo.
"Even within Sri Lanka the faster growing region is not the region which has the fastest increase in inequality. Growth and inequality does not go hand in hand."
The Western Province, the richest region in the country, had the lowest proportional increase measured by the Gini coefficient of 12 percent while the Uva Province, the poorest region, recorded the highest proportional increase 53 percent.
From 1990/91 to 2002, the (consumption) Gini coefficient for the Western Province increased from 0.356 to 0.4, while the Gini coefficient for the Uva Province increased from 0.257 to 0.392.
Sri Lanka's Presidential Secretary Lalith Weeratunga said the report provided a valuable basis for future policy making.
"Our planning has sometimes been on gut feeling and emotional experiences," Weeratunga said.
"But I think poverty reduction must be attempted on a more rational and scientific basis."
While the government's economic development framework Mahind Chinthana did not believe that urbanization was the answer to reducing poverty, a high priority was placed by the government on modernizing the village and pushing infrastructure into the provinces.
"It shows that the government thinking is quite in line with what is being recommended," Weeratunga said,
"Particularly I am happy that report provides adequate data, enriching the debate on understand of poverty and inequality in Sri Lanka."
The World Bank in a report released just before the development forum also called for policy reform to modernize agriculture, which has been stagnant, and a root cause of poverty in rural areas, while market reforms in the 1980 and 1990's have pushed up no-farm economic activity in the western province.
"In particular, agricultural policies have been geared toward the achievement of self-sufficiency in paddy production rather than the development of high-value agricultural markets," the report The Economy, Regional Disparities, and Global Opportunities said.
"As a result, private investment in commercial agriculture and agro-business has been limited."
Sri Lanka has many policies biased towards rice cultivation, including laws that ban farmers using land for other purposes. Between 1991 and 2000 valued added in tea grew by 3.4 percent, coconut 2.5 but, it fell by 0.7 percent in rice.
"While the immediate intention of policies in these areas has been to achieve seemingly sound social objectives, these policies have ultimately hurt the poor," the report said.
CPA overview of trends in 2006 now available
War, Peace and Governance in Sri Lanka: Overview and Trends 2006, the latest report by the Centre for Policy Alternatives (CPA), Colombo, Sri Lanka is now available for immediate download from the CPA website http://www.cpalanka.org/research_papers/War_Peace_Governance.pdf
The report a CPA release said issues related to human security governance, the peace process, constitutional developments, the economy, public opinion shifts and media, the report provides a comprehensive overview of key social, political and economic developments in 2006, with projections into 2007.
It also covers the emergent trends and consolidation of positions and strategies by actors such as the Government, the International Community, civil society, the LTTE and the Karuna group.
"This report clearly flags a country in crisis", Dr. Pakiasothy Saravanamuttu, Executive Director of CPA said. "Sri Lanka must decide clearly, and quickly, whether it wants peace and democratic governance. Most importantly, urgent action must be taken to arrest the humanitarian crisis and strengthen human rights protection. This report indicates trends to the contrary — protracted conflict with grave consequences for peace, human rights and governance."
Also speaking on the report, Mirak Raheem, Senior Researcher at CPA and a co-author of the document said, "The trends and projections in this report are vital for an understanding on how best to prepare for and respond to the escalation of violence in Sri Lanka."
The report will be useful in helping civil society strategies initiatives that address the growing governance, human rights and humanitarian crisis in Sri Lanka.
The Centre for Policy Alternatives (CPA) is an independent, non-partisan organization that focuses primarily on issues of governance and conflict resolution. Formed in 1996 in the firm belief that the vital contribution of civil society to the public policy debate is in need of strengthening, CPA is committed to programmes of research and advocacy through which public policy is critiqued, alternatives identified and disseminated.
More inclusive economic growth necessary for rapid poverty reduction
Siyambalaanduwa in Monaragala district most poverty stricken area
Poverty reduction at the national level has been slow in Sri Lanka due to widening growth disparities across sectors and regions a new World Bank report "Poverty Assessment for Sri Lanka: Engendering Growth with Equity: Opportunities and Challenges" stated.
This was revealed at a workshop held in Colombo yesterday to discuss the key findings of the World Bank report.
“Poverty reduction has been hampered by slow economic growth outside the Western Province which remains predominantly rural. Sri Lanka needs to integrate the rural economy into the growth path enjoyed by the Western Province," said Naoko Ishii, World Bank Country Director in Sri Lanka opening the workshop.
This report was done in close collaboration with a number of local partners and it explores the reasons behind the slow and uneven rate of poverty reduction in the country, high and widening inequality between and within regions, sectors and how economic growth can be made more inclusive of lagging regions or sectors.
Special attention has been paid to the challenges faced by the war ravaged North and East, increased poverty in estates and stagnation in rural areas. The report further states that poverty reduction in Sri Lanka has been uneven across sectors—rapid in the urban sector, but slow or stagnant in rural and estate sectors. The national poverty rate reduced from 26 percent in 1990-91 to 23 percent in 2002. While urban poverty halved during this period, rural poverty declined by less than 5 percentage points and poverty in the estates (plantation sector) increased significantly— making this sector the poorest in the country. These estimates exclude the North and East, for which data suitable for measuring poverty was not available.
"A high concentration of households around the poverty line in 2002 suggests a sizable vulnerable population at risk of falling into poverty as a result of economic shocks or natural disasters," says Princess Ventura, economist World Bank and co-author of the report.
This finding indicates the need to improve the effectiveness of safety net and welfare programs, including in the estate sector where coverage is limited. Also a number of interrelated factors have held the poor back from accessing opportunities in the dynamic sectors of the economy. Higher poverty is associated with areas characterized by low connectivity to towns and markets, and lack of access to electricity and quality human capital, all of which limit the growth of non-farm enterprises.
Poverty is also associated with individual attributes of household members, such as low educational attainment and employment in low-skilled occupations in the informal sector including agricultural wage work. Higher school dropout rate among children of poor families at secondary and tertiary levels and malnutrition among poor children limit lifetime earning potential and contribute to keeping them trapped in a poverty cycle. The multifaceted nature of poverty calls for coordinated interventions.
At the live discussion the participants unanimously emphasised the importance of restoring peace and stable government policies in the process of eradicating poverty in Sri Lanka. Further more they pointed out the need to empower women, youth and the elderly.
Lalith Weeratunga Secretary to the President in his overview on poverty and inequality said, “We have comprehensive programme in our ten year plan forward through Mahinda Chinthana where we focused on modernisation instead of urbanisation.”
The programmes they have implemented under Mahinda Chinthana focuses on the upliftment of the villages which have perished over the years. Accordingly the government has steered holistic approaches through programmes such as, “Nanasala”-to impart knowledge of Information Technology among the rural community, “Gama Naguma”-to upgrade the village life, “Maga Naguma”- for road development.
“Each village should get electricity and common telecommunication system. Dailong has already taken the lead in taking telecommunication to villages” added Weeratunga.
Department of Census and Statistics in their survey has identified Siyambalaanduwa in Monaragala district as the most poverty stricken area among the 119 poverty stricken villages they have selected.
Dr. R.M.K Ratnayake Secretary Ministry of Trade and Commerce pointed out that everything is correlated in poverty. Even though urban sector poverty is reduced by 10% and rural sector by 5% state sector poverty has increased by 50%. “Farmers don’t want their sons and daughters to follow their footsteps and take up agriculture instead they wanted them out of it. In order to avoid it we should set up new polices” commented Dr. Ratnayake. He highlighted the fact that agricultural people can be encouraged through Land titling Act where they will get an opportunity to own lands. “Through improving agriculture sector we can increase productivity” he added.
Further elaborating on poverty and inequality in Sri Lanka Dr. Dileni Gunawardena Senior Lecturer, Department of Economics and Statistics University of Peradeniya said that urbanization should be taken out of the Western Province. “The concept Wewai- Dagabai Gamai- pansalai doesn’t assist eradication of poverty” expressed Dr. Gunawardena. She recognised inflation as another candidate for poverty and coordination dilemma of every government. She also pointed out the importance of education in eradicating poverty.
Free engineering training for rural kids
The Engineering faculty, University of Peradeniya together with Kelani Cables Ltd, has come forward to assist rural students unable to gain university entrance to study engineering by providing facilities for them to study electric engineering technology free of charge.
As a leading and renowned institute of technical education in Sri Lanka the engineering faculty of Peradeniya University has co-partnered with Kelani Cables Ltd in providing technical know-how to these students.
This programme was inaugurated with the participation of professor S.B.S.Abekoon, the Dean of the faculty of Engineering of Peradebiya university; Hemantha Perera the Managing Director of Kelani Cables Ltd, Dr. Sanath Alahakoon the Divisional Head of Engineering Faculty of Peradeniya University, Professor Janaka B.Ekanayaka of Engineering Faculty , Christian Nover, Assistant General Manager of Kelani Cables Ltd.
Through this scheme, Engineers and the Technicians engaged in production of cables are provided with the technical resources available at the engineering faculty. The selection of students for this technical programme would be through an interview board and the selection would be purely on merit.
Kelani Cables Ltd which is a local company with a standing of 37 years of experience and a workforce of over 350 employees of both sexes has an annual turn over of 1.78 billions. The company has been awarded the silver medal in 2005 and the gold medal in 2006 for being the most outstanding entrepreneur of the year.
At the end of this technical training course conducted by the engineering faculty of Peradeniya University and Kelani Cables Ltd the successful candidates would be awarded a university accepted certificate. The Engineering faculty of Peradeniya University and Kelani Cables Ltd have entered into a five year contract to provide this course of study of which particulars would be published in newspapers shortly.