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Top 10 Facts about Poverty in Sri Lanka
Sri Lanka is working hard to reduce poverty with its partners such as the United Nations Development Program and the World Bank. The country has faced a number of development barriers, such as a three-decade civil war, which ended in 2009, and a devastating tsunami in 2004. While sustainable development is ongoing in the country, poverty in Sri Lanka is still a significant issue. Here are the most pressing facts about poverty in Sri Lanka.

Top 10 Facts about Poverty in Sri Lanka

  1. Poverty occurs in concentrated pockets in Sri Lanka. For example, former conflict districts such as Mullaitivu and Mannar have 28.8 and 20.1 percent of their citizens living in extreme poverty respectively. Extreme poverty rates are also high in the Batticaloa district (19.4 percent) and in the Monaragala district (20.8 percent).
  2. While certain areas have very high rates of extreme poverty, most poverty in Sri Lanka occurs in affluent districts such as Kurunegala. The Kurunegala district houses 7.7 percent of the country’s poorest citizens as opposed to the combined 3.4 percent in Mullaitivu and Mannar.
  3. About 85 percent of Sri Lanka’s poor live in rural districts, which often lack quality access to education. Rural pre-schools, for example, are often private and for-profit and oftentimes inaccessible or unavailable to poor families. Even if a family can afford pre-school for their children, the schools are little more than playgroups and do not provide an adequate education.
  4. Lack of quality education leads to rampant unemployment, as seen in many rural areas across Sri Lanka. Reportedly 27.7 percent of Sri Lanka’s youth, ages 15 to 24, are not receiving an education, training for future employment or are currently employed.
  5. Nearly 45 percent of Sri Lankans live on less than $5 a day. This means that living standards in certain areas of the country are very low.
  6. There are high rates of undernourishment, stunting and malnourishment in Sri Lanka, especially in children. An overall 22.1 percent of Sri Lanka’s population is undernourished, meaning they do not have enough to eat. In fact, 17.1 percent of Sri Lankan children under the age of five are malnourished and lack access to balanced diets; 17.3 percent of children under five have stunted growth, meaning they are too short for their ages.
  7. About 4.4 percent of Sri Lankans still lack access to electricity. Lack of electricity means that this population also lacks the benefit of refrigerators, washing machines and any other type of technology. Without technology or internet access, this population does not have access to opportunities that could help lift them out of poverty.
  8. Women, rural women especially, are not very economically active. Gender roles in Sri Lanka dictate that women do the bulk of unpaid care work in their households. Women are often responsible for rearing and educating their children, caring for elderly or sick family members, cooking and collecting daily water. Many women do not have time to earn money of their own and become financially independent.
  9. Sri Lanka’s growth rate reached a 16-year low in 2017 at 3.1 percent. Such an occurrence means that the nation’s rate of economic growth is in decline.
  10. Despite environmental disasters and other factors, poverty in Sri Lanka is actually declining. From 2006 to 2016, the rate of extreme poverty declined from 15.3 percent to 4.1 percent, which is among the lowest rates of poverty in the region.

Looking Forward

According to the World Bank, Sri Lanka’s economic outlook remains favorable despite recent declines. The organization reports, “Growth should continue to translate into poverty reduction and improvement in living standards.”

The country still has a long road ahead recovering from civil war and facing ongoing environmental crises, but the declining trend in poverty is a good sign for Sri Lanka’s future.

– Kathryn Quelle
Photo: Unsplash

poverty in Sri Lanka
Poverty in Sri Lanka has seen a decline from 22.7 percent in 2002 to 6.1 percent in 2012-13. However, the Northern and Eastern provinces of the country have not yet experienced much change. The places most affected by poverty are Mullaitivu at 28.8 percent, Mannar at 20.1 percent and Batticaloa district at 19.4 percent.

The Role of Millennium Challenge Corporation

Like in many developing countries, poverty in Sri Lanka has been declining, but the pace of decline has been very slow and irregular. One of the primary ways in which the government tries to reduce poverty is by focusing on achieving the Sustainable Development Goals (SDGs) and improving job opportunities for people.

Today, many world organizations assist developing countries in realizing their goals. The Millennium Challenge Corporation (MCC) is one such organization working towards alleviating global poverty. The group is an independent U.S. foreign aid agency which grants financial assistance to developing countries in order to help uplift them.

Process of Selection

The process of selecting the country eligible for a compact, large-scale five-year plan is done based on a 20 point criteria laid down by the organization. Only countries that practice good governance, work towards the welfare of the citizens and fulfill at least a minimum number of those set criteria are eligible to receive grants. MCC assists such countries in the development of various sectors like transportation, education, housing and so on.

The focus of MCC is to enable developing countries to achieve the SDGs and thereby reduce poverty. The organization started operating in 2004 and has so far signed compacts with 29 countries around the world.

MCC’s Role in Alleviating Poverty in Sri Lanka

In December 2016, the organization selected Sri Lanka to receive foreign aid after noting that the country passed 13 out of the 20 indicators on MCC’s policy scorecard. In June 2018, MCC advanced its partnership with Sri Lanka confirming its unswerving support in helping the country prosper and flourish. Caroline Nguyen, the Managing Director of MCC for Europe, Asia, Pacific, and Latin America visited the country from June 11th to 13th to finalize the proposed MCC compact which aims to reduce poverty in Sri Lanka.

MCC’s focus is on investing in land and transport projects of the government of Sri Lanka. The proposed compact aims to systematize the interregional movement of goods and people, regulate traffic congestions and help develop a more organized land administration.

MD Nguyen signed an agreement with the U.S. Embassy Deputy Chief of Mission, Robert Hilton, at the Ministry of Finance granting $2.6 million as financial aid for the same. This is in addition to the $7.4 million which was granted in July last year. Nguyen told The Sunday Leader “We are pleased to partner with Sri Lanka on a program that will reduce poverty through economic growth and improve lives in the country.”

Future Direction

Robert Hilton, the Deputy Chief of Mission, told the Asian Tribune, “the Millennium Challenge Corporation compact is an important part of the U.S. government’s commitment to work as partners with the people of Sri Lanka to support sustainable development throughout the country.”

The finalized MCC compact will be presented to the MCC’s Board of Directors for approval by late 2018. The organization assures it will fund the compact entirely through grants (which do not need to be repaid) rather than loans — a sustainable start to a bright future.

– Shruthi Nair
Photo: Flickr

Infrastructure in Sri LankaBetween the years of 1983 and 2009, a massive civil war raged on in Sri Lanka. The war caused many issues for the small island nation, but it dealt major blows to its infrastructure, particularly in the northern part of the country. Infrastructure in Sri Lanka is still in need of many improvements, but the government has taken some steps towards improving it.

Sri Lanka has the highest road density of all South Asian countries and in 2004 it reached out to the World Bank for aiding its road sector. With funding from the World Bank, among other organizations, the country was able to carry through the Road Sector Assistance Project (RSAP) and reconstruct its rural and national roads. A main objective of the project was to create an efficient national road system and therefore lower transportation costs for its population.

Another positive step for Sri Lanka was the creation of the Road Maintenance Trust Fund, which efficiently allocated resources for road maintenance in a way that was transparent to the public. The trust fund also created a sense of social responsibility for contractors, as it made them obligated to repair and renovate roads and public buildings like schools and health clinics.

In 2005, Sri Lanka requested aid from the Asian Development Bank (ADB) in order to improve services such as water supply, drainage and solid waste management. The ADB evaluated the use of these funds and determined that Sri Lanka was successful in improving living conditions and reducing poverty through the updating of infrastructure services.

Additionally, the Asian Development Bank funded the National Highways Sector Project in Sri Lanka since 2016. This project focused on upgrading about 223 kilometers of major highways in the country and also implemented a more efficient maintenance system. These improvements to the road system in Sri Lanka has made transportation much easier for many farmers and merchants who would previously travel long days to sell their products.

These steps show Sri Lanka moving in the right direction in terms of infrastructure. In the future, the main issues the country may face are related to lack of funding for infrastructure. In order to maintain this growth, the government should prioritize internal development and continue to partner with organizations like the ADB and the World Bank.

With the improvements to infrastructure in Sri Lanka, there have also been improvements to other areas of development throughout the country, such as poverty levels and access to medical care. If Sri Lanka can continue this trend, it will be doing a service to its residents, its economy, and its overall development.

– Liyanga de Silva

Photo: Flickr

Poverty in Sri Lanka
In many ways, poverty in Sri Lanka reflects its tumultuous history.

From 1983 to 2009, this South Asian country of 20 million was embroiled in a civil war pitting the rebellious Tamil Tigers against the state government. Rebel forces controlled the north and east of the island nation while the army held the center and south. Seven years after the Tigers’ defeat, poverty persists in the former rebel provinces. But progress has come steadily for the Sri Lankan people.

A recently released World Bank assessment of Sri Lankan poverty finds that less than 7 percent of Sri Lankans now live below the poverty line. This is down from 22.7 percent in 2002, 15.2 percent in 2006 and 8.9 percent in 2010. Increasing wages, urbanization and greater domestic demand for goods have contributed to the decline. As more Sri Lankans obtain jobs in industrial and service sectors, wages grow. As wages grow, so too does demand, generating more jobs.

 

Poverty in Sri Lanka

 

However, this decline is not uniform across the country. Mullaltivu, Mannar and Kilinochchi districts in the north have poverty rates of 28.8 percent, 20.1 percent and 12.7 percent, respectively. The eastern district of Batticaloa has a rate of 19.4 percent while the Monaragela district has a rate of 20.8 percent. Information regarding most of these districts was limited until the early 2010s, as the war made survey collection impossible.

Men and women have also not seen uniform gains. While men have a labor force participation rate close to 80 percent, only 40 percent of women are active in the labor market. They also have an unemployment rate of 6 percent, which is twice as high as men.

Additionally, social service programs are limited in Sri Lanka, so not only do women suffer from a lack of employment, they also do not receive government assistance to get them through times of need.

A key challenge to be overcome by Sri Lanka is its low tax rates. According to World Finance, Sri Lanka has “one of the lowest tax-to-GDP rates in the world.” Investing in education, rebuilding infrastructure and redistributing societal wealth become difficult without adequate taxation. This leads to the absence of the skilled workers and roads necessary for businesses to flourish.

Still, with stability comes development and with development comes wealth. Following the cessation of hostilities, Sri Lankans were able to use their talent to diversify away from agriculture into industrial and service jobs, lifting millions out of poverty as a result. Sri Lankan leaders also recognize the need to spread the wealth, giving hope to millions more.

Most notably, Prime Minister Ranil Wickremesinghe said, “A priority for us is the creation of more jobs that will minimize poverty and provide for prosperity for ALL Sri Lankans.” He plans to do this by making the country more attractive for foreign investment. “Towards this, we need to enhance our capacity to successfully compete in global markets while creating the necessary space for investments to come in.”

Overcoming poverty is a process. It requires stability, which Sri Lanka achieved in 2009. It requires individual initiative, which the Sri Lankan people have shown in diversifying their economy.

Finally, it requires government investment in education, infrastructure, health and social services. This final piece is essential to solving Sri Lanka’s poverty puzzle — and with strong leadership and support from the global community, Sri Lankans can look forward to a brighter future.

Dennis Sawyers

Sources: Department of Census and Statistics – Sri Lanka, The World Bank, World Finance
Sources: Borgen Magazine