Financial Times

Widening gap between the rich and the poor
By Dinesh Ranasinghe
Today many talk about achieving an eight percent economic growth, but they do not emphasize the equality of distribution of that growth or income amongst the population. It is preferred to have higher development and lesser inequality than concentrated deveopment, which would make the rich richer and the poor poorer.

Our nation boasts about surpassing the per capita income of Rs.100,000 per year and being recognized as a not-so poor country, this figure is merely a calculation arrived by dividing the national income by the population.
They should note that the lowest incoming earning 20% of our population only gets 3.6% of the total national income, whilst the top income earning 20% segment enjoys more than 55% of the national income.

Therefore, it is clear that per capita GDP may be a distorted concept if viewed in isolation. Also it is believed in the rural areas, where the development and economic activity is less, the situation is worse with many earning a bare minimum, which is not even sufficient to survive.

Economic growth is the growth in sectors like agriculture, industry and services. However, the prosperity in these sectors itself doesn’t constitute economic development and equality. Economic development is a much broader term which encompasses certain other factors such as quality of life in terms of ability and access to satisfy basic needs, income distribution, education and many more other than economic growth per-se. In recent years though many international organizations praise our efforts despite the civil war and the tsunami, our World Human Development Rank has been hovering around the nineties despite higher per capita income, which indicates the deteriorating/stagnant quality of life of the majority of people due to incomd constraints.

Recently it was reported that a single parent (a mother) working in a garments factory had been apprehended breaking into a neighboring grocery. Her intension was to steal milk powder and a few essentials for her and her newborn baby.

When questioned she said the burden of escalating prices forced her into crime. Such social crises are not the first to happen in Sri Lanka, which takes place within the framework of a serious political and economic crisis where the poor become poorer. Likewise, the worst consequence is the deteriorating lives of people igniting social unrest and uprisings. To counter this, policies should be drafted to close the gap between the rich and the poor and develop rural economies and secure earnings of the poor.

As an initiative Mahinda Chinthanaya should be commended, but the implementation/effects are yet to be seen. The Sri Lankan leadership has recognized the need for rural development and equality, but the incapability to act quickly, efficiently in a responsible manner as the present time require, may see the country as a land of the poor and the frustrated.

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