ISSN: 1391 - 0531
Sunday, February 18, 2007
Vol. 41 - No 38
Financial Times  

World Bank preparing country strategy for next 4 years

The World Bank has embarked on the Country Assistance Strategy for Sri Lanka for the next four years and its new Poverty Assessment report will help in this process, its country director for Sri Lanka said this week.

"We hope the report will contribute to the debate and understanding of poverty in Sri Lanka," Naoko Ishii said adding that the report helped to raise new issues in the poverty situation.

The media was briefed this week about the "Poverty Assessment for Sri Lanka: Engendering Growth with Equity: Opportunities and Challenges" report and regional workshops held to discuss poverty issues.

For the first time, the Bank led a discussion in Uva, considered the most impoverished region. “We held a discussion with local parties there,” said Amba Narayan, senior economist World Bank and co-author of the report.

The report says poverty reduction at the national level has been slow in Sri Lanka due to widening growth disparities across sectors and regions.

It says poverty reduction has been hampered by slow economic growth outside the Western Province which remains predominantly rural.

The Western Province experienced the steepest reduction in poverty incidence-- from 19 to 11 percent between 1990/91 and 2002 - thanks to rapid economic growth. Growth was 2 to 3 times faster in the Western Province, which includes the main urban centre of the country, than in the rest of the country. Other provinces experienced modest growth and poverty reduction and in North West, Uva and Sabaragamuwa provinces poverty even increased as modest growth was combined with higher income inequality, the report said.

"The extent of poverty reduction in Sri Lanka will critically depend on how lagging regions and groups participate in the growth process," says Ambar Narayan, senior economist World Bank and co-author of the report. An important reason for slow growth outside the Western Province is stagnation in agriculture. Limited growth in agricultural incomes during 1991-2002 contributed to slow reduction in rural poverty where about 90 percent of the poor live.

Responding to questions about ‘nice’ growth rates trotted out by the government which means little to poorer sections of the society, Narayan said “more growth is better than no growth” but agreed that there should be equitable growth that benefits all communities.

“We care about where the growth comes from and the government too has expressed concern about lagging regions.”

At an earlier public forum on this report, it was revealed that poverty in the estate sector increased by 50 percent between 1990 and 2002 whereas urban poverty halved with rural poverty easing by a five percent.

Further needs such as looking at the estate sector as an industry and a business concern ‘not a welfare camp for the workers’, was also emphasized, while suggesting that the welfare of the estate community should be taken out of the hands of the trade unions and estate management.

Speaking at the release of the World Bank report on Sri Lanka Poverty Assessment in Colombo, Neranjana Gunatilleke, a senior professional at the Centre for Poverty Analysis (CEPA) said the fact that whether the welfare of the workers need to be taken care of by the industry alone or not is not spoken of and that it is an issue that need s to be addressed.

Gunatilleke said research conducted by CEPA identified the core issue in the estate sector as housing. The estate community is given workers quarters for their housing and if they live in them they have to work for the estate. Further there are other areas which have hindered the economic and social development of this sector such as the lack of national identity cards among its inhabitants which limits the prospects of the young community moving out of the estate sector to look for jobs.

“About 70 percent had at least one member of the family working outside the estate. Thus the flow of labour from the estates to the country is not limited. The bond between the workers and the management which keeps a web on the feelings of marginalisation has to be broken. It is not captive labour any more. We have gone half way with mainstreaming on this sector. We need to go the rest of the way too,” said Gunatilleke.

Speaking about the risks involved she said, “The estate community would lose the safety net of employment and welfare, the industry would lose a captive labour supply with a risk of disruption to production and the trade unions would on the other hand lose there power base and the state might lose export earnings.”

The report highlights even though the country is on par with middle-income countries and Millennium Development Goal timetables on various aspects, consumption and income poverty still persists and the poor continue to face basic welfare challenges such as malnutrition.

Basic interrelated constraints which prevent access by the poor to opportunities in more dynamic sectors of the economy such as inadequate connectivity to growth centres, lack of infrastructure facilities, poor quality schools and other public services, inadequate access to clean water, electricity, sanitation and quality of housing were also highlighted. The report warned of a possibility of the population in the estates, North and East, and the tsunami-affected coastal areas more likely to fall into the poverty cycle due to historical disadvantages or recent events like civil conflict or natural disasters.

“A high concentration of the households around the poverty line in 2002 suggests a sizable vulnerable population at the risk of falling into poverty as a result of economic shocks or natural disasters.”

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Copyright 2007 Wijeya Newspapers Ltd.Colombo. Sri Lanka.