Socialist Democratic Republic of Sri Lanka - Is it socialist?

21 May 2014 05:06 am - 1 - {{hitsCtrl.values.hits}}

A A A

Presently there is a substantial discourse on whether the Democratic Socialist Republic of Sri Lanka is waning in its commitment to the institutions of democracy. This insight explores a different question, is it waning its commitments to social institutions?

Economics of social commitments
Government expenditure can be classified into three categories: expenditure on public services, social services and economic services. In this classification, social services i.e. expenditure on education, health, welfare and community services play an important role in terms of creating economic opportunities, making opportunities accessible to all and protecting the vulnerable.

In other words, expenditure on social services helps to ensure that the benefits of economic growth are better shared within a society. The economic jargon for this is “inclusive growth”. Additionally, when applied wisely (to encourage rather than discourage hard work and entrepreneurship) they also help to unleash economic potential. For example, education and healthcare directly improve the welfare of the poor even as these services augment their human capital and productive capacity. Social protection (e.g. pension schemes) helps to protect individuals from the risks and uncertainties of life, and free them to engage confidently in the social and economic life of the country.

The Asian Development Bank’s economic outlook released in April 2014, shows ‘developing’ Asia doing poorly in terms of government expenditure on health, education and social protection compared to other regions in the world. This analysis shows that while ‘developing’ Asia lags behind the rest of the world in commitments to social institutions, ‘developing’ Sri Lanka is doing even worse than the Asian average.

Asia lagging behind rest of the world
According to ADB Outlook 2014, developing Asia lags behind advanced economies as well as its peers in Latin America in terms of public expenditure on education, health and social protection (Exhibit 1). The public spending on education averages 5.3 percent of gross domestic product (GDP) in advanced economies and 5.5 percent in Latin America but only 2.9 percent in Asia. The difference is more stark for public spending on healthcare, which equals 8.1 percent of GDP on average in the developed world and 3.9 percent in Latin America but a paltry 2.4 percent in developing Asia. Finally, Asian governments devote 6.2 percent of GDP to social protection, essentially half of Latin America’s 12 percent and less than a third of the 20 percent in advanced economies.

Sri Lanka lagging
behind Asia
While Asia is lagging behind the rest of the world, Sri Lanka is lagging behind Asia in terms of spending on education, health and social protection (i.e. expenditure on social welfare and community services).

While the Asian average government expenditure on education as a percentage of GDP is at 2.9 percent, Sri Lanka stands even below the Asian average by spending less than 2 percent of GDP on education. The same is true of government expenditure on health. While the Asian average spending on healthcare is at 2.4 percent of GDP, Sri Lanka’s spending is well below 1.5 percent. While developing Asia spends only 6.2 percent of its GDP on social protection, Sri Lanka spends only 2.4 percent.

Negative trends need to be reversed

Expenditure is not only low, it has been declining during the better part of the last decade (since 2006, Exhibit 2). The expenditure on education, health and community services as a percentage of GDP has been in steady decline and approaching record lows. This trend suggests that Sri Lanka’s commitments to its social institutions are waning.

Even existing social spending is increasingly bypassing traditional social institutional structures and being channelled through new methods that are more connected to political patronage (e.g. the Rural Development Organisations in Sri Lanka have become increasingly prone to political capture). Sri Lanka has held on to many of the social protection institutions from its pre-independence days (e.g. public healthcare), but suffer from flagging professionalism in management and lower funding commitments. These trends spell trouble ahead for the economic potential of the country.

The expenditures on health and education are especially important. Neglecting these can have huge economic and social consequences and more-so in the medium to long term. It is clear that the “socialist” tag attached to the name of the country is not being reflected in its current trend of policy decisions. Sri Lanka’s resulting status of being a laggard in its social commitments, even in lagging Asia, is an economic problem that needs attention.

(Verité Research provides strategic analysis and advice for governments and the private sector in Asia. Comments welcome, email insights@veriteresearch.org)

Order Gifts and Flowers to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Grocery, Kids Toys, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,Astrology, Courier/Delivery, Medicine Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka

Comments - 1

Das Saturday, 24 May 2014 12:24 PM

All children of politicians and affluent citizens obtain english education and enter foreign universities.Others are compelled to compete for limited places in national universities and only those graduating in medicine,engineering and the sciences are able to obtain employment.
Every citizen wishes english education for his children,but this is denied.
Misfits are appointed as university teachers and admiistraters.
Most of the national income goes to support the politicians and the bloated beaurocracy.
At least 6% of the budget is necessary for edcucation.

Add comment
Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Socialist Democratic Republic of Sri Lanka - Is it socialist?

Comments - 1

Add comment

RECOMMENDED

‘Spike in blast fishing’ poses renewed threats to Sri Lanka’s marine ecosystems

UDA owned land in Thalawathugoda; UDA Minister Prasanna Ranatunga under the spotlight for forceful occupation of reserved land

Loss-making SMIB faces political pressure in recovering loans

Baltimore Bridge Collapse: MV Dali, SL authorities anchored in mystery?

Has Sri Lanka become a potential hub for the illegal wildlife trade?

Spotlight on Moragahakanda Development Project Moragolla villagers lose livelihoods and down to one meal a day

Ambitious Sri Lankan jobseekers ‘trafficked into Ukraine war zones’

Most Viewed in News

Complaint lodged over Piumi Hansamali's possession of Gota’s Range Rover

Sri Lankan among NASA’s new crew for next simulated Mars journey

Racing event tragedy leaves seven dead including eight-year-old child

Ranil Wickremesinghe caravan moves on despite barking dogs

Uma Oya Development Project inaugurated

Two racing drivers arrested over Fox Hill tragedy

MIRROR CRICKET

Is Chamari Athapaththu Sri Lanka’s greatest cricketer ever?

Athapaththu back atop ICC Women’s ODI Batting Rankings

Chamari Athapaththu sets big goal for T20 World Cup

How does CSK get best out of Pathirana?

TODAY'S HEADLINES

No footboard riding allowed, no liability for accidents: Railways Department

Six patients claim Rs.600 million from Keheliya and others for permanent loss of sight

SLPP, UNP initiates action for forming broad alliance

Here is the way!

Pakistan lose key players for last two T20Is against New Zealand

Sri Lanka secures third spot in South Asian Kurash Championship 2024

Athapaththu back atop ICC Women’s ODI Batting Rankings

Army forms committee to probe Diyatalawa Fox Hill Supercross accident