What Remains to be Done: Minimising Inequality in Sri Lanka

25 January 2012 02:09 am - 0     - {{hitsCtrl.values.hits}}

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By Priyanthi FernandoExecutive Director,  Centre for Poverty Analysis
The Human Development Index (HDI) has become an alternative to Gross Domestic Product (GDP) for measuring ‘development’ or the progress of nations.  Introduced in the first Human Development Report published by the United Nations in 1990, it is based on the premise that “people are the real wealth of a nation”.  As Amartya Sen pointed out in the 20th Anniversary volume of the Human Development Report published in 2010 the HDI turned out to be almost as crude a measure as the GDP, but it did what it was expected to, move attention away from a singular focus on incomes.
It is encouraging to see that the HDI itself is evolving, and that as better and more data becomes available, more meaningful measures are used. Its evolution is testimony to the understanding that human development is complex and has multiple causes and effects. Recognising the inadequacy of a single measure to capture all dimensions of human development, the UNDP has recently developed three new indices to expand our understanding. They are; the Inequality-adjusted Human Development Index (IHDI), the Gender Inequality Index and the Multidimensional Poverty Index (MPI).  They help us focus on what remains to be done, despite great strides in human development over the last decades. 
The focus on what remains to be done is what is really important for Sri Lanka.  The   latest household Income and Expenditure survey for 2009/2010 suggests that the decrease in the Poverty Head Count Index recorded at the previous Household Income and Expenditure survey in 2006 has been consolidated. Our achievements in improving social conditions, health and education and the Millennium Development Goals (MDGs) are encouraging. But, it is in trying to work out what remains to be done that the IHDI becomes significant, because it focuses on inequality, and the aggregate national figures tend to hide a number of inequalities that exist in our society. 
The first step when thinking about what remains to be done, is to acknowledge that inequality exists and that it is increasing.
Table 1 (Marga Institute, 2009) shows clearly that the poorest peoples’ share of the income is declining, while the richest peoples’ share of the income is increasing.  The Gini coefficient shows that income disparities have grown significantly in the urban and estate sector and has remained relatively static in the rural sector.  We also know from other studies that the overall increases in consumption accrued disproportionately to the better off, and that growth in per capita consumption was negligible for the bottom 40 percent and sizeable for the top 20 percent of both urban and rural populations (World Bank 2007a).
The second point to bear in mind in the discussion on inequality in Sri Lanka is that it is also a spatial problem.  There are stark inequalities between geographical regions.  There are many indicators of geographical inequality. For instance, as sho wn in Table 2, it is common knowledge that the Western Province contributes over 50 percent of the country’s GDP. 
We also know that service provision, whether it is the provision of transport, electricity, education or health, is patchy and has considerable geographical variation. A particularly important geographical inequality has been created by the civil war.  People living in the areas of the North and East lost not just economic infrastructure, but also their livelihoods, their human resources (through death and out-migration), investment capacity and institutions.
The Household Income and Expenditure Survey of 2009/10 estimates Poverty Head Count Index of 13% and 15% for North and East provinces respectively which is higher than the national average. In addition, work done by Muthukrishna Sarvananthan (2005) suggests that indicators representing health and educational standards show the adverse impact of the conflict on human development aspects of people.
A third set of inequalities are found in the provision of services to different occupational groups and in the opportunities that are available to them. We know, for instance, that two-thirds of Sri Lanka’s work force is in the informal sector, and that informal sector employment is more insecure, and yields fewer benefits than employment in the formal sector.  The work done by the Centre for Poverty Analysis (CEPA) indicates that those who are engaged in small-holder rain-fed agriculture as a sole or major occupation, or as a wage labourer, are likely to be poor.   We also know that the incidence of income poverty is high among plantation workers and that they have fewer employment options and limited access to services.  But, we must also be aware, that there is inequality within this occupational group – with workers in private estates and working on small holdings without collective agreements, much worse off than those employed by the Regional Plantation Companies in terms of their entitlements and rights. 
Then there are also social inequalities imposed by our social structures, and our cultural groupings.  The most formidable inequalities are those that are linked with ethnicity and language.   A study by Gunewardene (2006) on disparities in wages by ethnicity in Sri Lanka, focusing on the Tamils outside of the northern and eastern provinces (so includes the Tamils in the plantation sector) concludes that Tamil men (outside the North and East) were underpaid compared to Sinhalese men in the same regions.
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What Remains...
She also showed that ‘discrimination’ did occur among men at the bottom of the wage distribution, and that minorities had restricted access to ‘good jobs’ – but this is very different when it comes to the higher levels.  We can see how language (whether it be knowledge of local languages or English) also limits access to services, and also to opportunities.  An ‘elephant in the room’ is that of caste inequalities, and another obvious, but not so well explored inequality, is that arising from political patronage.
Gender inequality is another aspect of cultural inequality, and while in Sri Lanka, gender inequalities seem to be minimal relative to education, health and employment opportunities (though there are studies that show that there are significant glass ceilings for women in employment), there are significant gender differences in terms of participation in the political space, and in the responsibilities for the care economy. We know that women are not equally represented in the legislature and in local government and that they are disproportionately involved in providing care for children, the sick and the elderly which in many instances, limits their life chances. The pressures of patriarchy on women in the different cultural milieu that makes up Sri Lankan society are documented and discussed. Pressures on men, in the context of violence and post-war have yet to be extensively explored.
There is some level of inequality also in the way children, older people and people with disabilities are excluded from the planning and the provision of services.  Their voices are rarely heard, their needs are not always acknowledged and the policies that focus on them where they exist are often not put into practice (e.g., the policy to enable disability access in all public buildings).
A different type of inequality emerges from the way development assistance is delivered – and we have seen this in post-tsunami and in the way some development agencies have dealt with internally-displaced communities or dispersed assistance in conflict-affected areas.  CEPA’s work indicates that inequality also arises from the targeting of the project for assistance and creating inequalities between the targeted group and their host communities (in the case of the displaced) or between the targeted group and their neighbours.
What remains to be done then is to construct a society that allows us to deal with these inequalities, now that we have more or less achieved our aggregate targets, and a middle income status. There is a real danger that a purely economic approach to growth is likely to exacerbate income inequality and push more people into wage labour and into the informal sector, increase the burden of care on women, and marginalise even further the elderly and the disabled.  It is important instead, to develop a growth model that also tackles the inequalities head on and targets those who are in danger of being left behind.  It is important also for development assistance to be sensitive to the existing inequalities and to ensure that they are not exacerbated.

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