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Sri Lanka ranks among top five most unequal nations in Asia Pacific region

13 December 2023 12:01 am - 8     - {{hitsCtrl.values.hits}}

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  • Sri Lanka among top 5 countries exhibiting highest wealth inequality along with Thailand, China, Myanmar, and India
  • New UNDP report says top 1% of Sri Lankans own 31% of the total personal wealth in the country while bottom 50% only own less than 4%
  • It also says 33.4% of the populace grappling with vulnerability and deprivation concerning debt-related metrics

 

Azusa Kubota, Resident Representative, UNDP in Sri Lanka officially handing over a copy of the Regional Human Development Report to Anura Dissanayake, Secretary to the Prime Minister

 

  • By Nishel Fernando


Fragile and uneven economic recovery has further exacerbated income and wealth inequalities in the country, placing Sri Lanka among the top five most unequal countries in the Asia Pacific, according to the United Nations Development Programme (UNDP).

“In the aftermath of the COVID-19 pandemic and economic crisis, unmet aspirations are born. 

In the context of Sri Lanka’s economic crisis, multiple assessments and simulations speculate that previous poverty reduction gains may now be lost,” said Dr. Vagisha Gunasekara, Country Economist from the UNDP Policy and Engagement Team.

Even before the economic crisis, the country was grappling with prevalent disparities and enduring structural exclusions, including entrenched inequality, gender biases, and a sizable informal sector. 


These challenges were further exacerbated by the pandemic and economic crisis, compounded by rising inflation resulting from geopolitical conflicts.

On top of this, the region and Sri Lanka are facing a triple planetary crisis— climate change, pollution, and biodiversity loss, which are hitting the most vulnerable populations the hardest. 

Dr.Gunasekara highlighted that high income and wealth inequalities, which remain persistent, specially after the pandemic and economic crisis, are major concerns for the country.

“Sri Lanka is a country with fairly high income inequality; we are in the top one third of the highest unequal countries in the world, and wealth inequality is also very high. For example, the top one percent of Sri Lankans own 31 percent of the total personal wealth in the country, while the bottom 50 percent only owns less than 4 percent of the overall wealth in the country. This provides us with a snapshot of how unequal our country is,” she noted.


These remarks were shared at the national launch of UNDP 2024 Asia-Pacific Human Development Report, titled ‘Making Our Future: New Directions for Human Development in Asia and the Pacific,’ held in Colombo yesterday.
According to the report, Sri Lanka is among the top five countries exhibiting the highest wealth inequality, as measured by the wealth share of the top 10 percent, along with Thailand, China, Myanmar, and India.

Although Sri Lanka scored 0.782 in the Human Development Index (HDI) in 2021, gaining 0.002 points over the previous year with a rank of 73, Dr. Gunasekara pointed out that the country loses 10.6 percent points when the HDI is adjusted for inequality.
Meanwhile, she also expressed concerns about the looming indebtedness of the population, with 33.4 percent of the populace grappling with vulnerability and deprivation concerning debt-related metrics. 


As of June this year, household debt accounted for 7.4 percent of the country’s Nominal GDP.
The primary catalysts behind incurring debt included economic activities (42.5 percent), housing construction or repair (32.8 percent), and basic consumption of food, fuel, and other household expenses (19.3 percent). 


For households seeking funds for consumption, the primary sources of debt include pawning (31.1 percent), money lenders (24 percent), and banks (23.5 percent). In particular, urban areas had a higher proportion of households that borrowed for basic consumption (26.2 percent) compared to rural areas (17.9 percent).
The UNDP report recommended mainstreaming human development, recalibrating growth strategy, and making change happen as the way forward. 
To make this happen, Dr. Gunasekara stressed that the government needs to expand people’s choices by focusing on governance, enhancing civic engagement, and eliminating discrimination, while enhancing human security through social protection programmes and insurance and risk finance tools, and accelerating the transition towards carbon-neutral and climate-resilient development.

 


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  Comments - 8

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  • VJ Wednesday, 13 December 2023 11:04 AM

    Sri Lanka will be number one soon and we all can be proud of that. Serve Kiri bath and take a day off.

    Racketeer Wednesday, 13 December 2023 01:29 PM

    This situation will continue only for a few more years and the scenerio will change after NPP takes over.

    Nadi Karunaratne Wednesday, 13 December 2023 04:02 PM

    You have a corrupt political clas a biddable and inefficient tax department and a wealthy elite who wrap themselves in the flag while squirreling their fabulous wealth away in off shore bank accounts. Sri Lanka like many impoverished African nations is losing both it's educated workers and financial wealth to developed countries such that progress at home is virtually impossible.

    The Public Opinion Wednesday, 13 December 2023 10:23 PM

    After IMF program was implemented, Ranil and Rajapakse government along with CB governor Nandalal Weerasinghe are deliberately putting the entire burden of the economic crime of mismanagement on the ordinary people, the poor, small businessesmen and the professionals in a biased manner while protecting a small group of ultra rich who help them in elections with funds. No regard to court verdicts against the wrongdoers. Only people can change this in election next year.

    Jagath Ekanaya Thursday, 14 December 2023 03:03 AM

    We will reach the number one spot if the current corrupt politicians run the country.

    Richard McNeil Thursday, 14 December 2023 06:03 AM

    We didn’t need a UNDP report to tell us this! One only has to live here and look around you. Basic education at grassroots level is part of the answer. The universities turn out doctors and lawyers etc, who then leave to country. Educate the masses and take the power away from the monks!

    Crazy Rich Asians Thursday, 14 December 2023 07:19 AM

    What can you expect? Decades of inept governance and corruption has brought the country to the level of a beggar. If you are in a pit, stop digging.

    cherath Thursday, 14 December 2023 11:04 AM

    The best indicator of the social decline is the exponential growth in the number of recipients of Samurdhi and other bodies of government hand outs. Rather than boasting no end of the larger numbers the government facilitates, it should provide know how, techniques, small financial assistance and equipment to the needy communities to help themselves to stand on their own feet over time UNDER SUPERVISION.


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