The government has launched a social welfare scheme called “Aswesuma Social Welfare Programme” to help the poor segment of the society that has been affected by the ordinary economic system that has been shaped up for the high-income segment to further benefit and also by the current economic crisis. This seems to be a project under the social safety net envisaged by the International monetary Fund (IMF) in its programme for Sri Lanka.
This is the third such programme with professedly aimed at eradication of poverty that is to be implemented in the country since 1989. The Janasaviya (people’s strength) programme initiated by President Ranasinghe Premadasa through the Janasaviya Act of 1989 was the first such programme. The main purpose of the programme was to alleviate poverty and it provided ‘investment and consumption packages’ to between 150,000 and 165,000 families.
The programme had the support of even the World Bank which provided it with US$100 million in 1990 to establish the Janasaviya Trust Fund (JTF) to execute a five-year programme. The programme was replaced by another similar programme called Samurdhi (Prosperity) in 1995 during President Chandrika Kumaratunga’s tenure. The main goal of the Samurdhi Programme as of the Janasaviya, was to reduce poverty in Sri Lanka through development, based on public participation.
Under the programme food stamps were distributed among poor people, saving and credit programmes were implemented through Samurdhi banks and rehabilitation and development of community infrastructure were carries out. The World Bank supported this Programme as well by way of technical assistance. Over the years, the Samurdhi Programme underwent so many transformations.
There have been several common features of these two so-called poverty alleviation programmes. In spite of them having been aimed at eradication or at least minimizing poverty, the end result has been the other way around. Hence, it is worth on the part of the concerned authorities to weigh the pros and cons of them with a view to prevent recurrence of such situations, when implementing the latest social welfare programmes – the Aswesuma.
Firstly, though these were described as poverty alleviation programmes, they were in fact programmes of proverbial provision of a fish instead of providing a fishing rod. Major portion of the funds of the programmes was allocated for consumption and not for income generation. In fact, the amounts of financial assistance received by the individual families were not sufficient for both consumption and income generation purposes.
Secondly, they were seen as programmes isolated from the country’s general economic movements in the face of which they had to struggle to cope up with changing situations. This was felt in an extreme manner during the COVID-19 pandemic and the subsequent economic crisis. While explaining the outcome of the economic crisis, the representatives of the IMF told during a press briefing on March 21 “There have been incredible increases in the cost of living. There has been loss of employment, loss of livelihood, rising energy costs and falling real income that have really hit the population large and in particular, the poor and vulnerable who have no buffers to deal with this crisis.” The social welfare prgrammes failed to face these sudden economic tremors.
Thirdly, and most importantly, the objectives of the past programmes met with difficulties or totally failed owing to politicization of them, resulting in eligible people being dropped out and ineligible people being accommodated.
In 2007, the Centre for Poverty Analysis (CEPA), a not-for-profit organization founded by the Boston Consulting Group (BCG) found that the Samurdhi food stamp programme which constituted 80% of total programme budget missed about 40% of the households in the poorest quintile while almost 44% of the budget went to households in the top three quintiles. A review of the Samurdhi project by the World Bank had concluded that “Based on the empirical analysis of the distributional outcome, Samurdhi does not emerge as an efficient transfer programme. It is modestly successful in reaching the intended beneficiaries, but it transfers a large portion of its resources to the non-poor.”
The IMF representatives told the above press briefing “So right now the social safety net covers around 40% of poor household. That should be significantly increased and some social safety net spending is paid to relatively rich families. Around 10% is paid to rich segment of the Sri Lankan society. So that should be corrected.”
The most important issue is that these projects were severed from a viable economic development programme mainly due to the absence of such programmes under the successive governments. They hence, soon lack direction.
