• Academic economist Dr. Roshini Jayaweera emphasises the need for attention to detail in the process of selecting eligible beneficiaries for scientific, feasible, up-to-date and well-planned social welfare subsidy programmes  

Given the socio-economic hardships that have befallen Sri Lanka in recent memory, social welfare programmes are now more necessary than ever before. The country is quite familiar with such programmes, as it was more or less a welfare State even before the prevailing crisis erupted, and programmes such as Samurdhi have played a noticeable role when it comes to low and lower middle income classes. However, despite the increased need to cushion economically vulnerable groups from the impacts of the economic crisis, due to the crisis, the country’s ability to provide such support has also waned.

That is why any existing or future social welfare programmes require a great deal of planning based on updated, scientific and practical factors. According to the Kelaniya University’s Social Sciences Faculty’s Economics Department Senior Lecturer Dr. Roshini Jayaweera, in this process, the country needs to pay more attention to selecting deserving individuals and groups because at the moment, there are flaws in the implementation of that process. She explained this situation during an interview with The Daily Morning.

Following are excerpts of the interview:

How has the concept of the ‘welfare State’ evolved in Sri Lanka, especially during and due to crises situations?

Even before the prevailing crisis broke out, Sri Lanka was more or less a welfare State. For example, before we gained Independence in 1948, there were subsidy programmes such as the rice subsidy. However, it was not an issue because Sri Lanka’s export income was big enough to cover its import expenditure, especially due to the plantation sector that was well-developed and was working well with the service sectors and also because the country’s population was smaller. However, at that time, subsistence agriculture was not very prevalent. Therefore, since we had substantial foreign reserves thanks to the plantation sector, we were able to import rice and provide the said subsidy. That said, even after we gained independence, we continued to provide those subsidies, although our plantation sector did not function as effectively as before. We also started experiencing issues in our foreign reserves, especially after the mid 1950s.

In response to these challenges, the Governments of the time took certain measures, including prioritising the production of food as opposed to importing food. However, not only food, but there are also other aspects of a welfare State, including education, the health services, lands and houses, and transport-related subsidies. In a crisis situation, social welfare programmes are extremely important, because those who suffered from poverty before the crisis get affected the most during a crisis. There is also a group that barely manages to remain above the poverty line, but declines below the poverty line as they become poor when a crisis breaks out. These two groups need to be taken care of during a crisis, because they are more vulnerable when it comes to unemployment and income losses. There are several other groups that require attention, in addition to the poor. Among them are the disabled groups and those living with health issues such as kidney diseases. Assisting them is the responsibility of the Government. 

Do you think that Sri Lanka’s existing social welfare programmes have resulted in positive outcomes in general? 

We can think of some programmes that have been a success. Sri Lanka’s public health sector provides services for free and is accessible to any person. Any person can obtain the services of the public education sector as well. In terms of these two sectors, which provide free or subsidised services, the outcomes are satisfactory. Especially when it comes to health indicators such as infant and maternal mortality, before the crisis erupted, Sri Lanka had achieved a satisfactory place, which was good even for a developed country. In addition, despite various issues, in terms of accessibility, the free education system is also functioning well.

On the other hand, there are concerns as to whether certain welfare programmes were a failure. For example, the Samurdhi programme, of which the main purpose is poverty alleviation, triggers such concerns when we analyse its impact on poverty. According to data published by the Census and Statistics Department in its 2019 Household Income and Expenditure Survey, 14.3% of the population was in poverty. When calculating poverty, various social assistance programmes that the people receive, such as the Samurdhi allowance and pensions, had also been taken into account as income. The survey attempted to study whether the poverty rate would increase if such payments were not considered when calculating the income. The exemption of all social insurance programmes such as pensions increased the poverty rate from 14.3% to 16.9%, while the exemption of social assistance programmes, such as those given to those living with kidney diseases or disabilities, had increased the poverty rate to 18%. When only Samurdhi benefits were exempted, the poverty rate increased only up to 15.9% from 14.3%. I personally think that this impact of the Samurdhi programme is not adequate. We bear a massive administration cost to provide Samurdhi benefits, and the question we must ask is whether the said change in poverty is commensurate with the amount of money that has been spent to provide those benefits. Overall, I think that while certain welfare efforts have been successful, certain programmes have failed to meet expectations.

Do you think that Sri Lanka’s existing social welfare programmes are sustainable?

There are groups that require assistance and the Government knows that. However, on the other hand, due to the crisis, the Government is facing challenges pertaining to fiscal sustainability when providing social welfare benefits. We criticise the existing welfare programmes, especially when it comes to targeting. We should resolve those issues and restructure the existing welfare programmes, because we don’t have fiscal sustainability. That is necessary in order for us to be able to face the prevailing situation in a sustainable manner. We cannot completely do away with social welfare programmes, especially in the present context.  

Protecting economically-vulnerable groups is a main concern in Sri Lanka’s economic recovery process. What are the policy or legislative challenges that we face in this process?

One of the reasons why the Samurdhi programme is being criticised is its inclusion and exclusion, or targeting errors, which simply means issues in ensuring that those who receive the Samurdhi benefits are in fact those who deserve it. There is a group that receives it, although they don’t deserve it, and another group that does not receive it despite being eligible. In my opinion, the main reason for this issue is down to errors in data. People’s income and assets are not being recorded properly. In addition, there seems to be no proper coordination between the several Ministries that are handling welfare programmes, which is another issue.

These social welfare programmes were initially launched to assist people. However, later on, they became something that could be called a ‘political weapon’. Before 2019, or until the prevailing economic crisis emerged, our poverty was on the decline. If poverty was in fact declining, the number of people that receive welfare benefits such as Samurdhi should also decline. But, no such thing happened. Politicians proudly increased the number of Samurdhi beneficiaries. Those decisions are aimed at elections, not ending poverty. These programmes are good as concepts. However, their implementation is affected by personal relationships and biases. 

There is a growing concern that social welfare and poverty alleviation programmes should be gender sensitive. What do you think about it?

Welfare programmes should be gender sensitive, because women are at the centre of many economic challenges. In some cases, women are more vulnerable than men, especially in households where women take more responsibility in terms of financial management, and where women are burdened with unpaid care work in addition to economic challenges. On many occasions, women face more economic disruptions than men. In this context, I think that women need to be empowered and supported through welfare programmes.

In the context of the economic crisis, microfinance issues are likely to further exacerbate. In your opinion, what are the responsibilities of the Government, microfinance institutions and individuals (borrowers) with regard to microfinance loans?

Microfinance loan issues became a problem even before the economic crisis broke out. I think that both the people and microfinance institutions, or borrowers and lenders, are responsible for the present situation surrounding microfinance loans. 

There is a lack of scrutiny and coordination on the part of microfinance institutions. Due to the lack of coordination among institutions. An institution may give a loan to a person who has already obtained a loan from another institution, which contributes to increasing the borrowers’ debt burden. Microfinance institutions don’t provide loans for day-to-day consumption, but for livelihood efforts. However, due to the lack of monitoring and evaluation by microfinance institutions, people take loans and use that money for day-to-day expenses. The purpose of a loan should be to establish an income generation method, which could in turn help repay the loan, even though it is not what is happening at present. Microfinance institutions have a responsibility to conduct a check in order to evaluate whether those who borrow money can actually repay it and that the purpose of borrowing money is sensible in economic terms.