An Analysis of the Poverty and
Human Development in Sri Lanka
A Report
By
P.T.Attygalle
Principles of Economics
This research is based on the data and information of 1st year 1st semester
CONTENTS
1. INTRODUCTION.
2. ECONOMIC GROWTH AND DEVELOPMENT.
3. HUMAN DEVELOPMENT AND HUMAN DEVELOPMENT INDEX.
4. SUSTAINABILITY DEVELOPMENT.
5. POVERTY.
6. NATIONAL POVERTY LINE AND MULTIDIMENSIONAL POVERTY INDEX
7. SUSTAINABLE DEVELOPMENT GOALS OF UNITED
NATIONS.
8. THE POVERTY AND HUMAN DEVELOPMENT IN SRI
LANKA.
9. CONCLUSION.
10. RECOMMENDATION.
11. REFERENCES.
INTRODUCTION.
This report provides important information on poverty, human development, and other related economic conditions in Sri Lanka. They are described briefly and clearly based on examples and data. The current situation in Sri Lanka regarding economic growth and development is considered, based on post-independence economic data. Non-economic factors that contributed to the situation in economic growth and development are also mentioned in the report. The report also describes non-economic factors that contributed to the unsatisfactory change in economic growth and development.
The progress of human development in Sri Lanka compared to other Asian countries and the Human Development Index are discussed in detail. And it'll discuss the current situation clearly based on the data of the human resources index. Considers the importance and current status of sustainable development in Sri Lanka. The United Nations' goals of sustainable development are simply stated.
The report is considered poverty and how it has spread globally as well as in Sri Lanka. It considers the steps we can take to eradicate poverty as well as the decisions taken by Sri Lanka as a government. This report has been considered the factors contributing to poverty, including inequality in income distribution, as well as the other factors.
My advice to all readers
ECONOMIC GROWTH AND DEVELOPMENT OF SRI LANKA
Sri Lanka
has been a developing country for a long time. From time to time our country faced
various economic situations. It's not only happened by the economic problems, but
also there are political situations, Civil war, Global economic situations, and
many more various problems we had to face as a country. When we consider the
economy after the independence of 1948, we had a fairly developed economy. But after
the independence situation wasn't a good one for the economy.
As an example, in 1960 Sri Lanka's per capita GDP was 152 dollars,
Taiwan149, but by 1978 Sri Lanka's per capita GDP was 226, Taiwan 505.
MAIN POINTS OF SRI LANKA ECONOMY FROM 1960 TO 2014
- From 1961 to 1964 the government pursued a policy of controlling the economy.
- From 1965 to 1970 economic barriers somewhat relaxed.
- After 1977 Sri Lanka government was changed the economy to an open economy. Since then, we have had an open economy.
- Overall, the average annual GDP growth was 5.2% from 1991 to 2000.
- However, in 2001 GDP was a negative value. (-1.4%)
- Again, Sri Lanka's economic growth was becoming 4% in 2002.
- The resumption of the civil war in 2005 led to a steep increase in defense expenditure. The increased violence and lawlessness also prompted some donor countries to cut back on aid to the country.
- As a result of the civil war and world petroleum prices, inflation was increased to 20%.
- After the end of the civil war, economic growth increased to 8% in 2009 and 9.1% in 2010.
- However, the boom didn't last and the GDP growth for 2013 fell to 3.4% in 2013 and only slightly recovered to 4.5% in 2014.
- The main economic sectors of the country are tourism, tea export, apparel, textile, rice production, and other agricultural products. In addition to these economic sectors, overseas employment contributes highly to foreign exchange.
ECONOMY GROWTH AND DEVELOPMENT LAST 10YEARS
- After 2014 Sri Lanka's economic growth ratio was started to decrease.
- But according to the chart, we can expect a 4.19% economic growth rate in 2021.
- One of the reasons for this situation is starting again develop projects what we already stopped.
- But the target is not the easiest one with this Covid pandemic.
- But there is a problem in our country, it's poverty we can't take numbers as perfect value to describe the economy in Sri Lanka.
- Still, we have poverty, unemployment, and various economic problems.
- There are lots of people who are unable to fulfill at least their necessary needs.
HUMAN DEVELOPMENT AND
HUMAN DEVELOPMENT INDEX
Human development
Human development or the human
development approach is about expanding the richness of human life, rather than
simply the richness of the economy in which human beings live. In 1990 the
first Human Development Report introduced a new approach for advancing human
wellbeing. It is an approach that is focused on people and their opportunities
and choices.
Human development index
The Human Development Index (HDI) is
a summary measure of average achievement in key dimensions of human development:
a long and healthy life, being knowledgeable and having a decent standard of
living. The HDI is the geometric mean of normalized indices for each of the
three dimensions.
- As a country economic development is not only the main thing that we can decide a country is a developed country or not, but also there are humans so their wellbeing must be considered.
- In this case, there we can calculate the Human Development Index for calculating human wellbeing.
- The Human Development Index (HDI) is a summary measure of average achievement in key dimensions of human development: a long and healthy life, being knowledgeable and having a decent standard of living. The HDI is the geometric mean of normalized indices for each of the three dimensions.
 |
World
map representing Human Development Index categories (based on 2019
data, published in 2020). |
HUMAN DEVELOPMENT AND
HUMAN DEVELOPMENT INDEX SRI LANKA
- Sri Lanka takes 72nd place from 189 countries in the HDI ranking. it's a good situation as a country
- The HDI is measured on a 0-1 scale, Sri Lanka was measured .625 in 1990.
- Healthy life measures life expectancy at birth where Sri Lanka's average life expectancy is now just over 76 years. This is well above the World Health Organization’s 2016 global life expectancy rate of 72. That is the second-highest n South Asia where only the Maldives has Sri Lanka beat by one year.
- The knowledge dimension is measured through the expected years of schooling and mean years of schooling. Sri Lanka's expected years of schooling is 14 years and its mean years of schooling comes in at a little over 11 years.
- Compared to Sri Lanka, other South Asian countries aside from the Maldives are in the Medium Human Development or Low Human Development categories.
- India has been ranked at 129, Bhutan at 134, Bangladesh at 135, Nepal at 147, Pakistan at 152, and Afghanistan at 170 in the 2019 index.
|
Year |
HDI |
Ranking |
|
2019 |
0.782 |
72 |
|
2010 |
0.754 |
72 |
|
2000 |
0.691 |
70 |
SUSTAINABILITY
DEVELOPMENT
Sustainability development is known as not only using natural resources in the present process but also saving them for the future generation to fulfill their needs. Therefore Sustainability Development is not only utilizing existing resources but also developing them and protecting those resources for future generations to fulfill their necessary needs.
- The foundation of Sustainability Development is Sustainable Forest Management which was developed in the 17th and 18th centuries.
- It contains two key concepts. Those are
- The concept of needs - Essential needs of the world's poor.
- The idea of limitations imposed by the state of technology and social organization on the environment's ability to meet present and future needs. — World Commission on Environment and Development, Our Common Future (1987)
- In 1992, the UN Conference on Environment and Development published the Earth Charter, which outlines the building of a just, sustainable, and peaceful global society in the 21st century.
- In Sustainability Development everyone is a person who uses information.
Sri
Lanka Sustainability Development Index
+ Overall score = 66.9
+ Overall rank = 94
+ Spillover score = 96.5
Scheme of Sustainability Development
 |
Scheme of sustainable development:
|
at the confluence of three constituent
parts. (2006) |
- Sustainability Development can be three spheres. Those are social, environmental, and economic.
- This three spheres framework was initially proposed by the economist Rene Passat in 1979.
- Sometimes there may be four spheres with including politics
POVERTY
Poverty is the state of not having
enough material possessions or income for a person's basic needs. Poverty may
include social, economic, and political elements. We can see some different
types of poverty here.
- Situational Poverty - This has happened through unexpected crises or losses, and this is often temporary. Environmental disasters, divorce, health problems can because by this situation.
- Generational poverty - This occurs in families where at least two generations have been born as poverty.
- Absolute poverty - This means there are some people who can't fulfill their necessary needs. (Foods, cloth, houses)
- Relative poverty - This refers to the economic status of a family whose income is insufficient to meet its society's average standard of living.
- Urban poverty - This occurs in metropolitan areas with populations of at least 50,000 people.
- Rural poverty - occurs in nonmetropolitan areas with populations below 50,000. The rural poverty rate is growing and has exceeded the urban rate every year since data collection began in the 1960s.
The Effects of Poverty
- Emotional and social challenges.
- Acute and chronic stressors.
- Cognitive lags.
- Health and safety issues
Solutions for Poverty
- Develop and implement rapid and sustained economic growth policies and programs.
- Improve management of water and other natural resources.
- Invest in and implement agricultural programs.
- Encourage countries to engage in trade as a path out of poverty.
- Create and improve access to jobs.
- Providing all people with access to basic social services.
- Progressively developing social protection systems to support those who cannot support themselves.
- Remove barriers to equal access to resources and services.
NATIONAL POVERTY LINE AND
MULTI-DIMENSIONAL POVERTY INDEX
The national poverty line is the minimum level of income
deemed adequate in a particular country.
the poverty line is usually calculated by the cost of necessary
resources used by elder humans within a year. The poverty line could be calculated
annually. The poverty line is a higher value in developed countries than in developing
countries.
Multi-Dimensional Poverty Index is an international measure of acute
poverty covering over 100 developing countries. The Multi-Dimensional Poverty
Index assesses poverty at individually.
Multidimensional poverty Index
(MPI)= 0.009(2016)
Multidimensional poverty Headcount
Index (H)= 2.4 % (2016)
Sri Lanka Poverty Line
- Sri Lanka is a lower-middle-income country.
- There was a civil war in Sri Lanka for about 30years. The economy and the people suffered from that.
- We can be happy about the actions Sri Lanka takes to avoid poverty but there is lots of people who still suffering from poverty.
- There are about over 40% of the population are above the poverty line.
- Further, many groups are highly vulnerable with a higher probability of falling into poverty in the advent of a shock.
- From the last calculations, we can see Polonnaruwa is the most vulnerable poverty district in Sri Lanka. And also, Colombo is the lowest one.
- Here we can see the national poverty line is decreasing, Poverty alleviation is a global goal by 2030 in line with the Sustainable Development Goals.
SUSTAINABLE DEVELOPMENT
GOALS OF UNITED NATIONS
In September 2015, the General
Assembly adopted the 2030 Agenda for Sustainable Development that includes 17
Sustainable Development Goals (SDGs). Building on the principle of “leaving no
one behind”, the new Agenda emphasizes a holistic approach to achieving
sustainable development for all.The newly implemented 2030 Agenda for
Sustainable Development holds a deep promise for persons with disabilities
everywhere.
Goal
1 - No poverty
Economic growth must be inclusive to provide sustainable jobs and promote equality
Goal
2 - Zero hunger
The
food and agriculture sector offers key solutions for development and is
central to hunger and poverty eradication.
Goal 3 - Good health and well-being
Ensuring healthy lives and promoting
the well-being of all at all ages is essential to sustainable development.
Goal
4 - Quality education
Goal
5 - Gender equality
Gender
equality is not only a fundamental human right but a necessary foundation for
a peaceful, prosperous and sustainable world.
Goal
6 - Clean water and sanitation
Clean,
accessible water for all is an essential part of the world we want to live in.
Goal
7 - Affordable and clean energy
Energy
is central to nearly every major challenge and opportunity.
Goal
8: Decent work and economic growth
Sustainable
economic growth will require societies to create conditions that allow
people to have quality jobs.
Goal
9: Industry, Innovation and Infrastructure
Investments
in infrastructure are crucial to achieving sustainable development.
Goal
10: Reduced inequality
To
reduce inequalities, policies should be universal in principle, paying
attention to the needs of disadvantaged and marginalized populations.
Goal
11: Sustainable cities and communities
Goal
12: Responsible consumption and production
Responsible
Production and Consumption
Goal
13: Climate action
Climate
change is a global challenge that affects everyone, everywhere.
Goal
14: Life below water
Careful
management of this essential global resource is a key feature of a sustainable
future.
Goal
15: Life on land
Sustainably
manage forests, combat desertification, halt and reverse land degradation, halt
biodiversity loss
Goal
16: Peace and justice strong institutions
Access
to justice for all, and building effective, accountable institutions at all
levels.
GOAL
17: Partnerships to achieve the goal
Revitalize
the global partnership for sustainable development.
THE POVERTY AND HUMAN DEVELOPMENT IN SRI LANKA
Sri
Lanka is an island country. There is a 21.7 billion population here. However,
in the vocational period, this may be increased from foreigners. Sri Lanka people and
the economy suffered from the civil war from 1983 to 2009. therefore, poverty is
the main turning point in our economy because it's a main economic problem for
us as a country.
In 2002 our poverty rate was 22.7 % then after 10 years, it's decreased to 6.7 %. In 2016 it was 4.1%. Therefore, we can see the poverty in Sri Lanka is decreasing. But there is income inequality.
A
large scale of the population is living in rural areas it's about 75% in 2013
and also 85% of the poor population are also living in the rural sector. It's one
reason for this unequal spatial distribution of wealth. The large scale of the
wealth of Sri Lanka is centralized to the urban sector. Therefore rural citizens have a problem with
resources. But after the civil war, the government started to development of these
rural areas.
Almost
30% of the workforce and about 50% of poor employees are worked in the agriculture
sector. Typically, there are lower wages and lower chances to advance their
jobs. So, we have a problem as a country it's how to increase their income.
Other
socioeconomic issues, such as malnutrition and climate change, directly affect
Sri Lanka’s poverty rate. According to the World Food Program, 22% of Sri Lankans
are undernourished or malnourished which signifies that many citizens lack
necessary vitamins and minerals.
To combat these issues, the Sri Lankan government partnered with the World Food Programmed to provide “technical and policy support to build national capacity to ensure access to food, end malnutrition and improve the productivity and incomes of smallholder farmers.” Additionally, the Sri Lankan government has made significant advances in reducing maternal mortality and increasing access to primary education.
The
percentage of skilled practitioners attending births in Sri Lanka has increased
in recent years. Resultantly, Sri Lanka’s maternal mortality ratio has
decreased from 500-600 maternal deaths per 100,000 live births to 60 maternal
deaths per 100,000 live births in 2020.
Education
is one of the most salient factors in alleviating poverty. Today, 99.08% of
children ages 5 to 14 years old attend primary school in Sri Lanka.
Predictions
determine that Sri Lanka will experience a 25 percent (or $750 million)
decrease in exports due to the COVID pandemic. As a result of that, we had to cut
off top export industries like Tea, Apparel, and Rubber.
Therefore, we can decide it has made significant strides to reduce its poverty rate.
Human
Development in Sri Lanka
The
latest report of the United Nations shows that Sri Lanka has made a significant gain
from the human development sector. Sri Lanka gained 0.782 index scoring and take
72nd place from over 189 countries in 2019. The HDI is measured on a 0-1 scale
and in 2000 Sri Lanka was measured 0.691. And maintained an annual 0.49 percent
growth in HDI from 2010 to 2018
The
HDI is a summary of several factors that can be categorized under three broad
dimensions:
- Long and healthy life.
- Knowledge.
- Decent standards of living.
Life
expectancy at birth in Sri Lanka is 76 years. It's a good point because HDI
average life expectancy at birth is 72 years. When we consider other Asian
countries, Sri Lanka takes 2nd place in life expectancy at birth.
The
knowledge dimension is measured through the expected years of schooling and
mean years of schooling. Sri Lanka's expected years of schooling is 14 years,
and its mean years of schooling come in at a little over 11 years.
The
decent standard of living is measured through Gross National Income per capita
where Sri Lanka measures at $4,020 in 2019.
The
government has recently increased direct taxes and reduced indirect taxes to
eliminate income inequality. It helps the poverty alleviation program.
CONCLUSION
All the contents of this report are
excerpts from recent reports and the Central Bank report. On closer inspection,
the main point we feel is that Sri Lanka is still a developing and low-income
economical country.
Furthermore, Sri Lanka's economic
growth and development are still very low. Recent reports suggest that in the
early days after independence, we saw a very good situation but new situations
are not a good one as a country. This report makes it clear to us that economic
growth should not be a mere numerical value, but a practical mirror of the
living standards of all citizens in a country.
Considering the Human Development
Index, we feel that the progress we have made in human development compared to
other countries in Asia is commendable. It is clear that it is a positive
measure of the living standards of the entire population of a country.
Sustainable development shows how a
country's resources are utilized efficiently and effectively, saving future
generations. It is also clear that the United Nations Sustainable Development
Goals are very simple and well described
Poverty is one of the major economic
weaknesses within a country. It is clear that this is a problem in all
developed and developing countries. Inequality in income distribution is a
major cause of this problem. The steps we can take to eradicate poverty as a
country are very brief. The report also cites the district-wide spread of
poverty in Sri Lanka. The report also commends the positive decisions we have
taken as a country to eradicate poverty.
Overall, we as a country are at a very low economic level. It is clear that poverty is a rooted problem in the Sri Lankan economy. While our progress in human development is commendable, we do not see an economic policy that will take advantage of it and lead the country towards real economic development. All economic and political regimes in power are responsible for this situation.
RECOMMENDATION
- The country must move towards further economic growth and development and actively contribute to the production process by training the workforce.
- The progress of human development should be used to eradicate poverty and reduce income inequality.
- The economy must continue to be driven to achieve the goal of sustainable development.
- Objectives to eradicate poverty should be implemented and rural economic development programs should be implemented.
- It must be further developed while preserving the progress of human development.
- The government should move away from the policy of consolidating political power and pursue economic policies aimed at the welfare of the people as a whole.
- The Central Bank should take steps to implement net financial credit in the country to avoid economic weakness.
- Outside of the report, entrepreneurs are the basic foundation of a country's development. They should be encouraged for innovation and business development.
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