27 July 2022 08:18 am Views - 15103
By Shabiya Ali Ahlam
The status of Sri Lanka’s fast-crumbling economy has been attributed to many factors, but the key reason for the downfall of the island nation is that it has been on a ‘champagne diet with a kassipu income’ for a bit too long, according to a top economist in the country.
Former Central Banker and economist Dr. Anila Dias Bandaranaike did not mince her words when she deliberated on the crisis status of the economy last evening where she asserted the need to rethink the social safety nets that have been offered for decades.
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Dr. Anila Dias Bandaranaike |
The expectation from the government to come to the aid of people ever so frequently has impacted the country’s productivity for decades. The outcome of the welfare handouts has not helped the country to realise the objectives of the programme rolled out, instead the economy is today faced with a staggeringly high public expenditure with little or no return in terms of outcome.
“What we have been doing all these years is being on a champagne diet with a kasippu income. We are so used to expecting support
from the government.
The issue is that while the welfare efforts must be extended towards the poor, the poor are not targeted at all,” said Dr. Bandaranaike at a webinar hosted by the Central Bank, yesterday. While the government must take responsibility for offering services and products at low prices that have led to State-owned enterprises (SOEs) continuing to make losses, the people have got accustomed to living with such benefits. “We the people have been happily and complacently using these resources,” she pointed out.
Dr.Bandaranaike stressed the need for social safety nets to recognise the country’s bankruptcy and move forward from that point of acknowledgment.
It is imperative for the relevant authorities to adopt a targeted approach when extending safety nets so that a much more efficient allocation of funds can take place, she said, while stressing the need to have in place an exit mechanism as well. At present, Sri Lanka performs poorly in exiting welfare programmes. This has led to the vulnerable population becoming increasingly dependent and expectant of handouts instead of actively coming out of the hardships faced. “We need to ensure that by the end of the period of support they have a rod to fish and that we are not permanently giving them dry rations for six months and expect them to recover.” Dr. Bandaranaike also highlighted the need to rationalise the social safety net administration and delivery, while removing all price anomalies to reflect costs. Furthermore, efforts must be taken by authorities to create decent work with livable wages, and social security that is linked to productivity. “Donor-dependence must reduce overtime,” she stressed.