Men push cartloads in Pettah - Pic by Pradeep Pathirana

The Asian Development Bank (ADB) stressed that for Sri Lanka, the near-term priority during economic recovery is to lay institutional and structural frameworks for an inclusive social protection system. 

In the absence of a cohesive social protection strategy and governance mechanism, programmes in the past have been fragmented, with low coverage, poor targeting, high inclusion and exclusion errors and low payments, the ADB said in its annual flagship economic publication, the Asian Development Outlook (ADO) April 2024.

In 2023, the government introduced the Aswesuma programme to consolidate over 25 state-sponsored cash-transfer programmes that were previously managed by several government agencies. 

The ADB asserted that this programme could be further strengthened with increased individual support, better forward planning and an effective graduation mechanism with technical and life skill training, better financial literacy education and enhanced social and financial inclusion. 

“The government must establish a comprehensive long-term strategy for poverty eradication that monitors progress and incorporates regular social dialogue to ensure the representation and participation of all stakeholders,” it said.

The Manila-based lender further stressed that the government should enhance access to public services to mitigate inequalities and better target poverty alleviation efforts. 

The integration of social protection programmes with other public services such as education and healthcare would ensure universal access to essential services, improve targeting and coverage and expand social inclusion. 

“In this regard, the government efforts to revamp education policy with updated curricula, improved teacher training and digitalisation are welcome. 

While the state-sponsored universal healthcare coverage and subsidised medicine provide considerable support to the poor, the government can better leverage the healthcare system for more targeted measures and promote health insurance programmes to protect the poor and vulnerable,” it said.

The ADB elaborated that the government should intensify efforts to train and retain health and care staff, particularly considering the significant outmigration by professionals. 

Given the fiscal constraints, the ADB said expanding access to services could be achieved by enabling greater private sector participation in essential services. Meanwhile, investments in infrastructure for water supply, road connectivity and energy are needed to address inequality in income and opportunity and in access to resources.

The ADB, in the ADO, forecasts Sri Lanka’s economy to record a moderate growth of 1.9 percent in 2024 and 2.5 percent in 2025, following two consecutive years of contractions.