IPS’ proposals for Budget 2022 – Part I

Ahead of the presentation of the national budget for 2022, the Institute of Policy Studies of Sri Lanka (IPS) outlines some policy areas of concern and puts forward proposals to be considered for inclusion in the forthcoming budget:

Health

Improving child nutrition
An IPS study on child malnutrition reveals that the ‘life cycle effect’ is one of the main contributors to the high prevalence of child malnutrition, especially among the poor. The study shows that dietary issues are caused by food insecurity and the lack of awareness about proper nutrition among the poor. Among the country’s several nutritional programmes, the Maternal and Child Health (MCH) supplementation programme by the Family Health Bureau (FHB) is one of the most beneficial, as it covers the entire life course interventions, as recommended by the World Health Organisation (WHO). However, this is the programme with the least resources at present. 
The country’s annual public investment on key nutrition-specific interventions is approximately Rs.15 billion. Of this, 40 percent is absorbed by the school meal programme, followed by the pregnant mother’s food allowance programme (37 percent) and the Thriposha programme (16 percent). The FHB medicine and supplements in the MCH programme accounted for only 5 percent. 

Recommendation
Streamline the existing nutrition programmes to focus on the most effective ones to improve nutrition outcomes. Expand budgetary allocations for the MCH programme and provide targeted benefits to the most vulnerable in other nutrition programmes. There is potential to gain some fiscal space by changing the supplementary feeding programme (Thriposha), for pregnant and lactating women, to target pregnant women at risk rather than all. Likewise, pregnant mother’s food allowance programme should be targeted in deprived regions.

Reducing smoking prevalence 
Although smoking rates have come down considerably over time, still more than a quarter of males are smokers and smoking remains a significant health threat killing more than 20,000 Sri Lankans, annually. Recent studies show that smoking is currently prevalent among selected population groups. Thus, there is a need to target specific groups (e.g., construction workers, drivers, youth groups those who are not in schools or any other education institute) to reduce smoking prevalence.

Recommendation 
Launch targeted programmes to build awareness on the benefits of smoking cessation and provide cassation support to the existing smokers. The existing programmes can be realigned to focus on high prevalence groups, so they do not impose an additional burden on government expenditure. But such programmes will help to reduce the tobacco smoking prevalence and reduced tobacco smoking-related illnesses, deaths and the burden of cost.

Education

Improving access to quality early childhood education
The early childhood care and education (ECCE) sector is one of the most important sectors of education, providing a solid foundation for a child’s education trajectory. However, access to ECCE in the country is low. In 2019, only 55.6 percent of three to five-year-olds were enrolled in preschool education in the country. 
Further, there are large inequities in access to preschool education, with access lower in rural and estate sectors and among poorer households. Public presence in this sector in the provision of core as well as support services, such as curriculum development and teacher training, is inadequate. 

Recommendation
Allocate public funds to implement ECCE policies that have been developed to improve access to the ECCE sector for low-income households and to align ECCE with general education. Government involvement is important in improving access to children from underprivileged backgrounds, through the provision of scholarships or by setting up ECCE centres, where there is low supply of ECCE centres. The functioning of ECCE should be monitored to improve quality.

Human resources development

Improving access to quality vocational training 
Scientific breakthroughs in a spectrum of fields, such as genetics, artificial intelligence, nanotechnology and 3D printing, are feeding into innovations that redefine how people live, work and interact with each other. These innovations are constantly creating and altering production processes and revolutionising the operations of a large spectrum of industries. These transformations are also restructuring labour markets and affecting labour markets in multiple ways. 

With the growing demand for high skilled workers, tertiary level skills development is critical. However, the effectiveness of the tertiary education and vocational training (TVET) institutions in improving access to TVET is limited due to resource gaps, teacher shortages and governance issues.

Recommendation
Streamline the public sector provision of TVET education. Money saved from this can be used to provide eligible candidates financial support to participate in the most effective TVET programmes (public, private or joint) in the trades of their choice. Partnerships with the private sector and industry training can alleviate problems of lack of access to high-tech equipment. 

Invest in public sector capacity for provision of support services to the sector such as monitoring and evaluation, curriculum development and the quality assurance of TVET institutions to improve the efficiency of the sector. 

Women

Increasing female labour force participation 
Labour market data show that more women have become economically inactive due to COVID-19, lowering the already female labour force participation (FLFP) rate. As the COVID-19-related restrictions are relaxed, there will be more opportunities for women to participate in the labour market. 

Recommendation
Provide training and job matching programmes to facilitate skills acquisition and improving employability, especially for women. Online training programmes can be facilitated by industries with labour shortages, with possible job opportunities for those successfully trained. These programmes can be coordinated by the institutions under the purview of the TVET sector.

Persons with disabilities 

Ensuring financial security of persons with disabilities 
The cash assistance programme to assist persons with disabilities (PWDs) implemented by the National Secretariat for Persons with Disabilities (NSPD) covers only a fraction of PWDs from low-income households. As of May 2020, the disability assistance programme covered 72,000 persons while another 37,492 persons were in the waitlist. 

Moreover, another 14,149 PWDs were identified during the first wave of the pandemic by the rural committees set up at the divisional level, as eligible for the cash assistance. 

Recommendation 
Assist all PWDs, especially those from low-income households to ensure their economic and financial security. Extending benefits to current waitlisted persons alone will require an additional budget allocation of around Rs.2,250 million in 2022, while extending it to those identified by the rural committees too (subject to a reassessment of their eligibility) will require a further allocation of around Rs.849 million. 

Migration

Increasing reintegration support for returning migrant workers
Available estimates indicate that by early January 2021, a total of 128,470 Sri Lankans wanted to return, while only 60,470 or 47 percent had been repatriated. The IPS pointed out that “such limited capacity to repatriate and delays in repatriation is the first indication of weaknesses in Sri Lanka’s preparedness for the return and reintegration of migrant workers in a crisis”.

Limited social and psychosocial return and reintegration support for returnees restrict the capacity of a returned migrant worker to reintegrate with his family and community and contribute to the economy. Reintegration issues experienced during the pandemic were amplified by the low base level of return and reintegration support service structures that were operational in Sri Lanka before the pandemic. 

Recommendation
Implement the existing policy on ‘Return and Reintegration’ introduced in 2015. A critical implementation aspect of this policy is integrating reintegration support policies into the mandates of the relevant ministries and providing necessary budgetary allocations for the same. This will result in faster and more successful reintegration of returnees to their families, communities and the economy.

Addressing gaps in recruitment sector for foreign employment
Given that the number of migrant workers has reduced drastically during the pandemic, concerted efforts will need to be made to facilitate foreign employment, when the situation improves. Findings from a study conducted by the IPS shows several areas to focus on improving business practices of recruitment agents would be beneficial for promoting foreign employment. 

The absence of an effective international marketing strategy to promote Sri Lankan migrant workers to foreign employers have led to the recruitment agents micro-managing recruitments by resorting to unfair competitive behaviour with agents from other countries of origin. This leads to additional costs for the agent, which is likely to be passed to potential migrant workers seeking employment. 

Recommendation
Establish a centralised and effective international marketing strategy to promote migrant workers from Sri Lanka. This should be coordinated by the Foreign Affairs Ministry and Foreign Employment Promotion and Welfare State Ministry, with the necessary resources and budgetary allocations. The above proposal will improve the efficiency of recruitment agents. It will also indirectly contribute to increasing remittances.

(Read the IPS’ budget 2022 proposals in full at https://www.ips.lk/ips-proposals-for-budget-2022/)