The Festive Season Amid Soaring Poverty, Hunger And Inequality - EDITORIAL

The season of Christmas with all its attendant festivities is with us. Yet our country is broke. Some among us like to think that we have recovered from our national bankruptcy, pointing out that we now have reserves and that international financial agencies are willing to offer us credit. But the fact of the matter is, we have not even started to repay our outstanding debts.   
We are raking up more debts while negotiating a rescheduled repayment of past debts and awaiting the second tranche of funds from the International Monetary Fund (IMF). To achieve this goal (second tranche of funds from the IMF) the government has been forced to impose more taxes. 
As is usual, the government expects to increase revenue not through taxing the rich, but by heaping more burdens on the poor. A Value Added Tax (VAT) of 18 percent is set to hit an already impoverished people from 1 January 2024. 
Research by the University of Peradeniya reveals that close to half of Sri Lanka’s population, 42% or 9.6 million people are living below the poverty line.
The Centre for Poverty Analysis (CPA) describes poverty as either a form of absolute or relative deprivation. Absolute Poverty is perceived as subsistence below the minimum requirements for physical well-being, while Relative Poverty is taken as income or consumption levels that are below a particular percentage of the national average.
Speaking to reporters, Wasantha Athukorala Professor of Economics at the University of Peradeniya, said a study carried out by the university showed a three-fold increase in poverty over the past three years. In 2019, nearly 3 million people lived below the poverty line, but that number had increased to 9.6 million by October 2022.
Athukorala added that the study revealed 42% of our people are currently living in poverty.
The World Food Programme and the UN’s Food and Agriculture Organisation have assessed that nearly a third of Sri Lanka’s 22 million population have been food insecure since the economic crisis hit.  
In Colombo, around 66,022 families live in 1,506 shanty dwellings, without proper sanitary facilities. Many of them earn a living as daily paid workers, receiving around 2,000 rupees a day, when they find work.
In the upcountry areas – in the tea and rubber estates – most workers do not receive even one thousand rupees a day. These workers receive a maximum of twenty-four days work a month. 
At the same time, the UNDP in its report published on Tuesday shows Sri Lanka among the top five most unequal countries in the Asia Pacific. The study reveals, the top one percent owns 31 percent of the total personal wealth in the country, while the bottom 50 percent owns less than 4 percent of the overall wealth. 
This column has repeatedly pointed out that an average person receives an income ranging from Rs. 40,000 to Rs. 50,000 per month. At present rates, a family of four would need a minimum of Rs. 120,000 monthly, to have three basic meals a day. The costs are for meals without meats or fish. Families have also to meet the costs of education, travel, medical and other needs.
In January 2024, a further 18% VAT will also hit these already over-burdened, ‘beasts of burden’. 
The VAT has come in for criticism by opposition parties ranging from the right to the left. But none of them have promised to scrap the additional taxes or propose any alternative.
In other words the poor will receive no succour from any future government. No political party it appears is ready to ease the burden on the poor, by targeting the top 10%. 
According to the World Bank, “poverty reduction could resume from 2024 and continue in 2025, but this depends on the continued implementation of structural reforms and a restoration of economic growth and job creation...”
If it is of any comfort, this situation is prevalent in even the most developed country in the world - the USA, where the top 1% of American earners now control more wealth than the nation’s entire middle class. 
The top 1% holds $38.7 trillion in wealth, while low-income Americans, representing the bottom 20%, own about 3% of the wealth.