Where Is The Promised Safety Net For The Poor?

The country is totally relying on the International Monetary Fund (IMF) led programme for recovery from the unprecedented economic crisis that was created by the leaders who for the past several decades promised to the people a paradise on earth. Despite the successful recovery being still in the balance, the economic reforms that are being implemented under the IMF programme have already started to bite especially the poor and the vulnerable.
Those who paid between Rs. 1,000 and Rs. 1,500 monthly for their electricity usage in the early months of last year are now paying an amount between Rs. 6,000 and Rs. 7,000 under the cost recovery pricing formula of the IMF, while the water tariff levied from most of the poor people has risen from about Rs. 600 to Rs. 3,000. Power, water and fuel prices have affected the prices of all other commodities and services, hiking them at least by threefold whereas the income of a majority of the population has been static or dropped drastically during the period, besides the real value of money also having dropped significantly. 

The Value Added Tax (VAT) Amendment Bill which is meant for the increase of tax and the removal of tax exemptions for certain items was passed a few days ago and is expected to have a huge impact on the prices of many essential goods and services. It is expected to affect the electricity tariff and fuel prices as well and would have a spiraling negative effect on the lives of the people, especially the poor. They are destined to further suffer for no fault of their own, but due to the economic mismanagement by those who were elected by them to rule the country. 
 From the beginning, the IMF reiterated this situation calling it “brutal” while proposing the need to have what it called a social safety net to protect the poor and the vulnerable from the effects of the reforms that are being implemented under its programme. One can observe this in the statement made by the IMF staff members soon after they inked the initial agreement with the Sri Lankan officials on the programme on September 1 last year. They underscored the need for a protective mechanism for the low income groups in the country who they knew would bear the brunt of the economic reforms on the way to recovery. They say that the objectives of the IMF-supported programme will continue to focus on restoring macroeconomic stability and debt sustainability, while protecting the poor and vulnerable, 
among others. 
In spite of the IMF officials and the Sri Lankan leaders often offering assurances on the so-called social safety net for the poor and vulnerable, the situation on the ground is a far cry from what the affected communities expected. The only concession that was in place for the people most affected by the economic crisis as well as the reforms under the IMF programme was a cash dole-out for a freshly selected group of people which is also meagre to offset the effects of the crisis and the remedy for it – the 
reform programme. 
During a press briefing in September on the first review of the progress of the IMF programme in the country, the IMF officials were questioned about the poor by journalists, and Sarwat Jahan, IMF Resident Representative in Colombo said “We can help through multiple ways. First is when there is stabilization in the economy that means that it’s good for all Sri Lankans, including the poor and the vulnerable, because this means that inflation will go down” Isn’t it a long wait for the most affected group of people, since the IMF officials themselves are concerned that “full economic recovery is not yet assured.”

The programme does not seem to realize the grave situation the poorest of the poor have faced with. Both the government and the IMF are concerned about the revenue targets, no matter what happens to whom. Neither party seems to have put more weight on tax evasion especially by big sharks, despite it being under discussion, from the beginning.