Poverty

New Year, New VAT: Can Sri Lanka’s Poor Cope with the Increase?

Ringing in the new year for Sri Lankans was an increase in the value-added tax (VAT) rate to 18% and a withdrawal of tax exemptions on several goods and services. The last day of 2023 witnessed long queues as people rushed to stock up on essentials such as fuel and gas. Although queues are a familiar sight following the onset of the economic crisis, this time around, it was to avoid being hit with the VAT hike.

In light of these developments, this blog aims to shed light on VAT, offering a brief overview and delving into the potential implications of the increase, particularly on the poor and vulnerable.

Revamping Welfare: Is Aswesuma the Salvation Sri Lanka’s Poor Hoped for?

With the introduction of Aswesuma as a brand-new initiative targeting the poor and vulnerable, social protection in Sri Lanka has been a much-debated subject lately. Aswesuma primarily intends to overcome some key weaknesses of existing social protection programmes – at least on paper – but several challenges prevail. However, opinions regarding its capabilities to accomplish this remain ambiguous. The public has been protesting the scheme, and opposition party critics have called it an unfair political gimmick. Initially scheduled for disbursement in July 2023, the benefits for July finally commenced disbursement last Monday (28th August) for 800,000 beneficiaries. This blog delves into the key areas that warrant clarification, with the hope that authorities will address these concerns transparently.

Driving Policy Action in Sri Lanka from Economic Crisis to Recovery

The Institute of Policy Studies of Sri Lanka (IPS) held a seminar on 25 October 2022 to coincide with the release of the Institute’s annual flagship report, Sri Lanka: State of the Economy 2022, on the theme Driving Policy Action from Crisis to Recovery. Dr Nandalal Weerasinghe, Governor, Central Bank of Sri Lanka and Mr K M Mahinda Siriwardana, Secretary to the Treasury/Ministry of Finance, Economic Stabilisation and National Policies, delivered the keynote addresses. Dr Dushni Weerakoon, Executive Director, IPS, made a presentation to mark the release of the Sri Lanka: State of the Economy 2022 report. Mr R H W A Kumarasiri, Director-General, Department of National Planning and Mr E A Rathnaseela, Addl. Director-General, Department of National Planning chaired/moderated a session on ‘Policy Action for Shared Sustainable Growth: A National Policy Framework’. Under this theme, senior IPS researchers Dr Nisha Arunatilake, Director of Research, Dr Ganga Tilakaratna, Research Fellow and Dr Manoj Thibbotuwawa, Research Fellow, made presentations.

Sri Lanka’s Deepening Economic Crisis: The Plight of the Poor

Empty supermarket shelves, endless queues to buy essentials and overnight camping around fuel stations are now regular sights in Sri Lanka. As the economy continues to plummet with no viable short-term solutions in sight, levels of frustration among the citizens continue to rise. The country’s worst economic crisis since independence has battered Sri Lankans from all walks of life but the fallouts are impacting the poor with greater intensity. If urgent measures are not taken to support the most vulnerable at this time, more Sri Lankans will slip into poverty thus increasing intergenerational poverty in the long term. This blog identifies some of the most pressing challenges faced by the poor and vulnerable amidst the prevailing crisis and outlines policy options to safeguard their well-being.

Food Security in the BIMSTEC Region: Lessons from Sri Lanka’s Smart Farming

Sri Lanka is hosting the fifth Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) summit from 28-30 March 2022. Established in 1997, BIMSTEC is a seven-member regional organisation comprising Bangladesh, Bhutan, India, Nepal, Myanmar, Sri Lanka, and Thailand.  BIMSTEC pays significant attention to agriculture and food security, with agriculture included as a stand-alone sector in 2005 in recognition of its importance. Sri Lanka, the lead country for the coordination of activities in the Science, Technology and Innovation Sector, is in the midst of a food crisis even as it plays host. Against this backdrop, this blog discusses food security challenges in the BIMSTEC region, Sri Lanka’s experiences in smart farming, and its expectations from the summit.

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