Third ‘Sri Lanka: State of the Economy 2021’ Report Launch Webinar

14 October 2021

The Institute of Policy Studies of Sri Lanka (IPS) hosted the final webinar of a three-part webinar series to launch its flagship report ‘Sri Lanka: State of the Economy 2021’ on the topic ‘Equity in Recovery: Addressing Sri Lanka’s Social Protection and Food Security Needs’. It featured presentations by Dr Ganga Tilakaratna and Dr Manoj Thibbotuwawa from the IPS with commentaries from Prof Udith Jayasinghe, Secretary, Ministry of Agriculture, and Prof Dileni Gunewardena, Professor of Economics, University of Peradeniya. Lakshila Wanigasinghe from IPS moderated.

Dr Ganga Tilakaratna stated that according to World Bank estimates, approximately 500,000 Sri Lankans fell into poverty due to COVID-19, and the poverty rate (USD 3.20 a day) went up to 11.7% in 2020 from 9.2% in 2019. The government provided relief in the form of cash and in-kind transfers to the most affected that fell into the Samurdhi, Elder’s Assistance, Disability Assistance, Assistance for Kidney Patients, and Farmers and Fishermen’s Pension programmes.

According to a recent IPS survey, more than 70% of the recipients of these transfers fell into the less-than LKR 25,000 monthly income category. Although there were changes in the coverage and amounts, these transfers were efficient and useful for the most part, with only a few negative comments. However, there were implementation gaps as people had to stand in long queues and some experienced delays in cash distribution. Dr Tilakaratna explained that the root causes for such gaps were mainly due to the fragmented system that the country adopts, along with inefficient delivery mechanisms, lack of integrated beneficiary database, and lack of preparedness to cover many new beneficiaries.

Dr Manoj Thibbotuwawa highlighted that the pandemic has not significantly affected food production but has affected the micro-level dynamics of food production leading to food security concerns and rising food prices. He pointed out that labour mobility, restriction on certain inputs, and problems in the food value chain during the various lockdowns are to be blamed for this.

Dr Thibbotuwawa said that the way forward to creating a resilient food system is to address the structural issues. These include establishing proper farm-market linkages, greater use of e-commerce, effective information dissemination, continuous monitoring, ensuring the quality of products, establishing efficient procurement systems and implementing food-related social security programmes.

Prof Udith Jayasinghe explained that sharp price rises in food, such as rice occur, not because of low production, but because of the many agents that handle the logistics. Moreover, no one authority monitors the production process of rice giving way to disruptions in information flow and inefficiencies. Prof Jayasinghe noted that a similar scenario can be explained with the issue of organic fertiliser as there is no such thing as ‘organic’. ‘Environmentally friendly, non-hazardous and non-poisonous’ fertiliser is what the government should encourage farmers to use. He added that the country must change KPIs from how much fertiliser was used to other indicators such as food accessibility, food availability, and utilisation of food.

Prof Dileni Gunewardena reflected on the IPS survey on the impact of COVID-19 on households. The survey shows that beneficiaries were generally pleased with arrangements to receive the cash transfer, targeting appears to be effective, the cash transfer was mainly used for food purchases, and a reduction in consumption (20%) was the main additional measure taken. The survey made it possible to identify the monthly income levels of the individuals that were affected by the waves of the COVID outbreak. However, intrahousehold dynamics such as the most affected demographics should have also been considered as it gives greater insight into implementing better programmes. She outlined that greater social protection coverage, a broader range of benefits (including transformative social protection such as childcare and school feeding programmes), better macroeconomic policies to manage fiscal space and better delivery systems are some of the steps to be taken to build back better.

The full discussion can be viewed on YouTube or FB.