The poorly managed economic management of the Gotabaya Rajapaksa government and its impact on the poor is showing up in the numbr of applications recived for the Aswasuma povery relief programme.
At least 800,000 fresh applications have been received seeking to be registered under the Aswesuma Welfare payment scheme with an expected total beneficiaries of 2.4 million families this year, a Parliament Oversight Committee observed.
Sri Lanka had been making significant progress in reducing poverty over the past decade. Between 2012 and 2019, the national poverty headcount ratio declined steadily from 6.7% to 4.1%, driven by economic growth, better infrastructure, and targeted welfare programs. However, this progress was drastically reversed in 2022 due to the severe economic crisis.
Decade of Progress Interrupted
From 2010 to 2019, Sri Lanka experienced declining poverty trends, with sustained improvements in key sectors such as agriculture, industry, and services. Poverty rates in rural areas, which historically saw higher levels of deprivation, also showed notable reductions due to infrastructure development and livelihood programs.
However, the 2022 economic crisis caused a sharp reversal:
- Spike in Poverty Rates: By mid-2022, estimates indicated that nearly 25% of the population had fallen below the poverty line. This marked a significant jump from the single-digit poverty rates observed pre-crisis.
- Inflation and Food Insecurity: With inflation exceeding 50% during the peak of the crisis, household purchasing power plummeted. Essential food prices surged by 80-100%, leaving millions unable to afford basic necessities.
- Rural and Urban Divide: Rural poverty, which had previously improved, worsened disproportionately as agricultural inputs became unaffordable, and urban poverty increased due to job losses in manufacturing and services.
Government Response and Gaps
The government responded by enhancing welfare programs, including the Aswesuma Welfare Scheme, which now supports an estimated 2.4 million families. Key benefits include monthly allowances of Rs. 17,500 for the extremely poor and Rs. 10,000 for the poor, among others.
While these measures have provided temporary relief, systemic gaps in targeting beneficiaries and inadequate coverage remain concerns. Without addressing these inefficiencies, the country risks prolonging the recovery of vulnerable households.
Economic Crime
Sri Lanka’s decade-long reduction in poverty was abruptly disrupted in 2022, with poverty levels surging to nearly 25% of the population. Inflation, unemployment, and food insecurity were key drivers of this reversal.
In a historic ruling, the Supreme Court determined that ex-President Gotabaya Rajapaksa, along with former Finance Ministers Mahinda Rajapaksa and Basil Rajapaksa, bear responsibility for Sri Lanka’s severe economic crisis and had thereby violated the fundamental rights of the people by mismanaging the economy between 2019 and 2022. The apex court found that the 13 respondents, which also included Central Bank Governors Ajith Nivard Cabraal, Prof. W.D. Lakshman, former Secretary to the Ministry of Finance S.R. Attygalle, former Secretary to the President P.B. Jayasundara and Members of the Monetary Board of the Central Bank of Sri Lanka had violated public trust and breached Article 12 (1) of the Constitution, in their administration of the economy, leading to the economic crisis in the country.
While in opposition the NPP lead by Anura Kumara Dissanayaka said that they would take action against the perpetrators of economic crime. How ever since assuring power the promise seems to been pushed under the carports.
