1 m Lankans have fallen into poverty in 2020, 2021: Kabir Hashim

  • Kabir Hashim claims GoSL assistance lowest in South Asia

BY Pamodi Waravita

Samagi Jana Balawegaya (SJB) Parliamentarian Kabir Hashim said that about one million new Sri Lankans will have fallen into poverty in 2021 and 2020, owing largely due to the economic mismanagement of the incumbent Government.

Speaking at the budget debate on Saturday (13), Hashim said: “The informal sector was the most affected by pandemic-related job losses. This sector is one of the main drivers of our economy – from home businesses to small businesses to our PickMe and Uber drivers. This sector is not sponsored or protected by the Government but accounts for about three million jobs. Due to the pandemic, 60% of them lost their jobs – that is about 1.7 million jobs. What did other countries in the subcontinent do when their informal sectors faced the same fate last year? They supported them – they even paid the sector a salary equivalent to a government salary for months.

“But what did our Government do? They only made a small cash relief. As a result, people fell into poverty. The 2021 World Bank’s Poverty Update report on Sri Lanka shows that with job losses and earning reductions, poverty increased significantly in 2020, which led to 500,000 Sri Lankans falling into the poverty bracket. This year, it will be worse, owing to the agriculture crisis as the Government stopped the importation of chemical fertiliser. With another 500,000 expected to fall into poverty this year, that is one million new Sri Lankans who have fallen below the poverty line within these two years.”

According to the World Bank, the poverty line in Sri Lanka stands at $ 1.90 a day.

Hashim questioned whether Minister of Finance Basil Rajapaksa, who has been the chairman of the committee appointed to tackle poverty and a member of the cost of living committee since 2020, was aware of these figures.

“This Budget has failed to address these primary problems. How many mothers have been forced to reduce the amount of rice and milk they give their children this year? Leaders are supposed to be sensitive to this plight and are responsible for the people’s welfare. The financial relief provided by this Government to the informal sector in 2020 to help with the pandemic was only 0.6% of the gross domestic product (GDP) – the lowest in South Asia,” he stressed.

The report titled “2021 Sri Lanka Development Update: Economic and Poverty – Impact of Covid-19” by the World Bank stated that with jobs lost and earnings reduced, poverty increased significantly in 2020 in Sri Lanka. Over 500,000 people are expected to have fallen into poverty as a result of the crisis, which led to an increase in those below the $ 3.20 poverty rate from 9.2% in 2019 to 11.7% in 2020.

This more than reverses the progress made since 2016 when the poverty rate was 11%, the World Bank noted. Estimates using the national poverty line suggest a similar trajectory. Extreme poverty, as measured by the $ 1.90 a day poverty line, is projected to have doubled from the 2019 levels.

The same report further stated that the poverty gap, which measures the distance to the poverty line, is “estimated to have increased from 17.9% in 2019 to 20.0% in 2020”. “This implies that not only are there more poor people, but also that the poor have fallen deeper into poverty,” it added.