While Sri Lanka has long recognised the importance of social safety nets to support its vulnerable populations, the creation of a culture of dependency and concerns about low exit rates from such programmes raise questions about their effectiveness, especially amid recent Government promises to increase the number of welfare recipients.
The social protection systems in Sri Lanka primarily consist of Government-funded universal healthcare, nutrition, and education systems; retirement benefits provided through pensions or lump sums which are funded mostly through taxation; and a range of programmes aimed at poverty alleviation and financial assistance.
However, not only are Sri Lanka’s welfare programmes undermined in their effectiveness by failing to support those in genuine need and wasting resources on those who do not qualify, their effectiveness in lifting families out of poverty also remains questionable.
An inefficient system
Examining the state of social safety nets prior to the ‘Aswesuma’ reform, a 2023 LIRNEasia report on ‘Social Safety Nets and the State of Poverty in Sri Lanka’ notes that while Sri Lanka has over 25 social assistance programmes to provide citizens a safety net in times of hardship, the presence of low exit rates was a major challenge, with those on ‘Samurdhi’ receiving monthly cash transfers for 10 years and three months on average.
“The best criterion for us to understand the failure of the outcomes of these economic empowerment programmes is the President’s recent statement that ‘Aswesuma’ will be provided to an additional 400,000 families,” University of Peradeniya (UOP) Department of Economics and Statistics Professor in Economics Ariyarathna Herath told The Sunday Morning.
“Such an increase is evidence that the authorities accept that these programmes are unsuccessful, since if there had been any empowerment, such numbers would have declined.
“Research too has uncovered that these programmes are inefficient. Under such circumstances, it is clear that none of these programmes have succeeded in creating socially, economically, and financially empowered individuals,” he pointed out.
Further, LIRNEasia noted that there were only limited and opaque pathways to exit ‘Samurdhi’ in practice, such as migration, obtaining Government employment, and ad hoc criteria imposed by Government officials. It found that only 17% of those who had received ‘Samurdhi’ benefits had exited the programme.
The report further noted that the new scheme – ‘Aswesuma’ – signalled that graduation from social assistance was a priority.
Institute of Policy Studies (IPS) Research Fellow Dr. Pulasthi Amarasinghe also recently revealed that the process of ‘graduation’ from poverty through cash transfers via the ‘Aswesuma’ programme may not be sufficient for those in chronic poverty.
Similarly, speaking to The Sunday Morning, Deputy Minister of Rural Development, Social Security, and Community Empowerment Wasantha Piyathissa said that with previous programmes such as ‘Janasaviya’ and ‘Samurdhi,’ only an insignificant number – such as 4-5% – had managed to graduate from these programmes.
“In general, there are no reports of such individuals having developed economically to the extent that they could exit the programme,” he said, sharing that they would be preparing a report on this after analysing these programmes.
When contacted, Welfare Benefits Board (WBB) Chairman Jayantha Wijerathna informed The Sunday Morning that the capacity building programme for ‘Aswesuma’ recipients was undertaken by the Department of Samurdhi Development, with the WBB simply providing the cash benefits.
He noted that under the department’s empowerment programme, business plans were formed and grants given to recipients, while initial activities such as training were currently underway as well, making it too early to say how many had been empowered thus far.
Flaws in ‘Aswesuma’
While Sri Lanka’s education and health welfare programmes are at an internationally acceptable level (at least quantitatively, since qualitative issues remain), the country’s programmes to alleviate poverty and offer financial assistance are at a much lower level, according to Prof. Herath.
“‘Janasaviya’ and ‘Samurdhi’ were conceptually sound. There were three components – providing cash for daily needs, loans via Samurdhi Banks for investment activities and encouraging small business, and involving recipients in public infrastructure development,” he noted.
However, in implementation, issues with politically motivated recruitments that drove up operation costs of the programme and ineffective selection of recipients plagued these programmes.
In contrast, he noted that ‘Aswesuma’ was a simple cash transfer programme, designed for survival rather than to enable self-sufficiency.
“‘Aswesuma,’ which came afterwards, was a very simple programme which only provided cash. There is no component to ‘Aswesuma’ that encourages small businesses or involves recipients in development activities. There is no inquiry into what the money is being used for,” he added.
Meanwhile, Deputy Minister Piyathissa, while acknowledging that the Government planned to identify new families and empower 400,000 new families per year for a period of five years, also noted: “Our goal is to help formulate an income source for these low-income families and make each of them a family that no longer receives ‘Aswesuma.’ Thus far, there was no practical programme for this purpose.”
Fixing welfare
Despite this, there have been cases of upward economic mobility among welfare recipients. Prof. Herath noted: “There are success stories, especially in terms of social mobilisation, where marginalised women, in particular, can enter society through Samurdhi Bank assistance. However, the programme is not methodical enough to provide business development support.”
He noted that based on Department of Census and Statistics (DCS) data (given the absence of an islandwide survey), it was difficult to extrapolate that these programmes had been successful. However, based on university case studies, there have been instances of success stories where small businesses have achieved a certain level of success through Samurdhi Bank loans.
Moreover, ‘Aswesuma’ lacked specific benchmarks or indicators to assess whether a recipient was ready to exit the programme, he noted.
Accordingly, ‘Aswesuma’ has a higher tendency to push people towards a state of dependence on welfare. Moreover, due to the failure to consider proper criteria when including beneficiaries in these programmes, it is impossible to say with certainty whether people who no longer need such financial assistance had in fact been empowered through these programmes.
Without fixing the welfare programme’s inclusion criteria, Prof. Herath said that it would create a populace with a mentality of depending on handouts.
“On the flip side, the narrative becomes that those who diligently earn by working are taxed to provide handouts to others. This is not a good practice and must be changed immediately. At least the three main components of the ‘Samurdhi’ programme should be activated,” he added.
Accordingly, he noted that these programmes required a credit-plus approach instead of a minimalist approach to be successful, where additional support is given instead of simply providing cash.
“If there was a credit-plus approach, these programmes could have been successful to a certain extent. This was there at the initial stages of ‘Janasaviya’ and ‘Samurdhi,’ but now it has become a fully minimalist approach, where only cash is provided.”
According to Deputy Minister Piyathissa, in terms of livelihood development and vocational training that have been integrated into the ‘Aswesuma’ framework, work is currently underway at the ground level.
Accordingly, in every grama niladhari division, Samurdhi development officers, the grama niladhari, and economic development officers initially select 50 families per division, and subsequently discuss the formulation of a family development plan in terms of livelihood, employment, etc.
“They are currently formulating the plans to provide support, aid, and training to empower these families,” the Deputy Minister explained.