Poverty alleviation programmes ineffective - CEPA

from the Sunday Times

The effectiveness of poverty alleviation programmes like Janasaviya, Samurdhi and Maga Neguma) have been hindered by political patronage and misallocation of resources, says the Centre for Poverty Analysis (CEPA).

In a statement issued to coincide with the international day for the eradication of poverty commemorated last week, the CEPA said the Samurdhi programme for example, has come under increasing criticism since the Department of Census and Statistics revealed that its targeted food stamp programme, which constitutes 80% of the total programme budget, misses about 40% of the households in the poorest quintile while almost 44% of the budget goes to households in the top three quintiles.

It said there was an inconsistent approach to poverty. “The lack of a consistent poverty reduction strategy at national level over the past few decades has meant that the improved performance in the economy has not contributed to employment generation and human development in several groups,” the statement said adding that many poverty eradication efforts have been driven by the need to gain “the electorate’s support, and in recent years these have focused on large-scale investments in infrastructure, such as highways, power generation, irrigation, etc.”

Three main donors - the Asian Development Bank (ADB), the World Bank and the Japanese government -- provide over 60% of foreign aid to Sri Lanka and their efforts in poverty reduction have focused on economic growth as the main driver. “However, the ‘trickle-down’ effect which this relies on has not borne fruit and economic inequality is worsening.

Donors have failed to recognise and adequately engage with some of the political and social issues that have contributed to poverty in Sri Lanka and led to spatial and social inequalities,” the CEPA said noting that issues of lack of sustainability, limited interaction between different donor activities, and a lack of accountability for the way funds are spent by donors and the state also limit the effectiveness of programmes.”

On the rising cost of living, the CEPA said many people are just above and below the poverty line, which means that shocks such as inflation can quickly push them into poverty.

Rising fuel costs and food prices have a significant bearing on the poor’s ability to meet basic needs. Given the transient nature of poverty in Sri Lanka, these shocks could easily push the vulnerable back to levels of poverty that they had struggled to move out of, it said.

The CEPA said that while there are many success stories of individuals and households who have succeeded in overcoming these hurdles, significant progress in poverty eradication cannot occur unless these larger, structural factors are addressed. “The poor can only be empowered to move out of poverty if they are offered the right resources and opportunities – for this we must all take responsibility,” it said.

The CEPA said access to services, jobs and infrastructure is patchy across the country and inequality is growing as growth continues to be heavily focused in urban areas and in the Western Province. A majority of the poor and the non-poor are clustered around the poverty line, indicating the vulnerability of those who struggle to move out of poverty.

It said CEPA’s work on poverty over the last five years provides some interesting, and sometimes counterintuitive evidence about how individuals and families move out of poverty, and how they act to transform their environment and become agents of change. For example, CEPA’s research on poverty dynamics in the estate sector and in areas affected by conflict reveal that families and individuals that have succeeded in moving out of poverty did so by combing both internal and external factors. They acted to improve their own situation by developing a culture of saving and investing back into livelihoods, avoiding alcoholism and being willing to exploit new and alternative livelihood opportunities. Most of the dynamic households had multiple and diverse sources of income, to avoid reliance on one earner and vulnerability to economic shocks such as a birth, death or marriage in the family.

The CEPA said factors outside people’s control such as lack of land and capital frustrate people’s efforts to increase their income through small businesses, and the overall lack of opportunities have led many, especially young, people to migrate outside of the province, or even outside the country to find higher paid work. In both conflict affected areas and on the estates CEPA found that many people who had moved out of poverty had also moved away from the community, and in turn the remittances they sent back to their families and networks enabled others to move out of poverty.

People living in areas where livelihood options are limited face great challenges in moving out of poverty. In the Central Province for example, small, low productivity agricultural units give very low returns so households are forced to look for additional income sources. However, much of the alternative work available is precarious and insecure and involves working on a casual or contractual basis, self-employed or unpaid.

Limited investment in areas outside the Western Province means that people, jobs and infrastructure are drawn to the more prosperous areas, creating poverty pockets in the regions that suffer from underinvestment, limited facilities and inadequate service provision.

The conflict has transformed traditional livelihoods by imposing restrictions on access to land and on movement and destroyed much of the local economy. Public sector employment is often the only steady source of income and a route out of poverty for those in conflict areas. Among traditional agricultural households, families tend to look for opportunities outside their immediate geographical area, or even outside the country, the statement said.