Poverty has fallen in Sri Lanka but challenges remains – World Bank
Sri Lanka has made encouraging progress in reducing poverty to below 7 percent of the population, but pockets of severe poverty remain and future prosperity will depend on addressing chronic revenue shortfalls and fostering a more competitive and inclusive economy, say new research findings announced by the World Bank Group on Tuesday (Feb 16).
The World Bank Group carried out a Systematic Country Diagnostic (SCD) to identify the key constraints to sustaining progress in ending poverty and boosting shared prosperity. The SCD highlights that Sri Lanka has one of the lowest tax-to-GDP rates in the world, undercutting the government’s ability to invest in education, health, and other services.
The research finds that while poverty has decreased, progress is uneven across location, gender, and ethnicity. Large numbers of poor live within or close to urban areas, and there are considerably higher rates of poverty in the North and East, the estate sector, and Moneragala.
Women’s participation in the labor market has remained low for a middle income country and static for decades. Coupled with social spending that is very low for a middle income country, inequality has increased. Many people are at risk of falling back into poverty as over 40 percent of the population live on less than 225 rupees per person per day.
“This new research provides an important platform of evidence and analysis to strengthen our partnership with the government to help design policies aimed at improving job opportunities for the poor and other disadvantaged segments of the population, while promoting sustainable growth,” said Françoise Clottes, Country Director, World Bank Sri Lanka and the Maldives. “The findings of the reports also reinforce the need to further measures aimed at improving the government’s effectiveness, transparency, accountability and establishing strong institutions so all Sri Lankans can take part in the country’s increasing prosperity.”