Resource information
This Poverty Assessment report reviews
the evolution, and nature of poverty in Sri Lanka, by
examining why its significant, recent economic downturn
contrasts sharply with its considerable, economic advances
during the 1960s; why poverty fell rapidly, and to a
relatively, low level in some areas, though it remained high
in other parts of the country; and, whether the large
resources given to re-distributive programs, really helped
reduce poverty. In response, Sri Lanka's hesitant
attitude towards progressive economic, and social policies
is seemingly the answer, for these policies would have
removed the regulations that hinder effective markets, and
the private sector, and, would have provided needed
infrastructure, and social services, accommodating diversity
within its social policies, through resources, and
opportunities for the poorest. Notwithstanding gradual,
economic liberalization, the economy is still more protected
than in countries which started liberalization much later.
The regulatory environment - particularly restrictions on
labor, and land markets - and weak competitive financial
markets, make the investment climate less friendly than that
of competitors in the East. Regarding the role of the state
in the economy, still large shares in the banking system,
insurance industry, power, and water utilities, among
others, are government owned. In terms of social policies,
the country has a long tradition of protecting acquired
rights, and encouraging patronage, rather than stimulating
market-based creation of opportunities. The report
stipulates the need for creating a policy environment that
facilitates poverty reduction, through a strong fiscal
policy, deregulation and privatization, agricultural growth
policies, and labor market flexibility, based on public
services that reach the poor, i.e., improved quality of
education, effective social safety nets, and transparent
public administration.
