Ilankai Tamil Sangam

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Association of Tamils of Sri Lanka in the USA

Poverty in Sri Lanka

by World Bank, 2004-7

Poverty is more prevalent in the estate and rural sectors and is likely to be a serious problem in the conflict-affected North and East. The unique circumstances in conflict-affected areas deserve special attention, especially as more empirical data for this region becomes available, although geographical coverage of household surveys remains incomplete. Poverty in the estate sector remains endemic and is related to issues that are specific to the sector, and thus worthy of special attention. The rural sector is home to most of the poor (88 percent), which implies that significant poverty reduction can only occur when key factors restricting incomes in this sector are addressed.

Poverty Maps here.
Note that there is NO data for poverty in the North East between the Census Department and the World Bank. These maps are useful for comparison, anyhow. It is also useful to know that, in a genocidal situation, a government would not want such information as poverty indicators to be public knowledge. The report uses data from 2002, collected when the cease-fire was taking effect, but to have NO data is rather amazing.

The maps showing Accessibility and Rainfall Anomalies are interesting.

Powerpoint summary here.

2007 Poverty Assessment here.

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IV. Poverty in selected sectors and regions.

30. Poverty is more prevalent in the estate and rural sectors and is likely to be a serious problem in the conflict-affected North and East. The unique circumstances in conflict-affected areas deserve special attention, especially as more empirical data for this region becomes available, although geographical coverage of household surveys remains incomplete. Poverty in the estate sector remains endemic and is related to issues that are specific to the sector, and thus worthy of special attention. The rural sector is home to most of the poor (88 percent), which implies that significant poverty reduction can only occur when key factors restricting incomes in this sector are addressed.

A. Social and economic conditions in the conflict-affected North and East

31. Over two decades of conflict in the North and East have had far-reaching economic and social repercussions for the country. Over 65,000 people have died, nearly a million citizens have been displaced, private and public properties and economic infrastructure have been destroyed, local economies and community networks have been disrupted, and health and educational outcomes have deteriorated. The macroeconomic impact of the conflict is estimated at 2-3 percent of GDP growth annually. [Central Bank of Sri Lanka, Annual Report 1998. ]

Table 2: Selected provincial indicators 2003-4

  Income per capita Rs. Transfers as share of income Literacy % Access to water seal toilet
Western 6,603 16 96 90
Central 3,548 17 89 74
Southern 3,279 18 93 88
Northern* 3,741 37 93

46

Eastern 3,162 24 87 49
North-West 4,139 20 94 86
North-Central 4,008 15 93 73
Uva 2,769 14 88 75
Sabaragamuwa 2,996 14 92 80
Sri Lanka average 4,326 18 93 80

* Excludes Kilinochchi, Mannar & Mullaitivu
Source: Central Bank of Sri Lanka (CFSES, 2003-4)

32. The conflict-affected regions lag behind the rest of the country in availibility of economic infrastructure, access to financial services, and key human development outcomes. Only 46 percent of the population in North and East has access to safe drinking water, compared with 62 percent for the rest of the country, and less than one-half of households have access to water seal toilets (Table 2). In the North and East 26 percent of children had low birthweight compared with 18 ercent for the rest of the country and 46 percent of children aged 3-59 months were underweight compared with 29 percent for the rest of the country [DCS 2004, Poverty Statistics for Sri Lanka; Central Bank of Sri Lanka CFSES 2003-04.] The literacy rate in Eastern Province is the lowest for the country. Per capita incomes for Northern and Eastern Province, however, appear similar to those of other provinces with the exception of Western Province, probably because significant inflow of remittances has safeguarded incomes to a certain degree (Table 2). These figures are, however, based on data that do not cover the entire North, including some of the likely poorest areas, and do not take into account spatial price differences that affect comparisons of income between provinces.

33. The Cease-fire Agreement signed in February 2002 and subsequent cessation of hostilities surred economic recovery in the North and East. Real GDP growth in the Northern Province increased four-fold to about 13 percent while that of the Eastern Province doubled to 10 percent pre-cease-fire (1997-2001) to post-cease-fire (2002-3) years.[Peace Secretariat using CBSL data.] Unemployment fell from 13 to 9 percent in the North and from 16 to 10 percent in the East from 2002 to 2004, while the national unemployment rate dropped only marginally from 8.8 to 8.3 percent. [DCS Labor Force Surveys (LFS) 2002 and 2004.]

34. Significant contraints to sustaining high growth in the North and East remain. These include (i) poor availability and access to financial services, (ii) poor access and quality of economic infrastructure (roads, telecommunications, and water), (iii) time restrictions on the use of the A9 highway, (iv) fishing restrictions, (v) limits on mobility in certain areas such as Jaffna, and (vi) outmigration of the better-educated to the rest of the country or abroad. The tsunami of 2004, as mentioned above, is likely to have aggravated the poverty challenges in the hardest-hit Eastern Province.

35. The cease-fire since 2002 has presented the North and East region with the longest semblance of normalcy and peace in recent years. Initial studies have shown significant peace dividends for the North and East. The sustainability of growth in the region and prospects for significant peverty reduction will depend on whether durable peace is acheived and the institutional constrains mentioned above are addressed.