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quite surprised to see the performance of Monaragala District, where the poverty level has increased to 20.8% in 2012/13 from the 14.5% registered in 2009/10.
The first thing is to confirm if this data is correct and if so why this has happened given the focus by many private sector companies in setting up BPOs and agricultural projects in the Monaragala District.
Inclusive growth?
Tracking back to a Poverty Alleviation Conference I attended in ADB headquarters in Manila, Inclusive Growth (IG) was defined as all sectors of the economy contributing to the overall growth of a country, which in turn results in a substantial reduction in poverty. In more simple words, growth must be broad-based and inclusive where a larger part of the country is engaged in the development agenda so that just top-line numbers do not dictate the strategy of the country.
However, a point to note is that a country can achieve all the Millennium Development Goals (MDG) but yet not register inclusive growth due to a skewed pattern of growth that has not been properly distributed. This is where the importance of the role of the government comes into play in a country.
Hence, it is important that a country highlights growth not only from its sheer pace but also from the pattern of growth, which will in fact give a new image to a country. For instance, in the case of Sri Lanka, where we highlight the 7.5% growth in the last four years in the country, we must see how growth has impacted the indifferent parts of the country, namely in lagging districts like Monaragala where the poverty is at 20.8%, Mannar at 20.1%, Batticaloa at 19.4%, Kilinochchi at 12.7%, Mullaitivu at 28.8% and my hometown Badulla at 12.3%.
It is also important to note that inclusive growth refers to areas such as equality, equity and protection from markets and employment, which are essential ingredients of a successful growth strategy of a country. To be honest, if growth does not happen in this manner, it can become toxic and result in adverse behaviour that includes revolts and political backlash and extremism is what history around the world has shown us.
Problems without IG
A best case in point is that way back in 1996 it had been reported that the overall poverty indicator stood at 24.3% whilst in 2002 it moved down to 19.2% and in 2007 it went down to the magical mark of 15.2% and today it is at a commanding 6.7%. However, if we analyse the commendable Annual Report of the Ministry of Finance and Planning for 2013, out of the 25 districts, the poverty level is higher than the national average in 13 of the districts, which does not augur well for the country.
Poverty – extremism link?
There are counter arguments of an ethos that countries that have high inequality have a greater risk of terrorism, extremism and adverse behaviour like revolts even though there are no conclusive studies that have been done on whether it’s nurture or nature that fosters this reaction.
Michael K. Moore, the former Head of the World Trade Organization, once said: “Poverty in all forms is the greatest single threat to peace, security, democracy, human rights and the environment.” This I believe is an indication of the possible relationships that can exist. However, Alberto Abadie, Public Policy Professor at Harvard University’s Kennedy School of Government, says development aid is important but it is not clear that it is an effective tool for reducing terrorism and extremism, which are interesting thoughts to deliberate given the issues we saw last week in Aluthgama and Beruwala.
English – life-skill
One of the strategies pursued globally to eradicate poverty has been the introduction of English as a life-skill. There was a proposal I remember in the Sri Lankan Budget on these same lines to develop 1,000 schools across the island as secondary schools, which will be linked to the primary education system driving English. Maybe we need to revisit the achievement of this initiative.
With the knowledge of English and the expanding network of ‘nenasalas,’ the reach to global media and knowledge houses will take form, which makes rural Sri Lanka connect to the world. The high penetration of mobile phones, where almost 95% of Sri Lankans have a mobile phone and access to the internet via mobile, can drive inclusion of people to mainstream communication, which in turn has a positive impact on the growth agenda of a country. The privatisation of the higher education system that is in process will also drive higher inclusion and stronger equity for the youth of tomorrow.
Health factor
Once when I was in India on a official visit, the former Indian Home Minister P. Chithambaram mentioned at a conference on poverty that the number of people who get treated by the Government of India must be also taken into account when discussing the concept of inclusion in a country in relation to poverty, which holds ground in Sri Lanka too. In this regard, Sri Lanka can take the high ground with the country being ranked first in the world in the area of health and survival indicators.
Role of ADB/WB
This also draws me to the role of multilateral organisations like the ADB and World Bank. Once a typical country progresses to middle income status, then the need for such traditional lines of support like road and water sanitation projects will decrease as there will be many private sector institutions that will come into the funding mechanism. Hence, it will be more prudent for organisations like the ADB and World Bank to drive a smoother interface between regional and local government level as well as focusing on driving trade between countries supporting governments in bilateral and multilateral trade agreements. This can also generate stronger inclusive growth within a region especially in South Asia where inter regional trade is at a low ebb of below 6%.
Next steps
Whilst Sri Lanka is showcasing to the world the 7% plus GDP growth and the strong development agenda with brands like Shangri-la, Movenpick, Hyatt, Best Western and retail brands like Subway coming into the country, we must be focused to the 13 districts that are below the national poverty average, especially the districts that are depicting an above 20% poverty level. If we do not do this, extremism and adverse behaviour like terrorism will once again start rising up – in fact we see some of the signs of this already.
(The author was the Sri Lanka representative at an Asian Development Bank forum on ‘Inclusive Growth and Poverty Reduction in New Asia and Pacific’ – Manila and currently sits on many trade and economic development policymaking bodies in Sri Lanka. The thoughts are strictly his personal views.)
