Aswasuma and finding an effective solution to poverty

Few days ago, the Government announced the application process of Aswasuma benefits for the year 2024 will begin by the end of January or early February. According to State Minister for Finance Shehan Semasinghe, the December instalment for 1,410,064 beneficiaries has already been disbursed, and the Government aims to extend the benefits to two million people.

Aswasuma’s predecessor Samurdhi – which was started in the mid ’90s during the Chandrika Kumaratunga administration – was riddled with political interference throughout its implementation and did not function as a genuine Social Safety Net (SSN). A sample survey carried out by LIRNEasia in 2023 discovered that the Samurdhi monthly cash transfer program only reached 31% of the poorest 10% of households, while 4% of the richest 10% of households too received its monetary benefits. The study further confirmed the accusations that individuals connected to the ruling political party were included in the program as beneficiaries disregarding the eligibility criteria. 

Effective SSNs can reduce poverty and inequality as well as promote inclusive growth. Such mechanisms also play a key role in protecting the vulnerable households from economic shocks, the importance of which has been manifested by the impacts of the COVID-19 pandemic in addition to the substantial increase in the general price level of the economy over the last couple of years. Furthermore, well-designed SSNs enable Governments to move forward with structural reforms by mitigating possible adverse impacts on the vulnerable and thereby mobilising the requisite public support. 

Many critics of the IMF rescue package secured by the Government never mention about Aswasuma and instead keep on driving the narrative that the Fund is neoliberal and its prescriptions worsen the plight of the poor. Where were these pseudo-economists and Leftist ideologues when the country was experiencing galloping inflation due to the adoption of Modern Monetary Theory – a concept discarded by mainstream economics – by former Central Bank Governor Professor W.D. Lakshman, whose actions brought disastrous repercussions to the underprivileged segments of the society? 

Rightfully, the Washington-based global lender has included the necessity for an effective financial safety net to be undertaken within the Island in order to safeguard the poor as a vital prerequisite for approving the economic bailout package. However, this aspect is conveniently overlooked by the regular IMF-bashing columnists and politicians in the country who have intensified their criticism of the Government’s structural economic reforms in the recent past. 

Some of the economic reforms such as cost-reflective pricing of essential utilities cause a huge shock to the financially vulnerable sections of the society. In that backdrop, effective implementation of Aswasuma is expected to offer relief to the poor and downtrodden to satisfy their basic necessities.

Aswasuma is only a safety net and should not be considered as a strategy to eradicate poverty. Poverty can only be eliminated by creating avenues of income generation and employment. Self-initiative and determination of individual citizens are critical in that regard. Unfortunately, the entitlement culture is endemic within the social fabric of the country, and Leftist politicians over the years have convinced people that the Government must offer everything they need from birth to death. 

There is a section in this country who are fond of living like parasites and thereby burdening the hardworking, educated professionals in the country. Such communities are mostly found in shanty towns across the country and most of them are stuck in misery due to their wrong lifestyles associated with drug addiction and alcoholism. Taxpayers would not like to see the Treasury channelling their hard-earned money to a group of people to indulge in boozing and smoking through a highly publicised State program. Hence, it is incumbent upon the Government to launch a scheme to liberate communities from such adverse lifestyles and set a path for them to become productive citizens in the society in order to provide a successful remedy to poverty.