Dependency Syndrome is the latest addition to the list of causes of poverty in Sri Lanka, which is a serious matter to take in to consideration, Chairman Sri Lanka Economic Association Prof. A. D.V. de S. Indraratne said at a recent seminar held in Colombo.
Dependency on the State for everything, free food in the form of food stamps or Samurdhi, free transport, free health and free education, without trying to be self-employed and self reliant and burdening the economy of the country had been a main cause of poverty though no serious note of that has been taken, he said.
"Sri Lanka is no longer classified as a least developed country, or for that matter, a less developed country. It enjoys a per capita income of more than 1,300 US dollars and falls into the category of low middle income country. However, nearly half its population (45.1 per cent) live below the poverty line of 2 US dollars per day and nearly a quarter (23 per cent) is considered poor according to the Consumer Finance and Socio-Economic Survey of 2003/04 published by the Central Bank," he said Prof. Indraratne emphasized that the rural poverty is staggering with more than four fifth of the poor living in the rural sector and there were several reasons for this. One of course was the slow growth, compared to high performing economies of East Asia, China and India, Sri Lanka’s per capita economic growth during the last decade has been 3.4 percent.
Even though this is respectable, and is higher than the growth rate of developing countries, as a whole, it has not been able to make a dent on rural poverty, he said.
The slight decrease of a 3 percentage point achieved in overall poverty between 1990 and 2002, the latest year for which these figures are available was almost entirely in the urban sector, Prof. Indraratne said.
Another reason for the slow poverty reduction and its concentration in the rural sector is the uneven economic growth and its inequitable distribution. While the lowest 20 percent of the population receives only 4 percent of the total national income wide range regional disparities exist between districts and provinces. For Example more than half of the gross national income is contributed by one province alone, namely Western Province with its per capita income being more than twice as much as that of provinces such as Uva, Sabaragamuwa and Eastern.
Still another reason in the failure of successive governments to realize the full potential of the economy, including its rural small and medium sectors as in the case of Sri Lanka’s Asian neighbours, such as Singapore, Thailand, Malaysia and Republic of Korea which were economically behind Sri Lanka before the sixties he said.
Corruption is another major cause of poverty Prof. Indraratne said.