CEPA takes a multi-dimensional view of poverty, moving beyond traditional measures and indexes in an effort to understand poverty rather than simply measure it. This means understanding poverty in relation to Sri Lankan issues, and in the context of specific factors that characterise certain areas and groups of people. CEPA specialises in measuring the relationship between and impacts of certain events and activities on poverty, rather than seeing poverty as an abstract state in itself. This helps to capture the dynamics of poverty rather than simply observing a static situation, i.e. how and why conditions change over time and identifying transitory and seasonal poverty.

CEPA focuses its research programmes on the relationship between poverty and certain key issues which are identified based on their importance relative to poverty, and on the current national and international policy environment. Outside of these main programmes CEPA identifies synergies and cross-cutting issues across different research topics; for example knowledge gained from CEPA’s Poverty and Youth programme contributed to subsequent research undertaken on poverty in the Estate sector.

CEPA’s approach combines qualitative and quantitative methods, contributing to and substantiating existing quantitative knowledge with valuable qualitative information collected in the field. This approach is contributing to the development of new multi-dimensional poverty measurement poverty methodologies and indicators which are more appropriate for Sri Lanka, measuring issues such as vulnerability, social exclusion and human security. CEPA also encourages and facilitates the dissemination and applied use of existing data and knowledge amongst development professionals in order to effect change and influence policy

The following pages outline CEPA’s specific experiences and views on poverty in Sri Lanka based on the research the organisation has undertaken. This more specific, qualitative information should complement and challenge the more traditional overview of poverty in Sri Lanka outlined above.

Poverty in Sri Lanka is largely measured and viewed from a monetary perspective, basing measures on income and consumption patterns. This reflects standard measures as used by most governments and international financial agencies around the world. However, the causes of absolute and relative poverty are more complex than can be conveyed by monetary measures alone, and there is a growing demand, both internationally and in Sri Lanka, for more information on 'alternative' dimensions of poverty, such as access to basic services, livelihood opportunities, social exclusion and vulnerability. This brief overview will present both the conventional monetary assessment of poverty in the country, and introduce some of the broader issues coming out of the multi-dimensional approach. The final section outlines CEPA's approach in the context of the challenges posed by a multi-dimensional understanding of poverty.

Although the establishment of a poverty line marked a significant step forward in measuring poverty in Sri Lanka, the focus on income and consumption levels continues to reflect the limited predominant monetary approach to poverty. Broader, multi-dimensional definitions of poverty are becoming more widely accepted in Sri Lanka, although there are not yet many official measures. A multi-dimensional approach takes into account people’s own perceptions of poverty and recognises that poverty can be experienced in a number of different ways and caused by a number of different factors. People may experience poverty in terms of relative rather than absolute deprivation, i.e. a lower standard of living compared to the majority of the population or past living conditions, or they may lack access to key factors other than income, i.e. employment, infrastructure, decent housing, land, potable water, food, or basic freedoms, capabilities and mobility.

The Human Development Index goes some way to measuring alternative dimensions of poverty and deprivation, looking at life expectancy, education and standard of living (GDP per capita). According to these measures Sri Lanka ranks 99th out of 177 countries and is the best performer in South Asia. This reflects the high social indicators mentioned above, including a high literacy rate of 90.7%, a relatively high life expectancy of 71.6 and relatively low under 5 mortality rate of 14/1000 (statistics from HDR report 2006/07). Once again, however, this aggregate view does not reflect the reality of regional, ethnic and sectoral disparities, and statistics are much lower in some areas – for example in the estate sector which has the lowest literacy levels and average years of schooling in the country.

The HDI’s Human Poverty Index measures the proportion of people below a threshold level in basic dimensions of human development; living a long and healthy life, having access to education, and a decent standard of living. In Sri Lanka the proportion of people living in poverty according to this definition is 17.8%. On the Gender Development Index (based on life expectancy, literacy and schooling enrolment, real income), Sri Lanka’s GDI value, 0.735 should be compared to its HDI value of 0.743. Its GDI value is 98.9% of its HDI value. Out of the 156 countries with both HDI and GDI values, 87 countries have a better ratio than Sri Lanka’s. However, the rating for the Gender Empowerment Index is low, reflecting the low presence of women in parliament or government or engaged in professional or skilled work.

However, few statistics are available for the Provinces in the North and East of the country, so aggregate statistics only tell part of the story. Conflict and the related insecurity that people suffer are key factors in poverty, and the ongoing civil conflict between the government and the LTTE in Sri Lanka has displaced many people and disrupted services and infrastructure. Investment in infrastructure maintenance and expansion was very low during the years of active conflict, so isolated rural communities in the North and East suffer from poor access to roads and essential services such as healthcare and education. Residents suffer from poor employment opportunities and high levels of human insecurity. Ethnic tensions between different communities run high, particularly where IDPs (Internally Displaced Persons as a result of the conflict) have settled in the areas to which they have been displaced. This has caused further tension and disputes over land resources with existing residents.

Another area in which conventional monetary statistics may convey a distorted perspective is in the distinction between rural poverty and urban poverty. According to income and consumption measures, poverty levels are relatively low in urban areas as many live above the poverty line. However, despite relatively higher income and consumption levels, a large number of people in urban areas live in poor quality, crowded housing and have little access to basic services such as electricity and water. The 2002 Poverty Profile estimated that there were 1,614 such Underserved Settlements in Colombo (Understanding the Dimensions and Dynamics of Poverty in Underserved Settlements in Colombo, CEPA: 14), revealing large numbers of people who experience non-income forms of poverty such as unstable livelihoods, lack of access to private sanitation, poor access roads, lighting and draining, and high levels of drug and alcohol addiction.

 

Sri Lanka tends to be known as an 'outlier' in the region, due to its high human and social indicators which put it on a par with mid/high middle-income countries, despite its status as a low middle-income country. However, despite good GDP growth in recent years (6.0% in 2005 and 7.4% in 2006 - Central Bank of Sri Lanka Annual Report, 2006), consumption and expenditure poverty levels remain high. The most recent data from the Department for Census and Statistics puts 23% of population below the poverty line (DCS, 2002). Despite this indicating a decline from the figure of 30% in 1990, the figure translates into more than 4 million people living below the official poverty line. (This official poverty line was first introduced in Sri Lanka in June 2004 and the figure is now regularly updated by the Department of Census and Statistics.)

However this aggregate figure belies the heterogeneity of poverty levels in Sri Lanka which differs widely between Provinces and Districts. At the two extremes are Colombo District with 6% of the population living in poverty, and Moneragala District which registers 37% of the population living in poverty (DCS, 2002). This demonstrates the importance of disaggregating poverty statistics in Sri Lanka in order to get an accurate picture of where the poverty 'pockets' lie. The DCS is now using Poverty Mapping in order to reflect the disaggregated statistics and to highlight trends and clusters.

A sectorally disaggregated view shows the highest levels of poverty occurring in the South (Southern, Uva and Sabaragamuwa Provinces). Overall, rural areas are poorest - 90% of the poor live in rural areas, but this statistic must be understood in the context of urban/rural classification in Sri Lanka which classes the vast majority of the population as rural. The worst sector in terms of poverty levels and social indicators is the Estate sector (the population who live and work on tea, coconut and rubber plantations) which registers a 30% head count poverty ratio based on the national poverty line (as compared to Rural: 24.7% and Urban: 7.9%) (DCS, 2002: 15). The poverty maps highlight the close correlation between isolation from social and economic infrastructure, cities and markets, and higher levels of poverty incidence. This is borne out in the Estate sector which is particularly isolated from mainstream economic infrastructure.

In terms of income inequality, the relative position of the poor has fallen over the past few decades. Statistics from 2002 reveal that the lowest decile earned only 1.7% of total income, whereas the highest decile earned 37.4% (DCS, HIES: 2002). Less than 1/3 of the population earned around 2/3 of total income, whereas more than 2/3 earned around a 1/3 of the total income. Therefore, while GDP may be rising in Sri Lanka, this growth is not being converted into poverty reduction as the poor's share of that growth is not large enough, and falling.