Sri Lanka: Universal social security: if not now, when?

While social security can provide the policy framework to enable communities to come together in a time of crisis, democratic structures at every level must be strengthened to pool resources and ensure smooth delivery.

Feminist Collective for Economic Justice

26 June 2022 

Dire Situation

The humanitarian crisis in Sri Lanka is visible in the daily struggles of people to access basic food and medicines. Days ago, the UN appealed for humanitarian assistance to Sri Lanka, noting that 70% of households are skipping meals or have reduced their food consumption. Food prices in the last two years rose by a staggering 73% while local production dropped drastically. Increased concerns over gender-based violence and child protection due to the stresses of painful economic hardships was also noted. Furthermore, UNICEF highlighted that 1 in 2 children need humanitarian assistance. 

While heart wrenching stories about struggles for survival multiply every day, the Government’s apathy in addressing immediate needs through price controls and distribution system have added to people’s feelings of despair. We recently witnessed the use of live ammunition on crowds in fuel lines, killing one person in Rambukkana and injuring two people in Vishvamadu. As the state fails to respond, women are having to make hard choices - which child gets to eat an egg in their meal or go to school, give up higher education and vocational training to find work that can supplement household incomes or to stop working because travel and accommodation are unaffordable. 

A famine is imminent. Yet, distorted notions of the reality continue to circulate among elites who are far removed from the harshest conditions the crisis has inflicted on the urban poor, workers in the rural informal sector, plantations, and factories and those performing unpaid work. 80% of Sri Lanka’s poor live in the rural sector. However, the romanticised claims that people can eat Kos and Kanji to survive signals an ignorance of the vast rural population and how their lives are, and will be, impacted and of the structures that drive and maintain inequality in this little island.

The purpose of social security: then and now

The Covid-19 pandemic and economic crisis exposed the importance of social security programmes cushioning people from the adverse effects of a sudden loss of incomes. Income earning capacities are affected by reasons such as old age, sickness, maternity, unemployment, disability, occupational accidents and disease. Thus, social security is recognised as a human right. Universal social security is a long-standing demand by feminists, as women are driven to work under precarious conditions and women’s unpaid labour in social reproduction are not compensated or valued. However, in recent discussions around the economic crisis, the vision and scope of social security has been distorted - reducing it to a handout as opposed to a lifesaving and economic recovery stimulating measure. 

Historically, Sri Lanka has enjoyed an extensive social welfare system. The provision of universal free health and education have been the two pillars of Sri Lanka’s post-independence development, contributing to high human development index (highest in South Asia and positioned at 72 out of 189 countries globally). Retirement benefits with old age pensions and the widows and orphans pension schemes for the public sector and the Employee Provident Fund and Employee Trust Fund for the private sector are provided. Voluntary contributory pension schemes are available for workers in the informal economy, including farmers and fisherfolks, although the amounts are inadequate. In addition, schemes provide coverage for disability and health care and the Samurdhi scheme, which targets the poor. These programmes have been systematically underfunded and weakened over the decades.  

Neoliberal thinkers argue that a targeted social safety net for the ‘most vulnerable’ can mitigate the painful consequences of austerity measures. Our previous statement highlighted that austerity will, “undermine improvements in productivity and deter inclusive economic growth along with a robust social infrastructure.” That safety nets can somehow compensate for the deep impacts of austerity on people’s livelihoods is misleading. For example, removal of fertilizer subsidies will leave farmers unable to afford the prices that have drastically increased, by a 1000% and forced to abandon farming. Fisherfolk have lost two months’ worth of earnings due to fuel shortages. Increase in kerosene prices this year alone has pushed the cost of taking a small fishing boat to sea from Rs. 6,000 to Rs. 8,000. In this context, targeted social safety measures in the form of a monthly cash transfer of Rs. 3,000 to Rs. 7,000 as suggested makes no difference, after their livelihoods and the national food supply chains have been wrecked by austerity measures.

Cash transfers provided via Samurdhi do make an important difference for those with precariously low or no incomes. Families rely on this meager contribution to maintain life. A savings scheme and a small-loans programme are provided through Samurdhi. In recent years, Governments focused on expanding the Samurdhi loan scheme with an interest rate of 8% to 10%. There is a general lack of clarity as to how the savings are used to benefit people’s lives. In addition, investigations into misappropriation, corruption and fraud of the Samurdhi Savings Fund have been reported over the years. Samurdhi has excluded many younger members from the cash transfer benefits while encouraging them to participate in the loan schemes. 

‘Targeting’ of beneficiaries for Samurdhi has led to wide abuse of the system whereby people are made to feel extremely uncertain about their limited entitlements. Making it onto ‘the list’ has more to do with political patronage and corrupt practices than genuine assessments of needs. More households are in need in each divisional area than the allocated numbers by the government, creating space for Samurdhi Officers to pick and drop members in an arbitrary manner. Owning a gas cylinder or a motor-bike, children getting married or migrating to a different area in search of employment are reasons deemed sufficient to strike members off the list. The power dynamics result in added hardships on poor and vulnerable people such as long waits to collect Samurdhi payments, forced participation in community service (shramadana), in community political activities, and being dropped from this list for lack of social acceptance or disrespecting the local Samurdhi Officer, his fellow administrative officers or politicians. Samurdhi members have little space to question or make demands relating to entitlements. 

Universal Social Security in a time of crisis 

Economists have suggested developing sophisticated statistical models for better targeting and ‘identifying the most vulnerable’ in order to extend support. Given the large-scale impact of the economic crisis, it is expected that 70% of Sri Lankan households (those earning Rs. 65,000/per month and less) will not be able to make ends meet, whereas currently, Samurdhi reaches only 1.8 million households. Any attempt at targeting households during this deep crisis is counterproductive, ill-advised and will lead to social unrest. Therefore, a social security programme applied universally is the need of the hour if we are to use it as an effective mechanism during a crisis. If not, it will merely amount to throwing good money after bad. 

Poverty-lines, in addition to their arbitrary nature, fail to capture the multiple, cyclical and complex processes that lead people into economic deprivation. This is particularly true for women. The crisis has also exposed that macro-level policies push swathes of people into poverty. It is high time that the gaze is turned from looking for the ‘poor’ to fixing those policies. With the existing programme, a shift from framing Samurdhi as a poverty alleviation tool to conceptualising it as a social security provision is necessary. Social security is an entitlement and not to be viewed as charity to be selectively doled out or as a disciplining mechanism. It is interesting to note that in 2017, the Public Representations Committee on Constitutional Reforms recommended that in the new Bill of Rights, that along with the right to food (food security and food sovereignty), water, housing and social security also should be included. 

In an economic depression, public investments to stimulate the economy ought to form a central response to the government’s plans. However, we saw that the lowest amount in the region, of less than 1% of GDP, was allocated towards supporting the economy during the Covid-19 pandemic. The current freeze on public spending has stifled the meagre aide that has trickled into the country as administrative costs are not allocated to transport and distribute provisions like rice and other essentials. In the short-term, given the looming famine, it is essential that humanitarian aid be prioritised for sourcing and distributing food. 

The impact of a famine is long-term, even intergenerational. In order to avert those negative outcomes, a system of basic food items, considering the basic nutritional needs of the households, along with cash transfers are necessary. Nutritious mid-day meals to all schools can ensure children and their families are supported and nutritional advice for food choices families will be compelled to make are also needed. Furthermore, medium to long term food security measures in terms of support and investment in agriculture, farming and fishing must be activated without any further delay.  

Given the depth of the crisis, it is clear that without mobilising the full support of all sections of the society, an economic recovery is not possible. In this context, an extensive social security programme must be given serious consideration, as part of the solution. Universal social security is an important solution to addressing the economic crisis as it can reduce the severity of the depression for the country. Universal social security also contributes to long term recovery and development as is recognised as part of the development agenda and can contribute to productivity, respond to inequality, and strengthen inclusive growth and social peace. 

While social security can provide the policy framework to enable communities to come together in a time of crisis, democratic structures at every level must be strengthened to pool resources and ensure smooth delivery. Only a political leadership that is capable of crafting such a vision and holds legitimacy in the eyes of the people to mobilise them, can lead us towards economic recovery and ensure political stability.