The Center for Poverty Analysis (CEPA) successfully hosted a Symposium on February 27th at Hilton, Colombo, presenting the latest policy-relevant findings from its comprehensive 5000-household poverty study conducted in 2023. The study, partially funded by the Asian Development Bank (ADB), assessed the impact of Sri Lanka’s economic crises on poverty incidence and the effectiveness of social protection programs. The half-day event convened key stakeholders, including government officials, representatives from the donor community, civil society organizations, academics, and development practitioners, to discuss crucial insights on poverty alleviation strategies. The keynote address was delivered by Dr. Indrajit Coomaraswamy, former Governor of the Central Bank of Sri Lanka.
Sri Lanka had made remarkable progress in reducing poverty over the past decades, with the poverty incidence dropping from 26.1 percent in 1990 to about 4 percent by 2016. However, the COVID-19 pandemic and subsequent economic crises led to a significant reversal, with the World Bank estimating poverty incidence at 26 percent in 2022. Other estimates suggested that by June 2023, the poverty rate had further escalated to approximately 31 percent. Given the rapidly evolving economic landscape, frequent updates on poverty incidence are vital for evidence-based policymaking and targeted social protection interventions.
The CEPA study employed both the Multidimensional Poverty Index (MPI) and the expenditure-based poverty line to conduct a comprehensive analysis of poverty dynamics. Initially, the Asian Development Bank (ADB) provided funding for a survey conducted through CEPA to assess the impact of escalating electricity costs on household welfare, particularly among vulnerable populations. Subsequently, CEPA expanded the scope of the study by incorporating an additional 2500 households using independent funding, thereby enriching the depth and breadth of the analysis. The workshop presented key findings from this consolidated dataset and facilitated discussions among stakeholders on future policy directions.
The symposium addressed several critical questions, including the current status of poverty in Sri Lanka and whether poverty levels continue to rise, stabilize, or decline. Discussions also evaluated the effectiveness of the Aswesuma social protection program, which replaced the previous Samurdhi program known for its high exclusion errors, with nearly 50 percent of allocated funds being misdirected. Implemented with a USD 200 million budget over the past year, Aswesuma was designed to enhance targeting efficiency. The workshop examined whether the program has successfully reduced exclusion errors and met its intended objectives.
Additionally, the workshop explored the impact of the economic crisis on health and education poverty, particularly the care economy. With multidimensional poverty measures gaining recognition as more holistic indicators of poverty compared to income-based metrics, the event also delved into the suitability of MPI in capturing poverty fluctuations during economic crises, where income levels shift more rapidly than asset ownership and access to infrastructure services.
Another key focus was the effects of crisis-driven electricity price increases on household welfare, particularly among women, and whether electricity consumption can serve as an effective metric for real-time poverty monitoring. The discussions further assessed the vulnerabilities of different population groups to electricity price shocks and broader economic disruptions, shedding light on those most at risk of falling into poverty due to external shocks.
CEPA’s workshop provided an updated and evidence-driven understanding of poverty in Sri Lanka, fostering informed policymaking and the design of more effective poverty alleviation strategies. The event served as a platform for collaboration among stakeholders, encouraging discussions on social protection measures, economic resilience, and sustainable poverty reduction initiatives.
