By Laksiri Fernando –
‘He who sees dukkha sees also the arising of dukkha, sees also the cessation of dukkha, and sees also the path leading to the cessation of dukkha.’ – The Buddha
The New Year is dawn with much celebration. Millions of people celebrated in capital cities, but we should not forget that millions of people also remained hungry on this day. What we see in Sri Lanka and the world over is the primary necessity of addressing the suffering (dukkha) of the poor, if we wish to avoid injustice, instability and violence. If it is a ‘struggle,’ it is a struggle primarily for economic justice, freedom from hunger and poverty, better living standards and economic upliftment of the poor. All democratic rights of the people should be defended in the process, because otherwise the political initiatives would be grabbed by a small group of questionable people.
In Sri Lanka, there is no point in rallying around Yahapalana (may I say) scoundrels again in the name of democracy as they have already betrayed not only the economic rights of the people but also much of the democratic rights. The task ahead is to find viable alternatives. There are possibilities that the government going against the media, journalists and independent and critical reporting in the coming future. They are already threatening them as ‘Black Media.’
World Bank and the ‘international community’ are undermining poverty in the world and in Sri Lanka. Sri Lankan authorities, past and present, are playing the same music by propagating the myth that they have reduced poverty from 22.7% to just 6.1% within ten years. Is it a miracle or a myth?
The last year 2018 has seen dramatic events world over. Most of the former neoliberal countries are crumbling due to internal contradictions. They have still not been able to come out of the 2008 global financial crisis because of the fake nature of their capital markets and equity/financial arrangements.
Donald Trump is threatening to close down the US/Mexican border, after a government shutdown already affecting more than 400,000 working people. US crisis will deepen in the future with implications for many other countries. In France, although people for a while thought that a ‘non-partisan’ person like Emmanuel Macron would address poor people’s grievances, he has turned out to be much worse than previous Presidents. His increase of fuel prices and mismanagement of the economy have generated an unprecedented Yellow Vest movement.
European Union is in a major riddle and Brexit is only the tip of the iceberg. Italy, Spain and Portugal are in the middle of the crisis. More dramatic is the crisis in the British political system. ‘Deal or no-deal’ conundrum with EU has created an extraordinary crisis in this oldest Parliament in the world. Although a deal with the EU might appear a rational path of exist, the British people have become extremely suspicious of external actors, particularly of countries like Germany and France.
It is under such a context that Sri Lanka is hilariously advocating ‘unmitigated free trade’ without any national safeguards, under the dictates of the World Bank and the IMF.
What is behind all these unprecedented happenings? Bloomberg reported that ‘unequal distribution of wealth has increased in every region of the world from 2007 to 2016’ (22 September 2018). Most stark is in the United States, and China not excluded due to rapid urbanization. More recent information is given by Credit Suisse. The total size of the world economy is around US $ 317 trillion with a growth rate of 4.6%. In 2017, the world wealth increased by 14 trillion. But who gobbled this wealth?
There are two major contradictions. According again to Credit Suisse, ‘North America and Europe together account for 60% of total household wealth, but contain 17% of the world adult population.’ Is this reasonable? What does the so-called ‘international community’ and human rights NGOs say about this situation?
The second major contradiction is internal to these and our countries. In the EU, the top 1% gobbles 12% percent of all income, while the bottom 50% left with only 22%. If we count the bottom 10%, the share is around 2%. The situation is quite appalling not only in the peripheral countries like Turkey, Portugal, Spain, Italy and Eastern European partners, but also in the core countries like Germany, Britain and France. That is why the Yellow Vests and Brexit activists are operating. In the US, the tope 1% gobbles 20% of the wealth while the bottom 50% left with only 20%. No need to talk about the bottom 10%. No figure is suitable. US Gini coefficient is very similar to Africa!
There is no question that income inequalities are much wider (and even camouflaged!) in developing countries including Sri Lanka. The highest number of billionaires are now present in India. China is not so behind despite President Xi’s efforts to rectify the economic imbalances on socialist lines.
What about Sri Lanka?
Sri Lanka has become more and more a neo-colonial country emulating Western countries and their dictates in the economy. This is done under the pretext of globalization or fake ‘internationalism.’ The country is rivalling in neoliberalism under the dictates of the IMF and the World Bank while many of the Western countries themselves have abandoned it. Most of the welfare safety nets for the poor and low income people are already disbanded and the remaining safeguards are under threat directly and indirectly.
The public sector is neglected. For example, a poor person still can go to a government dispensary or a hospital but most of the medications have to be obtained from private pharmacies. Although the school participation levels are satisfactory, the children in remote areas do not have required facilities. Even in schools with facilities in urban areas, children from low income or poor families find it difficult to cope for the lack of financial background that the other children have.
Sri Lanka is boasted to be a middle income country (lower) now with a $ 90 billion economy and a per capita income over $ 4,000. However, the income gaps have increased even under the present calculations and estimates. Incomes shared by top 10% exceeds 32% and the lowest 10% is left with only 2%. These are 2012 statistics (Index Mundi) without much change or much worsening trends. When it comes to the top 20%, they hold almost 50% of the national income, while the bottom 20% having only 5%. Is this reasonable? Or can we just blame the poor for their laziness or Karma for the situation? Or are their structural and policy reasons, national and international, for the prevailing conditions of poverty and income disparities?
Reginal disparities of income are also alarming. Districts of Mullaitivu, Kilinochchi, Moneragala, Mannar, and Batticaloa are in the bottom of the pale. Some of these districts are minority districts severely affected by the war. However, the World Bank, IMF, Asian Development Bank and the likeminded organizations praise Sri Lanka for reducing poverty over the years.
Absurdity of Official Poverty Count?
According to the government of Sri Lanka and the World Bank, a ‘miracle’ has happened within ten years between 2002 and 2012! The policy think tanks like the IPS also have not questioned it. The following is what a great economic expert of the World Bank, David Newhouse, says in March 2017.
“Excluding the Northern and Eastern provinces, headcount poverty fell from 22.7 percent to 6.1 percent between 2002 and 2012/13. In that same period, extreme poverty in Sri Lanka decreased from 13 percent to less than 3 percent in 2012/13— lower than many of Sri Lanka’s neighbours, other post-conflict countries, and other comparable countries.” (‘Understanding Poverty in Sri Lanka,’ 2 March 2017).
Can you believe it? Reducing poverty by 17% percent in ten years would be a miracle in any country. I was in the country mostly between these years. There was no such a miracle except relative growth and expansion of the rich and the upper middle classes. I was visiting the country again in July/August 2018. What I have seen is increased poverty in Colombo.
All these absurdities are based on the absurd calculation of the Official Poverty Line (OPL). According to the technical notes of the Census and Statistics Department a person requires a minimum of 2030 kilocalories per day. That is correct or even high. Then they have calculated the minimum expenditure required by a person to fulfil this target during a month since 2002. This is the absurdity. In 2002 it was Rs. 1423 and by November 2018, it was Rs. 4707. This is the OPL and this means what a person requires to achieve 2030 kilocalories per day is just Rs. 157!
It may be possible that people who have less than Rs. 4707 per month income might be less than 6 percent of the population. Even this can be doubtful now given their professional expertise! However, they have not explained at all in the technical notes or elsewhere how a person can have 2030 kilocalories for Rs 157 per day, let alone other basic needs!
Need for New Thinking
Neglect of the poor and poverty is a global trend and a problem. This neglect originates from the international monitory and economic organizations themselves who dictate terms to developing and still poor countries. No need to talk about the rich countries or their ‘international community.’ For over three decades, the World Bank calculated the poverty line as $ 1.20 per day grossly underestimating the suffering (dukkha) of the people without a universal basic income (UBI). Then in 2015 after thirty years it was raised to $ 1.90 per day and now says even under that, there are over 800 million people in the world below that poverty line. It is still a gross underestimation. It is not clear whether they have done a kilojoule calculation like our officials!
What is unjust in the world is not mere poverty, however you calculate it. Vast economic disparities are unjustifiable. These disparities have been increasing in Sri Lanka over the years and have come to an unbearable position. This may not be due to any rich person’s or business company’s direct fault, but for structural and policy failures for which the politicians are responsible.
At Ratmalana, where I was staying during the last visit, there was a vast difference between the two sides of the Galle road. On the sea side, mainly the poor and the workers live, struggling to make their ends meet. On the land side, there was a thriving upper middle class, with high walls, modern luxury vehicles and CCTV cameras for security purposes. Attached is a picture of a poor beggar sleeping at a roadside.
The beggar population has increased exponentially during the last couple of years. There can be some fraudulent people exploiting the situation, but the prevailing prejudices against beggars are completely unwarranted. I even wondered what the charity organizations were doing under the circumstances?
- There is a pressing need in the country to bring economic and social rights of the people to the forefront of human rights campaigns. Apparently, these are neglected aspects among the foreign funded human rights NGOs, except a few.
- The current demand of the estate workers to raise their daily wage to Rs. 1,000 is absolutely a justified demand. All concerned people should unconditionally support it.
- I have previously written about a Universal Basic Income (UBI) for all deserving. It can be in the range of Rs 10,000. The bottom 20% of the population should be entitled to it, and any democratic government should be able to deliver it.
- Political democracy should be accompanied by economic democracy. Good governance should be established in the economy as well.