One minister has said that pressure of FUTA to compel the government to allocate 6 % of GDP amounts to a terror action. If similar demands are made by doctors for the maintenance of the free health system and Buddhist monks for the up keeping of pirivena education then, according to the minister, system could shut down. This is said by a government that spends large sum of money for various uncertain projects and elite entertainment. It is perfectly OK for the rulers to dish out money from government coffers to satisfy the new-rich gangs that hang on to the regime, but the demand of university teachers to safeguard and maintain the national education system amounts to a terror attack. Education and health are the most important items of the welfare system which promises equity with development. Equalizing effect of free education and free health is obvious and needs no explanation. In Lanka this had been tested by several generations and except the cynical rich, rest are satisfied with the end result. If we have problems then certainly it is not because we have free education and free health; certainly not. On the contrary we are civilized and cultured inspite of poverty, because we had these amenities for so many generations.
Poverty amidst growth is a much debated issue; that is true. The poverty paradigm has shifted from poverty reduction to what is known now as inclusive growth. This is because the process of rapid capitalist economic growth has left out large numbers of people from meaningful participation in social activities. Inclusive growth is concerned not merely with income inequality, but with all dimensions of poverty. It embraces both income and non-income dimensions of well-being. This discussion is very relevant to the Lankan situation. IMF has given green light to the government to go ahead with the dismantling of the welfare system. They wanted the government to transfer the burden of education and health to the private sector to make these profit-oriented, and save money for balancing the budget. While the IMF has taken that attitude in relation to welfare measure in Lanka, the ADB has taken a critical view in relation to growth of poverty. The ADB goes on to say: “While poverty and living standards have improved in the region, more than 900 million people in Asia and the Pacific still live on less than $1.25 a day. In terms of economic benefits and access to social services, large numbers of people are being left behind or left out. In many developing countries, economic inequality has increased in the past decade. Without steps to address these disparities, the risks this trend poses – including social instability – will continue to grow.”
Key word here is social instability. Social instability may express as youth unrest and urban mass actions obstructing the normal life of city dwellers. On the other hand it could lead to national and communal violence with continuous terror actions. We have already seen such developments in this country in the recent past. Even the liberals have recognized the problem and they have suggested several changes in the development paradigms. The new paradigm of inclusive growth emphasizes that the process of rapid economic growth should not leave out large numbers of people from meaningful participation in economic, social and political life in their societies. Increasing economic inequality has followed the economic growth in Lanka and in several other South Asian countries. Thus the main reason for the persistence of poverty was the skewed distribution of assets and capabilities. Unequal assets, wealth and opportunities in turn breed inequalities. Also inadequate opportunities lead to inadequate incomes.
Lanka has improved income distribution owing to its past welfare programmes of free health and free education. Free education is an intergenerational lever to reduce poverty. Many have moved upward socially and economically owing to education facilities provided by the state. It is precisely because of that the university academic strike has highlighted the need for higher investment in education that would make society more egalitarian. Public expenditure on education had fallen to 1.47 per cent of GDP, the lowest in many years. This reduction in educational expenditure could be a setback to social mobility. Reduced expenditure on public health facilities too could deprive the poor of good health.
It is government priorities that determine the allocation of expenditure on various sectors. When governments spend large amounts of money on defence, then there are inadequate funds for social welfare policies that are egalitarian in their outcomes. It was pointed out that defence expenditure had a component of egalitarian income distribution, as the bulk of soldiers came from poor rural households. However all that happened within Sinhala community; many died and lot got disabled. The large amount of defence expenditure on wages would have improved incomes and livelihoods of Sinhala rural households in particular, while the war brought poverty and misery to the victims of war. Time has come for all Lankans to get together and fight to defend free health and free education. This is a common struggle against the chauvinist reactionary regime.