Economic gains and the ground reality
In Geneva, the UNHRC chief drew reference to Sri Lanka's poverty having risen by an estimated 27.9 percent last year and how monthly incomes have decreased since March 2022. The IMF has, meanwhile, started its second review of Sri Lanka’s economic recovery programme. The Government anticipates that the difficult decisions it took over the past few months, including raising taxes, have paid sufficient dividends to convince the international financial agency to release its third tranche of funding.
In general, IMF support is aimed at buttressing efforts to “restore macroeconomic and financial stability and debt sustainability while enhancing growth-oriented structural reforms”. These are buzzwords many Sri Lankan economists live and die by. And it is true that the macroeconomic indicators are improving.
On Wednesday, President Ranil Wickremesinghe told Parliament that State revenue had risen by over 50% last year— alongside a surplus in the primary account—when compared with 2022, allowing the Government to settle outstanding dues to contractors. Losses incurred by major State-owned enterprises in 2022 were transformed into profits last year. And inflation dropped from 70 percent in September 2022 to 5.9 percent by last month.
The President also regretted “the tendency of certain political factions to prioritise rhetoric over tangible solutions”. Be that as it may, the “stability” narrative is less meaningful to the growing number of urban and rural poor than it is to economists. Because, while it has been emphasised that there will be “some pain” before these reforms provide widespread dividends, the degree and type of difficulties ordinary people are grappling with risk creating problems that last at least another generation.
Take the nutritional crisis. It has not abated. According to the National Consumer Price Index, the average food expenditure per month is Rs. 48,441.68. Food remains expensive and families are still avoiding proteins because they cannot afford them. Pulses like chickpeas (green gram has skyrocketed in price) are avoided in urban settings because they consume too much gas to cook.
With the new school term starting, there is a flood of charity requests for school provisions, in cash or kind: books, stationery, school bags, lunch boxes and water bottles. Shoes and uniforms are another critical need. Again, while some schools have received vouchers for shoes as well as uniform material from the Government, others have not.
Meanwhile, thousands of homes were cut off from the national electricity grid owing to soaring prices. Ceylon Electricity Board statistics show that in November and December last year, some 145,000 homes were disconnected. The problem with this is that once the arrears and penalties pile up, it becomes increasingly difficult to get supply back.
The era of subsidised utilities may be over, but time must be given for ordinary folk to get adjusted to the new measures and balance their home budgets just as the Government must the national budget.