The COVID-19 pandemic offers Sri Lanka the opportunity to review and strengthen its social protection programs to help citizens recover from future shocks faster. Social protection includes social assistance (social assistance programs for the poorest), social insurance (for unemployment, disability, sickness and old age) and programs to improve opportunities to help people find better jobs.
The World Bank is helping the Sri Lankan government reform and improve its social protection policies and programs. At the heart of these efforts is the development of a national social protection strategy. Sri Lanka has never had a coherent social protection strategy, which in many countries is used as a common guide and planning tool for government social protection programs.
Sri Lanka’s social protection programs have been introduced sporadically. This limited their impact and prevented them from working in tandem with other government programs like education, health and disaster response. Because there is no comprehensive framework for thinking about well-being, there are still large gaps in the safety net, as with informal workers. Therefore, it is necessary to have a clear strategy for social protection.
âSocial protection is fundamentally about risk management. It is about having a real safety net that prevents people from falling into poverty and helps those who lose their income to recover. It goes beyond tackling chronic poverty or the long-term drivers of social exclusion to examine job security and employment and the help people can expect to receive s ‘they get sick or lose their jobs’, World Bank Senior Economist Dr Thomas Walker said.
The COVID-19 crisis is forcing policy makers to redefine their understanding of âpoor and vulnerableâ. The pandemic has affected many people economically, most of whom may have experienced a significant drop in their standard of living. In the context of COVID-19, the simplistic âpoor and non-poorâ dichotomy – which has often guided social protection policy – is not a useful tool in determining who really needs government help.
The pandemic has also proven that shocks can push even relatively financially secure people into dire straits. Countries around the world have started to realize that a broader approach to safety nets, using advances in identification and information technology, is needed to ensure that all households can obtain temporary assistance and stay safe. recover quickly from negative shock. This is particularly important in a context like that of Sri Lanka, where the majority of the population lived on relatively low incomes even before the crisis.
Countries like Pakistan and the Philippines are pre-positioning financial resources to help respond to shocks. This includes external insurance programs for natural disasters like the one adopted by Sri Lanka in 2016, or a fund reallocation mechanism that can be used effectively to provide support to households.
Well-targeted policies also save valuable public funds and can help vulnerable groups in the long run. Sri Lanka’s difficult fiscal situation and large budget deficits are forcing the government to review the targeting of its social protection programs.
âIn Sri Lanka, spending on social protection has not had a big impact on poverty reduction. This limited impact is due to weak targeting, which means funds don’t always go to those who need them most. In the case of Samurdhi, which is the government’s largest social protection program, the funds are too dispersed. Better targeting could help focus resources on the poorest 10-15% of the population, helping them increase their incomes and lift them out of poverty.
The World Bank estimates that by 2030, one in five Sri Lankans will be over 60 years old. The changing demographics of the country make it essential to expand the coverage of social insurance programs. Only around 30% of citizens are currently covered by an official pension. Women are much less likely to have their own pension and will live an average of seven years longer than men. It is therefore essential that they receive adequate support for their retirement.
âA large portion of working people will retire without a regular income, and the state will either have to pay for these people through welfare or depend on charity from friends and family. It will be more and more difficult as the addiction ratio increases, âadded Dr. Walker.
A coherent strategy to bring a long-term vision of social protection to all Sri Lankans could benefit and improve the lives of millions of people.