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Tuesday May 28th, 2024

Sri Lanka’s targeted Aswesuma poverty alleviation program faces delay amid resistance

ECONOMYNEXT – Sri Lanka’s ambitious poverty alleviation program Aswesuma which has planned to target only the poor and vulnerable people is facing a delay due to resistance from bureaucrats at the grass root level, multiple sources said.

The new program aimed at providing funds directly to the poor and vulnerable people who are hit hard by the unprecedented economic crisis.

Sri Lanka has already secured $185 million World Bank funding to support the welfare benefit payment scheme which was originally scheduled to start in July.

However, the resistance from bureaucrats dragged the program and the benefits were given partially for July. Payments for August and September are yet to be made, a Finance Ministry official said.

“This is the best example to show the dysfunctional system of Sri Lanka’s bureaucracy,” a Finance Ministry source who has been directly working with the Aswesuma program told EconomyNext asking not to be named.

“Some Grama Niladaris at grass root level are not cooperating and some state officials are against the government’s decision to use non-government employees to collect data to select the deserved people.”

“There has been resistance at some District Secretariat level as well. Overall, some bureaucrats have dragged this out.”

The President Media Division (PMD) on Tuesday (24) citing Jayantha Wijeratne, the chairman of Welfare Benefits Board, which oversees Aswesuma program has said that, as of October 16, the government has disbursed 7.7 billion rupees for 1,230,097 families across five benefit categories related to July.

“He also noted that the remaining payments for July will be finalized by December,” PMD said, citing a discussion on Aswesuma.


“However, it was also revealed that there have been delays in providing payments to another group of beneficiaries due to various issues, including pending appeals and protest investigations. The Minister of State for Finance emphasized the need to investigate the causes of these delays and expedite the disbursement of benefits.”

The PMD quoting Wijeratne said that approximately 200,00 beneficiaries have faced delays in receiving their payments because they haven’t opened bank accounts yet. Once they open their accounts, they can promptly receive the associated payments without any issues.

“During the discussion, the importance of maintaining a robust unit within the divisional secretaries’ offices for the execution of the relief program was emphasized. Given the goal of completing benefit payment activities by the end of December, it was also suggested to declare a special work week to facilitate this,” the PMD said.

The government data showed there had been nearly 1 million appeals and 17,500 objections received for Aswesuma to make accurate determinations.

The new poverty alleviation program aimed at changing the previous politically motivated Samurdhi program, which was expanded to all the party supporters under the regime of former president Mahinda Rajapaksa.

A report by the country’s Auditor General in 2017 found Samurdhi had failed to alleviate poverty in Sri Lanka and discrepancies observed in the districts the safety net program was implemented and the poverty headcount in that district.

The IMF’s strong insistence to protect vulnerable groups through strong social safety nets compelled President Ranil Wickremesinghe’s government to target the lower income and vulnerable groups for the new Aswesuma program.

However, when the government first met with protests over the new program from the previous Samurdhi beneficiaries.

Over 1,280,000 families who had earlier received Samurdhi welfare benefits have applied for Aswesuma and 887,653 families have qualified, according to State Finance Minister Shehan Semasinghe.

The rest have protested and submitted appeals after the government request. (Colombo/Oct 24/2023)

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Sri Lanka president’s UNP proposes postponing elections by two years

The UNP party headquarters in Pitakotte/EconomyNext

ECONOMYNEXT — Sri Lanka’s United National Party (UNP) has called for a referendum to postpone both presidential and parliamentary elections by two years to extend President Ranil Wickremesinghe’s term to continue ongoing economic reforms.

UNP general secretary Palitha Range Bandara called on the main opposition Samagi Jana Balawegaya (SJB) and the leftist opposition formation National People’s Power (NPP) to support the move.

At a press conference on Tuesday May 28, Bandara said postponing the two elections would not be undemocratic as it would be the result of elected representatives in parliament passing a motion, followed by a referendum.

Defending the proposal, he recalled the controversial decision by then Prime Minister Sirimavo Bandaranaike to postpone elections in the 1970s, which resulted in the decimation of her Sri Lanka Freedom Party (SLFP)-led alliance.

Bandara said that all parties must understand that now is not the time for elections as the economy has yet to emerge from bankruptcy and that President Wickremesinghe must be permitted to carry out his reforms which have already brought stability.

The UNP’s latest statement is a far cry from its pronouncements as recently as last weekend that the presidential election would definitely be held between September 17 and October 18 this year, followed by the parliamentary elections in early 2025.

UNP spokesmen also boasted that Wickremesinghe would not only contest the presidential poll but would also win it.

Tourism and Sports Minister Harin Fernando told reporters that Wickremesinghe would definitely contest the election, in response to some speculation that the president may opt to sit out.

“I think President Wickremesinghewill himself reveal his plans next week or one of these days,” said Fernando.

“He will definitely contest. I said he would for sure. Not only will he contest, he will also win,” he added.

Labour Minister Manusha Nanayakkara concurred.

“President Wickremesinghe will definitely win the election,” he said, adding that the president has provided much relief and that the economy continues to recover having fallen to its lowest point. (Colombo/May28/2024)

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Sri Lanka reforms have started to yield positive outcomes: State minister

ECONOMYNEXT – Sri Lanka’s State Minister of Finance Shehan Semasinghe says reforms have lead to positive incomes, including an increase in reserves.

“The reforms have started to yield positive outcomes, reflecting significant progress in multiple areas. Sri Lanka’s gross official reserves have seen a significant increase, reaching USD 5.5 billion by the end of April 2024,” Semasinghe said on social media platform X (twitter).

“Additionally, the Sri Lankan rupee has appreciated by approximately 8 % against the US dollar so far in 2024. This will boosts investor confidence and enhances the country’s ability to manage external shocks and meet international obligations and enhance confidence on the economy.

“The appreciation of the rupee can help lower inflation and reduce the overall cost of living and make it easier for the government and businesses to service foreign debt, thereby improving our financial reputation globally. Further, will improve the trade balance by potentially reducing the trade deficit.”

Sri Lanka’s inflation was 1.5 percent in the 12-months to April 2024, measured by the widely watched Colombo Consumer Price Index, data from the state debt office showed.

The CCPI Index fell 0.8 percent, to 195.2 points in the month of April after falling 1.9 percent in March.

Sri Lanka’s central bank has been operating largely deflationary policy, since September 2022, except perhaps in December 2023, and also allowed the rupee to appreciate in the balance of payments surplus it created.(Colombo/May28/2024)

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Sri Lanka risks foreign retaliation over VFS visa deal

ECONOMYNEXT – The Maldives could take reciprocal action after Sri Lanka’s new system of outsourcing its visas, which requires the payment of “processing” and “convenience” charges of 26 dollars, even though the government does not collect any fees.

Maldivian authorities have reminded Sri Lanka of the long-standing bilateral agreement under which their citizens could travel freely between the two neighbours without any charges or bureaucratic barriers.

A one month stay is available without a fee.

Maldivians, who consider Sri Lanka their second home, often spend more than a month in the larger country, but are now required to pay 26 dollars to VFS Global, which has controversially been contracted to handle Sri Lankan visas.

“The Sri Lankan government will not charge a fee, but Maldivians still have to pay VFS after applying online for a visa,” a Maldivian government official said in the capital, Male. “This violates the spirit of our agreement.”

He said the new administration of President Mohamed Muizzu was taking up the issue with Sri Lankan authorities in both Male and Colombo.

In a worst-case scenario, the Maldives will be compelled to reciprocate the new cost of a Sri Lankan visa and charge Sri Lankans traveling to the archipelago. There are also expat Sri Lankans in the Maldives.

There are only a handful of countries to which Sri Lankan passport holders can travel without any visa restrictions.

Singapore is another country which could take action against Sri Lanka if the bilateral deal is found to be violated, according a source said.

Opposition parties have said in parliament that outsourcing the visa handling to VFS Global and their partners was a bigger corruption scandal than the bond scam of 2015 and 2016, when billions of rupees were stolen through insider deals. (COLOMBO/May 28, 2024)

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