3 ways to make social protection work for Sri Lanka’s poor and vulnerable

The COVID-19 pandemic and the worst economic crisis in Sri Lanka's post-independence history resulted in an increase in poverty rates of up to 25 percent in 2022, a dramatic increase from 11.3 percent in 2019. Although one fourth of the country’s population has fallen into poverty, many do not receive monetary support from the government, largely due to the weaknesses of social welfare schemes. More than 50 percent of Sri Lanka’s poorest population is not covered by the government welfare programs such as Samurdhi, the major social protection scheme in Sri Lanka.

Research shows that Samurdhi and other social protection schemes in Sri Lanka are bogged down by administrative inefficiencies and possible political interference and consequently are not reaching those most in need. Many who are eligible for benefits are excluded, while others who are not eligible are receiving support. These failures contribute to further deteriorating living standards of the poor who have been severely affected due to the COVID-19 pandemic and the ongoing economic crisis. To fix this, Sri Lanka needs a social protection system that serves its poor and overcomes the weaknesses of the existing system.

1. Unbundle the fragmented social protection system

Under the current social protection system, there are several cash transfer schemes that are handled by different government institutions. For example, Samurdhi is handled by Samurdhi Development Authority and transfers made to beneficiaries using Samurdhi banks. The allowance for the elderly is handled by the Elderly Secretariat, and the allowances are provided via post offices. The allowances for People with Disabilities are handled by the Disability Secretariat and transfers are made through post offices. This fragmented nature has resulted in many administrative inefficiencies including delays in adding new recipients to the rolls and providing cash to existing beneficiaries. Often the poor have to queue up at local government offices for hours, sometimes several days, to receive their cash payments and some applicants must wait an exceedingly long time to enroll in social protection programs.

The Welfare Benefit Board (WBB) was established with the support of the World Bank-financed Social Safety Nets Project to streamline the fragmented social protection system and adopt technology to increase efficiency. The Welfare Benefits Information System (WBIS) was set up under WBB to coordinate all forms of government cash transfers that will be transferred directly to beneficiaries’ bank accounts. This will allow recipients to withdraw money whenever they need it, without queuing in government offices. As a part of the WBIS, the information of those who request social protection has been digitized, allowing the government to constantly review and update the cash transfer recipient list. This complements the use of QR Codes and the Aswasuma mobile app in collecting data from applicants.

2. Build strong governance, transparency and accountability into the system

The existing social protection system in Sri Lanka has excluded more than 50% of the country’s poorest, while providing benefits to non-poor. One major reason for such exclusion and inclusion errors seems to be due to political influence on determining eligibility.

“I didn’t get Samurdhi until I began working for the ruling political party [at the time]. There was a key person who works with Ministers during elections. The Samurdhi officer would go to him to see who needs to be given Samurdhi”

-  Respondent to a recent survey conducted by Lirne Asia

Addressing this requires adopting more comprehensive criteria for determining eligibility and removing political influence in the selection process. In 2023, WBB started collecting data covering the entire country to identify eligible beneficiaries. The WBB determines eligibility based on multidimensional poverty levels of applicants (this is a measure that considers deprivation along monetary poverty, education, and basic infrastructure services – to capture a more complete picture of poverty), assessed through verifiable data collected at the household level. The system therefore remains transparent and free of political influence.

The World Bank estimates that nearly 60% of the poorest income quintile (or the bottom fifth of the population in poverty) will be eligible to receive cash transfers as compared to just 43% covered by the old system. For the system to be more beneficial for the poor, the eligibility criteria and targeting methodology will need to be reassessed on a regular basis and made more robust.  

3. Engage citizens early and often

An efficient and transparent social protection system is vital to protect the poor during crises and enhance their living standards. But establishing such a system is a gradual process. Such a system starts with transparent processes and consistent engagement with different stakeholders, including civil society organizations (CSOs).

As Sri Lanka reforms its social protection system, it needs to use methods to engage citizens to get their feedback on how best a social protection system can meet their needs. This also ensures that the system is adaptive, ensuring support to those who are adversely affected by shocks such as natural disasters and economic crises. The World Bank’s global experience in social protection shows that having active citizen engagement plays a vital role in establishing resilient and adaptive social protection systems. For example, in Chile, Pakistan, and the Philippines the majority of the population is registered in the social registries—equivalent to the WBIS—to provide support to the poor and vulnerable, including in times of crisis when more people would need to be brought onto the rolls on a temporary basis.   

Citizens also have a role to play in ensuring the accountability of the system. It is essential to use input received from citizen engagement to carry out periodic reviews of how the social protection system is actually working on the ground and to include a grievance handling mechanism. The WBB is setting up a grievance mechanism to flag problems and persistent issues in the system so that they can be fixed.

As Sri Lanka works to recover and reset from its worst economic crisis in decades, now is the time to turn crisis into an opportunity to build a resilient and fair social protection system that benefits the people who need it most – Sri Lanka’s poor and vulnerable.