SRI LANKA, OFFICIALLY THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA
“IF YOU BORN POOR IT’S NOT YOUR MISTAKE,
BUT IF YOU DIE POOR IT’S YOUR MISTAKE”
TITLE ECONOMIC PROFILE OF SRI LANKA
CO-ORDINATOR THILINI L. DE SILVA
GROUP MEMBERS KAUSHALYA HERATH
THILINI L. DE SILVA INTRODUCTION
RESEARCH- ECONOMIC PROFILE
PROOF READING FINAL VERSION
KAUSHALYA HERATH RESEARCH- WELFARE SYSTEM
ACTIONS BY BUSINESS, GOVERNMENT AND INTERNATIONAL AGENCIES
WILSON KOUXIAOWANG RESEARCH- RICH
BOBUR SOBIROV RESEARCH- POOR
REASONS FOR POVERTY
ECONOMIC PROFILE OF SRI LANKA
o ECONOMIC, PRICE AND FINANCIAL SYSTEM STABILITY OUTLOOK AND POLICIES
o NATIONAL OUTPUT, EXPENDITURE AND INCOME
o ANNUAL GDP GROWTH RATE
o GDP PER CAPITA
o PRICE, WAGES, EMPLOYMENT AND PRODUCTIVITY
o INFLATION RATE
o LIFE EXPECTANCY
INCOME AND WEALTH
o INCOME AND WEALTH
o EQUITY IN THE DISTRIBUTION OF INCOME AND WEALTH
o MAIN REASONS FOR INCOME INEQUALITY
o WHO ARE THE RICH AND WHY ARE THEY RICH?
o THE EXTEND OF POVERTY AND HOW IT IS MEASURED
o WHO ARE THE POOR AND WHY ARE THEY POOR?
o WHAT DOES IT MEAN THE POOR IN SRI LANKA?
o WHAT DOES THE GOVERNMENT DO TO HELP LOWER INCOME EARNERS?
o WHAT WELFARE SUPPORT IS THERE IN SRI LANKA
o INTERNATIONAL ACTIONS TAKEN TO ASSIST THE POOR
Each country has an economic profile which provides economic indicators, data statistics, its history, GDP, GDP per capita, population size, economic growth rate, inflation rates, life expectancy, major exports and imports and major industries, international trading relations. With an economic value of 80.591 billion dollars and a per capita gross domestic product of about $4085 trillion, Sri Lanka has had strong growth rates in recent years.
ECONOMIC PROFILE OF SRI LANKA
ECONOMIC, PRICE AND FINANCIAL SYSTEM STABILITY, OUTLOOK AND POLICIES
The monetary policy stance of the central bank, which has tightened steadily since the end of 2015, tightened further in March 2017, by raising the central bank’s main policy interest rate at 25 basis points.
This slowdown is done through a more active open market operation, through these actions, the central bank, by reducing the government securities held by the Central bank, maintains the appropriate level of liquidity in the domestic currency market, thus greatly offsetting the impact of the net foreign assets of the banking system, which was rapidly accumulating as results of the central bank’s net purchase of foreign exchange inflows.
While the positive OMOs help the central bank maintain short-term interest rates, particularly in the interbank lending market, an enhanced monetary policy communication strategy at an appropriate level will help anchor inflationary expectations, although higher than expected headline inflation is driven by supply-side disturbances.
While the main account surplus helped to reduce the percentage of central government debt to GDP in part, the relatively high real interest rate in the government securities market, compared to real GDP growth, was further conducive to easing food inflation, which was a sharp deceleration in headline inflation in the first quarter of 2018, and favorable inflation and inflation prospects and weak real GDP growth have prompted the central bank to send a signal to end the tightening cycle.
Monetary policy, which lowered the policy rate corridor by 25 basis points in April 2018
NATIONAL OUTPUT, EXPENDITURE AND INCOME
The restoration of GSP+ has facilitated manufacturing activities, provided incentives for industrial activities and observed mitigation in construction activities.
The expansion of service activities has benefited mainly from the growth of financial services and the wholesale and retail trade activities.
At the same time, investment spending grew slowly compared with a year earlier, while consumer spending accelerated in 2017, with some slowing last year.
ANNUAL GDP GROWTH RATE
In the fourth quarter of 2017, Sri Lanka’s economy grew by 3.2%, above its initial estimate of 1.4%, and expanded its industry and services in the 2.87% years that had been adjusted in the previous period.
GDP PER CAPITA
Gross domestic product per capita in Sri Lanka averaged $1491.24 from 1961 to 2016, a record high of $3759.20 in 2016, and a record low of 582.70 dollars in 1961.
PRICE, WAGES, EMPLOYMENT AND PRODUCTIVITY
The general price level, as measured by the consumer price index compiled by the Census and Statistics Department, has been on an upward trend and maintained a high level during the 2017 period.
Higher prices for non-food commodities have also contributed to an upward trend in general price levels as results of the rise in the management prices of certain commodities.
During the year, rising producer prices for agricultural and manufacturing projects were driven.
In the case of the development of real wages, there would only be an increase in the informal private sector, partly owing to the shortage of labour in some sectors and the erosion of real wages in the formal sector during the 2017 period.
RETAIL PRICES OF KEY DOMESTICALLY PRODUCED AND IMPORTED ITEMS
KEY ITEMS WITH ADMINISTERED PRICES
In the first quarter of 2017, NCPI’s overall inflation rate rose from 6.5 in January to 8.6 in March, declining in the second quarter of 2017. At the same time, the average annual NCPI inflation rate in January 2017 rose from 4.6 to 7.7 in December 2017. The headline inflation rate of the annual price index also follows the trend of similar NCPI inflation and the annual core inflation index, based on NCPI, has seen an overall downward trend during the year.
The headline inflation rate of the annual price index also follows a trend similar to that of NCPI inflation, while the annual core inflation rate based on NCPI has risen in the overall downward trend this year.
Life expectancy in Sri Lanka is 71.6, 78.3 for women and a total life expectancy of 74.9, according to the new WHO data released in 2015, ranking 67 of the world’s life expectancy in Sri Lanka.
INCOME AND WEALTH
INCOME AND WEALTH
Income is the consumption and savings opportunities that an entity obtains in each time, usually in the form of currency. For families and individuals, income is the sum of all wages, salaries, profits, interest payments, rents and other forms of income received over a specified period and Wealth is the net asset of an individual, a family, or a country, that is, the value of all assets owed at a given moment.
EQUITY IN THE DISTRIBUTION OF INCOME AND WEALTH
The distribution of wealth and income is the way in which the wealth and income of a country are divided among the population or the way the world’s wealth and income are divided between nations. Financial institutions are exposed to the stock market through investment and lending activities, so the stock market operation has a relatively low impact on the stability of the financial system in Sri Lanka.
MAIN REASONS FOR INCOME INEQUALITY
The current economic literature mainly points to three explanations for the increase in wages and income inequality, technology, trade and institutions. Social inequality is not a new phenomenon, and if inequality continues, without proper attention, it will affect the country’s overall economic growth and poverty reduction efforts. Although many countries, including Sri Lanka, have managed to reduce poverty over the past three years, inequality remains a major concern. Income inequality represents only one aspect of inequality. Data on access to education and health care, asset ownership, access to water, electricity and improved environmental health can also indicate that inequality is high, even in countries where income inequality is low.
WHO ARE THE RICH AND WHY ARE THEY RICH?
The rich are the people who exchange time and power for money. They get more and more resources, more and more money than they become more candy paper richer and become the pinnacle of society. The rich make money from the poor, and the poor become poorer.
THE EXTEND OF POVERTY AND HOW MAY IT BE MEASURED?
The problem of poverty in Sri Lanka remains a major problem. While all this suggests that Sri Lanka should experience a high standard of living, it has only recently been listed as a medium category in the Human development index. The Government of Sri Lanka had successfully reduced poverty from 15.2% to 8.9% in 2010, urban poverty from 6.7 to 5.3%, and rural poverty from 15.7 to 9.5%, and the country had made significant progress towards achieving the Millennium development. The development goals of eradicating extreme poverty and hunger. In Sri Lanka, poverty figures refer to the share of households’ per capita consumption of individuals below the official poverty line. This indicator of poverty is a standard measure of the incidence of poverty.
WHO ARE THE POOR AND WHY ARE THEY POOR?
The poor at work are working people whose income is below a certain poverty line. Depending on how a person defines work and poverty, one person may or may not be counted as part of the work of the poor. Although poverty is often associated with unemployment, in practice, a large proportion of the poor are employed.
According to the 2017 budget, the level of poverty in Sri Lanka is 5.4, meaning that 5.4 of the total population is about 15 million living below the official poverty line. The figure was 15.2 in 2006. This shows commendable poverty reduction. Of the 5.2 million households, 302120 are poor because the poverty group is 0.96 yuan per person per day and $1.32 is the international poverty line that meets the basic needs.
WHAT DOES IT MEAN TO BE POOR IN YOUR COUNTRY?
Poverty is more than just the amount of money a person has. Poverty is a multidimensional issue involving a person’s level of health access and coverage, existing educational opportunities and quality of life Although poverty is declining, there are still people living in poor conditions, about 39.2% of the total population. To some extent, children in some families are forced to work from the age of early and save some money to grow their own vegetables or start a small domestic animal, and agriculture is becoming more popular among the Sri Lankan people.
WHAT DOES THE GOVERNMENT DO TO HELP LOWER INCOME EARNERS?
The researchers say low-income and middle-income earners in Sri Lanka will pay lower income taxes with wider brackets and lower interest rates, but higher earners will pay more, with the highest rate rising from 16% to 24%.
Personal income tax is collected by declaring tax returns or by paying (PAYE) employers to deduct the wages of workers. The new PAYE tax system has improved slightly, and the income balance is higher than the current PAYE tax system, Nisha Arunatilake and Priyanka Chopra analysis from the Policy Institute of Colombo. This means that the rich will pay more personal income tax than the poor.
For example, according to our simulations, under the new system, 98% of the PAYE tax revenue will come from the richest 30% in Sri Lanka, and the government plans to open a new center of excellence in 2018, which will help to raise this status and salary.
WHAT WELFARE SUPPORT IS THERE IN YOUR COUNTRY?
The Ministry of Social Power and welfare is the central government department responsible for social services and social welfare in Sri Lanka. The Ministry is responsible for the formulation and implementation of national policies concerning the empowerment, welfare and other issues under its jurisdiction.
April 23, in Colombo according to an initiative taken by the Ministry of National Policy and Economic Affairs in 2015, the Department of Project Management and Monitoring (DPMM) has taken steps to develop a social welfare project management Information System (MIS).
Implemented by the Government of Sri Lanka. The information and Communication Technology Board (ICTA) developed this MIS under the coordination and support of the DPMM and Policy Development Office of the Prime Minister’s office.
Currently, the system contains information on 24 beneficiaries of welfare projects under the 12 national institutions funded by the Government.
INTERNATIONAL ACTIONS TAKEN TO ASSIST THE POOR
The World Bank Group supports the development of Sri Lanka for nearly six years.
Although this is a successful development story in many ways, Sri Lanka still faces serious challenges in its efforts to become a middle-income country. While Sri Lanka strives to put an end to extreme poverty and promote common prosperity, some of the key challenges that it identified in the 2015 SCD are fiscal sustainability, increased competitiveness, increased and better work at the end of 40%, and the promotion of social inclusion and long-term sustainability for disadvantaged people.
In strategies to reduce poverty and income inequality, the country should be seen whole. The rate of economic growth should be pro-poor and inclusive. Poverty and inequality measures should not be absolute, but relative. Social policies and interventions are equally important to ensure that economic growth is inclusive. Poverty reduction policies should focus on education and health, as poverty in both generations can be reduced and income distribution more equitable. Fiscal policy is also essential in reducing inequalities. There should be sufficient income for education and health care, and the poor should have adequate welfare spending to increase their income. Once again, tax reform is essential to collecting more revenue from affordable income and allowing a more equitable distribution of income. The problem we have now is that the rich are getting richer and the poor are getting poorer, which leads to a huge gap in their income.