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Good Governance and Poverty Alleviation Programmes in Sri Lanka: Special

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African-Asian Journal of Rural Development, Volume 47, No.1, 2014, pp.43-64

GOOD GOVERNANCE AND POVERTY

ALLEVIATION PROGRAMMES IN
SRI LANKA: SPECIAL REFERENCE
ON SAMURDHI PROGRAMME
M. K. Nadeeka Damayanthi*

The objective of the paper is to examine the governance issues in

government’s major poverty alleviation programme - the Samurdhi
programme- in Sri Lanka. During the past three decades, the concept of
‘good governance’ became more popular in many subject areas such as
development studies, political science, public administration, public policy,
management and economics. Specially, the good governance concept is
most familiar in poverty alleviation programmes in developing countries. The
author uses both primary and secondary data related to poverty alleviation,
the Samurdhi programme as well as governance. Primary data was collected
through questionnaire survey, key informant discussions and focus group
discussions in selected eight districts. The quantitative data were analyzed
using the simple statistical method and qualitative data and information were
analyzed through descriptive methods. The introduction part of the paper
provides a brief introduction to poverty and poverty alleviation programmes.
Then, the paper discusses the concept of ‘governance’, ‘good governance’
as well as ‘poverty’. In the third section of the paper, the author presents
poverty situation in Sri Lanka using both monetary approach and non-
monetary approach. The fourth part of the article discusses poverty alleviation
programmes in Sri Lanka. In this part, author gives details about the Samurdhi
programme and its major components. In the fifth part of the article, the
author explores the major governance issues related to Samurdhi
programme. The conclusion is that the Samurdhi programme is suffering
from serious governance issues such as mis-targeting, lack of transparency,
accountability, efficiency and effectiveness, equity and social justice as well
as informed citizenry.

* Senior Lecturer, Department of Econcomics, University of Kelaniya, Sri Lanka.

E-mail: [email protected]

43
1 Introduction

Poverty is one of the major threats to the world. Approximately, 8 million

children dying every year, 1 child dying every 4 second or 14 child dying
every minute any where of the world. The silent killers are poverty, hunger,
easily preventable diseases (http://www.globalissues.org). In 2010, 7.6 million
child deaths were (under 5 years) reported in the world. Of them, second
highest (2.5 million) was reported from South Asia. According to the World
Bank poverty estimation, 1.4 billion people live at the poverty line or below
the US $1.25 per day. Of them, 36 percent live in South Asia. Therefore,
poverty is a major challenge for South Asian countries.

All most all the countries have been implementing various projects and
programmes with the aim of poverty reduction. For example India has been
implementing Swarnajayanthi Gram Swarozgar Yojana, Sampoorna Gramin
Rozgar Yojana, National Rural Employment Gurantee Programme and the
National Social Assistance Programme. The Kacamatan Development
Programme in Indonesia, National Target Programme for Poverty Alleviation
in Vietnam, Medium Term Development Framework in Pakistan, Kapit Bisig
Laban Sa Kahirapan (Arm-in-Arm against poverty) in the Philippines and
Samurdhi Programme in Sri Lanka are some of other examples for
government poverty alleviation porgrammes in South Asia.

Though governments have been implementing large number of programmes

and projects to reduce poverty and hunger, data and information of the
developing countries prove that most of the countries are far behind from
their targets. Many argue that lack of good governance practices as a major
reason for the situation (CIRDAP, 2009, Gamage, 2006). As revealed by the
Surbakti (2009) principles of transparency and accountability were not
adhered to government major poverty alleviation programme- Kacamatan
Development Programme in Indonesia. The evident were lack of information
about the use of funds, poor availability of supporting documents and lack of
village accountability meetings.

As revealed by the Department of Census and Statistics, in Sri Lanka, poverty

ratio was recorded as 26.1 percent in 1990/91 which declined to 6.5 in 2013
(www.statistics.gov.lk). Though many projects and programmes have been
implemented focusing on the issues over the decades, the Janasaviya and
Samurdhi programme are the major poverty alleviation programme
implemented by the government. Since the initial stages of these
programmes, however, a number of governance issues occurred in both

44
programmes. These issues badly affects the programmes objectives. The
paper attempts to explore the governance issues of the Samurdhi
programme.

1.1 Research Methodology

This paper uses both primary and secondary data. The study uses the primary
data collected in 2012 in eight district in Sri Lanka; Kalutara, Batticaloa,
Anuradhapura, Monaragala, Kurunegala, Ratnapura, Vavuniya and Jaffna.
The total sample of the beneficiaries were 478. The quantitative primary
data analyses using simple statistical methods such as tables and graphs
while the qualitative data analyses using descriptive method.

2 Theoretical Background

2.1 The Concepts of ‘Governance’ and ‘Good Governance’

The concept of ‘governance’ is constantly related to power and old as human

civilization. During the last four decades, the word ‘governance’ has become
more popular in development literature, even without agreement on
definitions. As Aminuzzaman (2007) citied, Mills and Serageldin (1991) defined
governance as ‘how people are ruled, how the affairs of the state are
administered and regulated as well as nation’s system of politics and how
these function in relation to public administration and law’. The concept is
always related with power and management of the development process,
involving both public and private sector (Singh, 2005, Khadka, 2005). The
‘human governance’ concept emerged in 1990s fulfilling the vacuum or unmet
basic human needs in governance process. Human governance pressures
the state, civil society and the private sector to provide room for building
capacities favourable for meeting the basic needs of all people, particularly
women, children and the poor ensuring sustainability of human development
(Aminuzzaman, 2007). Expanding the extent of the subject, the concepts of
‘good governance’ and ‘pro-poor growth’ come into the forefornt since 1990
in the development literature as well as practice.

The definitions of ‘good governance’ differ from institution to institution as

well as person to person by their purposes. Kautilya described good
governance expressing three elements. First, provisions of national security
and public infrastructure. Second, formulation of efficient policies and their
effective implementation, removal of all obstacles to economic growth and
provide tax intensives to encourage capital formation. Third, ensuring a fair,

45
caring and clean administration (Sihag, 2007). Concept of ‘good governance’
consists of constitutionalism, rule of law, justice, security of persons and
management, electoral and participatory democracy, respect for human rights
and basic freedoms, transparency, accountability, ethics and integrity in the
conduct of public and private corporate affairs, equity, informed citizenry,
effective and efficient delivery of public services and at least the minimum of
a decent standard of living for all (Singh, 2005). The United Nations
Development Programme (UNDP) described good governance with the
elements of people centered, equity, accountability, transparency,
participation, consultation in planning and decision making, effective an
deficient public sector management, involvement of civil society, rule of law
and service oriented. Considering the situation in Sri Lanka, good governance
in poverty reduction is a process of management of the poverty reduction,
pro-poor and development programmes ensuring transparency, peoples’
participation, equality and equity, gender balance, rule of law, justice, informed
citizenry, ethics and integrity, accountability, efficiency and effectiveness of
service delivery and provide at least the minimum of a decent standard of
living for all.

As many believe, good governance is an essential ingredient for poverty

reduction (World Bank, 2001). According to Grindle (2004), when governance
is poor, the consequences are wasted resources, undelivered services and
denial of social, economic and legal protection of citizens especially the
poor.

Good governance is deeply problematic as a guide to development. The

problematic issues of good governance in poverty reduction in developing
countries paves the way towards to emerge the concept of ‘good enough
governance’ in 2000. As described by Jabben (2007), governance is a cultural
phenomenon. Therefore, societal values govern the behaviour of people in
formal and informal institutions. The modern concept of governance evolved
in developed countries with stable democratic political system and
competitive markets. Due to the mismatch of different cultures (western
and developing countries) and economic and political background, the
application of good governance concept for developing countries is making
unintended and serious consequences.

2.2 What Poverty Is?

Normally, poverty is defined based on the income, but it is a multi-dimensional

phenomena. Often, Poverty is measured by the amount of income needed

46
for purchasing the required nutritional level of food1. Such amount of money
uses as the cut-off income level of poor from non poor (Ravallion, 1990).

In a broader perspective, poverty is a phenomena occurring due to deprivation

of employment, infrastructure, housing, land, water, food and sufficient
income. In this sense, poverty has spatial-infrastructural, political-economic,
environmental, socio-cultural and gender dimensions. Lack of infrastructure
is linked with lack of access to health services, education, communication,
market and other public and private services as well as lack of income and
employment opportunities (ADB, 2001). Considering the above situation,
poverty can be defined as a general state of deprivation, having more to do
with entitlement and capacity, rather than conventional indicators such as
income and nutrition (Sen, 1999). Therefore, poverty means, the forms of
economic, social and psychological deprivation occurring among people
lacking sufficient ownership, control or access to resources to maintain or
provide individual or collective minimum levels of living standards (Hye, 1996).
The World Banks suggested to measure poverty including powerlessness,
voicelessness, vulnerability and fear while European Commission defined it
including lack of access to education, health, natural resources, employment,
land and credit, political participation, service and infrastructure (Pathak etal,
2005).

Poverty is measured based on two approaches. These are: i) Monetary

approach, ii) Non-monetary approach (Alailima, 2007).

In monetary approach, poverty is defined as a shortfall in consumption or

income in relation to a poverty line. Two types of poverty could be identified
within the monetary approach; absolute poverty and relative poverty.
Commonly, absolute poverty refers to people’s basic needs and it is defined
as subsistence below the minimum requirement of physical well-being
(Jabbar and Senanayake, 2004). Amartya Sen (1981) defines absolute
poverty as “there is an irreducible core of absolute deprivation in our idea of
poverty, which translate reports of starvation, malnutrition and visible hardship
into a diagnosis of poverty, without having to ascertain first the relative picture”.
On the other hand relative poverty refers to income or consumption levels
that are below a given percentage of the national average. In 2004, the
Department of Census and Statistics had computed an official national poverty
line using consumption data. However, before that some independent
researchers had attempted to measure absolute poverty in Sri Lanka2.

The non-monetary approach can be divided into three dimensions as

47
capability approach, social exclusion approach and participatory approach
(Alailima, 2007). Though, it has generally been accepted that in the need of
non-monetary approach for defining, measuring and monitoring poverty, there
is no consensus about which dimensions to include, what indicators to be
used or which method to be adopted (Alailima, 2007, Gunawardane, 2004,
Gamage, 2006). A number of dimensions have been used to capture the
level of non-monetary poverty such as economy (consumption and assets),
human development (education, health, safe sanitation, safe drinking water,
electricity), socio-cultural dimension (dignity and network), political dimensions
(power and voice) and protective aspects (conflict, natural disasters, risk of
eviction) (Cader, 2007, Alailima, 2007). Most methods under the capabilities
approach try to measure absolute poverty while social exclusion and
participatory approach focus on relative poverty and inequality.

3 Poverty Situation in Sri Lanka

According to the international measures of poverty, 6.6 percent of the Sri

Lankans were below the poverty line of US$ 1 and 45.4 percent were below
the US$ 2 per a day (Alailima, 2007). In Sri Lanka, poverty headcount ratio
reduced from 26.1 percent in 1990/91 to 8.9 percent in 2009/10. Further,
percentage of poor households based on the official poverty line has
decreased from 24.3 percent in 1995/963 to 7.0 percent in 2009/104. All sub
sectors-urban, rural and estate- show the significant achievement reducing
poverty headcount ratio from 14 percent to 5.3 percent in urban sector, from
30.9 percent to 9.4 percent in rural sector and 38.4 percent to 11.4 percent
in estate sector during the period of 1995/96 to 2009/10. Similarly, percentage
of poor households reduced from 11 percent to 3.8 percent in urban sector,
25.9 percent to 7.5 percent in rural sector and 32.2 percent to 8.9 percent in
estate sector during the reference period. The present government policy of
providing government employment has largely contributed to declining the
poverty ratio.

Though, the poverty ratio has been declining, income distribution increased
in the recent past. For example, Gini-Coefficient has slightly increased from
0.46 in 1995/96 to 0.49 in 2009/10 islandwide (Department of Census and
Statistics, 2013).

Poverty is a rural and agricultural sector phenomenon in Sri Lanka. The

largest proportion of the poor population, 85 percent are from the rural sector
(Gunawardane, Meedeniya and Shivakumaran, 2007, Department of Census
and Statistics, 2011). As revealed by Gunawardane etal (2007), there were

48
clear differences in poverty by ethnicity. When compared with the Sinhalese,
poverty was higher among Tamils and Moors. There is a strong and inverse
relationship with education and Poverty. Also, poverty is higher among
disabled and in households with a disabled member, regardless of poverty
line or measure. Land ownership is linked with poverty and around 1/3-½ of
the population in landless households were poor (Ibid, 2007). Households
with members engaged in paddy farming (29.1 percent), vegetable farming
(31.1 percent), plantation crops growing (tea-33.1 percent, rubber-27.8
percent, coconut-16.9 percent, cinnamon-28.1 percent), fishing (26.3
percent), beedi manufacturing (20.7 percent), brick manufacturing (28.4
percent), carpenters (21.4 percent) or construction workers (23.6 percent)
had high incidence of poverty (Ibid, 2007). Furthermore, there is a wide
variation in the magnitude of poverty in the country across the districts and
provinces (Department of Census and Statistics, 2011, Institute for Policy
Studies, 2011, Gamage, 2006).

In terms of relative poverty, two major patterns can be observed. First, the
income accrued to the bottom 20 percent of the population has remained
around 5 percent of total household income in the country over the last five
decades. Second, population’s nutritional levels have been low, but some
improvements have been recorded during the last two decades. In spite of
poverty and malnutrition, Sri Lanka’s achievement is impressive in terms of
the physical Quality of Life Index and Human Development Index. Most
indicators are comparable with those of developed countries.

Though, the Country has been achieving high performance in poverty reduction
in line with income level, it shows that country faces the issues related to
poverty in terms of malnutrition, child labour and many other aspects. Though
percentage of children below five years of age, who are underweight for their
age, has declined progressively during last decades, 1/5 of children under
five years of age are reported to be underweight. On the other hand, half of
the Sri Lankan population is deprived of adequate dietary energy (Department
of Census and Statistics, 2009a). This phenomenon is remaining unchanged
since 1990 but the situation is differing by sectors. For example, as revealed
by Department of Census and Statistics (2009) in their work of midterm
review of Millennium Development Goals, 65 percent of the urban population
deprived of adequate dietary energy while it was reported as 33 percent for
estate sector.

Further, food ratio5 is 63.1 percent for poor household in Sri Lanka while it is
reported as 36.3 percent for non-poor households (Department of Census

49
and Statistics,2009 b). In other words, higher proportion of the income of
poor families spends for food and drinks. As revealed by Household Income
and Expenditure Survey (2009/10), poor households spent around 61 percent
of their expenditure on food items. However, for all income groups, food ratio
was 42 percent in 2009/10 while it was varied from 36 percent in urban
sector to 51 percent in estate sector.

Though poor households spent more than half of their expenditure on food
items, their calorie intakes are far behind the required calorie intakes per
persons. For example, poor households’ average per capita energy
consumption for Sri Lanka was 1472 Kilocalories in 2009/10 while it was
reported as 1139, 1497 and 1596 Kilocalories for urban, rural and estate
sector poor households. Similarly, urban area non poor households energy
consumption was also less than the required energy consumption. It was
reported as 1922 Kilocalories in 2009/10 (Department of Census and
Statistics, 2011).

Child labour has declined over the years due to government policies and
involvement of non governmental sector. However, 12.9 percent (557,599)
of children are providing child labour for the economy. Of the total child
laboureres, 1.5 percent (63,916 children) provides hazardous child labour.
Of the total child labourers approximately 20 percent never attended schools
(Department of Census and Statistics, 2011). This provides evidence for
lack of accessibility for education.

4 Major Poverty Alleviation Programmes in Sri Lanka

4.1 Poverty Focused Programmes

Since the independence of the country, the government of Sri Lanka has
implemented a number of policies and programmes toward benefits the
poor directly or indirectly. The government provided welfare, subsidies, land
to landless and many other supports for agricultural activities till 1977. In the
post 1978 period, the government provided social safety nets and introduced
employment promotion programmes like establishment of free trade zones
and 200 garment factories established in rural areas, facilitation and support
for migration for foreign employment, employment creation schemes
associated with Integrated Rural Development Programmes (IRDP) in many
districts, vocational and technical education programmes for youth and self-
employment programmes implemented by governmental and non-
governmental organizations.

50
4.2 The Janasaviya Programme

The commencement of the Janasaviaya programme was the milestone of

the poverty alleviation programmes in Sri Lanka. The programme was differing
from other welfare and poverty focused programme which were implemented
since independence of the country. The programme consisted of safety net
for the poor, enhancing the poor through government assistance for livelihood
practices such as animal husbandry, cottage industries, marketing,
agricultural activities and social mobilization and programmes for empower
of the poor. The Samurdhi programme was launched in 1995 replacing the
Janasaviya programme, food stamps and midday meal programmes.
Therefore, existing Janasaviya recipients, totaling 403,000 were brought
under the Samurdhi programme.

4.3 The Samurdhi Programme

The Samurdhi Programme is the major poverty alleviation programme of

the government and is implemented under the Ministry of Economic
Development of Sri Lanka. It employs approximately 27,600 employees island
wide under various job categories. Of these, around 24,000 are Samurdhi
Development Officers, 2,000 are Samurdhi Managers and others are
engaged in various job categories attached to the Colombo head office
(Samurdhi Authority of Sri Lanka, 2011). The Samurdhi programme had
1,549,107 beneficiaries by the end of the 2012. Of them, around 3 percent of
the total beneficiaries (52,686 beneficiaries) had benefited from the social
security fund in 2012 (Central Bank of Sri Lanka, 2012).

The government allocates around 0.2 percent of Gross Domestic Products

for safety net transfers by annually (Kesavarajah, n.d.). It was around 01
percent of total government expenditure (Jayaweera, 2010). The government
has been allocated approximately 4-5 percent of national budget for safety
net assistance of the Samurdhi programme (www.med.gov.lk).

The main objective of the programme is to get the low income earning families
to join the main stream of the country’s economic process by encouraging
them, whilst subsidizing them financially to enable them to maintain their
living conditions at least at the critical minimum level (Samurdhi Authority of
Sri Lanka, 2008). By the end of 2011, Samurdhi benefits had been bestowed
on 1,541,619 families. As at end of December 2013 number of small groups
were 400,470 island-wide and members of the small groups were. 2,489,466.

51
The programme consists of six major components as follows:

i) Welfare programme (this consists of food stamp, subsidy for fuel,

nutrition package for pregnant and lactating mothers, milk feeding subsidy
for children between years two and five)

ii) Social insurance support to the poor to protect during extreme

situations such as hospitalization and death of a family member

iii) Savings and financial assistance (micro credit and savings)

iv) Spiritual and social development programme (anti narcotic and anti
smoking projects, programme for preventing child abuse, women
development projects, scholarship projects, cultural development projects,
family development and moral upliftment projects)

v) Infrastructure development programme

vi) Human resource development programme (livelihood development

and empowerment) (Perera, N.D).

The Samurdhi bank is one major component of the programme. It consists

of micro credit, savings and social insurance which consistently supported
to reduce the vulnerability of the poor in some occasions such as death,
hospitalization and child birth. There are 1,400 banks island- wide in 2013.
The total number of members was 3,157,719 as at the end of 2013 (Dinamina,
23.12.2013). Of them, 65.6 percent were females. The Asian Development
Bank identified the Samurdhi Banking Union system as the world’s fourth
largest micro financial structure. The Bank has LKR million 4,212 worth
share capital. The Samurdhi Banks have released 3,721,662 loans worth at
LKR 4,835 million as at 31.12.2009 (www.samurdhi.gov.lk). According to the
Samurdhi Authority of Sri Lanka, 76 percent (790) bank societies have been
self-sufficient in financially. As at 31st December 2011, the Samurdhi banks
unions had 5,524,025 accounts including member, non-member, group,
Diriya Maatha, Kekulu and Sisuraka. The total amount of deposits had grown
up from LKR 768.96 million in 1999 to LKR 18,907.33 million in 2011. During
the year 2011, 522,226 members had taken credit facilities worth LKR 13,189
million. The recovery rate for the year 2011 was 111.90 while bad debt rate
was reported as 5.51 percent.

The Samurdhi Authority has introduced a number of credit programmes for

52
various activities such as Mihijaya loans programme for self-employment
and income generating activities, Loans for fisheries and cultivation, Kirula
Development credit scheme, Housing loan, Viduli Athwela credit scheme to
provide support for getting electricity connections for beneficiaries houses,
Consumer loans, Distress loans and Swasakthi loan scheme. The Samurdhi
Authority issues loans for income generating activities with different interest
rates for beneficiaries (8 percent) and low income earners (10 percent) while
for other loans interest rate is 12 percent. Of the total loans highest proportion
(53 percent) has been given for self employment activities while least
proportion (4 percent) is for consumption. As explained by the Annual report
(2011) of the Samurdhi Authority of Sri Lanka, they had invested LKR 39,048
million in state banks by 31st December 2011.

In addition to banking and financing sector, the Samurdhi Authority of Sri

Lanka has been implementing its programme in various ways such as animal
husbandry, fisheries programme, infrastructure development programme,
agricultural development programme,industrial development programme and
marketing development programmes. In the year 2011, infrastructure
development projects were implemented giving high priority to irrigation and
water supply and under this section, 5,969 projects were completed including
roads/bridges, irrigation projects, water supply and sanitary facilities . Number
of beneficiary families of those projects were 142,552. The finished value of
the projects was LKR 575.13 million and of them 47.15 percent (LKR 271.18
million) was contributed by beneficiaries (Sri Lanka Samurdhi Authority of
Sri Lanka, 2011).

Under the animal husbandry and fisheries development programme, the

authority basically provided facilities for animal husbandry and fisheries
development projects, introduced value added projects and provided market
facilities for the beneficiaries. Furthermore, the authority attended to all
coordination functions related to the introduction of services and new
technology to the beneficiaries. Under this programme the Samurdhi Authority
of Sri Lanka implemented 8,393 projects in 2011. These projects consisted
of dairy farming, goat farming, breeding of pigs, egg production, broiler
production, cattle sheds, marine fisheries, inland fisheries, exotic fish, fishery
and dairy products.

The industrial development programmes have been involbed in the

development of cottage industries and uplifting the income of beneficiaries
and low income families. Under this programme the Samurdhi Authority of
Sri Lanka implemented 14,204 projects spending LKR 373.4 million during

53
the year 2011 (Ibid, 2011). These projects consisted of welding industry,
carpentry, tailoring, blacksmith industry, masonry, lacquer industry, brick
industry, jewellery and gem industry, rice processing industry, pottery, coconut
fire related products , exercise books and paper related products , gold and
silver related products, cement related products, leather related products,
electronic products , aluminum article products, coconut oil production, joss
stick/lamp wick products, candle production, jaggery/sweet products, grinding
of spices and cereals, bakery industry and machinist work.

The marketing development programme has been implementing functions

with the objective of strengthening and making sustainability of ongoing small
and medium scale enterprises (SMEs). Fulfill the objective, the authority
provides necessary capital equipment to the low income families and
Samurdhi beneficiaries who are engaged in small and medium scale
enterprises. The Samurdhi Authority of Sri Lanka allocated LKR 309.98 million
for the selected projects in 2011 but spent only LKR 144.16 million as at end
of 2011. Under this programme, the Samurdhi Authority of Sri Lanka helped
to start 7,727 projects. In addition, by using cyclic fund another 2,186 projects
were started in 2011 (Ibid, 2011). Most of the project are sales outlets for
various items.

5 Governance issues in Samurdhi Programme

There are number of criticisms related to the Samurdhi programme and its’
implementation such as weakness of targeting 6 (Glinskaya, 2000;
Gunawardane, Meedeniya and Shivakumaran, 2007; Gamage, 2006),
effectiveness 7 (Glinskaya, 2000; and Gunatilaka and Salih, 1999.),
politicization of the programme and achievement of targets (Fernando, 2009).

5.1 Transparency

All poverty alleviation programme launched by the government since 1989

become highly politicized at the implementation stage (Kelegama, 2001,
Gamage, 2006). It appears, the animators were appointed under political
patronage system. The recruitment process of the Samurdhi Development
Officers is not systematic and transparent. Around 7 percent of the Officers
of the Samurdhi Authority of Sri Lanka proved the situation mentioning that
they do not have systematic and transparent recruitment process
(Damayanthi and Champika, 2014). Therefore, officers are very often subject
to pressure and interference of politicians and grass root level political
organizations in carrying out their duties. This is specially prevalent in selection

54
of beneficiaries and infrastructure development projects (Salih, 2000). As a
result, it has seen serious mis-targeting in the project (Glinskya, 2000, Salih,
2000, Gamage, 2006).

Under the Samurdhi programme, the government provides a huge amount

of money for the upliftment of the poor. But, it has been found that the selection
process is not much clear or transparent for the beneficiaries. Often, the
selection is biased due to personal intervention of the officers. As many
bank customers mentioned, at the field survey on evaluation of Samurdhi
Banks in poverty alleviation (2012), selection of beneficiaries for livelihood
development projects under divineguma programme is not much transparent.
Further, even though some people have been selected as beneficiaries they
themselves do not know what are the selection criteria and how they were
selected for the programme.

In addition to biasness of the officers, it also appears that political patronage

also affects the programme. For example, the process of issuing of credit
from the Samurdhi banks influence from politicians in some areas. Monaragala
district is the best example. Due to influence of the politicians from grass
root level to regional level banks had to issues loan moving away from their
accepted procedures. As a result, recovery rate has gone down and most of
the banks which faced the problem are now identified as lost banks
(Damayanthi and Champika, 2014). There are many other problems
associated with fulfilling the Samurdhi programme’s objectives such as
rampant corruption involved with forgoing rent seeking behaviour of people
involved (Gamage, 2006). On the other hand, subsidy and social safety net
programmes are used as strategy for maintenance of a vote bank favourable
for the political parties than reduce poverty and inappropriate policy tends to
overlook the issues related to equity (Gamage, 2006).

5.2 Equity, Equality and Social Justices

Major issue related to equity, equality and social justices is poor targeting of
the programme. As many researchers pointed out, major weaknesses of
the Samurdhi programme is mistargeting (Glinskya,2000, Salih, 2000,
Gamage, 2006, Damayanthi and Champika, 2014). Also, the programme
provides assistance to a large number of households from its beginning
over the numbers reported in national poverty surveys. For example,
Glinskaya (2000) revealed that though poverty ratio was 20 percent in 1990,
the Samurdhi programme covered 50 percent of the households in the
country.

55
The programme included some portion of well-off people while excluding
some portion of poor. The recent research done on Samurdhi banks in eight
districts proved the fact (Figure 01). As mentioned by the officers of the
Samurdhi Authority, they did not do a survey regarding beneficiaries recently,
therefore, the programme can not include even very poor people for the
programme or exclude wealthier people due to practical problems. This was
proved by survey results. As given in the Table 01, only 7 percent of sample
families (including both beneficiaries and non-beneficiaries) get less than
LKR 1,500 which was considered as income level for Samurdhi beneficiaries.
If, less than LKR 1,500 per month is considered as family income for selection
criteria of beneficiaries according to the survey results given in Table 01, of
the present Samurdhi beneficiaries only eight percent are eligible for the
subsidy.

This logic is proved by another set of data of the survey but in different
quantities as given in the Figure 01. According to the Figure 01, more than
fifty percent of the Samurdhi beneficiary families in all the districts except
Jaffna and Batticaloa, get monthly family income exceeding district poverty
line during the survey period. The poverty lines of the survey districts are
given in Table 2.

Available information revealed that the programme does not cover 40 percent
of the poorest income quintile at all while 51, 45, 36 and 4 percent of the
households in third, fourth, fifth and tenth income quintiles get support from
the programme (Table 3).

Social justice is questioned in this scenario. Even though the government

provides public finance including tax money collected from the people for
the Samurdhi programme, it is redistributed among a portion of well-being
people while excluding some portion of poor which need to assistance from
outside for their survive.

5.3 Informed Citizenry

Lack of accurate, sufficient and timely information is another weaknesses of

the Samurdhi programme. As mentioned in the section on transparency,
many beneficiaries felt with inadequate information. Most of the officers tend
to share information specially related to some sort of subsidy schemes with
their closer group instead of announcing publicly. Therefore, benefits will be
limited to a few and the most suitable persons may not be included as
beneficiaries.

56
In some areas of the Batticaloa district like kalavanchikudi, beneficiaries were
selected for livelihood programme and provided subsidies. However, after
getting subsidy they only know what the terms and conditions are. Under
this programme, beneficiaries had to put 50 percent of the project cost.
Since most of the selected beneficiaries were not willing to invest in such
projects or some of them did not have enough capital to invest, most of the
projects were unsuccessful even the area had persons who have capacity
to implement such project.
This weakness was also noticed in the Samurdhi banks. Though great
majority (95 percent) of the Samurdhi bank customers were aware of loan
conditions, only 76 percent of the customers have had a clear idea of the
insurance scheme which was implemented by the Samurdhi Authority
(Damayanthi and Champika, 2014). In some district like Vavuniya, awareness
on insurance scheme is less (46 percent in Vavuniya district). Furthermore,
majority of the bank customers (63 percent) do not have a clear idea of
annual interest rates of their deposits (Ibid, 2014). Making the beneficiaries
aware of programmes is a responsibility of the officers and it could have
done at small group meeting or village society meeting. But survey result
shows that officers did not carry out their duties properly.

5.4 Accountability
Regarding the Samurdhi programme, accountability of officers as well as
beneficiaries is problematic. The officers those who are functioning as
animators of the programme, have a duty to exclude the beneficiaries those
who get rid of the poverty and include those who need government assistance
for their minimum standard of living. Also, beneficiaries have a social
responsibility to move away from Samurdhi subsidy when they get out of
poverty, providing chance to others, those who need help from the
programme. Most often, both parties do not consider the matter. Therefore,
accountability of both parties are questioning in the present scenario.

The major objective of the Samurdhi programme is stimulating the people to

get out of poverty. However, the programme certainly cultivates a dependency
culture rather than stimulate the people to get out of poverty (Salih, 2000,
Gamage, 2006). Though, some beneficiaries get out of poverty, most of
them do not like to give up the subsidy allowance. This is not only for money,
but also for other benefits people who can claim as Samurdhi beneficiary
such as social insurance, subsidiary price for new electricity and water supply
connection, scholarship for grade five scholarship examination and Mahapola
scholarship for undergraduates (Damayanthi and Champika, 2014).

57
5.5 Efficiency and Effectiveness

Furthermore, previous research findings also reveal that the programme is

not effective in poor provinces or districts where infrastructure is (very poor)
inadequate to a great extent (Glinskaya, 2000, Gunatilaka and Salih, 1999).
As pointed out by Damayanthi and Champika (2014), around 12 percent of
the Samurdhi bank customers faced the issues of inefficiency and
ineffectiveness of the service delivery. Also banks customers (17 percent)
mentioned that issuing of the loans by the banks delayed from one week to
two months due to inefficiencies of the officers. Though small groups are
the most important part of the Samurdhi programme, officers are rarely
participat in the meetings. Therefore, communication as well as
empowerment of the people is not much success as expected by the
government. As a result of inefficiencies of the officers, some times the
programme couldn’t achieve the target. For example though, the Samurdhi
Authority of Sri Lanka was allocated LKR 309.98 million for the selected
marketing development projects in 2011, it spent only LKR 144.16 million
(46.5 percent of total allocation) as at the end of 2011.

6 Conclusion

The Samurdhi programme was introduced replacing the Janasaviya

programme in 1995. The programme is rich with the concepts and
procedures but poor in governance in terms of transparency, accountability,
efficient and effectiveness, informed citizenry, equity and justice. The
programme seems to be politicized since the initial stage. Therefore, though
the major objective of the programme is reducing poverty through empowering
the poor, it has been performing as an agent to protect and enhance the
voter bank of the politicians. Further, programme's objectives are badly
affected by the personal biasness of the officers in many ways such as
unnecessary intervention for selecting beneficiaries for the programmes and
safety net, decision making on infrastructure development and project
implementation. Though the government attempts to avoid some governance
issues establishing the Janasabhas at grass root level, it does not appear
as a success step or remedy for the issues at all.

Endnotes

1 The accept calorie intake for a person is 2030 kilocalories per day.
Those who unable to get such amount of calories due to insufficient income
called as poor.

58
2 Bhalla and Glewwe in 1985 calculated poverty line in of 1969/70 as
Rs.21 (person/month). Gunaratne in 1985 has calculated Rs.70 and Rs.106
(person/month) as a poverty line in 1978/79 and 1981/82 respectively.
Pradhan in 1999 has calculated Rs.860 (lower) and Rs. 1,032 (person/month)
as a poverty line in 1996/97.

3 Excluding Northern and Eastern Provinces

4 Excluding Mannar, Kilinochchi and Mulathivu districts

5 Proportion expenditure on food and drink (non-alcoholic) to total

expenditure

6 Glinskaya (2000) revealed that though poverty rate was 20 percent

in 1990, Samurdhi programme covered 50 percent of the households in the
country. Forty percent of the poorest households do not get support from the
programme while 51, 45, 36 and 4 percent of the households in third, fourth,
fifth and tenth income quintiles get support from the programme.

7 Programme is not effective in poor provinces or districts where

infrastructure is (very poor) inadequate to a great extent

References

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Districts in Sri Lanka. (Place is not mentioned).

2 Alailima, P., 2007. The Conventional Approaches: An Overview of

Poverty in Sri Lanka in Fresh Perspectives: Exploring Alternative Dimensions
of Poverty in Sri Lanka (eds.) Carder, A.A. and Remnant, F., Colombo: Centre
for Poverty Analysis.

3 Aminuzzaman, S.M., 2007. Poverty and Governance- A Quest for

Alternative Focus: in a Bangladesh test case, JOAAG, Vol.2, No.1, pp. 11-20.
4 Central Bank of Sri Lanka, 2012. Annual Report-2012, Colombo.
5 CIRDAP, 2009. Indonesia : Assessing Rural Development Initiatives:
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6 Damayanthi, M.K.N. and Champika, P.A.J. 2014. An Evaluation of

Samurdhi Banks in Poverty Alleviation, Colombo.

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7 Department of Census and Statistics, 2011. Child Activity Survey-
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Household Income and Expenditure Survey-2009/10. Colombo: Department
of Census and Statistics. Available at www.statistics.gov.lk

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Expenditure Survey 2012/13: Preliminary Results of First Three Monthly
Round, Colombo.

10 Dinamina, 23rd December 2013, Samurdhi, Colombo, Lake House.

11 Fernando, R.L.S., 2009. An Evaluation of Samurdhi Programme in

Sri Lanka. In Governance and Poverty Reduction: Beyond the Cage of Best
Practices, (eds.) Singh, A., Kapoor, K., and Bhattacharyya, R. Eastern
Economy Edition, New Delhi: PHI Learning Pvt.

12 Gamage, D., 2006. Governance of Poverty or Poverty of Governance,

Economic Review, Volume 31 (10-12), January/March 2006, Colombo,
People’s Bank, pp. 8-24.

13 Glinskaya, Elena, 2000. An Empirical Evaluation of Samurdhi

Program, World Bank draft report.

14 Grindle, M.S., 2004. “Good Enough Governance: Poverty Reduction

and Reform in Developing Countries”, An International Journal of Policy,
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15 Gunatilaka, R and Salih, R., 1999. How successful is Samurdhi’s

Savings and Credit Programme in Reaching the Poor in Sri Lanka? Colombo:
Institute of Policy Studies, Poverty Series.

16 Gunawardana, D., 2004. Poverty Measurement: Meanings, Methods

and Requirements. Colombo: Centre for Poverty Analysis.

17 Gunawardane, D., Meedeniya, A. and Shivakumaran, S., 2007.

Absolute and Relative Consumption Poverty in Sri Lanka: Evidence from the
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http://www.globalissues.org

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18 Hye, A.H., 1996. Below the Line: Rural Poverty in Bangladesh., Dhaka:
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19 Jabban, N., 2007. Good or Good Enough Governance in South Asia:

Constraints and Possibilities, Inaugural address delivered on 2nd April 2007
at Utrecht University. Available at http://www.sinhalasongs.lk/songs/dayan-
vitharana/api-heta-gana-pasuwa.mp3. [accessed on 28th December 2013]

20 Jabbar, S. and Senanayake, D., 2004. Overview of Poverty in Sri

Lanka. Colombo: Centre for Poverty Analysis, (Briefing Paper Series 1-2004).

21 Jayaweera, R. 2010. Better Targeting of Transfers: Samurdhi

Programme, Colombo: IPS. Available at http://www.ips.lk [accessed on 26th
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22 Kelegama, S., 2001. Poverty Situation and Policy in Sri Lanka, Paper
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Institutions for Poverty Reduction, Manila: Asian Development Banks, 5th-
9th February 2001.

23 Kesavarajah, M., n.d. Poverty and Economic Support in Sri Lanka:

The Case of Samurdhi Programme. Available at http://www.iiirr.ucalgary.ca/
files/iiirr/26.pdf. Accessed [25th December 2013]

24 Khadka, N.B., 2005. Defining Governance and Good Governance in

Guideline for Good Governance (ed) Roa, B.S., CIRDAP Training Series No
74, Bangladesh: Centre for Integrated Rural Development for Asia and the
Pacific.

25 Pathak, R.D., Rao, P.S. Singh, J., Rahman, M.H. and Sarker, E.A.,
2005. State Poverty Alleviation in South Asia and South Pacific: A Comparative
Perception Survey of Civil Servants, The paper presented at Network of
Asia-Pacific Schools and Institutes of Public Administration and Governance
Annual Conference, Bejing, PRC, 5-7 December 2005. Available at http://
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26 Perera, B.S., N.D. Current Situation and Emerging Challenges in

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61
27 Salih, R., 2000. The Samurdhi Poverty Alleviation Scheme, Paper
prepared for the Social Security Division of the ILO, Geneva. Available at:
http://ilomirror.library.comell.edu/ public/english/region/asro/colombo/
download/rozscl00.pdf.Accessed [17 February 2012].

28 Samurdhi Authority of Sri Lanka, 2008. Annual Report-2008. Colombo:

Samurdhi Authority of Sri Lanka

29 Samurdhi Authority of Sri Lanka, 2011. Annual Report-2011. Colombo:

Samurdhi Authority of Sri Lanka.

30 Sen, A., 1981. Poverty and Famines: An Essay on Entitlements and

Deprivation. Oxford: Clarendon Press.

31 Sen, A., 1999. Development as Freedom. New York: Knopf Press.

32 Sihag, B.S., 2007. “Kautilya on institutions, governance, knowledge,

ethics and prosperity”. In Humanomics vol.23 No.1 , pp5-28, Emerald Group
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33 Singh, S. K., 2005. Good Governance through Rural Local

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34 www.med.gov.lk

35 www.samurdhi.gov.lk

36 www.statistics.gov.lk

62
70

60

50

40

30

20

10

0
Kalutara

Batticaloa

Anuradhapura

Monaragala

Kurunegala

Ratnapura

Vavuniya

Jaffna
Name of District

Fig.1 : Percentage of Samurdhi Beneficiary Families having

Monthly Income above the Poverty Line

Source : Field Survey, 2012

Table 1 : Sample by Monthly Family Income (LKR)

Level of Income (LKR) Percentage

Samurdhi Non- Total

Beneficiaries beneficiaries
(N=383) (N=95) (N=478)

Less than 1,500 7.8 3.2 6.9

1,500-5,000 11.1 7.4 10.3
5000-10,000 17.8 10.5 16.3
10,000-15,000 22.2 15.8 20.9
15,000-25,000 21.1 24.2 21.8
More than 25,000 20.1 38.9 23.8
Total 100.0 100.0 100.0

Source: Field Survey, 2012.

63
 Table 2 : Poverty Line by Districts (As at March 2013)

Name of District Poverty Line (LKR)*

Kalutara 3,798
Batticaloa 3,896
Anuradhapura 3,585
Monaragala 3,563
Kurunegala 3,596
Ratnapura 3,626
Vavuniya 3,776
Jaffna 3,933
National 3,659

Source: www.statistics.gov.lk
* Minimum expenditure per person per month to fulfill the basic needs

Table 3 : Distribution of Samurdhi Beneficiary Households by Monthly Income

Deciles

Household Income Average Household Percentage of Households

Deciles Income (Rs) in 2006/07 receiving Samurdhi in 2006/07

First deciles 4,288 60

Second deciles 7,680 51
Third deciles 10,170 45
Fourth deciles 12,540 36
Fifth deciles 15,225 32
Sixth deciles 18,404 25
Seventh deciles 22,450 21
Eighth deciles 28,290 14
Ninth deciles 38,467 9
Tenth deciles 105,438 4

Source : Household Income and Expenditure Survey-2006/07, Department of Census and

Statistics.

64

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