Review of Welfare Activities in Sri Lankan Economy from 1977 to Up to Date

Introduction  

Welfare activities of an economy are linked with the social policy of the country and the social development of the country in the past and present. Welfare activities are the availability of resources and the presence of conditions required for reasonably comfortable, healthy, and secure living (Business Dictionary). It is the aid in the form of money or necessities for those needs: an agency program through which such funding is distributed (Merriam Webster). So it is clear that different governments’ perceptions, reconstructions affect the welfare of the economy. Social policy is the study of human well-being and guidelines meant for the changing maintenance or the creation of living conditions that are perceived to be conducive to the welfare of human beings (Alcock, Erskine May 2003). Until the reach of neo, liberal social policies in the post-1977 era evolved welfare in the society inherent to different governments since 1833. Early colonial state during the period of 1833 to 1931 identified as the formative period of social policy under the document of Colebrooke-Cameron Commission of 1833. The Ceylonization of the public service was the influence for other social policy reforms, especially relating to the higher education. More significantly, they put the foundation for the rule of law and the protection of the equal rights of all individuals within an open and accountable judicial system. Colonial social policy was that education as the dual society and understood as the promotion of English education for the urban middle class and the primary school mostly in the rural sector in Sinhala and Tamil Medium. So in this era, social development was guided by the two main factors such as the need for stable, efficient, and orderly government and the effective use of public expenditure in the management. After that, the Donoughmore Commission reforms also firmly focused on social welfare in addressing social inequalities and the need for collective action for social welfare. 
Basically, it was for the primary two areas, education and health and to a lesser extent on public welfare relating to unemployment, food subsidy and social infrastructure mainly housing and public utilities (electricity and transport). Again it was reflected the dual society, one strategy for urban areas and another for rural areas. It was exercised for the urban areas by providing short term relief by expanding work opportunities as casual workers in public works and the first time in the colonial rule was given the attention for the lack of unemployment in the rural area by increasing the potential of agriculture that deals high public expenditure on it. And food subsidy was introduced in 1942 as a measure of general welfare in Second World War time, but it remained an essential element of social policy expenditure until the 1970s. And it emerged in the society as a single policy welfare measure for economic, social, and political development for poverty alleviation also. The emergence of the welfare state recorded from 1948 until 1977. 
After the independence in 1948, Sri Lanka adopted a new Westminister style constitution that modeled on British law. So newly independent government embraced the welfarism that was inherited by the late colonial state and developed the “Welfare State.” It was built around the three primary social documents, Education Act of 1945, the establishment of the Department of Social Services 1948 and the Health Act 1953. Initially, the welfare state mainly focused on the three pillars, education, national insurance, and federal health. So at 1977, the school was the most critical part of the transformation of Sri Lankan Society. Social policies in the fields of health, education, subsidized food as an income supplement and public utilities, including transport. Income redistribution highly focused on social expenditure on GDP. Compensatory agricultural policies to mitigate the benefits of social development only for the urban bias and social assistance model of social security income maintenance were emphasized until the neoliberal social policies implemented in 1977. Perception of necessary welfare-oriented manner lead to the economic crisis due to the welfare expenditure of the country; country went towards the liberalization that addressed the laissez-fair growth, ideology economic rationalism and the practice of the free market economy to maximize investment through primary means of income and employment generation. Structural changes of this new policy required significant reductions in public expenditure on social welfare by encouraging private capital to deliver social services. For the study, three main sectors are reviewed such as Health-care, Education and Other health that mainly focus on the poverty (Weekly and Weekly, 2017) (Herring and Herring, 2017) (Kelegama, 2002). That’s how the position of welfare activities until 1977.

Health-care

Privatization was Mostly evident in public utilities, particularly healthcare. Since 1930 with the expansion of health midwives services, the network of rural hospitals, maternity homes and central dispensaries and the emphasize on the control of communicable diseases such as malaria, HIV to achieve the concept of “Health for all” of World Health Organization (WHO) in 1980 and the Declaration of Primary Health Care in 1978. In 1977 the private health sector blossomed. Public sector doctors were allowed to do the private practice in their off-hours using The method of channeling. Health policy in 1990 was managed by the Presidential Task Force (PTF) report in 1992 with significant areas of health promotion, prevention and control of communicable and non-communicable diseases, encouraging healthy lifestyles, human resource development in both public and private health sector by strengthening the quality and range of services and Bridging the gaps and decentralization of health administration. Due to the changes in the government in time to time was the reason for the failure of Coordination between two segments. So imbalances and disruptions of services Were occurred due to the unplanned manner of policy. To avoid that transferred The administration in the district level to the sub-district level. National Health Policy in 1996 aimed further increase in life expectancy by the reduction of both communicable and non-communicable preventable deaths and the improvements of quality of life by reducing avoidable diseases, health problems and Disability and focusing on health promotion. Poverty Reduction Strategy Paper (PRSP) in 2001 states that the assistance of government for the expansion of private sector due to the increasing demand for hospital-based care and high Quality services. This document was focused on the improvement of nutrition, keeping the burden of non-communicable diseases low and ensuring the quality of The health services up to the international standard (Weekly and Weekly, 2017) (Kelegama, 2002). But still, our government fails to achieve the global standard of government expenditure on GDP for the healthcare (that is 5% from GDP according to the WHO), improving the quality of health services due to the resource constraints such as shortage of drugs and the migration of medical employees to foreign countries, facilities for most vulnerable groups and mental health needs of youth by the Growing population in the country. But the Sri Lankan government spend on the the welfare of healthcare sufficiently, because Sri Lanka can achieve decreasing infant and maternal mortality, increasing life expectancy and decreasing malnutrition since 1977 to up to date (Reduction et Al., 2004). And also the satisfaction of quality of the health services was 78% according to the Gallup, 2013.

Education

Education expenditure results in generating human capital, labor productivity, improvement in life cycle earnings, and economic welfare of the society. Like so many countries in the world, Sri Lanka also spends for education to achieve the development of the country. Since 1977 also government provides free education to the country. At present, there are 10144 government schools in the state with 4.2 million children and 236998 teachers. From 1970 to 1980, the government focused on the quantitative expansion of the education system. But it was focused on the quality of the education emphasizing the job-oriented curricula and technical skills rather than general learning. In 1977 UNP government reintroduced the broad and British style public education system. In the 1980s and 1990s, educational expenditure on national income was 2.5-3 percent. The single Multicampus University of Ceylon was broken into six autonomous universities in 1979 to facilitate managerial efficiency and promote competition. Pre-service teacher education was introduced in 1980 before they placed in schools. Under the Companies Act, international schools are allowed to operate and use English as the medium of instruction in the early 1990s. Time to time education attainment is increased. In 1990 the government focus on the quality enhancement of the education with universal access. Introduced new curriculum and promoted student-centered learning and activity-based pedagogical methods in schools under the National Education Commission. About the higher education, developed the autonomy of the universities by mobilizing resources and facilitated the private sector participation in tertiary education in Sri Lanka. Satisfaction for the quality of education is 80% according to the Gallup, 2013. But Sri Lanka is not achieving the international standard of education expenditure on GDP (it is 6% on the GDP according to the Federation of University Teachers Association. And also there must be a sufficient system to provide employment opportunities for undergraduates. According to the World Bank report, so many developed countries are spending more than 10% on education. Even Cuba is a developing country; they have spent 13% of its GDP for the school in 2013. So the quality of the education system and funding system of the education must be improved. (Weekly and Weekly, 2017) (Reduction et al., 2004) (Kelegama, 2002)

Other

Other welfare activities mainly focused on the poverty alleviation of the country by addressing social security, regional disparity, and local development. Most of the programs that were introduced in this period were aiming the poverty alleviation and regional disparity of the country. Now, the country achieved a lower level poverty ratio than before but not regionally. Mahaweli Project in 1980, Janasaviya and Gam Udawa, Samurdhi in 1995 and Mahinda Chinthana development plan are the most significant welfare activities in the economy since 1977. They mainly focused on poverty alleviation through developing agriculture, rural facilities such as transportation, communication, etc. But due to the mismanagement of funds and political influence of the country, the agricultural sector is still developing, and most of the benefits of economic growth are distributed around the urban areas of the country. The problem is associated with Samurdhi are discussing at present due to the partaken of Samurdhi by inadequate people in the country. So there must be a proper mechanism that identifies the right people who are qualifying for the Samurdhi. This program featured on most of the welfare activities such as food subsidy, Sip Dora Scholarship program, woman welfare, employment programs, sanitary, and irrigation development programs. Gam Udawa addressed the issue of lacking houses of poor people, and Mahaweli and Janasaviya are enhanced the household economies of low-income families. As well as under the Mahinda Chinthana infrastructure development was highly emphasized. But those programs were finally burdened on the budget deficit of the country. As an example, southern highway initially estimated for $348 million, but eventually, it escalated to $741 million. (Damayanthi, 2014) (Yapa, 2017) (Kelegama, 2002)

Issues of funding system of welfare activities

Government financed mostly by the public debt for the welfare activities in the country. But it is a burden to the country again due to the hyperinflation of the country as a result of money creation. So, a better way to finance fund for welfare activities is the tax. But it is low as a lower-middle developing country. Because the government must achieve a tax revenue that is 16% of GDP. And direct tax revenue is very less than indirect tax revenue. (Lecturer and Lanka, 2013)

Appendices

Growth of population, facilities, and manpower in the health sector

	1970-1980	1980-1990	1990-2000
Hospitals	16.6	11.1	16.8
Beds	12.0	-2.0	37.7
Doctors	6.4	18.7	226.4
Nurses	23.3	31.3	64.3
Population	17.8	15.2	102.0

Source: Economic policy in Sri Lanka, Dr. Saman Kelegama

Government spending on healthcare and education since 1977 to up to date

Year	Education	Health
1980	2.7	1.47
1995	2.96	1.62
1998	3.05	1.88
2009	2.06	1.54
2012	1.72	1.22
2014	1.3	1.96
2015	2.07	1.3
2016	2.72	1.2

Source: (Bank and Lanka, 2009; Statistics and Lanka, 2012; Bank and Sri, 2014, 2015, 2016)

Comparison of tax revenue of Sri Lanka and Cuba

Country	2010	2011	2012
Sri Lanka	12.9	11.26	10.4
Cuba	37.2	37.9	39.1

Source: Publications of the World Bank

Importance: As a lower-middle country, Sri Lanka must achieve 16% of tax revenue on GDP. But in 1990 Sri Lanka made the highest tax revenue on GDP was 19.02. As a developed country it must be 25-30% on the GDP

Public Debt

Year	Public debt on GDP
1990	93.4%
2004	102.3%
2014	74.7%
2015	71.8%

Source: Central Bank Annual reports

Poverty Trends                                 

1990-91           1995-96           2002               

Urban              16.3                 14.0                   7.9                

Rural               29.4                 30.9                 24.7

Estate              20.5                 38.4                 30. 0

National          26.1                 28.8                 22.7

year	Poverty Ratio
1990-91	26.1%
1995-96	28.8%
2002	22.7%
2006/07	15.2%
2009/10	8.9%
2012/13	6.7%

Source: Census and Statistic Department