Professor Buddhadasa Hewavitharana (Prof. of Economics, University of Peradeniya, during his sabbatical in England, as a Visiting Fellow to Queen Elizabeth House, Oxford University) gave a special lecture, last year on the eve of his return to Sri Lanka, at the Wren Steward Room of Marlborough House, Commonwealth Secretariat in London, on the subject of " Poverty and Equity in the Context of adjustment and Meso Policy interventions: Sri Lanka" to an audience of Executive officers drawn from the several disciplines of the Commonwealth Secretariat. The meeting was organised by Dr. Indrajit Coomarasawamy, presided over by Dr. Dick Gold, Director of Export and Industrial development Division.
Professor Hewavitharana prepared the background for his discussion by maintaining that a concern for minimising the social costs of adjustment was an important factor in Sri Lanka's policy making on structural adjustment, taking the practical forms of attempts at protecting the long cherished social norms, through a variety of equity-orientated and poverty-focused measures. This, he pointed out, was evidenced by the fact that sizeable economic and social infrastructure development measures such as multipurpose river valley development, integrated rural development, rehabilitation of village tanks and development of rural schools were undertaken simultaneously with adjustment measures. Meso policy interventions, he explained, were those programmes, projects and policy measures introduced at the intermediate level, lying in between macro or overall policies and the micro level households. When these are suitably designed and appropriately targeted, such Meso policy interventions could not only protect the poor from any adverse effects of adjustment but also positively improve their lot, he said.
Drawing attention to certain paradoxical situations that had developed during the period 1977 to 1990 in Sri Lanka, Professor Hewavitharana pointed out, according to the most recent data available to him, that poverty and inequity had increased during the early part of this period, when growth was at a relatively high level, but decreased considerably in the latter part which witnessed falling and very low growth . Probing this phenomenon further, he said, it was in the rural sector, particularly in agriculture, that had made by far the largest contribution to the decline in poverty and inequity, despite a weak growth performance in the second period. This suggested that if these improvements were not positively related to growth, then they could arguably have been engendered by well designed and appropriately targeted meso level policy interventions.
Lending support to this suggestion was the empirically observed fact that those improvements in poverty and equity conditions had taken place despite a rise in the unemployment rate to high levels, in association with the decline in growth. He also cited recent statistics on rural informal wage labour market conditions to have improved , of late, partly as a result of an expansion in self-employment and unpaid family labour work, mainly in rural and semi-urban based non-farm activities. Such improvements in rural employment conditions, he argued, probably indicated the effects of intermediate level policy interventions through appropriately targeted programmes, projects and policy measures.
He went on further to say that the time series data on direct welfare indicators too lent support to this suggestion. Despite restricted budgetary allocations for investments in social and economic infrastructure and weak growth performance, the indicators relating to education, housing and amenities, infant, child and maternal mortality rates; immunisation and disease specific death rates had all been able to show improvement through the eighties.
Looking at the theories to support such phenomena, Professor Hewavitharana cited a number of contemporary scholars including Ashwini Swaith, Irma Adelman, Giovanni Cornia, Frances Steward and Fields, who have evolved the hypothesis that while adjustment policies do have adverse impact on the poor, this need not necessarily be so or inevitable, provided that correct policy choices were made at the meso level in areas such as improving productivity in agriculture, promoting rural non-farm activities and designing economic infrastructure development in such a way as to benefit the poor. In these ways, the meso level variable could be transformed into transmission mechanisms that would serve to improve the command that the poor households would have over financial, physical and human resources, he continued.
Professor Hewavithrana then presented a fairly comprehensive list of programmes, projects and policy measures arranged under five key elements and five key strategies and rated them according to certain evaluation criteria designed by him. The five key elements related to measures that could be adopted in order to favour the poor in social and economic infrastructure development under conditions of severe budgetary constraints. Those elements comprised of shifting resources in favour of the poor, improving the spatial distribution of such limited resources, mobilisation of supplementary resources from the households, improving the cost-effectiveness of the use of resources and improving the management and productivity of such resources. The five key strategies relate to improvement of targeting, implementation and delivery; decentralisation of decision making, promotion of peoples' participation and mitigation of inter-and-intra regional disparities. Most of these programmes, projects and measures, he pointed out, fell under two leading paradigms of poverty alleviation/employment creation and regional and rural development.
Taking up the conditions which supported these to operate reasonably well as macro-micro transmission mechanisms, he pointed, particularly to the fact that the public service was able to be maintained as a useable instrument for the planning and implementation of meso intervention, as compared to the sorry situation that prevailed in some of the African countries, thanks mainly to the attempts at protecting the efficiency wage levels of the administrative service and the training imparted by the donor agencies and the monitoring and auditing systems instituted by them. An underlying supportive condition, he stressed, had been the political commitment to welfare norms that cut across the political party system. Professor Hewavitharana concluded his lecture by saying that an analysis of the Sri Lankan experience on the above lines could provide useful lesson to other adjusting countries and to the international donor community.
At the end of the lecture a long and lively discussion took place around the topics of reconciling the rolling back of the state with an intensification of selective meso interventions, the scope and coverage of cost -benefit analysis and what to be included in such calculus, the growth-welfare trade-off and time lags, good governance, role of the international community and the resourcing of meso level interventions.
Ps: Prof. Hewavitharana was interviewed in London.