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The Plight of the Poor

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3 years ago

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Sri Lanka’s Deepening Economic Crisis:

By Lakshila Wanigasinghe

Empty supermarket shelves, endless queues to buy essentials and overnight camping around fuel stations are now regular sights in Sri Lanka. As the economy continues to plummet with no viable short-term solutions in sight, levels of frustration among the citizens continue to rise.

The country’s worst economic crisis since independence has battered Sri Lankans from all walks of life but the fallouts are impacting the poor with greater intensity. If urgent measures are not taken to support the most vulnerable at this time, more Sri Lankans will slip into poverty thus increasing intergenerational poverty in the long term. This blog identifies some of the most pressing challenges faced by the poor and vulnerable amidst the prevailing crisis and outlines policy options to safeguard their well-being.

Background

Sri Lanka’s current economic crisis is a result of several years of mismanagement, corruption, shortsighted policymaking, and an overall lack of good governance. Insufficient foreign reserves at Sri Lanka’s Central Bank and loss of access to international capital markets resulted in the country defaulting on debt for the first time in history. Unchecked external borrowings, tax cuts that widened the existing budget deficit, the chemical fertiliser imports ban and the sudden floating of the Sri Lankan rupee are among several factors that contributed to the economic collapse. Tourism, together with apparel and tea exports – some of Sri Lanka’s main income sources – were affected in recent years due to various internal and external factors such as the 2019 Easter Sunday attacks followed by COVID-19 in 2020. Now, the economic crisis presents multiple challenges including severe threats to nutrition, food security, healthcare, and education.

Impacts on the Vulnerable

The rapid depreciation of the Sri Lankan Rupee and the inability of wages to keep up with inflation have drastically lowered the standard of living. Inflation, as measured by the Colombo Consumer Price Index (CCPI) for June 2022, was 54.6% in comparison to 39.1% in the previous month. Further, food inflation rose to an alarming 80.1% in June 2022.

The ability to earn a living wage is hampered by insufficient fuel supplies. This along with the rise in transport costs and overcrowded public transport have left workers struggling to commute to work. Daily wage earners such as three-wheel drivers are in fuel queues for days losing out on productive work hours. Regular interruptions to the power supply are affecting small-business owners’ ability to conduct business and with many completely shutting down operations. Shortages in gas and kerosene oil for cooking, rise in commodity prices and supply shortages are changing people’s consumption patterns forcing many families to reduce their consumption and non-consumption expenditure. The inability to receive adequate nutrition due to increases in the cost of living is affecting children’s health and may lead to increased rates of malnutrition in the future. Apart from this, continuous school closures are impeding children’s education, especially at the village level where most families lack the technology for digital learning.

Short-term Relief

Sri Lanka was facing a reversal in poverty levels since the COVID-19 pandemic and faces the risk of many new groups following suit along with those who are already poor falling deeper into poverty. Hence immediate measures must be taken to support the poor and ensure their livelihood sustenance to some extent. As the current fiscal restrictions pose a challenge in supporting all groups in need, emergency relief efforts need to be targeted toward the most vulnerable so as to not further cripple the economy. Providing cash transfers is one such relief option. They were widely popular as a global emergency response during COVID-19. While Sri Lanka also adopted this as a response to the pandemic, the key in this context would be to provide an adequate sum of money to the most deserving households. Although this may include a considerably large number of at-risk families due to rising inflationary pressure, unfortunately only those in dire need of support must be beneficiaries at this time. As such authorities will have to make tough choices to correctly identify deserving households. Financing these cash transfers will require an allocation of a portion of funds from foreign aid, loans and other humanitarian assistance received by Sri Lanka.

Following the declaration of a three-day weekend for public sector employees, primarily to utilise their time to cultivate consumable crops at the household level, the provision of in-kind support such as seeds and fertiliser for cultivation is another option. As with monetary support, these initiatives must be targeted toward the poorest who are unable to meet their required nutrition levels. However, there is an issue with such families not having suitable plots of land for cultivation. Thus, initiatives need to be thought of on how to overcome space limitations. One option is through community gardens which can be introduced in village-level Grama Seva offices, school grounds etc. Proper organisation, allocation, and monitoring are imperative to successfully execute these initiatives.

Although an unpopular solution, temporary rationing measures will need to be put in place, especially for high-demand commodities such as fuel, gas, milk powder and medicine etc. This will help curb excess purchasing of items and ensure all individuals have access to purchase necessities. Excessive purchasing often leaves the poor on the losing end since they do not have sufficient funds to purchase beyond their immediate requirements. Hence rationing will help with maintaining sufficient supplies for low-income groups such as daily-wage earners. While it is important to support the poor and vulnerable at this time, it is imperative to ensure the limited fiscal and other resources are used effectively. Further, these measures need to be taken alongside working towards ensuring political stability and debt sustainability to restore international confidence in Sri Lanka. This will encourage support from the global community to help Sri Lanka work towards overcoming this crisis.

Link to the full blog – https://www.ips.lk/talkingeconomics/2022/07/18/sri-lankas-deepening-economic-crisis-the-plight-of-the-poor/

Lakshila Wanigasinghe is a Research Officer at IPS with research interests in poverty, social welfare, development, education, and health. She holds an MSc in Economics with a concentration in Development Economics and a BA in Economics with concentrations in International, Financial and Law and Economics from Southern Illinois University Carbondale (SIUC), US. (Talk with Lakshila – lakshila@ips.lk)


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Dialog delivers a strong first quarter performance

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4 hours ago

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2025/05/10

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Dialog Axiata PLC announced its consolidated financial results for the three months ended 31st March 2025. Financial results included those of Dialog Axiata PLC (the “Company”) and of the Dialog Axiata Group (the “Group”).

The Group delivered a strong performance across Mobile, Fixed Line, Digital Pay Television and Tele-infrastructure businesses recording a positive Revenue growth of 4% Year on Year (“YoY”) to reach Rs43.3Bn for Q1 2025. On a Quarter on Quarter (“QoQ”) basis Revenue declined by 5% owing to conscious scaling down of low margin international wholesale business amounting to Rs1.7Bn for Q1 2025. Group Core Revenue was recorded at Rs41.4Bn for Q1 2025, up 20% YoY albeit declining 2% QoQ due to days impact. Group Earnings Before Interest, Tax, Depreciation and Amortisation (“EBITDA”) recorded a growth of 45% YoY to reach Rs19.7Bn albeit declining 7% QoQ due to moderate decline in core Revenue.

Headline EBITDA margin improved 12.8 percentage points as compared to Q1 2024. The Group Net Profit After Tax (“NPAT”) was recorded at Rs4.1Bn for Q1 2025 up 49% YoY albeit declining 39% QoQ. Dialog Group continued to be a significant contributor to state Revenues, remitting a total of Rs14.8Bn to the Government of Sri Lanka (“GoSL”) during Q1 2025. Total remittances included Direct Taxes and Levies amounting to Rs4.5Bn as well as Rs10.3Bn in Consumption Taxes collected on behalf of the GoSL. The Group continues to remain steadfast to meet growing demand from both retail and corporate sectors, whilst also ensuring seamless experience and leadership in Sri Lankas’ Broadband and ICT sectors. Dialog mobile network was recognised by third party network monitoring platform as the leader across 5G Experience, Coverage and Overall Experience. The Capital expenditure (“Capex”) for Q1 2025 reached Public

Rs3.7Bn representing an increase of 36% YoY. As a result of improved performance and controlled Capex, the Group recorded Operating Free Cash Flow (“OFCF”) of Rs12.3Bn for Q1 2025 up 71% YoY and >+100% QoQ.

In the recent quarter, Dialog was honoured as the ‘Telecommunication Brand of the Year’ for the 14th consecutive year and the ‘Service Brand of the Year’ for the 4th time at the SLIM-KANTAR People’s Awards 2025, held on March 18, 2025. This recognition, awarded based on the voice of the people, reflects the strong affinity with Sri Lankans over the years. Dialog was also recognized at the ACCA Sustainability Reporting Awards 2024, winning the ‘Non-Financial Services Category’ for its exemplary commitment to sustainability and transparency. This achievement reflects the company’s ongoing efforts to integrate sustainability into its business strategy and operations.

At an entity level, the Company continued to contribute a major share of Group Revenue (74%) and Group EBITDA (72%) during the quarter. Company Revenue was recorded at Rs32.3Bn up 26% YoY due to consolidation of Airtel business and stable pricing in the consumer space. On a QoQ was down 1% owing to days impact. EBITDA was recorded at Rs14.2Bn for Q1 2025 representing a growth of 63% YoY on the back of strong revenue performance and moderation in cost increase. On a QoQ basis EBITDA declined by 21% due to higher Network and Manpower costs. The Company NPAT was recorded at Rs2.9Bn for Q1 2025, up 78% YoY albeit declining 64% QoQ. Dialog Television (“DTV”), continued to consolidate its leadership position in the Digital Pay Television space, maintaining a strong subscriber base of over 1.6Mn as of end Q1 2025. DTV Revenue reached Rs3.1Bn for Q1 2025, remaining stable YoY albeit declining 6% QoQ due to slow down in subscription revenue and days impact. DTV EBITDA was recorded at Rs475Mn a growth of 3% YoY whilst declining 29% QoQ largely in line with the revenue movement. NPAT was recorded at a negative Rs367Mn for the quarter. Dialog Broadband Networks (“DBN”) featuring the Group’s Fixed Telecommunications, Broadband and International Businesses recorded Revenue of Rs9.0Bn for Q1 2025, down 38% YoY and 17% QoQ. The headline Revenue decline was due to the scaling down of low margin international wholesale business. The Core Fixed Business recorded a Revenue of Rs7.8Bn for Q1 2025, up 6% YoY and 2% QoQ. The EBITDA Public for DBN grew 24% YoY and 82% QoQ to record at Rs5.0Bn for Q1 2025, driven by decline in Network and Manpower costs. NPAT reached Rs1.6Bn for Q1 2025 increasing 72% YoY. More details are available at the following links:

Dialog Axiata PLC direct weblink: https://www.dialog.lk/financial-report-archives#quaterly-reports

CSE direct weblink: https://www.cse.lk/pages/company-profile/company-profile.component.html?symbol=DIAL.N0000

Dialog sustainability: https://www.dialog.lk/sustainability

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Hachajah puts Sri Lanka on the global music map with double win at the CARAs

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2025/05/10

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hachajah - Double-Award Winner at CARA 2025. (From left) Alexander Koutzoukis, BOSS executive producer - CASA; hachajah; Anthony Pulido, Chief of Staff - CASA; and Jessica Chen, Director of Awards - CASA

Sri Lanka celebrates a moment of immense national pride as hachajah – the artistic moniker of Colombo-born singer, songwriter and producer Charith Peris — secures two prestigious accolades at the Contemporary A Cappella Recording Awards (CARAs), hosted by the Contemporary A Cappella Society (CASA). These global awards, considered the highest honour in recorded a cappella music, have previously recognised internationally acclaimed acts like Pentatonix, now a household name in the genre.

hachajah’s debut EP, No Place Like, was awarded Best Semi-Professional Post-Collegiate Album or EP, while his poignant single Colombo Sky earned Best Song by a Solo Performer. With eight nominations and runner-up honours in two additional categories, this debut marks a breakout moment for the artist – and a significant cultural win for Sri Lanka.

“Winning a CARA was a personal dream. To win two with my first EP is surreal,” hachajah shares. “These awards are an honour to receive, as they recognise my journey, my Sri Lankan roots, and the stories I carry through music.”

Known for his distinctive fusion of pop a cappella with traditional Sri Lankan narratives and musical elements, hachajah crafts songs that are both deeply personal and widely resonant. Drawing from his experiences growing up in Colombo during the civil war, his music explores themes of identity, longing, and cultural memory.

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An innovative Rotary program to promote values in children

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4 hours ago

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2025/05/10

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Season 4 Honda Purudu Championship Finals were held at the Temple Trees Auditorium on the 27th of April, with the Rotary district governor, Sushena Ranatunga, as the chief guest. The governor enlightened the audience, filled with teachers, principals and other educators the importance of bringing back the lost values in our country. He thanked the children for learning and expressing these important values using performing arts and advised them to make them part of their daily lives.

Children in Sri Lanka are navigating a world filled with complex moral dilemmas and often lack the guidance to cultivate essential values like kindness, honesty, and respect. Honda Purudu Championship is part of the Little Minds Strong Values (LMSV) program, conceptualised by Rotarian Rukshan Perera, supported by the Rotary Club of Colombo Metropolitan, and collaborated with the Ministry of Education to roll out to schools around the country. LMSV attracts the children with engaging, value-embedded, video-animated songs that teach core values while inspiring the child

ren to express these values and perform skits in school and join the Honda Purudu Championship through the performing arts. This process aspires to place values education at the forefront of children’s lives (in school and at home) and mould the next generation to become compassionate and responsible leaders.

HONDA PURUDU CHAMPIONSHIP: The annual Honda Purudu Championship further encourages children and schools to participate and sustain these values while winning Awards & Certificates. It is open to preschoolers, primary and secondary schoolers in the Solo and Group categories. As a byproduct, the children continue to enhance their talents in the performing arts.

Season 4 LMSV Championship has made remarkable strides with more than 11,000 children showcasing active engagement nationwide, with schools embracing LMSV values in various innovative ways, benefiting thousands of children. The professional judges selected 140 children, and they were invited to the finals in Colombo. They came from North, South, East and West – Jaffna, Ampara, Batticaloa, Galle, Kalutara, Kandy, Badulla, and several other big cities and small towns. Children selected LMSV songs of their choice to eagerly express these values via Song, Dance, Speech, and Drama. In the process, they surprised the audience with their fabulous talents, wearing beautiful costumes, expressing these values in the mediums they enjoy, and elevating the afternoon to an impressive event.

The principals, teachers and other educators spoke very highly of the event; “We are thankful to the Ministry of Education and Rotary for introducing LMSV to schools”, “This is an innovative program for children to build future leaders with good morals”, “Every child must be exposed to the LMSV program to build the future of our country”…etc.

COMPREHENSIVE WEBSITE TO DRIVE THE PROCESS: LMSV website WWW.LMSV.LK provides a comprehensive platform that connects educators with integrated tools in one seamless experience. It’s a one-stop shop for teachers, parents, students, and the community to learn the program via online tutorials, guides, and presentations.

This is an annual event organised by the Rotary Club of Colombo Metropolitan, and we welcome all school principals, teachers and parents around the country to help the children join the Honda Purudu Championship and learn these important values for life. Season 5 will begin in May 2025.

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