Knowledge Articles

Why Moving Beyond GDP is Essential to Avert Planetary Disaster

A few weeks ago, I saw Greta Thunberg live at the launch of the The Climate Book and something that stuck with me, amongst others, was when she said “we are never going back to normal again because 'normal' was already a crisis.” The idea of GDP as a sole measure of how ‘successful’ a nation is, is one such example of a deep-rooted idea that is considered ‘normal’ which has led to growth at the expense of natural resources and human well-being. Moving beyond GDP and focusing on the idea of ‘green growth’ could unlock a host of new opportunities such as job creation, restoration of natural capital, and increased climate adaptation. Policymakers and politicians should explore alternatives of GDP as Sri Lanka forges forward from the biggest economic crisis in its independent history by placing value in what society really envisions as a good life

LSE Event on ‘Looking Ahead in Sri Lanka’: Four Priorities for the Near-term

CSF Co-founder Anushka Wijesinha was recently invited by the London School of Economics South Asia Centre to speak at a forum on 'Looking Ahead in Sri Lanka', alongside four eminent panelists. This article recaps the key points made in the opening intervention at this event. Wijesinha pointed to four key priorities for the near-term: 1) Looking beyond the macro, to real lives; 2) Looking beyond taxation in fixing the fiscal mess; 3) Looking to build public confidence and trust; 4) Looking at quick wins in trade and exports

How Can Sri Lanka Improve Gender Considerations in its Trade Agreements?

In this article on gender considerations in Sri Lanka’s free trade agreements, CSF Visiting Fellow Dr Janaka Wijayasiri argues that as the country begins to explore FTAs once again, it is timely to consider mainstreaming gender into Sri Lanka's trade policy and trade agreements taking into the gender inequality in the country. The article also explores international experiences and practices in gender mainstreaming of trade agreements, identifies ways in which to include gender considerations in trade agreements, and discusses the main problems in effectively mainstreaming gender into trade agreements and how to address them.

Food for Thought: Rethinking Home Gardening and Subsistence Agriculture

To mitigate the rise in food insecurity,  “home gardening” has emerged as a popular buzzword amongst policy makers. In May, the Minister of Agriculture encouraged the public to start growing food in their home gardens. Whilst home gardening can help improve dietary diversity and reduce the severity of food insecurity, it will, in no way, completely eradicate food insecurity for Colombo’s working class poor. It also cannot be the Government’s way of absolving themselves from Colombo’s food crisis. For those living in Colombo facing a burden of duality of both food insecurity and space restrictions, instructions to “stay at home and grow food”, is simply not enough. There needs to be more targeted focus on supporting communities that don’t have the space or resources to grow. In order to better support Colombo’s working class poor to grow food to help increase dietary diversity, and to reduce the impact of food insecurity, we have detailed some recommendations based on empirical evidence from our field work.

Is Economic Valuation of Biodiversity Necessary for Successful Conservation?

The debate on whether biodiversity should be economically valued remains highly polarized and a more nuanced contextual approach is required. This method is essential for successful conservation as it calls for integration of biodiversity-related data in policy making and decisions. However, there are barriers to operationalizing this and economic metaphors such as ‘natural capital’ and ‘ecosystem services’ are yet to enter mainstream economic and political decision-making. Although the approach needs to be developed further, it is on a promising step towards striking a balance between environmental, social and economic objectives.

Debt or Disconnection: Prioritising Energy Justice in Economic Recovery

In Part One of this article, we considered the proposed electricity tariff revision from the perspective of the urban poor in Colombo, arguing that the revisions failed to account for ground realities faced by domestic consumers, both in terms of understanding the financial pressures of the economic crisis as well as how electricity usage has changed in response. In light of the approved tariff increase that averages at 75% in all categories, we take a closer look at low-consumer tariffs, and offer recommendations that uphold principles of energy justice.

Changing How We Think About Economic Growth and Nature

Earlier this year, Sri Lanka’s census and statistics department released a new version of the country’s Gross Domestic Product (GDP) calculation. The existing National Accounts had been ‘rebased’ from the year 2010 to the year 2015. In explaining the re-basing, the department noted that “a number of improvements” to GDP compilation was done, the first item on the list was ‘Inclusion of generated value addition from the reclaimed land of Colombo Port city project’. The fact that the creation of an 269 hectare artificial land parcel attached to the capital, with sand extracted from nature, materially changed the country’s GDP base was startling. It triggered within us, again, a growing discontent we have felt for a while on how we think about economic growth and an unease with how we assess progress. For some years now, stemming from a love for the natural world, interest in biodiversity, and enthusiasm for photography, we had begun to think about critical issues with our current approach to economic growth. Particularly, there was little appreciation for the value of nature - for instance the emerging agenda of the valuation of natural capital.

Sri Lanka: Anatomy of a Crisis and the Path Ahead

Even though much of the recent foreign media coverage of Sri Lanka’s economic crisis and external commentary or analysis of it has focussed rather narrowly on the policy missteps in the last two years, the country’s economic problems have been at least a decade in the making. The debilitating economic collapse Sri Lanka is experiencing today is in no small part due to the flawed economic model followed in the years after the end of the civil war in 2009. This article serves to provide an international reader with a more useful reference point for the recent origins, evolution, and dimensions of Sri Lanka’s economic crisis, and selected perspectives on the policy issues and path ahead. It is written largely from an economics lens, and would need to be read alongside work by others that focuses more closely on human rights, the environment, and social justice issues.

Debt or Disconnection: CEB’s Tariff Hikes and the Urban Poor

The Ceylon Electricity Board (CEB) in July sought an increase in tariffs from the Public Utilities Commission of Sri Lanka (PUCSL), proposing a regressive scheme of tariffs that will see the lowest consumers burdened with the highest increases in rates. The rationale for this revision is that the CEB (excluding LECO costs) requires an 82.4% increase in revenue to meet their forecasted costs for 2022. The proposed raise is likely to increase energy poverty among a population that is already burdened by inflation with a Consumer Price Index (CPI) that is nearly at 60%. Domestic consumers who use fewer than 30 units of electricity per month will have their bills increase by 835% to Rs. 507.65 from the current Rs. 54.27. Overall, it has been identified that 50% of domestic electricity consumers in Sri Lanka – 3.14 million households who use fewer than 60 units a month – will face the greatest increase in electricity bills due to the proposed increase in tariffs.  Women who already perform the majority of housework will bear the brunt of the planned price increase. The gendered impacts of energy poverty will constrain a generation of women and girls, stripping them of time and inhibiting their access to education and the workforce. In a deteriorating economy that places a massive and disproportionate burden on the urban poor, these tariff hikes represent an additional cost that will increase energy poverty and even threaten access to the grid. The tariff hikes are insensitive to the changing consumption patterns of electricity among residents in urban areas, as well as to the significant debt that many households have already fallen into. Beyond the tariff hikes, any policy recommendations regarding support to families during this crisis period must be mindful of these diverse consumption patterns.

Impact of Sri Lanka’s Economic Crisis on the Exports Sector

While steady growth in exports was recorded in the year 2021, Sri Lanka’s deepening economic crisis runs the serious risk of impacting the export recovery achieved to date. In March 2022, merchandise exports, consisting largely of industrial and agricultural exports, recorded a decline of 3.4% in earnings, compared to the previous year, due to a reduction in both volume and prices of exports. In addition to this, industry representatives predict a decline of about 20% - 30% in total exports as a result of the current crisis, with tea exports being among the lowest it has been in 23 years, and the apparel sector expecting a 20% - 25% drop in output by August 2022. Latest figures for June indicate that apparel sector has exceeded expectations and pre-Covid export numbers. In the context of the economic crisis, escalating now to a de facto lockdown across the country, understanding the challenges posed to the country’s external sector performance, one of Sri Lanka’s main sources of foreign exchange, is crucial. At present, exports of goods and services, which account for 17.7% of GDP as of 2021, have been adversely affected by several factors including most significantly, the worsening fuel and energy crisis.