Sri Lankans are actually getting richer all the time, and are even becoming able to save a bit. Average household income was Rs. 881 in 1980 and is 36,451 according to the latest data, 2010. People who hark back to the good old days of colonial administration are quite mad. There simply wasn’t much to administer. Life has undoubtably gotten better since Independence, but still not yet enough.
According to the poverty measure they use, 8.9% of people are thus poor now, compared to 26.1% in 1990. Which is remarkable, unless you note that people are still spending a lot on food. As people get actual wealth, they usually spend less (as a percentage) on food, and more on protein. Sri Lanka isn’t really following that law.
For more on that issue check out my dad’s article in LBO, from whence I discovered this data. I just put this graph up as a teaser. There’s good up to date info on everything in the 2009/10 Household Income and Expenditure Survey Report (HISE) and I’ll try to put up an infographic soon.
Getting richer, it is good news, I guess if not for the war, that would have been even steeper climb. How is that plotted against Dollar conversion value? Thank you for the info and the pointer to LBO article.
These info interests me, lately, ever since I got offered ridiculous pay from a University over there :) So I am interested in the value too.
You’re really pushing the graphs out these days aren’t you?
If the citizens of a developing country with reasonable growth haven’t become richer, there would be very serious problems indeed. A civil war will do that, of course. However, reading your father’s article, the figures of 8.9% cf 26.1% in poverty may not be accurate, as he carefully points out himself. In fact, taking the main measure of poverty (food expenditure), it would seem that poverty is on the increase – a high increase in expenditure on food in the past few years to 2010 combined with a modest increase in expenditure on protein.
That certainly is my personal and anecdotal experience. I have little faith in govt figures for inflation, but looking at my own receipts for food and domestic goods, there has been well over 10% price inflation for most items in the past year alone. I doubt wages have caught up. I have no idea how most poor people survive to be honest.
Add to this some other key factors. Unless reliable inflation is taken into account, the graph you show may be quite misleading. Is it inflation linked? I doubt it from the numbers. If one Rupee is worth less now than it was 10, 20 or 30 years ago (self-evident), then one would need to know the inflationary effect to judge whether there is a real-terms increase in wealth. Beyond that, there are many other factors to consider, such as the huge reduction in the cost of ‘white goods’ and additional effects of reduced import taxes over the years, which might account for some of the increase in such household items without inferring a consequent increase in wealth (though living standards must have improved). Then there’s the massive increase in the wealth of the wealthy, and rich ex-pats returning home post-conflict (which will skew the stats significantly when one considers how poor the poor are).
I hope it’s true. The poorest people in Sri Lanka deserve better.
It’s generally very difficult to estimate income, especially among poor households. One reason is that people with irregular income (most the poor) simply do not know the answer to the question how much did you earn last month. The other is that people may have all sorts of reasons to understate or overstate.
One workaround is the SEC classification commonly used by market research firms (and in our surveys). Here you simply ask about the chief wage earner’s highest educational qualification and occupation and read off the SEC classification, which is correlated to income.
I was using another workaround, which is using household assets as a proxy for income. Quite solid, according to the studies that have been done.
Even if you have doubts about the provincial breakdowns, I am sure the 20 year chart showing how much asset ownership has increased should be persuasive. I’ve been playing the transport numbers. Again, a stunning story. Three-wheelers overtook cars/vans in 2007. Motorcycle ownership has exploded in the NCP and NWP. These are assets that require operational expenditures. There is no way around it. People are less poor.
@ Mr Rohan Samarajiva. I think the points you make are sound, and the ‘workaround’ does seem to be a pretty good measure from your report. It gives me hope!
The transport stats might be even more persuasive, though do cheaper loans account for some of that? People in Western Europe (not least Greece!) thought they were rather well off when they were able to get cheap finance to ‘pay’ for these sort of assets. If people can afford to run these vehicles with increasing fuel costs, they must be less poor I guess.
I don’t know how much I made last month, and when I’ve calculated my estimates have been way off.
As a note, in Sri Lanka more education generally means higher unemployment, so the SEC classification would probably be inaccurate.
so what do you put down as income on your tax returns
What I sit down and calculate, based on documentation.
Hey Indi you didn’t take inflation into acount when making the graph. Also, the exchange rate in 1980 was significantly lower. The rupee against the USD was like 52 in 1990 and it’s 109 today. http://www.oanda.com/currency/historical-rates/
those numbers are most likely adjusted for inflation
how are sri lankans getting richer if unemployment is increasing? who is paying all these unemployed ppl, maybe indi? while indi works a crappy job at sunday leader, the majority of sri lankans work even crappier jobs, aka sucking off arabs. indis data only works if u don’t adjust for inflation. of course you can buy more stuff with today’s money in 1970 than you could in 1970 with 1970 money. cheerio kiddies.
Unemployment isn’t increasing. It’s declined from 15.9% in 1990 to 4.9% in 2010.
Labor Force, pg 34.
Indi, can you get the exact numbers employed by the government?
I believe the state sector employment went from about 700,000 to about 1.3m between 2005 and 2010 and accounts for a large number of the jobs created.
If you look at the subsectors industrial employment which grew steadily from 2000 drops off sharply from 2008. The growth in numbers come from agriculture and services.
Agriculture – if we can get a breakup by sector, tea, paddy etc we would have a clearer understanding as to what is going on. Are many people in subsistence farming?
most of the jobs that got created were in the services sector. industries lost 111K jobs while agriculture gained 10K and services gained 162K
The Census and Statistics website is worth a visit, perhaps the best govt website. Lots of good stuff including answers to questions like how many people the govt employs.
From a talk to be given in a few days by the Asst Governor who was in charge of the numbers at the Central Bank:
“Unemployment highest among educated youth (12% in 2010).
State provided 14 % of employment in 2010.
Migrant workers more than 20% of labour force.”
But do look at the new labor force survey on the Stats website.
Thanks for the info.
When I went to the website the public sector employment in 1Q 2011 is listed as 1,057,555
The comparable figure for 1Q 2004 was 7.8% of 7,336,708 or 572,263
The figures for 2004 show that 7.8 % of the total workforce was in public administration & defence, which works out to the above.
Therefore the public sector has absorbed 485,292 workers during this period.
The employed population has grown from 7,336,708 to 7,783,574 which is an increase of 446,866.
If my reading of the figures is correct it looks like the sole increase in employment between 2004 and 2011 came from the state.
http://www.statistics.gov.lk/samplesurvey/2011Q1%20report.pdf
as per page 21
percentage of workforce employed in the public sector in 2005 — 13.3
percentage of workforce employed in the public sector in Q12011 — 13.6
nothing much has changed
your method is flawed here any way. People move across sectors all the time, plus there is alot more to the public sector than administration & defense.
kid, y r u looking at unemployment over a 20 yr period. too many fluctuations there to draw any accurate conclusion.
jack points stats are closer, only employment in the state sector has shown significant improvement.
this is how i see it: quality of the labor force has not improved significantly (so productivity is not higher) in the past 5-6 yrs, inflation has remained super-duper high since o6′, n’ economic growth has not been that much. so is it possible that people have more money to spend with higher prices, and a sluggish economy, though the ppl themselves still have average job skills. doesn’t make sense — > no major increase in per capita GDP, aka income.
Stop making up stuff to suit your prejudices. Sri lankan economy has never been sluggish
http://www.indexmundi.com/sri_lanka/gdp_real_growth_rate.html
the economy here has been growing at 4-5% for several decades now. the post war climate has pushed this number closer to 8-10%. And those numbers are adjusted for inflation.
It appears that some people want facts to fit their preconceived conclusions. Here are some more facts they can grapple with: http://lbo.lk/fullstory.php?nid=1489457800. In the process one hopes the conclusions may change.
The problem is in the inflation number Dodo.They have been playing around with the index since 2008 and maybe before that and if inflation is understated growth will be overstated.
Also the Chinese projects are contributing a lot (port, refinery, highway) however the local component in these is minimal. Money comes from China and then goes back to China, so limited employment creation and limited benefit to local businesses, although the number looks good.
When I looked at Q1 2004 it was 7.8% in the public sector, cannot seem to find the corresponding fig for 2005.
only gullible sheep like dodo will believe the inflation figures put out by the Central Bank. back to my main point: per capita income will not grow unless the quality of labor improves. u can seen it in india and u can see it in china, but all u c in SL is a brain drain. also, i am willing to bet that a large % of the economic “growth” is due to government spending, the “G” portion of the GDP equation. net exports are down, net imports are up, consumer spending is down due to high inflation, and investment has been sorely lacking. so the major reason for economic growth is government spending. can i get my Nobel Prize now. tata kiddies.
did i mention the trillion rupee fiscal deficit.borrowing was never fix-all. one-month from now, u’ll get all the details, when His Highness unveils the budget.