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Determinants of Poverty Among Households in Monaragala District, Sri Lanka

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Determinants of Poverty Among Households in Monaragala District, Sri Lanka © JAN 2019 | IRE Journals | Volume 2 Issue 7 | ISSN: 2456-8880 Determinants of Poverty Among Households in Monaragala District, Sri Lanka MALLIKA APPUHAMILAGE KUMUDINI SRIYALATHA Business Economics, University of Sri Jayewardenepura, Sri Lanka Abstract -- This study examines the determinants of poverty that the global poor are belongs to rural, young, low among households in Madulla division, Moneragala level of education, majority engaged in the agricultural District, Sri Lanka. In order to identify the relationship sector, larger household size and more dependent between demographic, economic and socio-characteristics especially higher number of children. Further, the and poverty among households in Madulla Division, a report highlighted that 80 percent of the poor regression analysis is used. Further, this study examines the income distribution among household by using micro- population live in rural areas; 64 percent employed in level income data. The regression analysis clearly indicates agricultural sector; 44 percent are 14 years or younger; that, variables such as dependency ratio and size of the 39 percent do not have formal education. households significantly and positively affect the poverty level. We also find that income level of the household and As mentioned in the report of ‘Poverty and the world number of employed person of the household significantly of work: the Global Monitoring Report (2015/16) the and negatively affect poverty level. Also, educational level rate of extreme poverty (measured from 2008) as and nature of earning have positive impact but not living on less than $1.25 per day in 2005 reached 10 significant. percent in 2015, compared with 30 per cent in 1990. The declining trend in extreme poverty was especially Index Terms- Gini coefficient, income distribution, poverty noticeable in developing countries. The rate was determinants, Sri Lanka declined from 47 percent in 1990 to 14 percent in 2015 (Global Monitoring Report (2015/16)). Accordingly, I. INTRODUCTION in this report, extreme poverty is defined as living on a household per capita income of less than $1.90 PPP Poverty mitigation is a key policy consideration in per day. Another definition which moderate poverty is recent development literature. Large numbers of is defined as living on between $1.90 PPP and $3.10 scholars in the field of development economics have PPP per capita per day. The emerging and developing claimed that the battle against poverty is an important countries have shared about 15 percent extreme requirement for economic growth (Emwanu et al. poverty level in the year of 2012 and the regional (1995)). According to global economic prospects poverty level also has been changing in globally. This (2018) indicates that the world made significant is because of uneven progress which is happening in progress in the poverty reduction from 35 percent to the world. In Sub-Saharan Africa have the largest 10.7 percent of the population in 2013. At the same poverty headcount ratio (41 percent) and the largest time 60 out of 83 countries in the world, the income of number of poor households (389 million) in 2013. This the poorest 40 percent has raised from 2008 to 2013 figure is higher than all other regions in the world (see with the global financial crisis. Global Monitoring Table 01). This is a remarkable change with respect to Report (2015/16) predicted that global poverty rate 1990, when half of the poor were living in East Asia may have reduced up to 9.6 percent (700 million) of and Pacific region. global population in 2015. Further it says that for the first time in the history, the global extreme poverty has Considering the poverty levels across the regions, reached to single digit number. In 2015 the absolute without developed countries, reports that progresses in international poverty line was set at $1.90 per day. Asia and the Pacific region have been outstanding. For This is based on the monetary value of a person’s example, the share of people in extreme poverty level consumption expenditure or income level per day. has declined by 46 percentage points between 1990 Poverty and Shared Prosperity Report (2016) showed and 2012. The extreme poverty level in 2012 was IRE 1700897 ICONIC RESEARCH AND ENGINEERING JOURNALS 64 © JAN 2019 | IRE Journals | Volume 2 Issue 7 | ISSN: 2456-8880 about 12.2 percent (Global Monitoring Report, region. The extremely poor were around 1.8 percent of 2015/2016) the population in 2013. Even though the extremely poverty is low, 45 percent of the population belongs to Table 01: World and Regional Poverty Estimates, less than $5 per day in 2013 in Sri Lanka. 2013 In 2016, the year of the latest comprehensive data on Region Headcount Povert Poor Share of poverty in Sri Lanka, poverty headcount index was 4.1 Ratio % y Gap (million) global percent and it was fell from 6.7 percent in 2012/13. % poor by Out of 20 million population 843,913 people were region (%) belonging to poverty in 2016. East Asia 3.5 0.7 71.0 9.3 and Pacific Table 02: Poverty head count index, number of poor Eastern 2.3 0.6 10.8 1.4 population and contribution to total poverty by sector Europe and in 2016 Central Asia Latin 5.4 2.6 33.6 4.4 America Sector Poverty Number of Contribution and the head count poor to total Caribbean index populations poverty Middle East - - - - (number) (%) and North (%) Africa Sri 4.1 843,913 100.0 South Asia 15.1 2.8 256.2 33.4 Lanka Sub- 41.0 15.9 388.7 50.7 Urban 1.9 67,649 8.0 Saharan Africa Rural 4.3 693,956 82.2 Total six 12.6 3.8 766.6 Estate 8.8 82,308 9.8 regions World 10.7 3.2 766.6 Source: Department of Census and Statistics, Sri Lanka, 2016 Source : World Bank, Washington, DC Note: Poverty is measured using the US$1.90-a-day Although poverty has fallen to a greater extent at 2011 purchasing power parity (PPP) poverty line. The national level during the last few decades, poverty six-region total includes all developing regions. World inequalities still exists across the provinces as well as includes all developing regions, plus industrialized districts. Table 02 shows that in general the poverty countries. headcount index in the estate sector is higher than the other sectors of the country. Majority household in this According to Sri Lanka’s official national poverty sector are belongs to poor and near- poor. Many of line, a person is identified as being poor in the 2012/13 them are young, Hindu Tamils, working in tea estates Housing Income and Expenditure Survey (HIES) if his and living in free housing units. In recent years, the or her real per capita consumption expenditure falls estate sector poverty rates have declined from 28 below Rs. 3,624 per month, which is equivalent to percent to about 10 percent in 2009/2010 and about $1.50 in 2005 purchasing power parity term. 2012/2013. This consumption threshold is based on Sri Lanka’s official poverty line developed by Department of Looking at the poverty movements across district level Census and Statistics (DCS) and the World Bank using shows substantial decline in the national poverty level data from the 2002 HIES (The Spatial Distribution of from 22.7 percent to 6.1 percent in 2002 and 2012/13 Poverty in Sri Lanka, DCS, 2015, p.05). respectively. Even though, national poverty level has declined sharply in recent years, there can be seen Looking at poverty level in Sri Lanka has among the large variations among districts. In terms of absolute lowest extreme poverty rates among countries in the as well as relative poverty level, the largest decline in IRE 1700897 ICONIC RESEARCH AND ENGINEERING JOURNALS 65 © JAN 2019 | IRE Journals | Volume 2 Issue 7 | ISSN: 2456-8880 poverty was seen in Hambantota and Puttalam Figure 01 show those nine provinces in Sri Lanka and districts. In contrast, the smallest decline in terms of number of poor population by province. It is clear that relative poverty has recorded in Galle and Moneragala Uva province has recorded the highest poverty level in districts, while the smallest decline in terms of 2012/13. Uva province has two districts namely absolute level was found in Colombo and Gampaha Badulla and Moneragala. Table 04 presents poverty districts. Still Moneragala and Badulla in Uva level of Moneragala district in accordance with DS. province have represented high poverty levels (see There are eleven DS in Moneragala district. Table 03). Therefore, Western province which Syambalanduwa DS has reported the highest poverty includes three districts such as Colombo, Kaluthara level while Sewanagala has recorded the lowest and Gampaha remain the least poor; while Moneragala poverty level. has recorded still high poverty rate. Figure 01 Number of Poor People by Province Table 03 Poverty headcount index by selected district- 2012/13 2002, 2012/13 200000 District HIES 2002 HIES 150000 % 2012/13 % 100000 Sri Lanka 22.7 6.7 50000 Hambantota 32.0 4.9 0 Moneragala 37.0 20.8 Badulla 37.0 12.3 Puttalam 31.0 5.1 Source: Department of Census and Statistics, HIES, 2015 Kegalle 32.0 6.7 Table 04 Poverty level in Moneragala District by Ratnapura 34.0 10.4 Divisional Secretariat in 2011 Matale 30.0 7.8 Divisional Poverty Divisional Poverty Secretariat Headcount Secretariat Headcount Gampaha 11.0 2.1 Ratio (%) Ratio (%) Siyambalanduwa 51.8 Bibila 26 Colombo 6.0 1.4 Madulla 40.7 Wellawaya 24.9 Galle 26.0 9.9 Thanamalwila 35.8 Buttala 21.2 Source: Department of Census and Statistics, 2015 Medagama 30.2 Katharagama 19.8 According to HIES in 2012/13, it reveals that for a large part of the country, the poverty level is less than Moneragala 29.3 Sewanagala 19.3 15 percent.
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