Sri Lanka's failure, India's success, fresh challenges

Poverty alleviation presents a critical global challenge, particularly in South Asia.

- By Kelum Bandara

While India has achieved remarkable success in reducing extreme poverty through strategic, digitally-driven initiatives, Sri Lanka faces a contrasting reality. Its 2022 economic crisis plunged a third of its population into poverty or vulnerability, necessitating urgent, data-backed policy reforms.

Poverty alleviation has become a challenge in the world, and South Asia, in particular, is no exception. For Sri Lanka, it has become a novel challenge following the economic crisis. Despite its previous achievement, more and more people slipped into poverty after the 2022 economic crisis leaving multiple challenges for policy makers in elevating the country's socio-economic development.

According to the World Bank's country report, the poverty rate was 24.5 percent (at US$3.65 per person per day) in 2024.

Although poverty declined marginally during the year, it remains nearly double what it was in 2019 (11.3 percent), the World Bank said.

The country is now on a growth path after the crisis. Macro-economic fundamentals are in place. Yet, the World Bank says, household incomes are well below pre-crisis levels, resulting in elevated poverty and food insecurity. Worse, vulnerability has also increased, with a third of Sri Lankans living in poverty or one shock away from falling back into it.

Poverty triggers food insecurity which, in turn, fuels malnutrition. The World Bank says malnutrition increased in 2024 posing concerns over potential long-term impacts on human capital formation and intergenerational poverty transmission.

Food prices more than doubled between 2021 and 2024. Households changed their diets, reducing the consumption of nutritious food, contributing to an increase in malnutrition from 12.2 to 17 percent (underweight among children under 5) and from 7.4 to 10.5 percent (stunting among children under 5) between 2021 and 2024, the report said.