by Ifham Nizam

Political instability is one of the biggest stumbling blocks when it comes to managing climate vulnerability, a senior climate scientist has warned.

Speaking at a recent symposium titled ‘Poverty Alleviation in an Era of Economic Crisis’, former Director of the Natural Resources Management Centre (NRMC) of the Ministry of Agriculture Dr. Ranjith Punyawardena stressed that the poor will suffer if government sheds the topic of Climate Change. The symposium was held at the BMICH and was organized by the Centre of Poverty Analysis (CEPA).

Speaking on the topic, ‘Dealing with Climate Vulnerability –Who is at Risk?’, Dr. Punyawardena said that his institution’s aim is to reduce climate sensitivity.

Dr. Punyawardena added: ‘If government could provide irrigation to farmers, then climate sensitivity could be reduced.

‘A good education, particularly access to information, could reduce the vulnerability.’

‘The Asian Development Bank (ADB) is preparing a new country partnership strategy (CPS) for Sri Lanka, which will provide the overarching framework for ADB’s operations over the next five years, ADB Sri Lanka Resident Mission Deputy Country Director Utsav Kumar said.

Kumar added: “We hope to have this ready in the first quarter of 2024.

“I don’t have to remind the audience about the number of times the country has been in IMF programs. This time, however, the crisis is not just a balance of payments crisis but also a sovereign debt crisis, leading the country into an unprecedented crisis. As Dr. Rana Hasan showed us yesterday, the crisis has eroded development gains as poverty spiked sharply.

‘I thank CEPA and Dr. Herath Gunatilake for inviting the Asian Development Bank to join CEPA’s annual poverty symposium, Asia Foundation and the Institute of Development Studies for joining hands for this event.

‘Dr Indrajit Coomaraswamy very eloquently articulated the causes of the crisis. In short, fiscal profligacy accompanied by fiscal dominance of monetary policy. To be sure, this is not of recent origin. I don’t have to remind the audience of the number of times the country has been in IMF programs. This time, however, the crisis is not just a balance of payments crisis but also a sovereign debt crisis leading the country into an unprecedented crisis. As Dr. Rana Hasan showed us yesterday, the crisis has eroded development gains as poverty spiked sharply.

“We have all seen the low point last year. The government’s stabilization efforts are showing results and need to be commended. Our keynote speakers yesterday highlighted some of these measures.

‘Stabilization is only the start and the country still has a long way to go to recoup losses. For this, stimulating growth is important, which will in turn be important not only for increasing revenues and restoring debt sustainability but also for poverty reduction.

‘While macroeconomic stabilization is rightly the immediate priority, it is important that all cylinders are fired on structural reforms. This covers a gamut of areas to improve competitiveness and productivity of the economy, such as SOE reforms; reducing barriers to trade and investment and shifting the stance to an outward oriented economy to integrate with the global economy; improving the regulatory environment and access to factors of production (land, labour, and capital). Reforms will also be crucial to attract FDI which are non-debt creating capital inflows. These reforms take time to implement and show results.

‘The crisis has pushed many households into poverty. So, protecting the poor and the vulnerable is critical. Reforms need to be accompanied by the guardrails of a well-designed and targeted social protection system. Progress has been made in this regard with the introduction of “Aswesuma.”

‘ADB’s Trade and Supply Chain Finance Program is crucial to support the import of essential goods at a time when LCs are hard to get.

‘ADB, this year has already disbursed USD 350 million for economic stabilization in May 2023. We have another budget support program pipelined for 2023. Sri Lanka was reclassified to what we call Group B making it eligible for concessional resources.

‘We are working at the sectoral level to support structural reforms. These include energy, water, agriculture, tourism, trade and investment, and PFM. We have recently approved a new technical assistance project to support institutional development and regulatory reforms around promoting SMEs and economic zones.”