Over the decades, Sri Lanka has witnessed substantial improvements in education, healthcare, and infrastructure, contributing to a reduction in poverty rates. Despite these achievements, pockets of poverty persist, particularly among rural communities, plantation workers, and urban informal settlements. Additionally, external shocks such as the COVID-19 pandemic, the 2022 economic crisis, and the ongoing impacts of climate change have intensified vulnerabilities, pushing many families back into poverty.
The national-level poverty statistics do not fully capture the true extent of poverty across Sri Lanka. Disaggregated data at the sectoral levels reveal significant spatial disparities, indicating that poverty remains a critical issue in certain areas. Variations in resource endowments, economic opportunities, geographical conditions, and infrastructure development substantially influence the spatial differences in the prevalence and intensity of poverty.
Table 01 shows the poverty situation in Sri Lanka according to the different sectors based on the 2019 survey.
The data indicate that 33.8% of individuals in the estate sector live below the poverty line. In contrast, 2,500,600 individuals are classified as poor in the rural sector, accounting for 15% of the rural population. Notably, the rural sector contributes significantly to the overall poverty in the country, representing 82.2% of the total poor population. Compared to the urban sector, poverty is more prevalent in rural and estate sectors, primarily due to informal employment, inadequate facilities, and limited economic opportunities. The high prevalence of poverty in the rural sector underscores the critical need for targeted interventions in rural areas.
Multidimensional Poverty
Poverty alleviation cannot be achieved solely by addressing income levels, as poverty is inherently multidimensional. In Sri Lanka, multidimensional poverty is assessed through indicators related to education, living standards, and health. Within these overarching dimensions, specific factors such as years of schooling, school attendance, chronic illness, access to healthcare facilities, housing conditions, sanitation, drinking water, cooking fuel, household assets, and basic facilities are considered to evaluate the extent of multidimensional poverty.
In Sri Lanka, around 16% of people are identified as multidimensionally poor. Among these, 41.6% face deprivation across all indicators in the multidimensional poverty index. The estate sector stands out as a major poverty hotspot, with over half (51.3%) of the population living in poverty. Rural areas are also a key concern, as they house the majority of the multi-dimensionally poor, with over 80.9% of impoverished individuals residing in these regions.
Policy interventions need to account for the specific characteristics of poverty to design cost-effective and impactful strategies for eradicating multidimensional poverty.
The multidimensional poverty in different areas varies depending on socioeconomic factors and natural hazards. For example, in the Colombo district, which has the lowest levels of multidimensional poverty, school attendance remains the most significant contributing factor to such poverty, primarily due to children living in slums or impoverished households often lack access to proper education, despite the district’s overall availability of quality educational facilities. Similarly, the number of years of schooling is the most significant factor in Puttalam, while access to health facilities is the predominant contributor in all other districts. Instead, tailored, district-specific policy and budgetary responses are essential to address the unique deprivation patterns in each area.
Poverty levels vary across different age groups, and their societal impacts differ significantly. Children aged 0 to 4 years are particularly vulnerable to poverty, and their growth is crucial for the country’s future development. Poverty among this age group has been measured by assessing the multiple deprivations they face, both within their households and in their individual development. Multidimensional child poverty is evaluated through four key dimensions: education, health, standard of living, and child development. Under this framework, twelve criteria were used to identify multidimensional poverty among children between 0 and 4 years old. These include years of schooling, school attendance, chronic illness, access to healthcare facilities, housing conditions, sanitation, safe drinking water, cooking fuel, assets, basic facilities, nutrition, and early childhood development. Collectively, these factors were deemed critical contributors to multidimensional child poverty.
A significant proportion of children aged 0 to 4 years face multidimensional poverty. For instance, 34% lack access to clean cooking fuel, while 33.4% are underweight or stunted. Additionally, 32.9% lack access to a safe drinking water source, 24.4% live in households situated more than 15 minutes from a bus stop, and 16.4% of children are deprived of early childhood development. The significant reasons for child multidimensional poverty emphasize the urgent need for policies targeting nutrition, safe drinking water, basic facilities, and preschool education to alleviate child poverty in the country.
Vulnerability
The end poverty target cannot be achieved by policies focusing solely on those living in poverty. Policies should also focus on vulnerable communities. Vulnerability refers to the conditions shaped by physical, social, economic, and environmental factors or processes that heighten the susceptibility of individuals, communities, assets, or systems to the effects of hazards. Like many other nations, Sri Lanka grapples with a range of shocks, hazards, and challenges that adversely affect people’s well-being and livelihoods. These diverse vulnerabilities extend beyond income-related risks and the possibility of monetary poverty. They encompass health, education, housing, access to essential services, and susceptibility to natural disasters or economic downturns. Marginalised and disadvantaged groups such as women, children, the elderly, and individuals with disabilities are disproportionately affected, often experiencing overlapping vulnerabilities that compound their disadvantages. Many individuals fall into poverty because they are unable to manage the risks and vulnerabilities that push them into economic hardship. Further, vulnerabilities perpetuate the cycle of poverty, trapping individuals in a persistent state of deprivation. Hence, it is essential to address the needs of vulnerable groups to ensure the success of poverty eradication efforts.
Sri Lanka’s multidimensional vulnerability has been assessed across three key dimensions: Education, Health and Disaster, and Living Standards. These dimensions are evaluated using twelve indicators, including school attendance, years of schooling for both females and males, physical health status, access to water sources, food stock, experience with disasters, adaptive capacity to disasters, asset ownership, unemployment, precarious and informal employment, and debt status.
Approximately 55.7% of Sri Lanka’s population is classified as multidimensionally vulnerable, accounting for 12.34 million individuals out of the total population in Sri Lanka. Additionally, the intensity of vulnerability does not significantly differ between urban and rural areas, indicating that vulnerability is a widespread challenge affecting both populations across the country. The percentage of vulnerable people in rural areas (56.4%) is marginally higher than in urban areas (52.2%). However, according to the population share, 80.9% of vulnerable people ( 10.13 million) live in rural areas, with a notable concentration in the Eastern, Northern, and North Central provinces.
A similar trend of indicator deprivations is evident in both urban and rural settings. The primary contributors to vulnerability in both sectors are household debt status and financial liquidity, followed by adaptive capacity to disasters. Overall, the health and disaster dimension makes the largest contribution, accounting for 39% in urban areas and 41.1% in rural areas. The Living Standards dimension ranks second, contributing 36.7% in urban areas and 33.2% in rural areas. Meanwhile, the Education dimension has the smallest impact on overall vulnerability.
To eradicate poverty sustainably, the policies on reducing vulnerabilities should focus on both the poor and the non-poor since both groups face vulnerabilities. The most significant deprivations are observed in the adaptive capacity to disasters (81.2%) and access to water sources (56.5%). Other notable areas of deprivation include debt status (44%) and physical health conditions (41.8%). In contrast, school attendance demonstrates the lowest level of deprivation at 6.1%.
Nearly half of the population (48.8%) faces vulnerability and deprivation in their adaptive capacity to disasters. Sri Lanka’s limited readiness for disasters exposes its population to greater risks due to a widespread lack of essential resources such as money, medical supplies, emergency equipment, or access to information necessary to seek help during a disaster. Additionally, about one-third of the population experiences vulnerability and deprivation in water access (35.6%), underlining the critical need to enhance water accessibility nationwide. Similarly, 33.4% of people are vulnerable because of high debt levels. Most people cannot escape the debt trap since they must depend on borrowing for essential needs such as food, healthcare, and education or resorting to pawning jewellery and assets. The ongoing economic crisis has likely worsened debt-related vulnerabilities. Approximately 29% live in households where at least one member suffers from physical health-related deprivations. Around 26% reside in households where no male or female member has passed the Ordinary Level examination, making them multidimensionally vulnerable, emphasising the urgent need for interventions to improve education levels. Furthermore, 18.5% of households are deprived in terms of asset ownership, while nearly 19% include individuals working as casual, domestic, or unpaid family workers. At the national level, deprivation levels in indicators related to disasters and unemployment are comparatively lower, though these figures vary significantly across sub-national regions.
Households with disabled persons face a heightened risk of vulnerability due to their limited capacity to manage risks effectively. Therefore, it is crucial to identify the unique challenges faced by this special needy group to implement targeted strategies for alleviating poverty sustainably. Households with persons with disabilities are defined as those with at least one member experiencing significant difficulty or inability to perform essential activities such as hearing, seeing, walking, concentrating, communicating, or self-care.
The journey toward a poverty-free Sri Lanka is ambitious but attainable. Success will hinge on collaborative efforts between the government, private sector, and civil society. By adopting targeted policies, embracing innovative strategies, and committing to social justice and inclusivity, Sri Lanka can make significant strides toward ending poverty and building a resilient, equitable society.
This article is part of the ongoing project titled “A Comprehensive Evaluation of Poverty and Vulnerability in Sri Lanka in Achieving Sustainable Development Goals,” funded by the Gamini Corea Foundation under the Research Award 2024-2025.
The Writer is a Senior Lecturer, at the Department of Economics in the Faculty of Social Sciences at the University of Kelaniya.
