Dec 28, Colombo: World Bank and Sri Lanka today signed a $75 million credit to support the country's welfare programs. The project includes an integrated system to better manage the selection, administration, and payments to beneficiaries.
World Bank Country Director for Sri Lanka and the Maldives Idah Pswarayi-Riddihough and Secretary to the Treasury, Ministry of Finance Dr. R.H.S. Samaratunga Wednesday signed the loan agreement on behalf of the World Bank and the government.
The social safety project 2017 - 2022 is designed to improve the equity, efficiency and transparency of Sri Lanka's social safety programs for the benefit of the poor and vulnerable.
The project will allow the government to develop a single registry of citizens with information on family structure and economic characteristics. The Welfare Benefits Board, set up to manage the selection and payment of beneficiaries, will develop new selection criteria based on data in the registry. This will make identification fairer and more transparent, and ensure that benefits reach the intended households. The project will also strengthen the government's capacity to monitor and improve welfare programs.
World Bank Country Director Idah Pswarayi-Riddihough said, "Safety net programs are a safety valve for Sri Lanka's poor and vulnerable populations. By increasing the efficiency of expenditures, the project will make social spending more sustainable, while ensuring that targeted households receive the full benefit of the programs. Over time, it will also help the government refine programs to address emerging fiscal challenges, such as an aging population."
The project will be implemented by the Ministry of Finance in partnership with the Ministry of National Policies and Economic Affairs, the Ministry of Social Empowerment and Welfare, and the Information and Communication Technology Agency.
Today, Sri Lanka has more than 30 welfare programs operated by 11 different ministries. A lack of digital record-keeping limits their capacity to coordinate, monitor and evaluate, and prevent fraud and mismanagement. While program costs have risen gradually over time, coverage of the poorest households has fallen. Analysis by the World Bank shows that the programs have had a decreasing impact on poverty over the past decade. This poses a challenge when the population is aging, a shift that is likely to increase demand for social assistance in coming years.
Data in the registry will be updated periodically, with records reviewed to ensure that only eligible beneficiaries remain in the programs. To prevent fraudulent applications, each individual will be identified using biometric technology.
A "one-stop shop" platform will be developed to harmonize management of welfare programs at the divisional secretariat level. This will help improve the customer service experience and reduce application processing times for beneficiaries. Through these initiatives, the project will help modernize Sri Lanka's welfare system for citizens' future needs.
"Governments around the world increasingly focus on system approaches to social protection," said Thomas Walker, Senior Economist and World Bank Task Team Leader for the project. "Harmonizing the delivery of programs has the potential to enhance each program's performance and increase the overall benefit of social spending for those most in need."
The credit is from the International Development Association (IDA) - the World Bank's concessionary lending arm - through the IDA Scale Up Facility. It has a final maturity of 24 years, including a grace period of five years.