Government’s failed promise of prosperity: Sri Lankan economic and social crises and the role of philanthropy

Cover photo by Nazly Ahmed

By Kaushalya Ariyathilaka, Manager – Programs and Grant at the Neelan Tiruchelvam Trust

Gotabaya Rajapaksa won the Presidential Election on November 16, 2019, with promises to usher in vistas of prosperity and splendour. Less than three years later, several UN agencies have stepped in to provide necessary assistance to Sri Lankans. 

The UN launched an appeal for $47 million for life-saving aid for at least 1.7 million people estimated to be at grave risk in the country1, while UNICEF launched its appeal for 2.3 million children from marginalised and vulnerable communities2 and the WFP launched an immediate response programme beginning with pregnant mothers in need.3 

People are spending up to several days in fuel queues. Inflation is at a staggering 40% with inflation of food items already surpassing 57% and the government is unable to supply the most basic services to its citizens. Sri Lankans are yearning to leave the country in search of prosperity elsewhere. In June, the government declared that all government officers would be required to work from home and all schools within Colombo city limits were closed for a week as there was no fuel for transportation. And in early July, after massive protests, the prime minister and the president of Sri Lanka decided to step down from power. 

Globally, Sri Lanka is being used as a cautionary tale of the outcome of authoritarianism intersecting with mismanagement and imprudent policies. Economic mismanagement by successive governments, and imprudent policy decisions taken by the Gotabaya Rajapaksa government since 2019, led the country down the path of steep recession and crisis. Sri Lanka’s woes are of its own making, but the consequences of the Covid-19 pandemic, climate change, the Russian invasion of Ukraine, and the degradation of international political and economic systems have worsened the crisis. 

During these crises, and what is yet to come, when the state has failed its citizens, the work of civil society organisations (CSOs) supported by philanthropic initiatives, which have always stepped in to address gaps in state services, becomes critical. It is important that while addressing immediate needs, philanthropy does not lose sight of deeper institutional reforms that are required to enable transparency and accountability in governance; reforms that address systemic inequalities and prevent such crises in the future. And here lies the difference between charity and philanthropy. Philanthropy, therefore, needs to be thoughtful and consistent. For instance, grant-making organisations cannot expect short-term fixes to long-standing issues and withdraw support when enough outputs have not been fulfilled by the interventions they have supported. Empowering marginalised and vulnerable communities takes committed, patient, and consistent funding. 

The grant-making model that the Neelan Tiruchelvam Trust (NTT) has followed in the past 20 years has recognised the importance of stepping up to strengthen communities, especially where the state fails. This is where philanthropy – deeply committed to social justice – needs to step in and direct its focus on supporting initiatives that challenge state failures and demand reform and can contribute to sustainable long-term social change.

During recent monitoring visits, the NTT has observed that the conditions of marginalised and vulnerable communities have sharply declined amidst the economic crisis. For example, many women-headed families that were already living in extreme poverty in Padaviya in the North Central Province are barely surviving on one meal a day – that too is only due to a home garden project introduced by a local community-based organisation (CBO) with the support of NTT. Another rightsholder from the same project who was a former sex worker has decided to accept a job at a garment factory to feed her two children until the home garden can generate some income. Even community groups – especially women-led enterprises – that NTT has supported through local CBOs are at risk of failing due to the unprecedented multitude of crises. 

Programmes introduced to improve value addition chains, such as the production of yoghurt from fresh milk sourced by the community, have now ground to a halt due to the daily power cuts because these community enterprises cannot afford to run generators. Even if they were able to source generators, they would not be able to find fuel for them. This has forced CSOs to re-focus their activities and choose the most sustainable intervention to ensure food security. For example, establishing off-the-grid solar panels for electricity generation for community enterprises, which will not be affected by power cuts and enable these community enterprises to survive. However, such solutions are extremely expensive, especially in the current economic recession, and should be viewed as a long-term investment by philanthropic institutions, which need to step up during such crises. 

A key learning for NTT is the importance of providing communities with seed capital and the required skills and connecting them to networks that are required to scale up their economic activities with available resources. Philanthropy must not get distracted by short-term solutions that will not result in sustainable outcomes. And this requires a deep commitment to the communities they support, which means a long-term engagement with CSOs, CBOs, and local communities that cannot end when financial support ends. Handouts are easier to implement and are cheaper, but are rarely sustainable. 

Globally, the Covid-19 pandemic and the economic crisis in Sri Lanka have demonstrated that the costs of political and socio-economic inequalities are too high for society to bear. Hence, without addressing long-term inequalities, short-term crisis management will inevitably fail. The crisis in Sri Lanka is therefore also a lesson for philanthropy. What works in the long term may not be cheap or even easy to implement in the short term, but if the goal of philanthropy is to ensure social justice, then that is the only road open to us.

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1. https://news.un.org/en/story/2022/06/1120032 

2. https://www.unicef.org/appeals/srilanka 

3. https://news.un.org/en/story/2022/06/1120562 


Kaushalya Ariyathilaka, Manager – Programs and Grant at the Neelan Tiruchelvam Trust

Kaushalya Ariyathilaka is the Manager Programs and Grants at the Neelan Tiruchelvam Trust (NTT). She holds a bachelor’s degree in Politics, Philosophy and Economics from the Asian University for Women, Bangladesh, and a master’s degree in European and International Studies from the University of Trento, Italy. She was a Rockefeller Foundation fellow and a Muhammad Yunus fellow during her university studies. Kaushalya was an investigative student journalist for Dispatches International, Canada, and wrote pieces with a focus on violence against women in Bangladesh. Before joining the NTT team, Kaushalya served as the Senior Manager of Fundraising at Transparency International Sri Lanka. Kaushalya also worked with the Human Rights Commission of Sri Lanka from 2017-2019 as the Coordinator for the UNDP Sri Lanka projects for the Commission.


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