Browsing by Author "Ranathunga, S.P.B."

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    An Economic Analysis of Determinants of Household Level Poverty in Sri Lanka: 1990 - 2010
    (Sri Lanka Forum of University Economists (SLFUE), Department of Economics, Faculty of Social Sciences, University of Kelaniya, 2016) Ranathunga, S.P.B.
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    Factors Affecting Remittances and Its Usage in The Rural Communities: Special Reference to Rural-to-Urban Labour Migration in Sri Lanka
    (Reviewing International Encounters 2018,The Research Center for Social Sciences (RCSS), University of Kelaniya, Sri Lanka, 2018) Ranathunga, S.P.B.
    Remittances play a significant role in poverty reduction in rural sectors in developing nations. Labour movement from rural villages to cities can be viewed as a universal phenomenon of economic modernization. Despite abundant research on this topic, there is no clear consensus among researchers on the pattern of rural to urban labour migration, remittance inflows to rural sector and its usage. Although international labour migration has gained more attention than rural-to-urban labour migration in the recent debate on migration and development, migration practices and remittances have been considered as significant livelihood development strategies for many poor groups in developing countries across the world. Although rural-to-urban migration has contributed immensely to household poverty reduction and income diversification strategies in rural communities in Sri Lanka, there is dearth of attempt in the literature to identify and quantify these impacts. The research question address in this study here is what are the factors affecting remittance and its usage in the rural communities? Data for this analysis were obtained from a questionnaire based survey conducted by the author between January and April 2011 in Sri Lanka. The survey comprised 400 rural-to-urban migrant workers from 20 urban factories located in Gampaha District in Sri Lanka. The remittance data in this survey consists of both positive and zero values as usual, as migrants who remit and who do not remit were included in the sample. Due to the nature of this type of data (censored regression), a Tobit regression model was applied to identify the determinants of remittance in Sri Lanka. Tobit estimations have the limitation of making the signs of both the determinants of remittances and the magnitude of the remittances the same. Therefore, a probit model was also employed to examine the decision to remit. Consequently, probit estimations provided the factors influencing the decision to remit while Tobit estimates provided the simultaneous decisions of whether to remit or not and how much to remit The results indicate that the decision to remit depends on the purpose of using the remittance rather than the amount of wages or experience. Unmarried migrants are more likely to remit for daily expenses in their households of origin to support elderly people and/or parents who cannot work and do not have a proper income in the places of origin. Households with larger areas of farmlands are less likely to receive regular remittances for consumption purposes whereas they receive more remittances for farming purposes as an investment. Households with students are more likely to receive regular remittances for daily expenses. Migrants tend to remit for the purpose of education if there are students in the household of origin. This confirms that rural-to-urban migration and remittances are not only for consumptive purposes but also for investment purposes. Moreover, rural-to-urban migration contributes significantly to asset accumulation in the communities of origin
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    Poverty impacts of agricultural trade liberalisation in Sri Lanka
    (University of Waikato, New Zealand, 2015) Ranathunga, S.P.B.
    There remains controversy over whether trade liberalisation in general, and agricultural trade liberalisation in particular, leads to poverty reduction in developing countries. Since the impacts of agricultural trade liberalisation differ according to the characteristics of the country and specific groups of people within that country, country-specific studies are imperative. It is both important and timely to investigate the poverty impact of agricultural trade liberalisation in Sri Lanka, a country that began opening its economy three decades ago and has reduced poverty tremendously, despite a civil war lasting nearly three decades. This study focused primarily on changes in poverty due to agricultural trade liberalisation in Sri Lanka. Analysis was undertaken in three main areas. Firstly, it investigated poverty determinants and their behaviour over sectors and over expenditure deciles in Sri Lanka since the second wave of economic liberalisation, and found that remittances (both local and foreign) have been a leading factor in poverty reduction in Sri Lanka over the last two decades. Thus, secondly, an attempt was made to capture the economic impact of rural-to-urban labour migration and the use of remittances within agricultural communities in Sri Lanka. Finally, the poverty, impact of future agricultural trade liberalisation in Sri Lanka was assessed within a global computable general equilibrium (CGE) modelling framework using the Global Trade Analysis Project (GTAP) model and database, augmented with poverty data for Sri Lanka (GTAP-POV). In addition, policies contributing to poverty reduction in Sri Lanka were analysed. The results of the econometric analysis using household survey data indicated that education and remittances were the primary factors which reduced poverty in Sri Lanka over the last two decades. Significant variations were identified regarding the direction and magnitude of the poverty determinants in Sri Lanka irrespective of the sector. The local remittance variable was tested as a poverty determinant for the first time in the Sri Lankan context and found to be significant in poverty reduction in the rural and estate sectors in particular. The poverty decomposition result indicated that the redistribution component has dominated the growth component of the change in poverty in Sri Lanka over the last two decades. This study also examined the economic impact of rural-to-urban labour migration and remittances using a sample survey data collected from Gampaha District, where the majority of the factories are located in Sri Lanka. It specifically investigated the “in-kind” variable as a determinant of remittances and confirmed a positive and significant impact. Individual migrants’ average income gains from migration varied between 4,000 and 9,000 rupees per month and migrants who shifted from agricultural sector jobs to factory jobs had the highest income gain in rural-to-urban migration. Individual income gain in the urban sector is rewarded by level of education and work experience, in contrast to rural sector earnings. Analysis using the GTAP-POV model indicated that agricultural trade liberalisation in Sri Lanka reduces poverty much more significantly in each population stratum under multilateral and unilateral trade liberalisations, than is the case with bilateral trade liberalisation. Poverty elasticities were derived and applied for all household strata in Sri Lanka in the GTAP-POV framework. It was estimated that more than one million individuals would escape from extreme poverty in the rural diversified stratum under the scenario of full trade liberalisation of the agricultural sector, as well as around four million individuals would move above the US$2/day poverty line. Rural labour stratum and diversified urban stratum also show a significant level of poverty reduction under the agricultural trade liberalisation. The analysis of poverty-focused policies in Sri Lanka indicated that poverty was initiated in the colonial period with the importation of Indian Tamil labour for the plantations. Welfare policies focused on the poor since independence have aimed at compensation of consumption expenditure rather than having an investment focus. Sri Lanka needs investment-focused poverty policies with welfare-focused compensation policies to achieve systematic poverty alleviation.
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    Poverty impacts of agricultural trade liberalisation in Sri Lanka: A review of the literature
    (Department of Economics, University of Kelaniya, 2016) Ranathunga, S.P.B.
    Any policy reform will bring positive impacts as well as adverse impacts to the society, depending on the economy and on the characteristics of the population group. The impacts of trade liberalisation, particularly the impact of trade policies in developed countries and inequality in developing economies, is strongly debated in the international trade and development arena. Objective of this paper is to present a comprehensive review of the theoretical and empirical literature on the effect of agricultural trade liberalisation on poverty, in particular, focusing in Sri Lanka. Methods used for analysing the complex poverty impacts of trade liberalisation include partial equilibrium models, econometric analysis, general equilibrium models, and micro/macro simulation models, which combine macro-level simulation with micro-level household models. Agricultural trade liberalisation in particular tends to adversely affect small farmers in developing countries while large scale farmers/producers and the farmers from developed countries gain through agricultural trade liberalisation. Therefore, agricultural trade liberalisation tends to supports consumers while adversely affecting rural producers. However, country-specific studies are needed to explore the outcomes for particular groups in particular countries. Each and every policy reform will bring positive impact as well as adverse impact to society, depending on the economy and on the characteristics of the population group.
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