Economy 2024 Business

Should “Aswesuma” be the “Saemaul Undong” Movement for Sri Lanka to Address Poverty?

“To solve Africa’s problem of poverty, Africa must adopt Korea’s Saemaul Undung as its role model” – Barack Obama – 44th President of the United States.

Apart from the Food Subsidy Programme (1948–1977) and the Food Stamp Scheme (1978–1989), Sri Lanka has had three comprehensive welfare beneficiary schemes since independence: Janasaviya (1989–1994), Samurdhi (1994–2023), and the newly introduced Aswesuma (2023), all of which were specifically designed to eradicate poverty in Sri Lanka. “The poverty or poor exists where some persons fall short of reasonably defined minimum levels of wellbeing such as access to certain consumption or income levels, housing, health and education facilities and certain rights recognized according to standards of human needs and socio-economic conditions of the society.” (Department of Census and Statistics, 2008, p. 1). Poverty is frequently perceived as both absolute and relative deprivation. “Absolute poverty is perceived as subsistence below the minimum requirements for physical well-being,” which means people cannot afford their basic consumption requirements at a particular time. Relative poverty “is determined by an individual’s or household’s deprivation (or lack of well-being) in comparison to its position relative to others in society” (Jabbar & Senanayake, 2004, p. 1).

“In 1989, under the Janasaviya programme, Rs. 2500/- was allocated per family per month, comprising a food grant of Rs. 1458/- and a compulsory saving of Rs. 1042/-.” (Central Bank of Sri Lanka, 2000) to develop some remedies to poverty in Sri Lanka. Then the Samurdhi programme, also initiated in 1994, brought all welfare programmes under its umbrella, which was also principally concerned with the cash transfer framework depending on household income level. Even though these two comprehensive welfare schemes have been in place for more than three decades now (1989-2023), we have been unable to diminish our poor population or burden of poverty in a sustainable manner.

Figure 1: National Poverty (Percentage of Household) in Sri Lanka 1990-2019

2019 * Poverty percentage – Based on 2012/13 living standard
Source 1: Poverty Indicators – Department of Census and Statistics

Figure 1 illustrates that, even though the poverty rate has decreased since 1990, the total population living below the official poverty line in 2019, which based on 2012/13 living standard was almost higher than in 2006. This demonstrates that these two cash transfer welfare benefit initiatives have not offered ample support to mitigate poverty in Sri Lanka in sustainable manner. On the other hand, we are still dealing with hardships caused by the economic crisis, and these difficulties have undoubtedly contributed to an increase in the current impoverished population rather than in 2019. Confirming this, 7 million Sri Lankans (31% of the entire population) were classified as poor in 2023 (LIRNEasia , 2023). Due to the story becoming much more complicated, we must think beyond the traditional framework of cash transfer procedures to confront the spread of poverty. 

Why do people remain poor? That is the challenge we must tackle step-by-step in a Competent manner. Before we kick things off, let’s go back to the origin of the word poor which comes from Latin. The word from Latin is “Pauco” (Little) which gives the “Pau” and “Parare” (Produce) which gives the “Per”. So, the “Poor” comes from the Latin word “Pauper” which means “Little Produce”. If someone produces little, they will earn little. In the book “An Inquiry into the Nature and Causes of the Wealth of Nations,” Adams Smith stressed that the wealth of people is determined by the employment that best suits their skills. When we totally rely on the cash transfer system to eliminate poverty or reduce the poor population, it merely helps to increase current consumption while failing to build the poor groups’ savings and investments. Along with this approach, we must increase the savings and investments of poor groups; otherwise, the cycle of poverty will continue unabated. Then, now is the time to implement a better approach, such as the highly successful “Saemaul Undung Movement”, which originated in South Korea in 1970 by President “Park Chung Hee” to address the tremendous poverty that existed at the time.

“The Republic of Korea’s “Saemaul” (New Village) “Undong” (Movement) (often referred to as “the SU movement”) is a classic example of community driven development (CDD) based on specific institutional principles and community participation” (Asian Development Bank, 2012, p. 7), which is align with three key components namely; Diligence, Self-help, and Cooperation (Called as Saemaul Spirit) and also focused on deploying surplus rural labour in production for rural revitalization, regional development, and improvement of workers’ living standards. Saemaul Undong was not the first rural community advancement initiative in South Korea, but it was eventually the key framework in the long-term economic development initiative to put down the poor population in the country in the most productive way. Moreover, this program was carried out as an attitude transformation instilling a “can-do” mentality in the impoverished and a common goal of a better life for everyone in South Korea.

Why was the SU movement essential for South Korea in the 1970s? The answer is totally matching for our current economy, too, because they brought this movement not only to address the huge absolute poverty they were faced (Korea’s annual per capita income in 1970 was a scant $254.) but also income inequality they were dealing with between rural and urban sectors due to the government’s focus on industrialization during its first (1962–1966) and second (1967–1971) five-year economic development plans. According to (Department of Census and Statistics, 2016), the poorest 20% people in Sri Lanka share 4.8% of the national income and the richest 20% people in Sri Lanka share 50.8% of the national income. Which means we are still facing the extremely unequal income distribution that South Korea also faced in 1970.

Before launching the SU movement, president “Park Chung Hee” emphasized to the Korean community that, “Rural poverty should not be viewed as a pre-destined outcome, but rather confronted with a spirit of self-help and self-support. In the near future, all villages could be well-kept communities. Why not build a village road and bridge within this coming year with your own resources? You could refer to such an initiative as a ‘Village Remodelling Movement’ or a ‘Making Your Village Comfortable Movement.’”. It appears that the government urged that rural and urban communities participate in Korea’s economic development as a public-community partnership, which the community has also done in a better way. During this period, the Government of the Republic of Korea actively promoted the SU movement in three successive stages (Asian Development Bank, 2012).

  • Stage I (1971–1973):  Upgraded basic rural infrastructure which is included expansion of village path networks, upgrading of housing, improvement of tiny stream beds, increase availability of water for irrigation, and Construction of Community Facilities etc.
  • Stage II (1974–1976): Expanding agricultural output is combined with the construction of farm roads, the alignment of farmland, and the mechanization of agricultural production.
  • Stage III (1977-1979): Dissemination: Rural communities was systematically spread from rural village settings into industrialized urban areas.

The most important element is that this movement did not rely heavily on government cash transfers, and they believed in the skills Koreans had and encouraged the community to work for themselves, which aligned with the concept of “Helping Those Villages That Help Themselves.”. Within the framework of the SU movement, “government played a central role in encouraging local community participation in the SU movement in a voluntary” (Asian Development Bank, 2012, p. 41) and the benefit was created collaboratively among all Koreans. Aligned with this, the government implemented several key activities under the umbrella of the SU movement, namely (Asian Development Bank, 2012);

  • Modernizing rural production infrastructure (developed road networks under 36 projects, community-based house modification, “Saemaul factory per village”)
  • Updating agricultural infrastructure with technology basis (introducing high yield seeds and green house farming, pushed farmers to agribusiness and collective farming, introducing motor vehicles, mechanized pumps, sprayers, sowers, transplanting machines, tractors, combines, and dryers)
  • Introducing electrification and telecommunications on a mass basis.
  • Increasing household incomes through increased productivity through Saemaul Education and recursive investment (encouraged wage-earning activities by rural residents during the agricultural off-seasons instead of cash transfers, increasing women’s participation in income-generating activities with providing farming-season day-care nurseries, introducing Saemaul training institutes to educating both blue- and white-collar workers)
  • Community empowerment through amassing of social capital and concomitant growth in civil society.
  • Increased female social participation and advancement of women in the role of household management.
  • Welfare and environment projects to address poor housing and sanitation conditions and build community facilities and improving the overall rural environment.

The great support given by the government through the SU movement from 1970 to 1979 was effectively leveraged by Koreans to improve their living conditions and household income levels. As evidenced by Figure 2, Koreans’ have completely attempted to vanquish the notion of the “barley hump” in 1979, which symbolically represented absolute poverty in Korea in 1971. In view of this, the average annual household income of rural farmers and urban labourers has increased by 770.7% and 590.2%, respectively, in just 10 years. The concept of “One Saemaul Factory for Village”, which was introduced in 1973, and when it came to the end of 1979, it generated 493 factories and exported a total of $494 million in products. In addition, the concept introduced as “Collective Farming” has achieved a target of 135 units, which has created employment opportunities for 750 000 households among the poor. Due to the impact of “Mechanical Agriculture,” by the end of 1979, each village had an average of 20 motorised vehicles. Not only that, government of South Korea has offered a public-community collaboration for housing development in rural areas under the “Saemaul Undong Housing Improvement Project,” which was financed by 56% of government intervention and 44% of community intervention. Social Capital Formation” is another successive initiative of the SU movement that emphasises voluntary engagement, especially by women. In line with this, it is noted that the “construction of 37,012 Saemaul Halls (village community halls), built by consensus of the villagers themselves, illustrates the self-help spirit of social capital formation that arose under the SU movement.” (Asian Development Bank, 2012, p. 33). Then, let us get to our primary topic: under this kind of economic transformation, has this economic shift been able to minimise the acute poverty that South Koreans suffered in 1965? As the story shows in Figure 2, almost over 40% of the total population in South Korea was living in the most vulnerable position before starting this movement.

Figure 2: Change of Average Annual Household Income and National Poverty in South Korea

Source 2: The SU Movement in Republic of Korea, Asian Development Bank ,1994, 2012 and www.macrotrends.net

However, things have changed as the poor population diminished speedily by huge 31% in just 10 years after it was implemented in 1970. This means that they were able to lower the number of poor people from 11,934 thousand in 1965 to 3740 thousand in 1980. When it came to 2016, only 615 thousand populations (1.2%) were below the $5.50 daily poverty line. Ultimately, as indicated by Figure 3, the entire initiative was funded not only by government cash transfers, as Sri Lanka had done for more than three decades, but also by the South Korean community as part of the government-community collaboration

Figure 3: Saemaul Undong Investment by Year and Funding Source (1970-1979)

Source 3: The SU Movement in Republic of Korea, Asian Development Bank

Community SU investment has gradually expanded alongside the movement rather than government financing, which has comprised of self-support and loans from the government-controlled semi-public bank. When it came to the end of all three stages of the movement, community financing nearly tripled opposed to the support that was provided by the government.

In view of the clarification offered so far, Koreans have demonstrated that, rather than sending money to the poor, a vast transformation of social production can reduce poverty more effectively.

Conclusion

As Sri Lankans, we are moving with huge economic vulnerabilities, which have expanded over the last couple of years. Even though we have two comprehensive poverty alleviation programmes, we have struggled with poverty and inequality throughout the past three decades. Which emphasises that those programmes have failed to maintain poverty in a sustainable manner. The core issue is that the newly introduced “Aswesuma Welfare Beneficiary” scheme is likewise aligned with this type of failed structure. So, we should think outside of the same pattern that we hang on to over a long period of time. To conclude, we cannot move forward with only the government cash transfer system further to relieve poverty because it can have a negative impact on government fiscal operations in situations of insufficient government revenue. In line with this, the South Korean “Saemaul Undung Movement,” which has been identified as one of the best poverty and inequality management projects ever, is the ideal solution for the problem in Sri Lanka, and Aswesuma should be attributed to that.

References

Asian Development Bank. (2012). The Saemaul Undong Movement in the Republic of Korea. Mandaluyong City, Philippines: Asian Development Bank.

Central Bank of Sri Lanka. (2000). Economic background of Independence Sri Lanka. Colombo: Central Bank of Sri Lanka.

Department of Census and Statistics. (2008). Poverty Indicators – Household Income and Expenditure Survey – 2006/07. Colombo: Department of Census and Statistics.

Department of Census and Statistics. (2016). Household Income and Expenditure Survey. Colombo, Sri Lanka: Department of Census and Statistics.

Jabbar, S., & Senanayake, D. (2004). Overview of Poverty in Sri Lanka. CEPA Briefing Paper Series(1), 1-16.

LIRNEasia . (2023). Social Safety Nets and the State of Poverty in Sri Lanka. Colombo: LIRNEasia.

By H.K.G. Dilan Janitha
Intern – Economics Intelligence Unit
The Ceylon Chamber of Commerce

Reviewed By : Sanjaya Ariyawansa
Senior Economist 
The Ceylon Chamber of Commerce

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