Boost skills, productivity to raise household income - Economists | Sunday Observer
Short-term concessions not a way out

Boost skills, productivity to raise household income - Economists

14 February, 2021

There is no end in sight to the woes of  many whose cost of living has sky-rocketed in recent times with prices of most essential commodities going up. 

Keeping the home fires burning is an uphill task for the vast majority of low- income earners whose income sources have dried up due the pandemic.

Added to the burden is the repayment of loans obtained to eke out a living which is now a far-fetched dream until normalcy and economic revival are restored.

“What I earn at the end of the day is hardly enough to provide meals to my family,” a daily wage earner in Colombo said, adding that he has been forced to skip his meals to feed his children.

Many consumers who noticed that prices of essential goods  shot up  overnight said unlike in the past where goods were bought in substantial quantities,  are now forced  to  purchase a few potatoes, chillies, garlic and onions.

“We could no longer afford the prices of goods that are rising daily.  The rupee has no value. My family needs a kilogram of milk powder every three days in addition to other food items which comes to over Rs. 5,000 a week,” a consumer said  adding that they do not get the price reduction made by the Government as traders refuse to sell at that price.

Traders say they cannot sell goods under subsidised rates since they have to purchase commodities at higher prices.

“Prices of goods have to be the same from the producer to sell at subsidized rates,” a trader in Pettah said. Currently a coconut is priced around Rs 90-100, a kilo of rice is between Rs. 95 to Rs 130 and a kg of sugar at Rs. 105. Speculation is rife that gas and oil prices would rise as the prices in the global market is on the rise.

A barrel of crude oil in the global market rose to USD 60 last week.

Oil prices are forecast to rise with global demand set to pick up following the revival of economic activities across the globe.The rupee depreciated against the US dollar by 4.1 percent up to end last week. Given the cross currency exchange rate movements, the Sri Lankan rupee depreciated against the pound sterling (4.4 per cent), the Indian rupee (4.4 per cent), the Japanese yen (1.9 per cent) and the Euro (1.4 per cent) during this period.

However, the  trade deficit on a cumulative basis contracted to US$ 5.416 billion during the first eleven months of 2020 from US$ 7.213 billion in the corresponding period of 2019 following the ban on imports of non essential commodities last year.

Economists said granting concessions by way of price, interest rate reductions and  moratoriums is not a sustainable solution which needs policy measures to improve skills and productivity among workers  that will generate employment and income opportunities to lift people out of poverty. 

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