Citizens in the Western Province, home to all the big businesses, financial institutions and government, not only have much higher incomes than their compatriots living in the eight other provinces as indicated by the provincial per capita incomes (provincial GDP divided by the population of each province), but they have also seen their incomes rise at a much higher pace, latest data released by the Central Bank yesterday (09) showed (see elsewhere in the page).
Per capita income in the Western province reached Rs. 491,000 last year which was higher than the national per capita income of Rs. 314,000. The per capita income in the Southern province is the second highest, far below the Western province at Rs. 289,000 followed by Rs. 276,000 in the North Western province, Rs. 239,000 in the North Central province, Rs. 237,000 in both the Central and Eastern provinces, Rs. 218,000 in the Uva province, Rs. 207,000 in the Sabaragamuwa province, and the Northern province, the lowest at Rs. 200,000.
The Western province is not only richer, but it also saw citizens higher increases in their incomes compared with the rest of the provinces.
The per capita income increased by Rs. 63,000 in the Western province where as the national increment in the per capita income is Rs. 43,000.
Per capita income rose by Rs. 49,000 in the Southern province, Rs. 48,000 in the North Central province, Rs. 41,000 in the Northern province, Rs. 28,000 in the Central province, Rs. 27,000 in the Uva province, Rs. 26,000 in the Sabaragamuwa province, Rs. 24,000 in the North Central province and the lowest increment of Rs. 23,000 in the Eastern province.
According to a recent report by the International Labour Organisation (ILO) income disparities are rising in Sri Lanka.
"Income disparities have risen in many developing Asian countries, despite remarkable economic growth and poverty reduction in recent past decades. This trend can undermine economic sustainability and threaten social cohesion. Among countries with higher income inequality (measured by a Gini coefficient of 40 or higher), the ratio in China and Sri Lanka increased significantly by 10.0 points and 7.8 points respectively. In the Philippines the picture remains stark with only slight improvement," it said.
The economy recorded an impressive 8.3 percent growth rate in 2011. Per capita GDP increased to US$ 2,804 last year from US$ 2,370 in 2010. The rate of unemployment has dropped 4.2 percent in 2011, the lowest level in post independence Sri Lanka.
Economists point out however, that much of the good work has been undermined by allowing the county to needlessly venture into a balance of payments problem which has seen more painful adjustments taking place now, with inflation and interest rates under pressure, translating into higher cost of living for the more vulnerable in society.