Resource Library

Economic Review

Budget - 2011

Publisher: People,s Bank

Place of Publish: Sri Lanka, Colombo

Year: 2010/2011

Page Numbers: 32

Series: Volume 36/ Number 9-10/ December 2010/January 2011

Acc. No: 194-J

Category: Journals

Languages: English

Priyanthi Fernando begins powerfully with a reference to the simply stated premise that has guided all subsequent reports:”People are the real wealth of a nation”. She then refers to Amartya Sen’s conclusion that the HDI that was initially meant to be a more accurate measure of development than GDP but is in fact as crude a measure as GDP. However, HDI has done what it was supposed to and moved the focus away from incomes. Fernando highlights the evolving of HDI and the availability of more accurate information for estimation. In order to capture all dimensions o human development, three new indices have been developed to expand our understanding. They are; the Inequality-adjusted Human Development Index (IHDI), the Gender Inequality Index and the Multidimensional Poverty Index (MPI). These indices will help us focus on what needs to be done in order to achieve human development. Even though Sri Lanka has seen tremendous improvements in aspects such as healthcare and education there are still many issues that require immediate attention. Inequality is a core issue and aggregate measures seem to hide a number of inequalities in our society. Gender inequality, geographical inequality, social inequalities and income inequalities are a significant problem in our nation. Priyanthi Fernando states that we must construct a society that allows us to deal with these inequalities and that we must avoid a purely economic approach as it may push us further into the income inequality trap.