Urban Poverty in Sri Lanka An Asset Based Analysis

Abstract

The meaning or the philosophy behind the concept of poverty has been changingover the past decades to cover the broader aspects of poverty: empowerment, health,education, social exclusion, social and human rights, and strategies. In this context,poverty is seen as a function of asset holdings and the need for wealth creation isstressed by many researchers.

Urban poverty is different from rural as well as general poverty due to itsinherent features and therefore economists increasingly advocate using the asset base toanalyze it multi dimensionally. It is reported that more than 66000 households arescattered in over 1500 settlements in the Colombo city. Poverty status of the peopleliving in these settlements cannot be identified on the basis of the official poverty line orany other income consumption related measures, as they have faced poverty with severedeprivation. Therefore, researchers have pointed out that the poverty in Colombo cannotbe regarded as one of low level income. It is considered in a broader sense of socialmarginalization in which social exclusion, lack of access to basic services and lack ofshelter are found to be crucial aspects of poverty.

This paper used the principle component method to carry out a latent structureanalysis in order to construct a wellbeing index to assess the urban poor in Sri Lanka,collecting data from a sample of 2250 household representatives of Colombo slumdwellers. Logistic regression was estimated for the determinants of poverty. It wasfound that there was an insufficiency of public as well as private assets for thewellbeing of the ultra poor, while there was no significant relationship between most ofthe demographic factors with poverty status. Further, it was found that education;ownership of productive assets; permanent employment and access to formal creditwere most significant determinants of urban poverty in Sri Lanka Wellbeing status ofthe urban poor was directly related with the level of education showing the possibility ofimproving livelihoods by creating opportunities for asset creation.

Key words: Urban poverty, Asset base, Wellbeing index, Logistic regression