By Joseph G.
The uneven rewards of adjustment seem to be uncomfortably glaring
Every economic recovery raises one fundamental question: who actually benefits? It is a question that becomes especially important in Sri Lanka today, as the Government continues to point to stabilisation, improved reserves, debt restructuring progress, and even an upgrade to Upper Middle Income status as evidence that the economy is turning around.
But beneath these headline achievements lies a deeper and more uncomfortable reality: the benefits of this “recovery” appear to have been distributed very unevenly.
For the majority of Sri Lankans, the period of adjustment has meant sacrifice. Higher taxes, reduced subsidies, elevated utility costs, tighter credit, and shrinking real incomes which have placed enormous pressure on households. Small businesses continue to struggle. Public servants and pensioners face declining purchasing power. Many families are cutting consumption, delaying medical care, and reducing educational spending simply to stay afloat.
Yet, while this hardship has spread across the wider population, another segment of society appears to have emerged stronger.
Asset holders, high-net-worth individuals, and those with access to capital have been immensely better positioned to benefit from the adjustment process. High interest rates rewarded large depositors. Asset values in selective sectors have risen. Financial market gains have accrued to those with liquidity and investment capacity. The appreciation of certain business sectors, and the visible rise in luxury consumption, suggests that while many tightened their belts, some found opportunities to expand wealth.
The problem is not that some prosper. The problem is when prosperity appears insulated from the pain borne by the majority. When economic policy is seen to protect capital more effectively than labour, or to reward wealth more quickly than work, it begins to generate a perception of structural unfairness.
That perception matters. Because economies do not operate in a political vacuum. Public acceptance of difficult reforms depends heavily on whether people believe the burden is being shared fairly. If sacrifice is concentrated among wage earners, small entrepreneurs, and vulnerable communities while gains are concentrated among the financially privileged, social trust begins to erode.
This is where Sri Lanka now faces a critical choice.
Arguably, the first phase of adjustment may appear to have restored a measure of macroeconomic order. But, recovery cannot be judged merely by seemingly stronger reserves, seemingly lower inflation, or seemingly improved fiscal balances. It must also be judged by on-the-ground job creation, visible business revival, real wage growth, affordable healthcare, and wider opportunity.
Otherwise, the danger is clear: what is celebrated as recovery by a few may be disnissed as exclusion by many. Worse still, if the majority begins to believe that the economy is growing, but not for them, the political and social consequences will be far-reaching.
In the end, the sustainability of any recovery depends not on how much wealth is created, but on how broadly its benefits are shared.
That is the question Sri Lanka must now confront: was this recovery for the majority of the people of the country — or only for a fortunate few?