By: Staff Writer
December 15, Colombo (LNW): The cyclone’s devastation has triggered a critical policy debate in Sri Lanka: whether relief commitments can keep pace with economic reality. While government officials insist that funding mechanisms are in place, opposition voices warn that compensation costs may spiral beyond manageable limits.
A senior Treasury official has outlined preliminary estimates showing that post-cyclone compensation could exceed Rs. 100 billion, even before infrastructure reconstruction costs are fully accounted for. These figures highlight a growing tension between fiscal discipline and social responsibility.
The total expenditure comes up to Rs 103 billion to be spent to pay compensation for damges and lively hood support for cyclone and flood victims.
At the household level, relief commitments appear modest but accumulate rapidly. Cleaning grants for damaged homes amount to Rs. 1.8 billion, while essential household assistance raises the bill beyond Rs. 5 billion. Temporary relocation support further adds Rs. 312 million, with the risk of escalation if displacement continues.
Rural recovery presents an even steeper challenge. Crop damage compensation alone is estimated at Rs. 7 billion, while losses to vegetable cultivation and livestock add Rs. 40 billion combined. These sectors support millions of livelihoods, making delayed compensation economically and politically risky.
Income restoration remains the single largest cost. Treasury projections indicate Rs. 44 billion would be required to assist families who lost livelihoods. Business recovery costs—including Rs. 200 million for SME rebuilding and Rs. 5 billion for destroyed commercial properties—underscore the long-term economic disruption caused by the disaster.
To bridge immediate gaps, the government has released Rs. 550 million in additional relief funding, sourced from the Rs. 30 billion disaster management budget. Officials maintain that comprehensive guidelines are in place and disbursement has already begun.
Beyond domestic funding, the United Nations has launched a Humanitarian Priorities Plan, aiming to raise USD 35 million to support 658,000 of the most vulnerable people, complementing state-led efforts. Insurance regulators have also coordinated with insurers to fast-track compensation, with minor claims already being settled.
While some opposition parties have criticized early preparedness, multiple sources confirm that relief systems are operational. Still, the cyclone has exposed a structural dilemma: Sri Lanka’s disaster response now hinges not only on speed and compassion, but on sustained fiscal resilience.
