Safeguarding Sri Lanka’s Coastal Economy: A Path to Resilient Fisheries and Communities

The World Bank recommends integrating Social Protection and Jobs (SPJ) programs with fisheries management in Sri Lanka to support vulnerable coastal communities and promote sustainable practices, particularly in the overfished spiny lobster sector. This approach emphasizes stronger institutional coordination, community engagement, and innovative financing to ensure both economic resilience and conservation.

A recent World Bank report explores how integrating Social Protection and Jobs (SPJ) policies with fisheries management could be key to sustaining Sri Lanka’s coastal fisheries while securing livelihoods. Coastal fisheries in Sri Lanka, especially the spiny lobster industry, are a vital economic and social resource, providing direct or indirect employment to around 586,000 people, which impacts 12 percent of the population. However, these fisheries face a severe crisis, with fish stocks declining rapidly due to overfishing, poor regulatory enforcement, and rising vulnerability among fishing households. Coastal fishing contributed over 1.2 percent to Sri Lanka’s GDP in 2022, but many fishing families struggle with poverty, worsened by the national economic crisis and price inflation. To address these issues, the World Bank examined the potential of SPJ policies to not only act as a safety net for these communities but also contribute to better fisheries management, particularly focusing on the spiny lobster fishery in Hambantota on the south coast. This approach is part of a larger initiative that aims to strengthen Sri Lanka’s economic resilience, especially in coastal areas impacted by the COVID-19 pandemic, climate risks, and the country's prolonged economic instability.

Using SPJ Programs to Build Resilience in Fishing Communities

The report highlights how SPJ programs could mitigate short-term income losses during fisheries management actions, such as temporary closures or stricter regulation enforcement. The lack of effective policies and a fragmented SPJ system means that many fishing families operate without adequate social protections. Although Sri Lanka has a broad social assistance system, access to social programs remains limited for many fishers, and there is a "missing middle" of near-poor households who rely on informal work and lack both social insurance and assistance. This vulnerability leaves them exposed to poverty, especially amid crises like the fuel shortages of 2022 that sharply increased production costs and cut into incomes. Addressing these issues, the World Bank report suggests specific reforms within the SPJ system, including the recently launched cash transfer program, Aswesuma, which replaces the Samurdhi program. Targeted assistance through Aswesuma could provide critical support to the poorest fishers while incentivizing their compliance with fisheries management measures. However, the program’s coverage is still limited, and fiscal constraints make it challenging to expand these supports to all vulnerable coastal households.

Strengthening Institutional Coordination for Lasting Change

The report emphasizes that without substantial improvements in governance and institutional coordination, SPJ interventions will likely fall short in protecting fishers or supporting sustainable fisheries. It recommends stronger partnerships between the Ministry of Fisheries, local government bodies, and community organizations like Fisheries Cooperative Societies (FCSs) and Rural Fisheries Organizations (RFOs) to enhance the effectiveness of SPJ programs in fishing communities. Fisheries co-management, where local fishers collaborate with government authorities in managing resources, is seen as a promising model to encourage sustainable practices. However, past efforts at co-management have suffered from low enforcement and political resistance, underscoring the need for genuine community engagement. Empowering FCSs and RFOs to participate in co-management could foster community trust and increase compliance with sustainable practices while providing a channel for SPJ program delivery. These organizations, once strengthened, could also help raise awareness among fishers about available SPJ programs, support benefit distribution, and facilitate other services like informal credit and welfare programs.

Strategies to Recover the Spiny Lobster Stock

To curb overfishing in the spiny lobster sector, two main approaches were considered in the report: a one-time extended fishery closure for several months and a partial ban on catching female lobsters. The report’s modeling results showed that these measures could support the gradual recovery of lobster stocks, but their success would hinge on strong enforcement and community support. For instance, a prolonged closure would significantly impact local incomes, so SPJ interventions could help compensate fishers during these periods and prevent illegal fishing activities from undermining conservation efforts. SPJ programs tailored to this context might include top-up payments to existing social assistance programs like Aswesuma, specifically for fishing households during the closure period. In the longer term, unemployment insurance could provide a buffer for fishers affected by seasonal or other regulatory restrictions, though implementing such a scheme would require overcoming substantial financial and administrative challenges.

Alternative Livelihoods and Innovative Financing for Sustainable Growth

Further recommendations include diversifying fishers’ livelihoods to alleviate pressure on declining fish stocks. Economic inclusion programs could encourage fishers and their families to pursue alternative jobs, with a focus on training programs for youth. The Ocean University in Sri Lanka and various vocational centers in Hambantota offer courses tailored to the blue economy and other sectors, providing critical skills for those looking to exit the fishing sector. Programs supporting women’s employment in post-harvest processing, food preparation, and handicrafts are also emphasized as ways to supplement household incomes while easing fishing pressure. Small-scale community-driven development grants, which provide resources for village priorities, could be expanded to further strengthen community welfare, creating a supportive environment for sustainable fisheries management. Considering Sri Lanka's fiscal limitations, the report suggests innovative financing mechanisms to support SPJ and fisheries management integration, such as partnerships with private-sector companies that benefit from sustainable fish stocks, tourism levies, and international climate funding. Additionally, Payments for Ecosystem Services (PES) could incentivize fishers to engage in conservation by providing financial compensation for their role in environmental stewardship. Long-term, these partnerships could lessen the reliance on limited public funds, helping sustain the necessary support programs. The report concludes that while integrating SPJ policies with fisheries management could significantly bolster Sri Lanka’s coastal fisheries' resilience, it is essential to address institutional capacity and funding challenges to ensure the lasting effectiveness of these interventions.