- Economist Warns
With the wealth gap increasing, the insecurity that goes with it may lead to unrest similar to that which is taking place in the Middle-East, an economist warned.
Dr. (Ms.) Dushni Weerakoon, Deputy Director Institute of Policy Studies (IPS), a semi-Government think tank, speaking at a seminar on Thursday said that Sri Lanka aims at growing at over 8% driven by the Services sector, but a number of the state’s resources are diverted to the low yielding Agriculture sector which also employs the largest number of workers.
She further said that though Sri Lanka has increased its public investment spend from 4.5% of GDP to 6.5% of GDP in the last five years, there has however been a decrease in the island’s social capital spend.
Weerakoon was referring to the Government’s low spend on the Health and Education sectors.
“Otherwise increasing the employability of our workforce is sub-optimal, complemented by the lack of skilled labour causing supply side constraints,” she said.
Weerakoon agreed with the previous speaker at this seminar, Dr. Ms. Ramani Gunatilleke, another economist, who said that an ageing population such as that which is plaguing Sri Lanka meant a shrinking workforce.
Working age cohort (those between the ages of 25-54) and which comprises around 8.4 million of the population is beginning to shrink due to ageing, said Gunatilleke.
It was therefore imperative to hone in better skills and increase productivity among the limited number of the working population available in the context of the Government wanting to double per capita GDP by 2020,* she said.
Meanwhile Weerakoon said that Sri Lanka’s skills development is not taking place within the demands of the labour market, while fiscal constraints limit budgetary spend.
As a World Bank report said, what was important was connectivity of the lagging provinces to the more advanced provinces and not redistribution of wealth, she said.
Government was working towards this goal by building infrastructure in the periphery in the last five years, added Weerakoon.
Gunatilleke in her speech also said that building a nation is building institutions, not just roads.
“We need to increase productivity in a sizeable way and promote marketable skills,” she said.
Gunatilleke added that 62% of the workforce belonged to the informal sector, earning low wages with no social protection compared to those employed in the formal public and private sectors.
Despite economic growth there are fewer opportunities to get decent jobs, one of the reasons for this being stringent job security regulations which scare investors away. There is also no social protection for the unemployed, she said
Gunatilleke also pointed out that 74% of those with a minimum of 10 years of education and who were between the ages of 15-29 years were unemployed.
A million of those employed belonged to the category of the poor, Gunatilleke further said.
She added that Sri Lanka is ranked 79th out of 133 countries in the Global Competitive Index.
Gunatilleke also said that Sri Lanka’s labour population was 7.5 million with a participation rate of 49.2%. Males comprised 66.7% of the labour force while the rest were females.
She said that unemployment among males was 4.3% and that among women was 8.2% last year.
The seminar was organized by the Centre for Poverty Analysis, an NGO which celebrates its 10th year in operation this year.
* Government’s target is to double per capita GDP income to US$ 4,000 by 2015.