Working age

Wednesday, 6 April 2016 00:00 - - {{hitsCtrl.values.hits}}

FOR Sri Lanka’s foreign investment search to be successful, it has to differentiate itself from the crowd and human resource could well be the most attractive element about the country, but workers need to be well trained for the advantage to be effective.

Sri Lanka’s working age population growth is forecasted to be the highest in the larger Developing Asia driving the country’s growth prospects during the next five years higher, the Asian Development Bank (ADB) said in a recent publication. It is estimated that Sri Lanka’s working-age population would grow at the highest pace in the 45-country bloc during the 2015 – 2020 period compared with the 2008-2014 period. This is despite Sri Lanka having one of the fastest ageing populations in the world.

Sri Lanka’s annual potential growth rate adjusted for the effects of working-age population trend is estimated between 5.96% and 7.22% during 2015-2020, ADB data showed. Further, the potential growth in per capita income is estimated to grow by an average 5.33% to 6.59% annually during 2015 – 2020. In contrast, the potential growth in per capita in Developing Asia is expected to fall relative to 2008-2014 by an average of 0.17-0.58 percentage points annually due to the fall in the working-age population growth over the period outstripping the fall in the total population growth.

The revelation by the Asia-based multilateral lender will certainly come as a silver lining for the now struggling Sri Lanka economy, which otherwise is overshadowed by negative outlooks from many fronts – looming balance of payment and external debt crisis, falling exports and expanding trade and current account deficits, fiscal imbalance and slowing growth, among others.

The United Nations projects that growth in the region’s working-age population will be lower in 2015-2020 than in 2008-2014; this demographic effect alone could depress Developing Asia’s potential growth by 0.4 percentage points. “….the growth rate of the working-age population has a direct proportional impact on the potential growth rate,” the ADO said.

Developing Asia’s growth is projected to slow to 5.7% in 2016 and 2017 from 5.9% in 2015 under the difficult and uncertain global environment but the region will contribute around 60% of the global growth in the next two years.

For Sri Lanka, the best chances at sustainable development is based on marketing its considerable human resource potential. At over 90% of literacy rate most of the new recruits to the labour force are ready to be trained in highly-skilled jobs. Granted, Sri Lanka’s higher education still has strong bottlenecks in dispensing vocational training, cutting-edge technology skills and soft skills to work with foreign companies, but the country has nonetheless been competitive in IT and BPO industries as well as high value addition sectors such as apparel, showing the impressive potential of the regional labour force.

The second challenge before the Government is encouraging women to become part of the formal labour force. As women make up 52% of the population, the majority of taxpayer-funded education is also taken up by women who have the largest share of university degrees. Unless these are gainfully used in the labour market, Sri Lanka’s brief window will close forever.