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Dinesh Weerakkody is the Chairman of the apex National Human Resource Development Council and an Advisor to the Prime Minister’s Policy Planning, Youth Affairs and Economic Affairs Ministry. Weerakkody says he works in an honorary capacity and is very keen to support the Prime Minister in developing and implementing the required policy interventions to build a future-ready workforce. He says skill shortages and mismatches are widespread and are affecting productivity and our competitiveness therefore it is timely that the Prime Minister has put skills development at the centre of his economic agenda.
By Shanuka Tissera
Q: You are playing a central role in the current Government to build our skills base. What is the role of the NHRDC?
A: The NHRDC is a national level advisory council vested with powers to develop policies relevant to human resources development at a national level. The prime objective of the institution is to organise itself as an apex body to guide the Government on its human resources development policies that are required to build a future-ready workforce. So far the NHRDC has not made any real impact. The institution needs to refocus and deliver on its powerful mandate.
Q: What is your key focus as the Chairman of the Sri Lanka HRD Council?
A: Skills development is an important component of national development. The demand for job-specific technical skills in Sri Lanka is high due to the structural changes taking place in the economy.
The demand for skills will continue to intensify as the country transforms itself into an efficiency-driven middle income economy. Recognising the importance of skills and the implications of skills constraints for the country’s economic growth is a top priority for the Government.
For a start we need to do a comprehensive assessment of Sri Lanka’s skills development sector, focusing on technical and vocational education and training by understanding the skills’ supply and demand, skills’ gaps and mismatches, system management, governance and financing. We need to go beyond the standard measures of skills in terms of enrolment and completion rates by looking at skills in three broad categories: cognitive, technical and soft skills. Although our labour force is the most educated in South Asia with the highest literacy rates and the highest pre-tertiary enrolment and completion rates, the job-specific skills supply is trailing behind some markets that we compete with.
Q: How do we improve skills development so that the country is in a better position to achieve economic growth and reduce poverty?
A: Firstly, we need to identify demand drivers and employers’ needs for skills, then the skills supply of the workforce and how skills are formed by our educational institutions and training providers, and then set the strategic direction for skills development.
Finally, we need to ensure the system is managed and financed properly. The voucher system proposed by the Prime Minister many years ago could be a viable solution to push many of the training providers to buckle up and deliver what the market needs.
Q: What are some of the big challenges faced by the NHRDC?
A: Every year an estimated 140,000 students complete general education without having acquired job-related skills. Since the capacity of the Sri Lankan higher education system is limited, the TVET system is the main means to closing the gap. However, serious deficiencies in the system prevent TVET delivering the required output thus risking Sri Lanka’s goal of becoming a competitive middle-income economy.
Along with skills shortages in a number of fields and occupations, Sri Lanka is also experiencing both underemployment and youth unemployment. The other challenge we have is to ensure that our workers have the skills which a modern competitive economy requires, such as computer knowledge, soft skills and English. The current education and training system does not do much to shape the soft skills required, that are in high demand for a wide range of occupations. Public sector capacity building is another area which needs urgent investment.
"Skills development is an important component of national development. The demand for job-specific technical skills in Sri Lanka is high due to the structural changes taking place in the economy. The demand for skills will continue to intensify as the country transforms itself into an efficiency-driven middle income economy. Recognising the importance of skills and the implications of skills constraints for the country’s economic growth is a top priority for the Government
No bank would get engaged in a merger or an acquisition unless it is done to benefit all the stakeholders. However, since some stakeholder groups may oppose consolidation to safeguard their own vested interests, the regulator can encourage consolidation by implementing a differentiated regulatory regime depending on the size and strength of the institution as measured by key prudential factors "
Q: What would be the major drivers of skills demand in Sri Lanka in the next five years?
A: I would say it is economic growth, labour migration, urbanisation, the expansion of primary and secondary education, demographic change and FDI.
Q: Firms in Sri Lanka often complain about the lack of an adequately educated labour force compared to other South Asian countries. Is this true?
A: Our employers point out that TVET is not relevant to their needs and question the quality of its curricula. There are mismatches between the skills that employers demand.
A mismatch is especially severe in higher levels of education e.g. GCE A-Levels and above, TVET and job-specific and soft skills. As the absorptive capacity of the public sector is shrinking, the private sector is becoming the main source for job creation. Yet employers are not fully integrated into the planning, provision and regulation of the skills they need to make job creation a reality. Skills development in Sri Lanka is yet to become truly demand-driven and aligned with the ever-changing needs of the economy and the world.
Q: What are some of the challenges facing the current skills development system?
A: The skills development effort faces challenges in such areas as organization and management e.g. excessive centralization, responsibility overlaps and poor accountability; access e.g. regional disparities; low quality instruction, inadequate qualification of instructors; lack of incentives e.g. absence of links between performance and rewards; relevance and information e.g. lack of visibility of skills needs; and social stigma attached to technical training.
Therefore, to expand the supply of skilled and employable workers we need to increase the quality of our training interventions. Then job training, internships and project work must be facilitated by easing the restrictions imposed by various outdated laws. In addition, re-tooling and competency accreditation needs to be mandated like in other markets.
Q: What are some of the key interventions required?
A: Sri Lanka has progressed significantly in increasing access to primary education. Sri Lanka has one of the highest literacy rates in the world, however, the quality and relevance of Sri Lanka’s labour human resources is a growing concern.
The changing economy has created new demand for new technical and soft skills but the supply has been more on semi-skilled, unskilled or skills with low demand. The quality and relevance of skills has still not been addressed in consultation with all the key stakeholders. There is a need for a conceptual framework.
I believe the shortage and mismatch of skills is due to a lack of an integrated national HR plan/skills development plan. Supply of relevant job-specific skills required by the labour market is essential to sustain economic growth. We must have the skills we need to support the growing economy, to reduce the gap between the haves and have-nots and also to export our labour to meet emerging international labour market demands.
I would say our priorities should be to strengthen governance and management with more focus on results and the efficient use of our resources, improve the quality and relevance of skills development by engaging all stakeholders, expand access to quality skills training and strengthen the capacity of the apex body to set policy and monitor it.
Q: You chaired a committee appointed by the Government to review the consolidation roadmap for banks and finance companies mandated by the previous regime. What was the outcome?
A: We said voluntary consolidation of banks was a normal business activity and this should be actively encouraged by the new Government by providing the required legal framework and removing impediments and the disincentives that have prevented institutions from taking that route.
Q: Are you saying the decision to consolidate should be driven by the banks themselves and not by the State?
A: No bank would get engaged in a merger or an acquisition unless it is done to benefit all the stakeholders. However, since some stakeholder groups may oppose consolidation to safeguard their own vested interests, the regulator can encourage consolidation by implementing a differentiated regulatory regime depending on the size and strength of the institution as measured by key prudential factors.
Q: Does the Banking Act and Directions need reform?
A: Certainly, the Banking Act and Directions needs revision. It is overly prescriptive.
Q: The involvement of the State in private sector banks has been criticised and the current Government is also continuing that trend. What are your views on this?
A: The involvement of the Government in private sector banks must be reduced. This can be either through the application of the same aggregated shareholder limits as applicable to private shareholders or by placing a cap on aggregate voting rights. [Regarding] Your question on whether the Government was interfering in the running of the banks, the Deputy Economic Affairs Minister Dr. Harsha De Silva has said the current Government had no choice but to restructure the Boards because of some bad appointments and more still needed to be done and would be done.
Q: What is your take on the consolidation roadmap for the NBFI sector?
A: The CB Roadmap for NBFIs was designed to broad-base the capital structure of the sector and therefore addressed only one aspect of the problem facing NBFIs. What are required to create stable NBFIs are much broader reforms. Therefore, in my view consolidation to reduce the existing large number of players is a good thing, but that is only one aspect of the corrective action required to create stable NBFIs.
Q: What are some of the broader reforms?
A: There are more than 50+ NBFIs registered with the Central Bank. The NBFI sector has many challenges around; capitalisation, governance structures, attracting talent, technology and the regulatory framework also needs to be tightened. The issuance of new licenses at will over the years has not helped the sector to move up.
Q: An issue that has been doing the rounds in the financial sector markets both locally and internationally has been the recent CB bond controversy. What is your view?
A: So many views have been expressed. I really don’t know all the facts. So, as a professional and a former Chairman of a Bank it is not correct for me to comment. However, there was a committee appointed by the Government and parts of those findings are freely available on the net. Some criticise the findings and some don’t like to comment.
Q: In some quarters you were criticised for joining the Access group?
A: I have said this many times, I am an independent Non-Executive Director of Access Engineering Plc (AEL). I sit on many more Boards as a NE Independent Director. I joined AEL on 1 January 2015. AEL is a widely held public company. I was invited because of my exposure in Finance and HR. Those who criticise don’t really understand the real role of an independent Non-Executive Director.
Q: Health Minister Rajitha Senaratne on many occasions has referred to the role you played in this new change. Some are not happy with the present situation with regards to appointments and the achievements of the 100-day Government. Your views?
A: Sometimes the people who do the hard work and take the risks end up getting the crumbs, this happens in many settings when the wrong people are used to select people for key positions. If this has happened as you say, it will get corrected after the next round.
The passing of 19A was a big victory for freedom, democracy and good governance. Some of us got involved purely to create that change. The other significant achievement was the substantial reduction in the cost of fuel and electricity during the 100 days.
Going forward, we certainly need to address some of the key policy issues and strive to get the right skills to run the Government. The public service capacity needs to be ramped up immediately, until then we need to bring in the required skills from outside.
We should avoid putting incompetent public servants in key positions both locally and abroad or retired people to key positions in the name of good governance. For key positions, people should be appointed based on their integrity, skills and current performance like in Singapore.
The bottom line is we need people who are credible, current and have the skills and competencies to outperform in the new world. We may have not done that too well. As a result there is confusion in the market which may have resulted in an overall slowdown and indecision on some fronts as you say.
But then this Government has a limited mandate. All this will surely change and will be changed to bring about the visible change that was promised under the promised Yahapalanya.
(The writer is a graduate in business administration and involved in capital markets)
