Sri Lanka to adapt to ageing population

By Shabiya Ali Ahlam

A demographic transition towards the rapidly growing ageing population will be witnessed in Sri Lanka within the next decade, and this shift has been recognised by key officials as an issue that the country will have to prepare for. In the current context, Sri Lanka has a large youth population that can productively contribute to the growth and development of the country. However, the prevailing demographic dividend is not expected to last long.

In view of gathering ideas and suggestions on how Sri Lanka can prepare to face this shift, the World Bank Sri Lanka hosted the first-ever live chat via its Facebook page on 7 January 2013 with Professor Indralal De Silva, Senior Professor – Demography and Dean – Faculty of Arts, University of Colombo on the challenges posed by the younger population in Sri Lanka that is aging quickly.

According to the latest World Bank Sri Lanka demography transition report, 67% of Sri Lanka’s population is of working age and the said population will continue to remain significantly larger than the dependent population until 2017, with the makings to play a crucial role in advancing the country’s economy.

Findings of a series of technical studies put together by Sri Lankan academics and the World Bank highlighted that the share of elderly population over 60 years of age is expected to increase from 12.5% to 16.7% in 2021, and by 2041, one out of every four people is expected to be an elderly person.

Examining economic implications of Sri Lanka’s demographic transition, focusing on employment and productivity issues, the report called for effective policy planning such as improving labour market outcomes and providing adequate services for vulnerable groups which could help ensure a smooth demographic transition.

What happens when a young population ages? How should countries prepare for it or should they even prepare? Much of the world faces similar situations and challenges – globally, within the next ten years, there will be one billion older people worldwide and by 2050, nearly one in five people in developing countries will be over the age of 60.

In reference to the welfare of the elderly, retirement benefits were noted to be crucial. During the exchange of dialogue, De Silva revealed that of the total elderly population in Sri Lanka, only 15% receive pension benefits and 26% receive EPF, while approximately 41% receive some benefit or the other. However noteworthy is that the remaining 18% of the elderly population receives no retirement benefits and tends to rely on the welfare of their children, relatives and friends.

He expressed: “The Government needs to consider the growing elderly population very seriously otherwise most of the elderly will not be covered by any social protection facility.” Of the total Government revenue, 14% is spent on pension benefits, therefore in the future when Sri Lanka has its large number of elderly people, management of pensions programs will be extremely important.

De Silva further stated that Government organisations and international institutions should provide adequate and relevant information to the state in reference to the elderly population in Sri Lanka. Changes in the size, structure along with the socioeconomic status should be carefully considered while all aspects of their protection such as retirement benefits rights, health benefits and insurance need to be strengthened. To achieve this, high ranking Government officials should be involved during policy dialogue along with other pertinent stakeholders.

Looking at ways in which the shift towards higher numbers in an ageing population would affect the economy, more specifically its effect on chances of employment amongst the youth, is was suggested that there was the possibility of extending the retirement age beyond the age of 60 to support the elderly population; it was noted that the Government would have to turn to such alternatives to lend a helping hand to the ageing population.

However, if such strategies are implemented, unemployment would hit the youth population of the country, therefore the Government will have to take steps towards creating sufficient amounts and opportunities for new employment to the youth to prolong productive engagement of the elderly in the labour force. “The state is seriously looking for foreign employment opportunities available in other parts of the world and to this, large number of youths are responding positively,” said De Silva.