Meeting the challenges of Sri Lanka’s demographic changes
Tuesday, 16 July 2013 01:01
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By Cassandra Mascarenhas
The focus on health and education in the past has led to an improvement in Sri Lanka’s social indicators to the levels of emerging economies, including reduction in birth rate and increase in life expectancy. Coupled with change in lifestyles has made Sri Lanka a country with one of the fastest aging demographic profiles, specifically for a developing country, leading to a decline in the proportion of persons in the employable age.
The size of the labour force will be further constrained by the high level of migration from Sri Lanka. The poor response in skills development in conjunction with the requirements of the demands in the labour market is another aspect that affects the availability of labour. The fifth session of the Sri Lanka Economic Summit 2013 discussed the foregoing issues and the way forward.
Sri Lanka’s demographic profile
University of Colombo Senior Professor of Demography Professor Indralal de Silva outlined Sri Lanka’s current demographic profile and future outlook in his presentation, providing the rest of the panellists and the audience with fodder for the panel discussion that followed.
People in the country now live longer. Sri Lanka’s rate of mortality has declined since the 1920s, as has fertility, which has declined since the 1960s. However, since 2000, there has been an increase noted in the latter. De Silva also noted that emigration of Sri Lankans has accelerated since the 1970s.
“We have lost about 149,000 people in a four year period. There is an argument as to whether there are 1.6 million employed in the Middle East or 1.8 million as there are many leaving through illegal means as well,” he pointed out.
Sri Lanka is expected to have a population of 22 million by 2040. Population growth rates are very low, de Silva said, at 0.7% per annum and the total population will not double in the near future but can the same be said for the elderly population, he questioned. That will double in the near future. Furthermore, the structure of the population is changing as well with only 94 males to every 100 females as opposed to 106 males to 100 females previously.
“The feminisation of the population is a problem. The sex ratio of the elderly is very serious as women tend to live longer. The population is also aging rapidly at a time that economic progress on a global scale is not very rapid. There is also a knowledge economy skills gap. Increasing the mandatory requirement age is important as is the growth of the female labour force which is currently growing at 0.55%,” he stated.
Suddenly, the child population will increase, as will the dependent group from both ends of the population – children and elderly – and the group in the middle will have to worry about both ends, de Silva predicted. Migration is another issue as the country is going through a shortage of labour, with Indians, Pakistanis and Bangladeshis now working in Sri Lanka in an unauthorised manner.
Families are also changing rapidly, he added, and female headed households are a problem. There is also a pressing need for social protection and labour protection, with only about 14% of the labour force covered by the latter. Of the 2.3 million elderly, only 20% receive some pension benefits. “Pension is key for welfare of the elderly,” he stressed.
“The demographic bonus is the window of opportunity. Each country undergoes a period comprising a demographic bonus during the age structure transition which has a positive impact on economic growth. Newly industrialised countries such as the Republic of Korea, Singapore, Taiwan etc. have utilised the demographic bonus effectively. During demographic bonus, dependency will be at minimum level and the highest proportion of population will be of working age,” he explained.
We are at the very last part of the demographic dividend, de Silva noted. “The demographic environment is conducive for economic take-off. Presently, the lowest level of dependency prevails. However, rapid ageing could make this favourable environment fade away. The economic take-off could provide sustainable benefits to all segments of the population but the demographic bonus alone would not sufficient enough for economic take-off. It is an opportunity that should not be missed,” he concluded.
Meeting HR challenges
IPS Research Fellow Dr. Nisha Arunatilake delivered a presentation the express need to understand how the world around us is changing and why it is important to adjust to that change to meet the human resource needs of the country in the future.
As highlighted by de Silva previously, she pointed out that Sri Lanka’s labour force growth is slowing down and that the labour force is ageing. Therefore, there is a dire need to maximise the use of the country’s labour resources.
“In the earlier period of the last century countries relied on resources for growth. Next, came efficiency-based growth strategies. Today, the emphasis is on knowledge based economic growth. Sri Lankan policy has also articulated the need to improve the knowledge economy to drive growth but knowledge driven economies require human capital – to develop, extend and make use of new knowledge,” she noted.
She went on to say that there is now a consensus around the world that highly skilled science and technology workers are needed to create and diffuse knowledge. With this knowledge, countries are scrambling to increase their stock of science and technology workers. Arunatilake pointed out that Sri Lanka’s policy document also looks to, among other things, making Sri Lanka a knowledge hub in the next five years.
“We are used to a linear economic model where young people who come out of schools, receives some job related training and they get a job and do that job for the rest of their lives. Very few people change their initial career paths but, increasingly this is not going to be feasible. The ability to use the internet and e-mails are a basic requirement for most white collar jobs as well as many non-white collar jobs. Increasingly people need to learn these new skills after their initial training,” she stated.
She added that in the US, the demand for training in community colleges have gone up, driven mainly by graduates from four year colleges looking to re-skill to upgrade their skills or to change their careers.
“The additions to our labour force come from children reaching working age, immigrants and foreign workers. We have very few foreign workers coming to our country. We lose workers due to retirements and deaths, and a large number of potential workers also go abroad for work. Statistics indicate that this outflow is larger than those returning to the country. Then we also have a large number of people who are of a working age, but are not working. These are the females, the youth and the retirees. One means by which we can increase the labour force is by encouraging the youth and females and the retirees to participate in the labour force more.”
Technological change is affecting the human resource challenge in two ways, she added. On one hand technological change has increased the demand for skilled workers and on the other hand, to be competitive in the increasingly competitive and globalising world, Sri Lanka needs to invest in highly skilled workers.
Across the world countries are looking to improve technology to drive innovation to stay competitive in the global market. It is now widely recognised that a substantial stock of high quality science and technology workers are essential not only to develop new technologies but also to use technologies used by others for improving productivity.
“This is a main challenge facing Sri Lanka – the stock of our science and technology workers are low. The quality of their training can improve. We are not making best use of the available science and technology workers in the country.”
Pix by Upul Abayasekara
