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OPA President incumbent Benedict Ulluwishewa welcoming the guests for the event noted that the theme of the conference was a timely one as the nation readies to raise its head after years of conflict and despair. In order for the country to gain maximum benefits of the multi-faceted development carried out by the Government, it is important to develop an economy based on human capital development, Ulluwishewa said.
In the modern services based economy, human capital is the path for growth. “A nation’s capacity to develop its economy is based on the human capital development which is important to sustain economic growth.”
While the more commercial aspect of capacity development has been recognised by all, there is another aspect of human capital that is widely unidentified by most, he said. With human capital being defined as the knowledge and skills developed/needed to produce marketable services, the world tends to consider the growing number of people with competencies and skill as a factor that increases the nation’s stock of human capital.
However, this mathematical notion of human capital is an incomplete one. “A professional is more than just about the bottom-line,” Ulluwishewa asserted. “It is a calling to serve the community motivated by a sense of love and dedication.”
Education as it is today prepares students for the job market, promoting people with skill and expertise. However it lacks a more humane touch, looking away from aspects such as love and compassion which are necessary to motivate people. The existing money oriented education system fails here, he commented.
“This is not the true purpose of education. Education is a word that is derived from Latin and breaks down to ‘edu’ and ‘care’ which means ‘draw out’. Education must draw out love, compassion and creativity hidden within the student.”
Noting that some recognise this as spiritual capital, he assured that human capital is likely to fail without a spiritual capacity, because they are not motivated to empower others.
President elect of OPA V. Ganesh commended the Government for its efforts in developing the academic curriculum and the national education policy to address the mismatch between education and skills necessary for job application amidst its focus on areas such as infrastructure, tourism, power and energy, etc.
“They have recognised the need for education for employment for the youth as well as to supply the necessary skills and manpower for the industries.” He noted that from 540,000 students who sit for the GCE O/Ls, only 60% qualify for A/Ls, of which only 10% gains entrance to university.
An alternative system for tertiary and secondary education development and professional development is the need of the hour.
“The conference will address the importance of human capital for the development of the country as well the country’s requirement of human capital,” Ganesh said. “The outcome of the technical sessions will be submitted to the Government for consideration.”
ADB’s commitment
ADB Deputy Country Director and Senior Economist Tadateru Hayashi noted that just as infrastructure and other sectors need investment, the field of human capital also needs investment for growth and expansion.
While the accumulation of human capital happens naturally as consequences of everyday observation, its key drivers are structuralised institutionalised learnings. Developing this has a direct impact on the productivity of people. Human capital in multiple dimensions is an important factor in the process of economic growth.
Sri Lanka as a middle income status country anticipating further progress must depend on its capacity to invent, innovate and adapt. Success in innovation will depend on the skills and attitude of the people and entrepreneurship throughout the country. “For Sri Lanka, the economic performance will be based on how well the education system moulds people to engage in the job market in a highly competitive environment,” Hayashi said.
He acknowledged that the country has made commendable progress in providing basic level of education with high percentage statistics. “This success is the result of the Government’s free education policy with the intervention of free text books, scholarships, etc.” However, there is more to be done. “Sri Lanka must improve this.” The country plans to modernise the process by shifting from a basic skill education to a highly cognitive and job driven one, he said.
The ADB has over the years committed to support the sector in the country. Noting that education falls under the core operation areas of the bank’s long term strategy for Sri Lanka, Hayashi said that the areas covered under projects implemented so far and in plans are inclusive all regions and social development aspects.
Supporting the ‘Mahinda Chinthana – Vision for the Future’ to create a human capital foundation for a knowledge economy, the ADB will over the next five years invest a total of US$ 200 million in education in Sri Lanka. Each year, the bank will invest US$ 40 million for projects under the umbrella of education. This will focus on preparing graduates for the development market while covering other areas as well.
“Human capital development doesn’t end when one finishes school. We will support both technical education and vocational training as well. This program will assist the Government.”
The ADB also plants to implement and support a science and technological park in the future. Hayashi expressed that harnessing science and technology has the ability to transform the country to a more innovative economy. “This would lead to enhanced knowledge creation and innovation system in Sri Lanka.”
The ADB will work with the Government to identify gaps in the policy and operational aspects in creating a more sustainable education system. 
A more focused feasibility study will be done with regard to education in the future.
“In gearing the next generation you must not forget human capital and technological growth as key important drivers for an economy,” Hayashi said.
Global scale integrated sustainability
Taking on a more global outlook, Munasinghe Institute of Development Chairman Prof. Mohan Munasinghe noted that human capital development is essential for overcoming threats faced by the society.
“There is a risk of a global breakdown as there are multiple shocks, crisis, persistent poverty, resource shortages and climate change which are the ultimate threat multiplier in the country,” Prof. Munasinghe said. “Unfortunately we need integrated solutions. There is a lack of political will to address issues globally. Poverty is severe in developing countries. Climate change means poor countries will be greatly affected even though they have the least contribution towards it.”
To find a better developed path to make development sustainable, we need integrated solutions. “If we have an unrestrained market force, then these problems can lead to a situation of chaos and breakdown. This is not a world we want to be part of.”
The present productive structure is organised in a manner where financial growth is at the top, level of productive economic assets to which human capital is included is in the next sphere and at the very bottom are the bio-geo resources. These three elements should be aligned ideally, he said. “However that is not what is happening.”
He pointed the asset bubble of 2008 as an example of excessive consumption and over-valuation of economic value. There is another bubble, Munasinghe warned. This is a social bubble where there are two billion poor people in the world. “It is a hidden bubble.” The last bubble is the environment bubble, he added.
“To overcome the issues, or as a solution for the financial problems US$ 6 trillion was found quickly. US$ 100 billion is set aside a year for poverty and for climate change only a few billion dollars are allocated. This tells you that our priorities are not correct.”
To solve this, what is needed is ‘sustainonomics’.
Munasinghe said: “The financial sector which caused the crash of 2008 has not reformed, according to many. Some predict that this will happen again in 10 years. However reports show that the BRICs are forging ahead, providing sources for growth and sustainability. This is very important.”
There is a need to change the way people think. Development needs to be more sustainable, he said. “The Government isn’t doing a good job solving the problems. Others must work alongside for empowerment and action and push the Government forward. Sustainable development is a mysterious peak covered with flowers. We will reach there one day. You are not powerless.”
At the corporate level movements such as CSR, shared values, etc., will help this, he said. On a more national level, macroeconomic values and sustainability and such aspects must be integrated in power, industry, etc. “Human capital is at the core of it because we can’t implement this method without developing human capital.”
Munasinghe said: “We certainly need economic growth but need to look at social growth as well as environment. It is the balance between the three elements that is important.” Human capital can find innovative paths. However, there are always barriers and vested interest. “You must break them and transcend the barriers of greed and self-interest. We are driven by an unsustainable process at the moment.”
Pix by Lasantha Kumara
