Sri Lanka’s workforce growth is not keeping pace with population growth, and this will have ramifications on economic growth, which is moving downwards, was the consensus of the panelists at the launch of the World Bank’s report - ‘Sri Lanka Development Update with a focus on ‘Demographic Change in Sri Lanka’.
The speakers, comprising policy makers and leading economists, noted that there has been around 1% growth in the population since the 1980s, and in the next five to 10 years the population would increase by around four million, creating pressure on the country to provide social security measures for the aged and the infirm. Former (Chair) of Demography, University of Colombo Prof. Indralal de Silva said the disparity in the country’s shrinking work force and the growing population will have adverse repercussions on the economy which needs an adequate workforce to keep the economy going.
On the other hand when there is a surge in population it means more funds would be needed to ensure social welfare measures .
“Over the next 10-15 years there will be more than five million elderly people in Sri Lanka. Longevity increases productivity but the question is how healthy would they be, as over 50% of the population do not have proper social protection,” he said, adding that EPF/ETF funds would be relatively small in value, for those retiring at age 55. The private sector will need to consider how to change the retirement age.
It was highlighted that Japan and certain other countries in the region have a higher retirement age with better retirement benefits. In Sri Lanka there is a vacuum when public sector workers retire.
Former Deputy Governor of the Central Bank, Dr. W. A. Wijewardene said, “The challenge in providing social security, is funding. The burden of paying public servants on their retirement, is upon the taxpayers. Sri Lanka might come to a stage where the government will be unable to pay pensions which have grown from around Rs. 500 billion to around Rs. 2,000 billion.”
The panelists stressed that the policy makers have done little to engage the female population in the country’s workforce which is dominated by males.
Prof. Amal de Silva, of the Department of Economics, University of Colombo, said the institutional factor plays a pivotal role in bridging the gender gap in the workforce and encouraging more female participation, (which is currency around 35% of the entire working population).
“Book driven education has shifted the burden onto parents today. The large percentage leaving the work force in Sri Lanka is alarming. The health of the work force, especially those in the Estate sector, is low. Despite recording economic growth during the past decade, there has not been an improvement in women’s participation in the work force,” Prof. de Silva said, adding that there still is discrimination against women at work.