Tackling unemployment

Much has been written and many webinars held about the impact COVID-19 has had on Sri Lanka’s economy but the latest Census and Statistics Department’s first quarter report on unemployment suggests that lack of jobs had reached a 10-year high before the lockdown. 

Clearly, employment opportunities have been hampered by low growth over the past few years and Sri Lanka has been struggling to create large numbers of good jobs over several years, by some estimates the better part of this decade, with growth driven by public investment in large infrastructure projects, rather than reform and private sector led development.

Job creation is a typical election topic and the usual fall-back of successive governments has been increasing public sector employment. However, the State sector is already overburdened and recruitments are often made to areas of little use to the people. Without increasing productivity, adding more people to the public sector is simply increasing taxpayer burdens. 

Of course the reason why public sector jobs are more popular is because jobs in the private sector are not attractive and not readily available in areas outside of the Western Province. There are also perks, such as a non-contributory pension system that is very attractive. 

According to data compiled by the World Bank, Sri Lanka’s private sector has a large component of contract and informal workers, which reduces access to social safety nets, such as insurance, maternity and sick leave as well as EPF and ETF payments. This sense of vulnerability also drives up demand for public sector jobs that are seen as more stable. Clearly, labour laws need to address this disparity and promote and protect rights of workers through reforms, and this is a critical need to get stakeholder buy-in. it is also a sustainable way to increase employment. 

In addition women make up only 34% of Sri Lanka’s formal workforce. Without increasing the amount of women in the formal workspace, Sri Lanka will struggle to push up growth and productivity given its aging population dynamics. This also requires policy attention. Then of course there is the challenge posed by technology and the gig economy, which both drive growth but also create inequalities and undermine basic work conditions for workers. 

The International Labour Organisation (ILO) in a recent report titled ‘Future of Work in Sri Lanka’ explores the challenges the Sri Lankan economy will face as it attempts to adapt technology to an aging population. The report recommends that policymakers adapt to a range of strategies to gainfully shape the world of work in the country. 

These include, education and skilling to provide lifelong learning opportunities, and build capacities for availing opportunities in new sectors and launching entrepreneurial ventures. Technology and innovation can be used to shape technological trajectories that develop applications to serve those that are at risk of being left behind, and accelerate employment generation in new sectors. Thirdly, enhanced labour protection will provide new frameworks to better protect workers, as the number of contracted, self-employed workers increase and employment relationships transform through platformisation of work. 

The Government and other stakeholders would have to promote digital skilling programs and strengthen foundational skills. In the future of a digital economy, there lies a critical window of opportunity for Sri Lankan youth entering the workforce over the next decade. Digital skilling interventions will need to go beyond technical skills to enable adaptiveness among workers, but skilling cannot act as a substitute for education. Clearly the Government has a huge challenge on its plate. Perhaps the best place to start is to acknowledge there are no easy answers and genuinely work with stakeholders for solutions.