An age for growth

Wednesday, 27 April 2016 00:00 - - {{hitsCtrl.values.hits}}

An explosion in the age of working people in the Asia Pacific is opening up new growth opportunities but only for those countries dedicated to planning ahead.

Demographic change in Asia and the Pacific is happening at a rate the world has never seen. An explosion in the working age population and a fall in birth rates that took a century in Europe are happening here in just 30 years.

If countries do not start planning for this demographic change, they will miss out on a unique opportunity to boost growth and investments for the future, says the United Nations Development Programme (UNDP) in its latest Regional Human Development Report. They also risk a surge in youth frustration, exacerbating instability and conflict.

The report, entitled ‘Shaping the Future: How Changing Demographics Can Power Human Development,’ notes that Asia-Pacific countries now have more working-aged people and fewer dependents than at any point in history, providing a springboard for growth. Region-wide, 68% of people are of working age and only 32% are dependents.

Sri Lanka’s working age population growth is forecasted to be the highest in the larger Developing Asia driving the country’s growth prospects during the next five years higher, the Asian Development Bank (ADB) said in a recent publication. It is estimated that Sri Lanka’s working-age population would grow at the highest pace in the 45-country bloc during the 2015-2020 period compared with the 2008-2014 period. This is other side of Sri Lanka having one of the fastest ageing populations in the world.

For states with a large working-aged population, UNDP is calling for the creation of decent jobs to match the growing workforce, equal employment for women, and ways to turn savings into investments inside the region.

For countries with young populations, there is a need to invest in education and healthcare, smooth the transition from school to work and encourage youth participation in public life. In older countries, governments have to design fair, sustainable pension systems, support active ageing and promote appreciation for the value of older citizens. This includes making sure that older people who want to work can bring their skills and experience to the market. All efforts local policy makers have to get behind.

For Sri Lanka, the best chances at sustainable development is based on marketing its considerable human resource potential. At over 90% of literacy rate most of the new recruits to the labour force are ready to be trained in highly-skilled jobs. Granted, Sri Lanka’s higher education still has strong bottlenecks in dispensing vocational training, cutting-edge technology skills and soft skills to work with foreign companies, but the country has nonetheless been competitive in IT and BPO industries as well as high value addition sectors such as apparel, showing the impressive potential of the regional labour force.

The second challenge before the Government is encouraging women to become part of the formal labour force. As women make up 52% of the population, the majority of taxpayer-funded education is also taken up by women who have the largest share of university degrees. Unless these are gainfully used in the labour market, Sri Lanka’s brief window will close forever.