Demographics expert says No labour shortage in Sri Lanka Importing foreign workers will lead to tension

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By 2017-10-09

BY Rathindra Kuruwita

What Sri Lanka has is a youth bulge, Professor Indralal De Silva, the current acting Executive Director of the Regional Centre for Strategic Studies, and one of Sri Lanka's foremost experts on demographics, claims, dismissing a popular belief that there is a labour shortage in the country.

Professor, you are one of the foremost authorities on Sri Lankan demographics. So let's start with a brief introduction on the characteristics of Sri Lanka's population? And how do you think it will expand in the coming decades?

A: The Sri Lankan population has changed dramatically in the last 30 - 40 years. Sri Lanka had its first national census in 1871, at that time the population was 2.4 million. However, by 1981 it was around 14.8 million. And by 2012, by our last national census, the number has risen to 20.4 million. So the size of the population has increased by almost 9 times since 1871.

The size of the population was a not a problem in the 19th and even up to mid-20th Century but by the 21st Century the Sri Lankan population has increased rather rapidly, creating certain strains. Although our growth rate is around 0.7 or 0.8, which is not much, I tend to argue that net additions are very significant. According to my latest population projection, from 2012 to 2060, by the 2040s our population will grow to approximately 25 million. This, in my opinion is a population explosion. We are a small country and our population density is already high, around 330 per square kilometre. Therefore this increase will lead to serious implications.

What has led to this increase?

A: The population increase is governed by three factors, i.e., births, deaths and international migration. We had a recent growth in fertility, per woman the fertility is about 2.4 on average. Along with that we are experiencing an increase in life expectancy (by 2012 female life expectancy is around 78 while the male life expectancy is around 72) this is another factor that has caused the population to expand.

Other factor is that in the recent past labour migration has declined significantly. Middle Eastern countries are cutting down on the number of people they hire, thus the number of annual migration has dropped by around 50,000 – 60,000. Moreover, during the civil war, a large number of people left the country and found asylum in Western nations. But after 2009 that migration has also dropped drastically. Moreover, now even professionals find it hard to find employment in developed countries because those nations are also facing internal pressure to reduce migration and invest more on native populations. Thus, all three factors, i.e., births, deaths and international migration, are positive for Sri Lanka and we have seen a spike in population numbers.

There is a lot of discussion on ageing population and its implications. Can you elaborate on that as well?

A: Of course, but there is something else I must mention. That is the change in the gender ratio in the country. In 1971, there were 106 men for 100 women in the country but now things have turned the other way. By 2012 the number of men for 100 women is 93. This trend will continue in the coming years, which has separate implications on the workforce and productivity.

And at the same time the population is ageing. In year 2012, the elderly population (60 years and above) was 12.4 per cent of the total population, if you go back to the 60s and 70s, the number was between 6 to 7 per cent. The growth in ageing population will be very rapid in Sri Lanka and by 2022 over 16 per cent will be over 60, and by 2042, 23 per cent of the population will be elderly.

That means there will be heavy dependencies. However, if the elderly can work in a productive manner, ageing is not going to be a problem but whether we can ensure such circumstances remains to be seen as the bulk of our labour force is engaged in agriculture in the non-organized sector.

If we can't manage this we will have severe implications. The current elderly population (2012), is 2.5 million, but by 2030s that number will rise to over five million. So the size of the elderly population will double. Since this is going to be a rapid increase, the required structural adjustments are not easy to make at the governmental, social or family level.

But isn't Sri Lanka supposed to be in the midst of a demographic dividend? A number of your papers suggest that our demographic dividend started in 1991 and will go until 2034? But you also suggest that the best part of that period will be over by the end of this decade?

A: In my work before 2007, I have shown that our demographic dividend started in 1991. So what is demographic dividend or window of opportunity for social and economic development? In the Sri Lankan population we had a high percentage of the people in working ages, and the proportion of dependents, i.e., elderly and the young, as a proportion of the population was not that big compared to the proportion of the working age population. Therefore, by the late 1990s and early 2000s I stated that we are in the era of demographic dividend.

As you said I am also arguing that demographic dividend will last up to 2034, however, if you take such a long period, it's obvious that there must be a most productive era or a peak. Although we all agree that the dividend will last till 2034, my idea is that the best part of this period will be over by 2019. So my argument is that Sri Lanka has not been able to make use of the best part of its demographic dividend.

Therefore, I tend to argue that we have missed the train but one must realize that the demographic dividend alone is not enough for economic and social development. Demographic dividend must be there but we also must have productive investment, productive savings, the labour force must engage in productive activities, political stability and skills. Even if we have productive investment, productive savings, the labour force must also engage in productive activities. Political stability and skills is doubtful.

So right now we should be at the peak of our demographic dividend but we hear a lot of complaints from companies and industrialists about the shortage of labour. How is this possible?

A: Yes, quite right, there many such complaints. Why is there a shortage of labour? That is of great interest to any demographer and we have identified a few.

For example, if we take female labour, out of 100 potential female workers only 35 are working. Moreover, all though the men work, there is a serious issue about the work they do. Very large segments of Sri Lankan youth are engaged in unproductive employment.

One may say that three-wheel driving is a productive employment, but I disagree. The main reason why there is such a high number of three-wheel drivers , and they keep on expanding, is that successive governments have not done enough to develop the public transport sector. In Sri Lanka we don't see an improvement in the public transport system and there is no will by the Government to address this issue.

Therefore, anyone who can afford to buy a motor vehicle tends to go ahead and purchase and those who can't afford to buy a vehicle, depend heavily on three-wheelers. There is an opportunity for youth to become three-wheel drivers and make some money.

If adequate attention was paid to developing the public transport system, there would have been no need for such a large three-wheel workforce and most of these youth would have been engaged in productive work.

A lot of people tend to think of South Korea, Singapore and China when they think about countries that used the demographic dividend well. But India who reached its demographic dividend period rather recently has also taken a long hard look at how to use its demographic dividend?

A: Yes, India has identified this factor very well and they are doing a lot of planning and execution. They are doing everything to capitalize their demographic dividend.

Now this can affect us in many ways. For example, there is a perception in Sri Lanka that there is a shortage of labour. Now our neighbour, that has a massive labour pool, reached its demographic dividend era only two years ago. Indian planners are knowledgeable about the demographic dividend and they know that a large number of youth are entering the job market. They are looking at finding jobs for these youth within India and in other parts of the world. Sri Lanka is one of their options.

Contrary to popular belief, what we have in fact is a youth bulge. But I have seen many heads of industries saying that there is a shortage but they are saying that because they don't know. But as demographers we know the reasons for this seeming shortage. The youth are there but they are not approaching these opportunities.

My worry is that this artificial shortage can be used by some elements and their proposed remedies might lead to conflict and tension. We need to look at sorting our labour needs internally.

In a situation of a youth bulge we need to be really careful because whenever we have had a similar situation we have had conflict.

Look at 71, 88/89 and the conflict in the North and East, these are results of a youth bulge. The educated youth found it difficult to find proper employment and we have seen what happened. If we don't tackle this youth bulge properly, we might end up facing a similar situation. The problem may further aggravate if we try to bring in foreign workers.

What are the implications of all this? Another major concern of population expansion and the lack of long-term planning is the damage on the environment, which in turn can lead to natural disasters and human health. You have been consulted on matters regarding demographics by everyone from the UN to the Megapolis Ministry, so can you tell me whether there are the plans to address these concerns?

A: The implications are obvious. We are going to add about 5 million in another few decades and already we are observing major problems in deforestation. Less than 100 years ago our forest cover was 80 per cent of the total land area. Now it is something like 25 per cent. And as the population grows more and more people will penetrate our forests for housing and agriculture. As a direct result of this we see an ever increasing human – elephant conflict, this is happening not because elephants are coming into human settlements but because we have gone into areas where they used to live.

In recent decades we have seen a significant amount of forests being cleared to make way for housing and cultivation. Those who settle in these new frontier areas believe that they can make a living by cultivating the fertile forest land and by selling the produce to those living in the city. However, most of their products are destroyed by elephants and ultimately we can't produce what is required for consumption. That is why we have become a country that imports food.

The population increase, environmental degradation, and urban-oriented issues will create a lot of tension and we need to get our physical planning right.

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