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Sri Lanka should strive for better balance between social development and wealth creation: Economist
05 May, 2015 14:59:45
By Ashanthi Ratnasingham
May 05, 2015 (LBO) – Sri Lanka has good social development indicators but lack the appropriate balance between social development and wealth creation, a senior economist said.

“Sri Lanka has been extremely successful in terms of social development according to the United Nations Millennium Development Goals (MDGs) but has not been able to achieve the appropriate balance between social development and wealth creation/employment generation,” Indrajit Coomaraswamy, a senior Economist and a Deputy Chairman of the Path Finder Institute said at a recent forum.

“The mismatch between opportunities and expectations were important causal factors explaining the two youth insurrections in the south and the separatist conflict in the north and east,”

“It is important, therefore, to attach priority to accelerating growth and generating higher value employment, particularly as Sri Lanka is no longer a low wage economy.”

Analysts say that Sri Lanka which house about 20 million people, have income inequality across the country especially in rural areas.

Poverty levels are highest in the estate sector at 10.9 percent and rural sector is at 7.6 percent, United Nations millennium development goals report on Sri Lanka says. The urban reports 2.1 percent of poverty level.

38 percent of the national income is shared by the richest 10 percent of the population while 1.5 percent of the national income is shared by the poorest 10 percent of the population.

According to Central Bank annual report, Sri Lanka’s per capita income has increased from 2,922 in 2012 to 3,280 in 2013 and is projected to reach 4,240 of per capita income by the end of 2015.

The Island is targeting to surpass 7000 US dollar per capita income to reach 150 billion dollars gross domestic production by 2020.

According to the MDGs country report only a small share of students who pass the advanced level examination can pursue tertiary education in Sri Lanka.

This is primarily due to limited admissions in the state universities and few alternative opportunities, such as private universities and expansion of tertiary education, both in universities and through vocational training, to meet the demand for high-skilled labour is another challenge, the report said.

“The education system could do more to address the skills mismatch in the labour market, and bridge the gap between education and employment.”

The report says the Government has recognized the need to address these challenges and has identified several policies and strategies in the National Human Resources and Employment Policy for Sri Lanka and the Public Investment Strategy 2014-2016, “Unstoppable Sri Lanka 2020.”

The introduction of the A/L technology stream in schools, in addition to existing streams like science, commerce and arts, is another important recent strategy to enhance the quality and relevance of education, and increase the employability of youth to minimize the skills mismatch in the labour market.

Coomaraswamy says furthermore, society has a whole is more aspirational and impatient. As a result, there is pressure to deliver rapid improvement in living standards,”

“It is also necessary to make up for the past poor performance.”

Sri Lanka was second to Japan at independence in terms of a number of socio-economic indicators. It had higher per capita income than South Korea and Singapore as late as the mid-1960s.

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