Connect with us


Decline in labour force in 2020 first half- Part III



Extracts from the Central Bank of Sri Lanka report, ‘Recent Economic Developments: Highlights of 2020 and Prospects for 2021’


Continued from yesterday

Meanwhile, several rounds of discussions were held in 2020 to determine the possibility of increasing the basic daily wage of workers in the plantation sector to Rs. 1,000.

= Nominal wages of the informal private sector employees, as measured by the informal private sector wage rate index (2012=100), increased by 3.5 per cent during the period from January to August 2020 compared to the same period of 2019. Nominal wages of employees in all sub-sectors, namely, agriculture, industry and services increased by 4.1 per cent, 2.9 per cent and 3.9 per cent, respectively, during the period from January to August 2020. However, real wages in the informal private sector declined by 2.8 per cent during the period from January to August 2020 compared to the corresponding period of the previous year.

The negative impacts of the COVID-19 pandemic amidst the persisting structural issues led the labour market indicators to deteriorate during the first half of 2020. As per the statistics reported by the Department of Census and Statistics, the working age population increased during the first half of 2020 compared to the corresponding period of the previous year, led by the significant increase in economically inactive population amidst a comparatively lesser decline in the economically active population.

Accordingly, the Labour Force Participation Rate (LFPR), which is the ratio of the labour force to the working age population, declined during the first half of 2020 compared to the same period of 2019. A considerable decline was observed in the employed population as well. The unemployment rate, which is the share of unemployed population to the labour force, increased notably during the first half of 2020 compared to the corresponding period of the previous year. Continuing the trend observed in the recent past, unemployment rates among females, youth and educationally qualified persons continued to remain at high levels during the first half of 2020.

The labour force, which is the economically active population,3 declined to 8.470 million in the first half of 2020 from 8.603 million in the corresponding period of the previous year, recording a decline of 1.5 per cent. This decline in labour force was solely driven by the significant decline of 6.0 per cent in the female labour force during the reference period. In contrast, the male labour force, which accounts for the highest share of the labour force, increased by 0.9 per cent during the first half of 2020 compared to the corresponding period of the previous year. In terms of sector wise labour force, declines were observed across all sectors namely urban, estate and rural sectors during the reference period mainly due to the considerable drops in the female labour force. Meanwhile, the male labour force in the urban and estate sectors also recorded marginal declines, though the male labour force in the rural sector recorded an increase.

In line with the decline of the labour force, LFPR declined to 50.6 per cent during the first half of 2020 from 52.6 per cent recorded in the first half of 2019. This considerable decline was mainly driven by the significant increase observed in economically inactive females during the reference period. Consequently, the female LFPR declined to 32.0 per cent in the first half of 2020 from 34.7 per cent in the corresponding period of 2019. The male LFPR also declined to 72.1 per cent in the first half of 2020 from 73.4 per cent in the first half of 2019 due to the higher increase in economically inactive males compared to the increase in economically active males. Accordingly, the gender gap in LFPRs soared to 40.1 percentage points in the first half of 2020 from 38.7 percentage points in the corresponding period of the previous year affirming the persisting issues related to low female labour force participation towards the economic growth in the country.

The employed population4 declined by 2.4 per cent to 7.998 million in the first half of 2020 compared to 8.193 million recorded in the corresponding period of 2019. This decline was led by both industry and services sectors, as an increase in employed population was observed in the agriculture sector. Within the industry sector, declines in employed population were observed across all sub-sectors namely, mining and quarrying, manufacturing and construction, electricity, gas, steam and air conditioning supply, water supply, sewerage, waste management and remediation activities, while within the services sector prominent declines in employed population were observed in wholesale and retail trade, repair of motor vehicles and motorcycles, administrative and support service activities, and public administration and defence, compulsory social security sub-sectors. These declines in employment in industry and services sectors were also reflected in the employment indices of manufacturing and services purchasing managers’ index surveys conducted by the Central Bank of Sri Lanka in the first half of 2020. Meanwhile, continuing the trend observed in the recent past, the services sector, which accounted for 46.2 per cent of the total employment, remained as the foremost employment generator followed by the industry and agriculture sectors contributing to 27.0 per cent and 26.8 per cent of the total employment, respectively, during the first half of 2020. yy In terms of the status of employment, the employed population in all categories declined during the first half of 2020 compared to the first half of 2019. With regard to employment status, the employed population is categorised into two major categories, namely, waged and salaried workers (employees) and the self-employed.

The employees category is further categorised into public sector and private sector, while the self-employed category is categorised into employers, own account workers and contributing family workers. Among these categories, a prominent decline was observed in private sector employees followed by public sector employees.

Nevertheless, with the government programme to provide jobs for 60,000 unemployed graduates and for 100,000 persons in the lowest strata of income earners in Sri Lanka with the objective of eradicating poverty, in line with the government policy declaration enunciated as “Saubagyaye Dakma”, public sector employment is expected to increase during the second half of the year.

In line with the decline in the employed population, the unemployed population increased significantly by 14.8 per cent to 0.471 million during the first half of 2020 compared to 0.410 million in the corresponding period of the previous year attributable to the negative impacts of the COVID-19 pandemic. This increase in the unemployed population was mainly driven by unemployed females who contributed to 58 per cent of the total increase 4 70

Accordingly, the increase in unemployed females was recorded at 16.0 per cent, while the increase in unemployed males was recorded at 13.4 per cent during the reference period. yy In line with the increase in the unemployed population,5 the unemployment rate increased to 5.6 per cent in the first half of 2020 compared to 4.8 per cent recorded in the first half of 2019. Accordingly, the unemployment rate of females increased significantly to 8.9 per cent in the first half of 2020 from 7.2 per cent in the corresponding period of the previous year.

The unemployment rate of males increased to 3.9 per cent in the first half of 2020 from 3.4 per cent in the corresponding period of the previous year. yy Unemployment rates among all age categories increased during the first half of 2020 compared to the same period of the previous year. It is noteworthy that among these age categories, youth (aged 15-24 years) unemployment, which continued to remain at a high level, increased substantially to 27.3 per cent during the first half of 2020 from 20.8 per cent in the corresponding period of the previous year. Moreover, unemployed youth contributed to 98 per cent of the total increase in the unemployed population. More than a quarter of the youth labour force being unemployed bring to the surface the issues related to underutilisation of the most productive human capital towards the economic growth of the country. 5 Persons available and/or looking for work, and who did not work and took steps to find a job during the last four weeks and are ready to accept a job given a work opportunity within next two weeks are said to be unemployed. yy In terms of education level, unemployment rates increased among all educational categories during the first half of 2020 compared to the corresponding period of the previous year.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *


Courtyard by Marriott to debut in Sri Lanka



Marriott International is set to introduce the Courtyard by Marriott brand to Sri Lanka, this year. The hospitality giant has signed an agreement with Colombo City Centre Partners (Private) Limited, part of the Abans Group, for this 164-key hotel, expected to open in late 2021, – according to Business Traveller India.

Located in the heart of Colombo city adjacent to the Beira Lake, Courtyard by Marriott Colombo will feature 164 modern guest rooms and suites. The rooms will be equipped with functional work area, smart amenities, and high-speed internet access, making it an ideal stay option for business and leisure travellers, the Indian magazine stated.

There will be two dining venues – an all-day dining restaurant serving a combination of western dishes, Asian favourites and a host of local delicacies as well as an adjoining Lobby Lounge decked with a full-service bar and a quick-bites menu.

Other amenities include a 24-hour fitness centre, an outdoor swimming pool and three meeting rooms.

Rajeev Menon, president, Asia Pacific (excluding China), Marriott International said:

“We are delighted to strengthen our Marriott Bonvoy portfolio of hotels in Sri Lanka with today’s signing. The signing underscores our long-term commitment to Sri Lanka as a strategically important market, offering the potential to grow our brands and provide customers with more choices.”

Kiran Andicot, regional vice president – Development, South Asia, Marriott International commented, “We are very pleased to collaborate with Abans Group, who share our vision to offer smart, intuitive service and high-quality accommodation in Sri Lanka.”

Further elaborating on the collaboration, Aban Pestonjee, chairperson of Abans Group said:

“We are happy to have forged this strategic business alliance with Marriott International and are keen to see our relationship grow from strength to strength. We eagerly look forward to the opening of the first Courtyard by Marriott Hotel in Sri Lanka. We are excited to have Marriott International with us at Colombo City Centre.”



Continue Reading


Virtusa appoints Santosh Thomas as CEO



Virtusa Corporation, a global provider of digital strategy, digital engineering and IT services and solutions that help clients change and disrupt markets through innovation engineering, yesterday announced the appointment of Santosh Thomas as its new Chief Executive Officer (CEO).

Virtusa’s Board of Directors appointed Santosh as successor to the company’s founder, Kris Canekeratne, who announced his transition from the business in May 2021. Santosh joins Virtusa during a time of significant growth and follows the recent appointment of Sander van‘t Noordende to the position of Chairman of the Board of Directors.

Santosh brings more than 20 years of leadership and industry experience to Virtusa. Most recently Santosh served as President of Global Growth Markets at Cognizant where he managed a business with revenues over $4 billion and built multiple billion-dollar businesses in Europe and Asia Pacific in Banking, CommTech and Products & Resources.  In his new role, Santosh will help Virtusa drive growth in key markets and continue to be recognized as an employer of choice.

“On behalf of the entire company and the Board of Directors, I would like to thank Kris for his more than two decades of leadership,” said Sander van‘t Noordende. “I would also like to welcome Santosh who brings a stellar track record of client service, leadership, and proven success. Santosh has the vision and experience to take Virtusa’s deep heritage in digital engineering to new levels of growth.”

 “I am deeply honored to join Virtusa at this exciting time for our employees, clients and partners,” said Santosh Thomas. “I have admired Kris and Virtusa for fostering a culture of innovation and distinguishing itself as a global leader in helping customers tackle their unique digital transformation challenges. Virtusa has a great brand reputation, an impressive roster of strategic partners, and is well positioned for sustained growth.”

“When I founded Virtusa 25 years ago I had a vision to build a global powerhouse in digital engineering services. And we did just that,” said Kris Canekeratne. “I leave with the confidence that the company and its leadership team have never been stronger and its opportunities have never been greater. I welcome Santosh Thomas to the CEO role and wish him the best in his efforts to lead Virtusa through its next phase of growth.”

Also announced yesterday, Denise Warren has joined Virtusa’s Board of Directors and has been appointed Chairperson of its Audit Committee. Ms. Warren recently retired from her position as Chief Operating Officer (COO) of WakeMed Health & Hospitals, and serves on the boards of Brookdale Senior Living, Computer Programs & Systems Inc., and Rockroom Insurance Group. 



Continue Reading


No double standards please, on govt’s vehicle import ban: CMTA



Meanwhile, on June 9, The Island published its front page lead story ‘Covid time bonanza: Luxury SUVs for MPs coming after all- LCs opened before Cabinet rescinded its own decision’.

The Ceylon Motor Traders Association (CMTA) has expressed its concerns on the decision the government has taken to import 400 vehicles – including 227 luxury SUVs – to a value of Rs. 3.7 billion through the Bank of Ceylon. The Government reversed its earlier decision to cancel the order, citing the fact that the Letters of Credit (LCs) had been already opened and “as the opening of Letters of Credit meant guaranteed payment, Sri Lanka faced the prospect of being blacklisted if a unilateral decision was taken” as per Minister Keheliya Rambukwella’s explanation to the press.

The CMTA notified the government of the same issues and repercussions on international trade as a result of unilaterally dishonouring 216 LCs of its members that had been opened prior to the import ban in March 2020. Totalling Rs. 5.2 billion, these include a considerable number of vehicles ordered by permit holders such as doctors and government officials who are at the forefront fighting the pandemic, some of whom had already sold their existing vehicle, anticipating their new vehicle to arrive shortly. Is it fair to keep these permit holders on hold indefinitely while new luxury SUVs are imported for MPs during the import ban?

Due to these LCs being dishonoured, a total of more than 14,000 vehicles comprising 10,780 Motorcycles, 2640 trishaws and 537 Cars specifically ordered for Sri Lankan market conditions were prohibited from being imported.

The vehicle import ban imposed last year has taken a toll on vehicle buyers by constricting the market at a time when the need for personal transportation is more acute. To make matters worse, the resulting imbalance of demand vs. supply has caused prices of used vehicles skyrocket within a short time span, and has led to unscrupulous activities at the expense of the consumer, such as odometer tampering.

Speaking on behalf of the CMTA, Chairman Yasendra Amerasinghe said, “Considering the rampant increase of COVID-19 cases at this time, with various potent variants of the virus spreading throughout the island, personal mobility represents the safest option for citizens who have no choice but to travel. The CMTA very much agrees with Minister Rambukwella’s statement that cancellation of confirmed LCs will affect the credibility of our banks and country. We strongly urge the government to apply the same standard to LCs for vehicles for government servants including doctors, and the general public as it has applied for luxury SUVs for MPs. We hope that there would be no double standard.”

Furthermore, the CMTA mentioned that it had been reminding the government of a proposal for Quota that It had submitted in March, at the request of the President’s Secretariat, to which no response had been given. This proposal was based on a minimum volume of vehicle imports for the industry to survive until the import ban is lifted.

Concerns were also raised as to how this purchase had been carried out without an open tender, with queries as to whether it complies with government procurement guidelines.

Founded in 1920, the Ceylon Motor Traders Association (CMTA) is affiliated to the Ceylon Chamber of Commerce and is widely accepted as the voice of the Sri Lankan Automotive Industry.

Continue Reading