Connect with us

News

Sri Lanka caught in low-productivity trap: IPS

Published

on

ECONOMYNEXT —Six consecutive quarters of negative economic growth in Sri Lanka has led to lower wage rates and discouraged workforce participation and skill development, lowering productivity levels and creating a low productivity trap, the Institute of Policy Studies (IPS) said.

Real wages also decreased after high inflation following the 2022 currency crisis.

At a recent discussion, IPS researchers said the negative growth recorded up to the third quarter of 2023 which had a direct impact on the labour market and the resultant “low productivity trap” has hampered further economic recovery.

The discussion held at the launch of the institute’s State of the Economy 2024 report focused on issues within three key aspects of Sri Lanka’s economy: the education sector, labour market, and public sector.

IPS Research Officer Suresh Ranasinghe noted that, between 2018 and 2023, Sri Lanka’s labour force participation rate fell from 51.8 percent to 48.6 percent, while the employment-to-population ratio dropped from 49.5 percent to 46.3 percent. According to Ranasignhe, some of the main issues within Sri Lanka’s labour market include rising labour market inactivity, declining labour productivity and employment growth, and declining high-skilled employment.

“While all three sectors – agriculture, industry, and services – observed negative average labour productivity from 2018 to 2023, the ICT sector stands out, with the highest output per worker.”

IPS said in a statement on Tuesday October 15 that the discussion had focused on the need to invest in technology, infrastructure, and skill development, particularly within the agriculture sector. Given the ICT sector’s high productivity, recommendations included offering VAT exemptions and bridging the existing skill gap within the sector through targeted interventions.

“Only 20 percent of the total workers held high-skilled jobs in 2023, a decline from 23 percent in 2018, mainly due to a decrease in the share of Managers, Senior Officials, and Legislators,” said Ranasinghe.

One potential reason for this decline was the emigration of high-skilled workers during the pandemic and economic crisis, as they sought better wages abroad due to declining real wages in Sri Lanka. To retain the remaining high-skilled workers, the importance of providing competitive salaries and benefits was pointed out by speakers at the event.

“In the long term, expanding knowledge-based industries, supporting persistent professional development, and revising public sector policies are important to foster high-skilled employment.”

Rationalising public sector employment was also a point of discussion at the event.

Sri Lanka’s public sector accounts for 15 percent of total employment and 35 percent of formal employment, while it consumes 26 percent of public expenditure and 5 percent of GDP, said IPS. Notably, public sector employment has increased by about 60 percent since 2005. However, “Sri Lanka’s government performance is considered ‘poor’ as per the Worldwide Governance Index (WGI), with the government effectiveness being negative 0.65.”

“The rise in inactivity, particularly among youth, is likely linked to education disruptions. To tackle this, the session highlighted the importance of promoting and improving the quality of Technical and Vocational Education and Training (TVET), focusing on access for vulnerable youth and improving public perceptions, as well as supporting entrepreneurship initiatives to create sustainable employment opportunities,” IPS said in its statement.

IPS Research Fellow Lakmini Fernando discussed the importance of improving public sector efficiency. She noted how government expenditure has a declining trend (47 percent decline from 1990 to 2023) while spending on wages remains stable (5 percent). While high government expenditure crowds out investments, it lowers prospects for growth. Fernando recommended introducing a new public management approach, which provides an immediate pay rise while ensuring the right size of the public sector. An effective public sector is essential for improving education planning and enabling strategic interventions in the labour market, she said.

Overall, Fernando noted that improving administrative operations, downsizing the sector, and addressing barriers that lead to policy failures were important. A debate ensued during the Q&A session on downsizing the sector and whether or not the public sector deserves a pay rise.  “The minimum monthly wages of all types of public employee levels are below the expenditure benchmark of LKR 68,056,” said Fernando, suggesting that to ensure successful policy implementation, the government needs to create an environment that supports adopting changes.

The institute also noted that education equips individuals with the knowledge and skills necessary for a productive and competitive workforce and fosters creativity and problem-solving abilities essential for driving innovation and technological advancements.



News

Ampara District special Coordination Committee meeting chaired by the President

Published

on

By

President Anura Kumara Dissanayake stated that a Special Committee, headed by the Deputy Inspector General of Police, will be established to protect lands in the Eastern Province.

The President highlighted that a number of issues have arisen in the region due to land grabs carried out through the misuse of political power, stressing that such practices will no longer be tolerated.

The President made these remarks while participating at the Special District Coordination Committee meeting in Ampara held on Friday (22) afternoon at the Ampara District Secretariat.

Drawing attention to coastal erosion affecting the Eastern coastline, the President instructed officials to develop a comprehensive plan to both protect the coastline and promote tourism in the region.

The President further noted that placing rocks and barriers is not a practical long-term solution to coastal erosion and instructed that urgent scientific studies be conducted to identify a sustainable and permanent solution, including consideration of the Oluvil Harbour and associated fisheries infrastructure.

Highlighting the tourism potential of the Eastern coastal belt, the President also stated that he had received reports of unequal treatment by public officials in the management of hotel operations in coastal areas and firmly instructed that such discrimination must not be allowed.

The President drew special attention to unauthorised land reclamation taking place in the Eastern Province and instructed the security forces to ensure that such activities are not permitted in the future.

Noting that 16 years have passed since the end of the conflict without a structured programme to resettle displaced persons in the region, the President instructed that urgent attention be given to developing and implementing a resettlement plan.

President Dissanayake further drew attention to the recurring flooding caused by the overflow of the Gal Oya, which affects several Divisional Secretariat areas including Ampara, Sammanthurai, Karaitivu, Addalachchenai, Kalmunai, Akkaraipattu, Irakkamam, Damana and Ninthavur. The President directed officials to conduct an urgent study to identify a permanent solution and confirmed that initial funding would be allocated for this purpose.

Discussions were also held regarding the current status of the Thirukkovil paddy storage facility and the continuation of operations at the Addalachchenai waste recycling centre.

Discussions were also held on the conservation of the Nuwaragala archaeological reserve and the development of tourism zones in Arugam Bay and Panama. Attention was further given to implementing a tourism development project in and around the Maduru Oya reserve, based on the indigenous villages in Henanigala South, Dehiattakandiya.

The committee also discussed restarting a drinking water project in the Lahugala area, which was initiated by the National Water Supply and Drainage Board approximately five years ago.

The President also paid special attention to the issues faced by sugarcane farmers in Hingurana. He noted that safeguarding sugarcane farmers within the industry is the responsibility of the relevant companies and stressed the need to engage in discussions on the emerging issues and reach an expedited solution.

Under the Kalmunai Urban Development Project, attention was drawn to the consolidation of all government institutions currently located in different places within the Kalmunai area into a single location. The President instructed officials to prepare and submit the relevant plans, noting that funding could be allocated in the forthcoming budget.

Discussions were also held on taking over and developing land with commercial value that had been allocated by the Sri Lanka Mahaweli Authority more than five years ago but where projects had not been implemented. The President directed that such lands be transferred to Divisional Secretaries or the District Secretary and developed under a structured programme for public benefit.

Discussions were also held on taking over and developing roads in the areas of Dehiattakandiya, Maha Oya and Padiyathalawa under the Road Development Authority and the Provincial Road Development Authority.

Special attention was also drawn to teacher vacancies in schools in the Ampara District and issues related to zonal education offices. The President emphasised that the establishment of administrative structures such as education offices and divisional secretariats is not a political exercise but an administrative function. He further stressed that such structures should be based on objective criteria such as geographical size and population, rather than ethnic considerations.

The President noted that LKR. 22,000 million has been allocated in the 2026 Budget for development projects in the Ampara District. Reviewing progress in ongoing projects in the sectors of roads, irrigation, drinking water supply and housing, he stressed that it is the responsibility of public officials to ensure that these funds are efficiently utilised within the relevant financial year to deliver timely benefits to the public.

The President also separately reviewed compensation and relief measures for the people of the Ampara District affected by Cyclone Ditwah, including compensation for loss of life, crop damage and losses in the livestock sector, as well as programmes for the fishing community, livelihood development initiatives and progress on partial and full housing damage compensation and resettlement programmes.

The President emphasised that the most affected by this disaster are economically vulnerable communities and therefore urged that housing construction and resettlement programmes be expedited without delay.

Co-Chairs of the Ampara District Coordinating Committee, Eastern Province Governor Professor Jayantha Lal Ratnasekera, Deputy Minister of Rural Development, Social Security and Community Empowerment, Wasantha Piyathissa, Members of Parliament, local authority Chairpersons and other public representatives, along with the Chief of Presidential Staff and Commissioner General of Essential Services, Prabath Chandrakeerthi, Defence Secretary Air Vice Marshal Sampath Thuyacontha (Retired), Ampara District Secretary Anupa Mangala Wickramarachchi and other government officials were present at the meeting.

(PMD)

Continue Reading

Latest News

Landslide Early Warnings issued to the districts of Colombo, Gampaha, Kalutara, Kegalle, Nuwara Eliya and Ratnapura

Published

on

By

The National Building Research Organisation [NBRO] has issued landslide early warnings to the Districts of Colombo, Gampaha, Kalutara, Kegalle, Nuwara Eliya and Ratnapura valid from 09:00 hrs on 23.05.2026 to 09:00 hrs on 24.05.2026

Accordingly,
LEVEL III [RED] landslide early warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Deraniyagala, Ruwanwella and Dehiowita in the Kegalle district and Ratnapura, Ayagama, Kuruwita and Eheliyagoda in the Ratnapura district.

LEVEL II [AMBER] landslide early warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Seethawaka and Padukka in the Colombo district, Attanagalla in the Gampaha district, Palindanuwara, Ingiriya, Bulathsinhala and Horana in the Kalutara district, Yatiyanthota in the Kegalle district and Pelmadulla, Kiriella, Kalawana, Nivithigala and Elapatha in the Ratnapura district.

LEVEL I [YELLOW] landslide early warnings have been issued to the Divisional Secretaries Divisions and surrounding areas of Divulapitiya and Mirigama in the Gampaha district, Mathugama and Agalawatta in the Kalutara district, Bulathkohupitiya in the Kegalle district, and Ambagamuwa in the Nuwara Eliya district.

,

.

Continue Reading

Latest News

Most people seeking green cards must now apply from outside US

Published

on

By

The US has announced a new policy that means most immigrants seeking a green card will have to leave the country and apply at an embassy or consulate abroad.

The US Citizenship and Immigration Services (USCIS) said on Friday that people seeking a change in status must do so through consular processing outside of the country “except in extraordinary circumstances”.

The move – a part of the Trump administration’s effort to curtail illegal immigration – closes a loophole that had allowed visa holders and visitors to apply for a green card while still in the US.

Critics of the policy say the longstanding system allowed families to stay together during the lengthy application process.

The new method could also make it difficult or impossible for some immigrants who leave the country in hopes of gaining a green card to return.

The USCIS policy memo states that people such as students, temporary workers or people on tourist visas need to go through the Department of State from outside of the US.

“When aliens apply from their home country, it reduces the need to find and remove those who decide to slip into the shadows and remain in the US illegally after being denied residency,” USCIS said, making the system “fairer and more efficient”.

On X, the Department of Homeland Security, which oversees USCIS, said: “The era of abusing our nation’s immigration system is over.”

“We’re returning to the original intent of the law to ensure aliens navigate our nation’s immigration system properly,” USCIS Spokesman Zach Kahler said.

“From now on, an alien who is in the US temporarily and wants a green card must return to their home country to apply, except in extraordinary circumstances,” he continued.

Kahler said the policy allows the immigration system “to function as the law intended instead of incentivising loopholes” and that visits “should not function as the first step in the green gard process”.

It is unclear whether pending green card applications will be affected.

A spokesperson for the USCIS told the BBC that as the policy is rolled out, “people who present applications that provide an economic benefit or otherwise are in the national interest will likely be able to continue on their current path”.

“Others may be asked to apply abroad depending on individualised circumstances,” it said.

Being a green card holder, or lawful permanent resident, allows a person to live and work permanently in the US. Obtaining one is a multi-step process that can take months to several years.

There are currently more than a million legal immigrants waiting for approval on their adjustment of status green card applications, according to the Cato Institute’s director of immigration studies.

Kahler argued that following the law allows the majority of cases to be handled by the US State Department at consular offices abroad and frees up USCIS resources to focus on processing other cases that fall under its purview – such as visas for victims of violent crime and human trafficking, naturalisation applications, and other priorities.

The move is consistent with longstanding immigration law and immigration court decisions, the agency said. Immigration officers are being directed to “consider all relevant factors and information on a case-by-case basis when determining whether an alien warrants this extraordinary form of relief”.

Michael Valverde, who was a senior official at USCIS under both Republican and Democratic administrations until his departure last year, said to the BBC’s US media partner CBS that Friday’s announcement would “disrupt the plans of hundreds of thousands of families and employers annually”.

“This is a largely unprecedented move that will limit lawful immigration to the US greatly,” Valverde said. “People who followed the rules faithfully now face tremendous uncertainty.”

The Trump administration has instated bans or restrictions on citizens from nearly 40 countries.

Another policy from the administration this year has paused all visa issuances to immigrant visa applicants from 75 countries.

Overstaying a US visa can lead to deportation, ineligibility for future visas and re-entry bans lasting up to 10 years, according to the US State Department.

[BBC]

Continue Reading

Trending