COLOMBO: The clock is ticking fast for Sri Lanka to take advantage of its ‘demographic dividend’ and get young people to participate in the country’s economic future — before ageing hits the population in the next 25 years.

Demographers say that over the next 25 years, the share of Sri Lanka’s over-60 population will double from about ten to 20 per cent when a similar occurrence can happen in countries like France and the United States only after a century. “This unprecedented speed of ageing is driven by a rapid decline of fertility coupled by a strong increase of life expectancy, which, over last 40 years, occurred much faster than in the rest of the world,” according to a World Bank (WB) study.

The demographic dividend is a rise in economic growth due to a rising share in people of working age within a population. This usually occurs when the fertility rate falls and the youth dependency rate declines and was said to be the main factor in the emergence of the East Asian Tigers.

For Sri Lanka the dilemma is that while the country desperately needs to mobilise its youth for productive work in the next few decades, youth unemployment here is the highest in the region. Time is running out for Sri Lankan youth — too many stay at home while the government desperately searches for solutions.

“The world is facing a youth bulge, where the 12-24 age group is larger than ever. Some see this as a fiscal and economic risk because governments have to allocate a lot of resources to take care of them. But this is also an opportunity because of the increase of workforce, creating an opportunity to invest in other things. However, this window of opportunity is open only for about 40 years depending on fertility rates, and then ageing will close this window,” notes the country director of the WB in Sri Lanka Naoko Ishii.

Speaking at the launch of the Bank’s latest World Development Report, titled ‘Development and the Next Generation,’ Ishii said: “In countries like Japan and Italy this window of opportunity closed about a decade ago. In developing countries like India and Bangladesh the window will remain open for another three decades. In Sri Lanka the window of opportunity will close within a decade. So you must seize this opportunity quickly,” she said. Currently, Sri Lanka has some 20 million people, a number that is expected to grow and stabilise at 22 million people after 40 years.

A 2006 WB study carried out at the University of Colombo found that college graduates typically waste several years at home before finding jobs — less than 20 per cent find jobs in the first four years after leaving university.

Startling as the statistics may be, the Youth Employment Network (YEN) under the ministry of youth affairs has got cracking with a programme — with the support of President Mahinda Rajapakse — that aims to cut youth unemployment to nine per cent of the workforce from 22 per cent in 2005. The ratio of youth unemployment in the workforce is much higher than with other age groups.

Deepthi Lamahewa, chief of YEN, said the government has approved a youth action plan which would be steered by a cabinet sub-committee, chaired by Rajapakse himself, as the government sets its eyes on creating avenues (through the public and private sectors) for 2.4 million jobs over the next six years.

The task would be coordinated by a national youth employment secretariat. Lamahewa says the action plan involves creating an employable youth force, creating opportunities, generating an entrepreneurship culture and changing the attitudes of society towards private-sector jobs.

“One of the biggest problems is that most poor but qualified youth want government jobs even if there are better paying jobs in the private sector — because state-jobs provide pensions, job security and entail less strenuous work,” Lamahewa said.

YEN says unemployment is highest amongst qualified young people. “There is a high degree of educated youth unemployment. Nearly 50 per cent of the unemployed have attained GCE ordinary level or higher education. For youth with an advanced level qualification the unemployment rate is 25 per cent,” said Lamahewa.

WB experts say that despite an open economy, jobs are still dependent on ‘connections’ rather than qualifications. Political and family connections are still extremely important in getting a job in Sri Lanka.

“Some 64 per cent of young workers reported that they were recruited through recommendations of their friends and relatives. These contacts were often based on social and family networks including ‘old boy’ school networks. The need for connections was more deeply felt for employment in the private sector, where the correct social connections and a shared cultural ideology were seen as basic requirements,” WB senior social protection economist Milan Vodopovic was quoted as saying at the WB workshop where Ishii was also present.

The WB study at the Colombo University revealed that graduates from lower socio-economic strata find it more difficult to get jobs. “So there is still use of contacts to get jobs when we would rather see more merit-based hiring,” said Vodopovic.

The WB says ad hoc government recruitment, like graduate recruitment campaigns, although providing jobs, indirectly adds to youth unemployment.

Vodopovic said government ad hoc recruitment policies also contribute to queuing and thus to unemployment. Queuing means waiting for a ‘proper’ job to turn up. Government jobs are generally considered more stable with generous fringe benefits. Thus when governments have a track record of absorbing large numbers of unemployed, parents and young people wait for these government jobs instead of looking for jobs elsewhere. Young people even quit the jobs in the private sector to join the public service, although successive governments have repeatedly said they would prune down the state sector and hand over most of the non-essential functions in the economy to the private sector. Coupled with an ageing population, Sri Lanka is facing a major crisis. Prof. Indralal De Silva, one of Sri Lanka’s population experts, says other populations age when their economies are prosperous, but here there is rapid growth while economic prosperity is down. “We have an ageing population that would be a burden on the country.”

Cuts in the government’s social programmes will deny comfort to the aged, he says. Although the country has several security systems, these do not adequately cover the needs of the elderly at retirement, say other economists, who add that the retirement benefits currently available cover only about half of the elderly because most employment is in informal activities.—Dawn/The IPS News Service