A great achievement

Sri Lanka's economy has been resilient enough to withstand the global economic downturn and the massive defence expenditure and still record considerable growth. The Government's prudent economic policies are responsible for this in no small measure. In fact, both the International Monetary Fund and the Asian Development Bank have recognized the Sri Lankan economy's potential in boosting aid to the country.

In the backdrop of these development comes the good news that the country's unemployment rate has decreased drastically to just 5.2 percent, from 16 percent in 1990 in spite of the twin challenges posed by the global economic recession and the North-East war. With the latter taken care of, we now have to contend only with the global economic crisis. Thus there is every possibility that the rate could go down further.

The Government has cited several reasons for this performance. State mechanisms on alleviating poverty, minimizing unemployment and boosting the education and health sectors have contributed directly to the gradual decline in unemployment. The rate stood at 7.7 percent in 2005, 7.5 percent in 2006, 6 percent in 2007.

It is significant that the Samurdhi poverty alleviation program is not a simple 'dole' system as seen in many countries. Samurdhi recipients are directed towards self-employment and self-reliance. Instead of perpetuating a vicious cycle of poverty, the program uplifts the recipients' economic conditions and guides them towards proper livelihood avenues. This has led to a reduction in poverty and unemployment levels.

Boosting education and health has also led to the opening of more job opportunities in these sectors. Thousands of new teachers, nurses and health workers have been recruited islandwide. These sectors are expanding at a considerable rate and the employment potential is immense.

Graduate unemployment was a serious problem some years ago. This was compounded by a decision taken by a previous Government to freeze State sector recruitment. Fortunately, this Government has rectified this colossal mistake. Since 2004 up to now, 57,764 graduates have been granted Government jobs, not only in teaching and health professions but also in a gamut of other sectors.

One of the biggest problems facing graduates is that many of them cannot match the requirements of the private sector job market. The private sector advertises thousands of new jobs every week, but there are only a few takers. This is a pathetic situation. The graduates should develop more skills, including English language proficiency, to be eligible for most private sector jobs. The authorities should tailor school and university curricula in such a way that they address the needs and concerns of the job market. This will pave the way for more graduates to work in the private sector.

The newly-liberated Northern and Eastern Provinces have to be developed anew. The Government has formulated two programs 'Northern Spring' and 'Eastern Resurgence' - for this purpose. The massive reconstruction and re-development effort now underway in these provinces will require a vast amount of manpower. The services sector too should gear itself for expansion in the North and the East. These will have a direct bearing on employment creation.

More investors are likely to commence ventures in all parts if the country including the North and the East, in the aftermath of the defeat of LTTE terrorism. The authorities are already conducting roadshows in major world capitals to attract more investors, including members of the Sri Lankan diaspora. The Board of Investment must encourage more of them to reach out to the provinces, where more jobs need to be created. This will also help reduce the disparities between the Western Province and other provinces in terms of development, employment and quality of life.

With more than 1.4 million Sri Lankans employed abroad, foreign employment has become a mainstay of the economy. They remit billions of dollars to the country every year, helping to boost the economy. Sri Lanka should aim to send more skilled workers, who can command higher salaries, to foreign job markets while minimizing the number of unskilled workers and domestic aides.

The Bureau of Foreign Employment and other authorities must also look for new labour markets as the Middle East is nearing saturation point. One example is the opportunity available for nurses to work in the United States.

Peace - and the unprecedented international backing for the Government's reconstruction drive - will undeniably be a catalyst for the economy. The absence of conflict will lead to a resurgence in the economy and to the re-integration of Northern and Eastern economies. An expanding economy is good news for unemployed youth as more employment opportunities will be created in manufacturing, goods and services sectors. More concessions and incentives are likely to be granted for self-employment and small and medium enterprises. Judging by the growth prospects so far, next year's unemployment figures should be even lower than the present rates as the economy surges forward.