Financial Times

World Bank suggests extending service of country’s ageing workforce

The World Bank says unless the country's large ageing work force is allowed to work longer in the light of the prospects of a shrinking labour force, Sri Lanka could find it extremely difficult to support a large elderly population with a weak economy. Sri Lanka will face a massive social challenge to provide income, health and other types of support to its elderly population in just over two decades, says a new World Bank report.

Outlining the needs of an ageing population at a media conference held in Colombo recently, Milan Vodopivec, Lead Social Protection Economist, World Bank said that the percentage of Sri Lankans who are older than 60 is expected to increase from 11 to 16 % within the next 12 years and 29 % by 2050. The country’s population will grow to be as old as ageing populations in Europe or Japan’s today, but will have much lower income levels, posing a massive social challenge to provide services to its elderly population, he said.

He noted that in the light of the prospects of a shrinking labour force, policy recommendations should thus include action to increase labour market supply, labour productivity, and the choices of old people. To meet the prospects of a shrinking labour force, the World Bank report suggests the improving of choices of old workers, allowing formal sector workers to work longer as well as allowing informal sector workers to withdraw from the labour market if they wish to do so, rather than being forced to work until health reasons prevent them to stay active.

“Sri Lanka will need to take appropriate policy measures in advance so as not to slow down economic growth, minimize impact on public health and pension spending and reduce the burden on families,” said Naoko Ishii, World Bank Country Director for Sri Lanka. “Investing in healthy and productive aging is essential– and specially, given the speed of population ageing, inaction is not a viable alternative
Under the support for informal care arrangements the report suggests expanding social welfare and care services targeted to the most vulnerable, providing community-and home-based support services for the sick and frail old people, as well as increasing the capacity of nursing homes to care for old people.

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