Economists say Sri Lanka’s aging population could be a speed breaker to Sri Lanka’s post war growth. The Labour and Social Trends in Sri Lanka 2009 report, notes that Sri Lanka’s economic growth will keep dropping, unless steps are taken to counter impacts of the aging population on the economy.
“If the current trends continue into the future, and the labour force growth slows because of demographic reasons, the average GDP growth rate can drop to 3.6% between 2009 and 2020, which is a slowdown compared to the historical average of 5%,” said an economist from the Economic and Labour Market Analysis Department of the International Labour Organisation (ILO), Steven Kapsos, speaking at the launch of the Labour and Social Trends in Sri Lanka 2009 report, this week.
The Labour and Social Trends in Sri Lanka 2009 report, is a joint report by Sri Lanka’s main national data collection agencies, the Department of Census and Statistics and the Central Bank, and the Ministry of Labour Relations and Manpower. The report was produced with technical and financial support from the ILO.
Old aging catching up
Available data indicates that Sri Lanka’s working age population will stagnate over the next 10 years, and the growth of the country’s labour force will slow down much more than in other Asian countries. Meanwhile, the older, non working age population is expected to increase. Between 2009 to 2020, the child population ( 0-14 years) is projected to grow by around 100,000 (2%), the youth population (15 – 24 years) is projected to shrink by 300,000, the working age population (25- 54 years) will increase only very slightly, while the over 55 years population is projected to increase by 1.7 million (45%).
“Policy planners need to take these factors into consideration when developing national policies for the future,” said the Director General of the Department of Census and Statistics, S Vidyaratne.
Plan for it
However, economists say Sri Lanka can adjust to continue high growth and counter impacts of the aging population. This includes generating more jobs, getting more working age people to go out and work and increasing productivity.
At the moment Sri Lanka has one of the biggest gender-based gaps in the labour force participation in Asia. The labour force participation rate is 38% for women and 76% for men. Economists say that barriers to women working, should be addressed, allowing more women to work. This is expected to help sustain economic growth.
The country can also tap the peace dividend to accelerate growth and investments in infrastructure are considered vital for growth. Focussing on improving agriculture is also seen as a good idea, as a large share of Sri Lanka’s population is dependent on agriculture.