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Unemployment at second lowest level in five years

14 Jan 2019

By Madhusha Thavapalakumar Sri Lanka’s unemployment rate reached the second lowest level in five years as it recorded 4.1% in the 3Q of 2018, a 0.1% drop from the corresponding period in 2017, according to the Census and Statistics Department (CDS) data. The lowest level of unemployment in the past five years was recorded in the 4Q17 at 4%. Sri Lanka’s unemployment rate was 4.6% in the 2Q18 while it was 4.5% in the 1Q18. The YoY decline in private sector employment was 1.5% in 3Q18, which hints at a slowdown in the private sector growth, which is often referred to as “the engine of growth”. The Sunday Morning Business contacted the Department of Labor (DOL) to determine the reasons behind the declining trend in the number of both public and private sector employment, where the Commissioner General of DOL P.R.A. Wimalaweera said he could not comment on the public sector of the country but attributed the decline in the private sector to a number of factors. “The private sector employment rate has declined because we are not implementing sufficient macroeconomic policy measures. It is so difficult to set up and operate a business and we do not have adequate trade facilities and proper labour laws,” Wimalaweera said. He noted that the numerous bureaucratic headaches a person has to go through when setting up a business in Sri Lanka eventually discourages people and forces them to abandon their plans. Stressing particularly on the labour laws, Wimalaweera noted that several labour laws hindered the private sector growth and prevented Foreign Direct Investments (FDI) from coming into the country. “Labour laws are not very helpful for the private sector. We need proper active labour laws and working arrangements. he labour factor is really important to attract FDIs,” he added. He also noted that these challenges in the labour market required immediate implementation of measures as the country’s growth was dependent on the private sector. “The Government should address these issues soon because we need the private sector to drive the growth,” he said. Elaborating further on the reasons of the decline in the private sector employment rate, he noted that Sri Lanka had to implement prudent and sound macroeconomic policies, which would automatically attract both locals and foreigners to set up businesses in Sri Lanka. “We need sound macroeconomic policy measures. An enabling environment should be provided to the private sector, so that companies will choose Sri Lanka to set up their businesses,” he added. He also noted that the Government was responsible for providing a business-friendly environment which fostered the private sector and increased its productivity. “A business-friendly, investment-friendly environment should be created so that we can have a vibrant private sector,” Wimalaweera said. However, the overburdened public sector, which continues to be the first preference of a majority of graduates due to pensions and other benefits, dropped by 7.7% YoY in the 3Q18 but still marks above one million jobs.

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