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Trade union strikes causing a stroke in economy

16 August 2018 12:00 am - 0     - {{hitsCtrl.values.hits}}


Sri Lanka has been a country repeatedly hit by trade union strikes and street protests for past few years. Labor is one of the key factors that drive economic growth, in addition to capital. There are more labour-intensive industries than capital-intensive industries in Sri Lanka. Hence, the country cannot bear any kind of shock in its workforce.

The apparel industry was set up in Sri Lanka mainly aiming at the educated and cheap labour available at that time. In other words, the quality of the workforce has been a key factor that attracts even foreign investors into the country over the decades. Even today, the country doesn’t have any other thing to put forward in its economic journey except for the natural resources and human resources. However, continuously taken trade union actions, street protests and lack of required training and skills can be clearly identified as factors that bottlenecks in the labour market, hampering economic growth. 

The right
While the right to join a trade union of choice is accepted as a fundamental right to the freedom of association by the law in Sri Lanka, they are subject to any restrictions as prescribed by law in the racial and religious harmony or national economy. However, fundamental rights don’t include the right to strike, meaning that no one has a legally accredited right to be on the strike because exercise and operation of all the fundamental rights declared in the constitution are subject to restrictions prescribed by the law in the interest of national security and protection of public health and morality, for the purpose of securing the rights and freedom of others. In simple, no one can exercise their rights by violating the rights of others. 

Economic cost
These kinds of trade union actions and street protests bring on an enormous economic cost that directly and indirectly delays economic growth of the country. A high rate of economic growth cannot be achieved without producing more goods and services locally. Nevertheless, when people are frequently on the streets, agitating against various things, many of which are politically motivated, they waste their as well as others’ time, which could have been used for development. 

When the recent railway strike is taken into consideration, it is needless to say that how many people from all walks of life were badly and inhumanely affected. The train commuters found it difficult to continue their day-to-day activities, due to this trade union action. 

More money will not resolve the problems faced by the public servants, as a country’s inflation is on the rise, resulting in a money illusion. These economic problems can be solved only by high level of production for which all the citizens must work hard. 

On the other hand, this has a spillover effect on the private sector as well, when the private sector employees also become victims of these trade union actions. Hence, the economic cost of strikes must be taken into account by the policymakers as well as trade unions. 

Furthermore, this is an era when the country is in dire need of foreign direct investment to boost the economy. When the labour force quality is at stake, they will not invest in labour-intensive industries, which account for a larger share of the economy. 

It is not fair to note that the employees should refrain from taking trade union actions, as they have been able to get some viable reforms implemented for the sake of development. Suggestions submitted in this regard should be moderate enough, in order that democracy and economic growth can be achieved at once. 

From July strikers to date, Sri Lanka has a very dark memory of strikes in the history. Even though ad hock remedies were presented for ironing out difficulties temporarily, the economy was dragged backward by this problem over the years. 

Early warning is something very ethical prior to a strike. Just because people are hurt doesn’t mean that the grievances will be sorted out. Undoubtedly, the frequency of strikes must be slow. On the other hand, the strikers’ objectives should be genuine without getting politically motivated. Then, equality can also be ensured for both parties. 

In conclusion, the economic cost caused by strikes and agitations not only has a considerable impact on the economy but also gets the economic image tarnished by foreign investors. Consequently, the situation should be somewhat mitigated in order to achieve economic development.
(Amila Muthukutti is an economist)  

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