Countries should increase public and private investment in labour-intensive economic sectors that generate wider benefits for society
According to generally accepted economic theories and their practical application, boosting economic growth has been seen as the best way to create job opportunities and raise living standards of people.
However, the growth is decelerating in Europe, the United States, China, Japan, and other leading economies, as the International Monetary Fund and World Bank recently highlighted by revising their global forecasts substantially downward. Sri Lanka is no exception.
Further, the development economists and social scientists know that economic growth alone is not enough to reduce the increased inequality and insecurity accompanying the transformation of work.
Moreover, high debt levels, low ratio of exports to GDP, vulnerability of our traditional export of textile & garments and foreign exchange from travel & tourism revenue etc. have left policymakers with fewer traditional tools to stimulate the economy.
Inclusive growth models and labour-intensive industries
Since we have to live with the COVID-19 pandemic, the government would now look at it slightly different and focus more on livelihood development and better equipping their employable work force and its people. We need to navigate the world of work, in an age of rising automation, stagnant wages, and greater part-time, temporary employment, thereby we could effectively boost the inclusive growth and economic development to improve purchasing power of the working population.
The International Labour Commission recommended three practical steps – all of which involve investing more in people – that countries can take to improve social inclusion and economic growth simultaneously.
Investing more in people is not only essential to strengthen countries’ social contracts with citizens at a time of rapid technological change. It can also form the basis of a new, more ‘people centric’ growth and development model that may be the best hope for sustaining the economic development.
First, countries should increase public and private investment in their peoples’ capabilities, which is the most important way they can durably lift their rate of productivity growth. Sri Lanka must take a bold decision in order to reverse the negative trend of under investing in access to quality education and skills development. The commission called on countries to build a universal framework to support lifelong learning – including stronger and better-financed labour-market training and a universal social-protection floor.
Second, governments, together with employers’ and workers’ organizations, should upgrade national rules and institutions relating to work. These influence the quantity and distribution of job opportunities and compensation, and thus the level of purchasing power and aggregate demand within the economy. All workers, regardless of their contractual arrangement or employment status, would enjoy an “adequate living wage” as defined in the ILO’s founding constitution 100 years ago, and health and safety protection at work.
Third, countries should increase public and private investment in labour-intensive economic sectors that generate wider benefits for society. As for Sri Lankan situation, these include tea, rubber & coconut plantation sector, the rural economy, and education and training.
Developing the plantation sector- extracting a gold mine
Sri Lankan plantation sector has a tremendous potential in contributing to the national economic growth and enhancing the purchasing power of the people.
Due to concerns on declining tea and rubber production, we need to focus more on sustainable agricultural practices and other development programs of estates through infusion of increased investments/management inputs in order to implement an accelerated program: to increase raising planting materials, to establish nurseries, model tea gardening with drip irrigation, mechanization & appropriate technology, undertake re-planting, crop diversification, agro- forestry etc.
It appears that the plantation industry presently owned and managed by state owned institutions, RPCs, and tea & rubber small holders have not been able to adapt mitigating strategies for resilience to climate change effects to practice integrated total quality management and productivity enhancement. The writer is of the view that the potential to earn higher foreign exchange and net financial returns through optimum utilization of resources - environmental resources including human resources has not been harnessed properly.
Consequently, the role of the ‘conventional large plantations’ is gradually becoming insignificant - other players thus becoming major contributors to foreign exchange earnings and employment creation. There is a need to migrate into a new economic & business model aligning with national economic and social well-being priorities, whilst making reasonable financial returns for the businesses on a sustainable basis.
It has become necessary to promote ‘high quality’ plantations, improve sustainable agricultural practices such as use of precision agriculture technology, reducing chemical fertilizers, protecting biodiversity and technological advancements in manufacture etc.
The government could provide necessary incentives and encouragement in the following two important areas of developmental activities:
1. Move up in the global value chain in core crops such as tea and rubber and/or diversification into other crops such as cinnamon, coconut, coffee, commercial forestry, other fruit and vegetable cash crops must be encouraged by the authorities.
2. Youth/worker empowerment through skill development and career development to mitigate labour shortage and deploy youth on productive work.
As for the second point, it is important to ensure ‘dignity’ for the estate youth and small holder. This could be done by empowering them through providing opportunities and many facilities such as;
Creating additional monthly income sources for estate youth in areas such as dairy farming, fruit & vegetable, horticulture, compost manufacturing plants, tree planting, many other vocations and interesting jobs to earn money, provide vocational training for landscaping & gardening, chefs, drivers, security, sales reps etc.
Government could provide Qualified teachers for science and computer studies and schools to have science labs and technical& vocational training classes, standard library facilities, knowledge and interest of ‘scout services’. This will even eliminate use of ‘drugs’ among the school children and increase of alcoholism’ in estates.
Estate management to provide more opportunities to have access to participate in sports & recreation, Social clubs, training centers for cultural activities (Ex: dance, yoga, music & singing).
Provide access to banking facilities for continuing higher studies and efficient public service to obtain Identity cards, passports, driving license etc. estate management would arrange providing educational & training facilities for ‘Household cash management system’ in the families.
Re-designating their jobs; say for an example; Pruning machine operators, mechanized male harvesters etc. without treating them as a ‘laborer. hold national level ‘Competitions’ to motivate productive employees to recognise their expertise and talent.
By empowering estate youth, we could meet their aspirations, solve their problems including Youths’ habit of purchasing ‘three wheelers’ with their parents’ provident fund, gratuity money without thinking about other job opportunities to improve quality of life etc.
Way forward, inclusive growth model
A decade ago, leaders of G20 countries pledged to build a more balanced and sustainable growth model that embodied lessons from the economic imbalances and policy mistakes of the past. According to an ILO study, the world has since made little progress toward realizing this goal. But the path it must take is clear: sustained, increased investment in people’s capabilities, purchasing power, job opportunities and above all we must have ‘inclusive economic institutions.
The Chinese success story and the contrast of South and North Korea, and of the United States and Latin America, illustrate a general principle. Inclusive economic institutions foster economic activity and productivity growth. Sustained economic growth is always accompanied by technological improvements that enable people (labour), land, and existing capital to become more productive.
Plantation industry in Sri Lanka could also follow this inclusive growth model to create job opportunities and raise living standards of people. Government and the private stakeholders must initiate a dialogue without delay.