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| Sunday, 13 February 2005 |
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Business |  |
| News Business Features Editorial
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More about aging and the economy by Lloyd F Yapa In one of the previous articles in this column there was a discussion about the aging of the population of Sri Lanka. The purpose of the present article is to discuss the effect of aging in the developed countries on the economy of this country. Aging in the developed world It is reported, for example, that by the year 2030, the ratio of the working population (those in the age group 20-64) to those over 65 would drop from 5:1 in the US to 3:1, from 5:1 in Japan to 2:1 and from 4:1 in Germany to 2:1. Implications - Opportunities What this means firstly is that the world's economic growth could slow down unless developing economies such as those of China, India and Brazil make a spurt and fill the vacuum created by the developed economies. If the former scenario were to unfold, world trade too could follow suit and exports from developing countries, such as Sri Lanka could meet with stiff competition, as markets contract. It has been stated several times in this column, that one of the very few ways in which small developing countries with small markets and with a small resource base could make the grade into the league of developed economies is by exporting manufactured goods and as well as services, which are differentiated to meet specific customer needs. Countries such as Singapore, Taiwan and South Korea have amply demonstrated this axiom. So the implication of the advancement of the aging process in developed countries is that this particular avenue of reaching prosperity for Sri Lanka could gradually reach a dead end, (unless the nation makes a drastic improvement in competitiveness and its exporters succeed in penetrating and nurturing other markets significantly). Another implication of the aging phenomenon is that the needs of this particular market segment, i.e. those over 65 in the developed economies, could be substantially different from the rest. Sri Lankan exporters along with the institutions vested with the task of promotion and development of exports therefore would do well to study such trends and adapt the goods and services they export at present accordingly. This is actually a -not -to be- missed opportunity, as focussing of value addition and differentiation of goods and services to be exported to special needs would enable exporters to earn premium prices. The labour shortages that will occur in the developed economies with the progress of the aging trend will open another opportunity of massive proportions for developing countries with rampant unemployment and underemployment. They could supply this labour (with some effort). A large area of demand in particular is for nurses and related personnel to care for the elderly. Sri Lanka should endeavour to exploit this opportunity, for the reasons mentioned below. The Commonwealth Secretariat in London is developing a database of such labour shortages along with methodologies, which could be adopted to exploit them. How to exploit them However, Sri Lanka is bound to meet with several impediments in such an effort. One of them is the stiff opposition displayed by communities in developed countries, against the influx of foreign workers for economic and cultural reasons. The other is the lack of the skills and the fluency in foreign languages, especially English, on the part of most of the people of this country, unlike in India, which has never downgraded the teaching of the subject. The methodology advocated by the Commonwealth Secretariat of solving the first problem is for a government to government agreement that Sri Lankans will work in the host country concerned for a specified period and return home. They will be eligible to re-apply for the same job or other jobs in that country. Similar agreements with other countries will also ensure, that those whose jobs have been terminated will get several chances of seeking employment again, along with new applicants. The suggested solution to the second problem is to train the cadres seeking such employment in collaboration with institutions in the host countries, (acquainted with the special requirements of their own societies). This could be a profitable business opportunity for the private sector in this country. The state of Kerala in India for example is reported to have obtained the expertise of a foreign university to train nurses to care for the elderly in the UK (as well as in Europe and America). According to the Commonwealth Secretariat, there is a demand for several types of skilled labour other than nurses in the developed countries, undergoing the aging trend. The government should team up with the private sector to exploit this opportunity for several reasons. It could help solve our problem of unemployment and the scarcity of foreign exchange reserves in no small measure. It could prove to be a less expensive and speedier way of solving these problems due mainly to the lower level of investment required in comparison with the amount of resources needed to generate employment in certain other sectors such as manufacturing. Above all it is a splendid opportunity to reduce the numbers of our people going abroad for low paid and demeaning jobs. The Philippines has succeeded in 'adding value' to its 'exports' of labour in this manner, not to mention India, which has made vast strides in the field of pushing computer analysts and programmers into employment in foreign lands. Better way out Having held forth on methods of adding value to our exports of labour, it has to be pointed out, that the better way to prosperity and happiness is developing our own economy to absorb all entrants to the labour market. The main reason is the enormous social problems created by our people, (especially mothers), leaving the country for overseas jobs. |
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