From job protection to worker protection

World Bank assess Sri Lanka's social protection system:

EMPLOYMENT: Sri Lanka's extensive social protection system while being remarkable for a developing country needs to reach the poor more effectively to facilitate inclusive economic growth says a new World Bank report 'Sri Lanka: Strengthening Social Protection.'

The report reviews the three key areas of employment protection, social insurance and social safety nets and proposes strategic options for enhancing their role in promoting growth with equity.

Identifying the poor and vulnerable groups, the report examines and evaluates employment protection and promotion policies and programs, social security/insurance schemes, and safety net programs.

The concluding chapter summarises key analytical findings and presents a unified policy framework to improve social protection

Over the years Sri Lanka has paid significant attention to worker protection and promotion, but the country has yet to achieve long-term balance of policies and programmes.

The message from the analysis is, in essence, 'From Job Protection to Worker Protection - a shift if implemented successfully carries with it double dividends of growth and poverty reduction,' said Naoko Ishii, World Bank Country Director in Sri Lanka.

Legislation in Sri Lanka has provided job protection, covered various aspects of working conditions and has protected core labour standards for formal sector jobs.

However, the report points out that this essentially has ensured excessive job security and generous benefits and wages to a few but has reduced access to 'good' formal sector jobs and associated insurance schemes for two thirds of the labour force working in the informal sector. Within this excluded group are some particularly vulnerable groups such as unemployed youth and women.

The analysis indicates that a likely consequence of the restrictive employment protection system is depressed job flows with potentially adverse implications for productivity, growth and access to formal jobs by marginal groups.

To boost employability of these marginal groups the report proposes that in the labour market the goal must be to expand job opportunities, enhance equal access to formal sector jobs, while improving skills of the current and future workers.

This will not only promote the access of informal sector workers and other marginalized groups to 'good' jobs, which in turn will foster equity, leading to enhance productivity.

The report also appraises Sri Lanka's social insurance schemes and argues that they provide some measure of protection with only limited coverage and inadequate benefits and are weighed down by weak administration and regulation.

In addition the report questions the financial sustainability, the coordination of benefit levels within the diverse schemes and the constrains that impact labour mobility.

The recommendation is for social insurance schemes to be improved so that adequacy and financial sustainability of insurance schemes for old age, disability and survivors, both formal and informal, are effectively in place.

This measure will help the country to meet the income support needs of an aging population, thus avoiding the mistake of some developed countries which delayed taking action and are now facing bankrupt pension systems.

The report also explores the possibilities of expanding coverage to meet the needs of the informal sector.

Examining Sri Lanka's main income transfer program, 'Samurdhi', the report findings indicate that it bestows benefits to 46 percent of Sri Lankan households but misses a significant proportion of the poor and leaks benefits to some higher income groups.

Similarly, income support to disabled leaves many poor disabled groups under-covered. The report argues for a more comprehensive approach to disability, focusing on prevention and enabling the disabled to integrate better into society.

Disaster relief seems to have worked relatively effectively in Sri Lanka and has acted as an important source of support for the affected persons.

However, the relief for the displaced in the case of food assistance is insufficient to meet basic nutrition needs. Rehabilitation assistance for permanent settlement also faces strong fiscal constraints that limit the coverage.

The report stresses the vital need for strengthening social safety nets, not only through programs that bring the poor within these safety nets but also by promoting exit strategies.

Two such opportunities could be improving access to income earning opportunities for beneficiary households and providing incentives for poor children to remain in school and receive adequate nutrition.

"These measures would help make 'safety nets' into safety ropes that would help the poor to climb out of poverty," said Mansoora Rashid, World Bank Social Protection Sector Manager.

The report also recommends developing a mix of safety net programs that can help address poverty among those affected by the conflict that can be scaled up to assist households who suffer in times of natural disasters.

At a workshop held on September 27 Sri Lankan Government officers, academics, union and private sector officials and World Bank staff discussed important challenges facing the country in three core areas of social protection: the labour market, social insurance, and social safety nets.

The meeting discussed how the social protection system could improve its coverage of the poor and improve governance through stronger administrative and implementation capacity.

"The goal of social protection is not mere survival but social inclusion and the preservation of human dignity," said Athauda Seneviratne, Minister of Labour Relations and Foreign Employment in his keynote address at the workshop.

Thanking the World Bank for taking the initiative to discuss measures to strengthen existing programs the Minister proposed convening an inter-ministerial working group, with stakeholder and donor participation to develop an action plan for social protection in Sri Lanka.

The Ministry of Finance officials noted that the issues raised in the workshop would be useful in the national development strategy currently under formulation.

(World Bank)