Human Resources and Employment Policy for social protection

The National Human Resources and Employment policy is now under submission at the Cabinet of Ministers and many issues on social protection and labour strategies have been addressed, said Human Resources Senior Minister D E W Gunasekera.

Some of the recommendations in the formulation of the policy are, the need for the integration of different schemes of the existing social protection and need to enhance the effectiveness, efficiency and sustainability of the EPF and ETF of the formal sector, he said.

The senior minister was addressing the workshop on Promoting Productive Social Protection and Labour system in Sri Lanka at the Institute of Policy Studies (IPS) auditorium recently. The workshop is held under the patronage of IPS, World Bank and National Planning Department. It is expected through this consultation process to provide a feed back to the development of an integrated social protection and labour strategy.

"We must reconsider the feasibility of establishing a pension scheme for the workers in the formal private sector," he said, adding that an unemployment benefit scheme is a major gap in the social security scheme in Sri Lanka.

He also highlighted the need for some security scheme for the informal sector.

"Action should be initiated for the establishment of a basic social protection floor to ensure access to basic healthcare income security," he said.

In so far as unemployment is concerned, there is no protection at all at present. Sri Lanka being a fast ageing society, we may face formidable challenges on this front in the future, unless the issues of social protection are addressed well ahead, he added.

Fund management has become a controversial issue today, he continued. "We have to consider seriously whether we have reached the point of diminishing returns in so far as the management of EPF and ETF is concerned. While we should appreciate the concerns of the workers and their sensitiveness to changes it is equally important to consider the long term sustainability of these funds," he said.

"The abortive private section pension fund needed a much more critical study, analysis and assessment by some professional actuaries," he added.

He said there are traditional common types of social protection programmes in force which include, labour market interventions such as employment creation, promotion and protection of workers etc., social insurance such as health insurance or employment insurance and social assistance.

"There is an imperative need for implementing successful labour market interventions in the informal sector of our economy, which is about 62 % of the employed," he pointed out.

This is a significant sector of our economy not covered by any social security schemes. This segment of the society is the most vulnerable and disadvantaged strata whose grievances have not received or are not receiving sufficient attention, unlike the workers in the formal sector (both private and public) who have the bargaining power to demand, he added.

It is necessary to look forward to target a minimum level of basic capabilities of human resource that will impact their quality of life unlike in the case of public and private sectors of the formal economy, the senior minister said.

"In our economy of US$ 56 billion, as per Ministry of Finance and Planning reports, more than 73% of its enterprises in fact belong to which come under the informal economy," he added.

The absence of a cohesive regulatory, supervisory system for the micro-finance sector has been one of the constraints to the growth of the domestic SMEs and micro-finance sectors, Senior Minister Gunasekera said.

It is necessary to lift the workers in this sector from the present levels of poverty through a micro-finance network, he emphasised.

He highlighted that even in the formal sector of the economy, the existing social security system is fragmented - either well established schemes of old age pensions or lump sum payment at retirement. Those well established schemes of old age pensions are today barely adequate for the purchase of their basic needs, not even medicine. The lump sum payment at retirement are inadequate to generate a flow of adequate income after retirements, he stressed.