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Sunday June 16th, 2024

High quality ICT graduates severely short in Sri Lanka, soft-skills gap: survey

ECONOMYNEXT – Sri Lanka’s growing information communication technology is generating a demand for higher skilled workers at degree level with soft-skills, which may leave workers with lower level qualifications from vocational schools without jobs, a survey has found.

A 2018 survey by Sri Lanka’s ICT Agency has found that pure ICT companies are now the dominant employer in the sector where the basic entry requirement had grown to degree level in a change from a survey in 2013.

Based on projected demand for 2019, there was a 12,000 person shortfall or ICT graduates compared to less than 500 in the last survey in 2013, with the sector growing fast due to globalization.

"The main conclusion of the survey is that the ICT workforce in Sri Lanka is undergoing deep structural changes at a time when the global ICT sector experiences a period of transition," the National IT-BPM Workforce Survey 2019 noted.

"The influence of the global and domestic transformations is visibly manifested in drastic changes taking place in composition of the ICT workforce in the country.

"The relative shares of major employer categories in the ICT workforce has changed significantly in favour of ICT companies that came to occupy nearly a two thirds of the total workforce."

Quality vs Quantity

The survey found a demand of 21,216 graduates by the ICT sector for 2019, while the supply was 9,076. The gap was higher than in 2013 with the industry rapidly growing and pure ICT companies making up the biggest employer.

"The current situation implies that the demand-supply gap for ICT workforce in the country is widening rather than closing," the ICT agency survey said.

"Considering the fact that the total supply also includes postgraduate trainees, many of whom may already be counted as a part of the existing workforce, this margin tends to increase further."

The survey said the entry level of workers for pure ICT companies was now a bachelors degree or equivalent and gap between demand and supply also relates to quality.

"Despite a large output of trainees from variety of courses offered by training organizations, the quality of a significant share of them remains below the level of expectations of employers," the survey said.

"Their main concern was that the gap should not be understood in terms of demand for numbers alone but in terms of demand for quality as well.

"As a result, many employers look for graduates which could have augmented the figures indicating demand for graduates."

"This is confirmed by the fact that the entry level qualifications for nearly all job categories have now been raised to the level of Bachelor’s degree by many employers.

"As a result, demand expectations for graduates could be somewhat bloated up by employers perceptions about the poor quality, especially of non-graduate trainees."

However, a part of the non-graduate trainee pool have qualifications from well-recognized bodies such as the Britsh Computer Society (BCS) and the Australian Computer Society (ACS) which provide skills similar to a degree.

Red Light for TVET L5 and L6

While universities should revise their curricula in consultation with a bigger task lay ahead for tertiary and vocational education institutes in both state and private sector offering courses below degree level.

"In this connection, raising the skills of trainees at NVQ qualification levels of L5 and L6 (i.e. Diplomas and Higher Diplomas) and upgrading them into the level of L7 which is equivalent to graduate level should be given priority," the survey said.

"These changes should be undertaken in close consultation with prospective employers to make necessary improvements in core, soft and technical skills offered by TVET institute so that the employability of Diploma and Higher Diploma level trainees could be increased."

Soft-Skills

Employers were also looking for soft-skills. It was particularly so for TVET levels trainees in both state and private sector.

"Increasing the quality of these trainees by giving special a􀆩en􀆟on to enhance their soft skills could be expected to reduce the demand-supply gap further," the survey noted.

ICTA Chairman Rohan Samarajiva said it was not a gap in English that was the main problem as software engineering itself was not depended on English, which could be acquired.

"Don’t get too hung up on English. A lot of people in the ICT sector are very fluent in hardware, software and computer languages. These people are naturally intelligent and English will come," he said.

The survey showed that English proficiency per se was a factor especially for non-ICT companies and BPM firms.

But communications skills in general, team work, creative thinking skills, and professional ethics was in high demand. (Colombo/Aug08/2019)

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Sri Lanka state airport agency swimming in cash after sovereign default

ECONOMYNEXT – State-run Airport and Aviation Services (Sri Lanka) Ltd is swimming in cash after a sovereign default halted debt repayments allowing it to post a profit of 29.7 billion rupees with 10.4 billion rupees in interest income, official data showed.

In April 2022 Sri Lanka declared a sovereign default after printing large volumes of money over more than two years to enforce rate cuts and blowing the biggest hole in the balance of payments in the history of the island’s money printing central bank.

Interest earnings of Airport and Aviation Services also shot up to 10.4 billion rupees in 2023 from 6.1 billion in 2022 and 3.3 billion rupees in 2021 before the sovereign default.

Under the terms of the default or ‘debt suspension’, state agencies like the Airport and Aviation Services, and Sri Lanka Port Authority were also not required to service loans, even if they had the cash to repay loans.

AASL’s finance income shot up in 2023 “mainly because the company has invested surplus cash saved by not servicing the foreign loans obtained by the company due to the temporary debt moratorium policy of the country,” the Finance Ministry said in a report.

Sri Lanka’s rupee and foreign currency interest rates also shot up in 2022 and 2023 as rate cuts enforced by money printing were lifted to clear anchor conflicts.

After inflationary rate cuts kill confidence in a currency triggering capital flight and parallel exchange rates, excessively high rates are needed to kill domestic credit and stabilize the currency.

Countries with such flawed operating frameworks in central banks tend to have chronic high nominal interest rates in any case.

AASL’s rupee revenues went up to 48.8 billion rupees in 2023 from 32.2 billion rupees in 2022 as passenger movements increased to 7.5 million from 5.5 million with a recovery in tourism and local traffic.

Sri Lanka’s currency crisis hit in 2022 just as the island was recovering from Coronavirus pandemic triggering fuel shortages and power cuts as money printing triggered forex shortages.

From 2022 March the rupee collapsed from 200 to 370 levels an attempt to float the rupee was failed by a surrender rule (a type of buy-side pegging which pushes the exchange rate down).

In 2023, after hiking rates to kill credit, the surrender rule was removed, leading to a currency appreciation.

The airport agency also made an exchange gain of 6.1 billion rupees in 2023 against an exchange loss of 10.5 billion rupees in 2022 the rupee appreciated. (Colombo/June16/2024)

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Sri Lanka car import relaxing roadmap given to IMF: State Minister

ECONOMYNEXT – Sri Lanka has submitted a roadmap on relaxing vehicle imports to the International Monetary Fund, State Minister of Finance Ranjith Siymabalapitiya said as the country recovers from the worst currency crises in the history of its central bank.

The import relaxation will allow vehicles for public transport, goods transport, then motor cycles and cars use by private individuals and after that, luxury cars, Minister Siyambalapitiya said.

Luxury cars however attract the highest taxes for each dollar spent on imports.

Economic analysts have characterized vehicle import controls as a ‘cascading policy error’ that follows inflationary rate cuts, which then deprive taxes to the state and triggers more money printing and more forex shortages, requiring even higher corrective interest rates and a contraction of economic activities to save the rupee.

According to the latest IMF report car import controls may have led to revenue losses of 0.7 to 0.9 percent of GDP.

Sri Lanka started controlling imports few years after a central bank was set up in 1950 and also tightened exchange controls progressively, so that macroeconomists using post-1920 spurious monetary doctrines taught at Anglophone universities could print money through various mechanisms to suppress rates.

Sri Lanka is working with the IMF as a guide on many issues and the roadmap was submitted to the agency on June 14, Minister Siyambalapitiya said.

The IMF in an economic report released last week the plan was expected to be submitted by June 15.

Whatever the IMF’s faults, which some wags have called ‘progressive Saltwaterism’, the agency does not advocate import controls as solution to balance of payments problems, despite a Mercantilist fixation with the current account deficit in countries with reserve collecting central banks, analysts say.

Import controls have the same effect as import substation on the balance of payments, which is none, classical economists have pointed out and is now mainly a problem associated with macro economists and economic bureaucrats of so-called basket case countries.

Any pressure on the currency or missed reserves targets in the IMF program has come in the past only if the central bank printed money to suppress rates as credit growth picked up from car imports.

Sri Lanka had 3,000 items under import controls when rates were suppressed with printed money from 2020 to 2022 but eventually ended up with the worst currency crisis triggered by macro economists in the history of the country and eventual external default.

A committee made up of the Department of Trade and Fiscal Policy of the Finance Ministry, the Department of Registration of Motor Vehicles, the Central Bank and two associations representing vehicle imports were appointed to come up with the roadmap, he said. (Colombo/June15/2024)

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Chitrasiri Committee presents draft constitution for Sri Lanka Cricket

ECONOMYNEXT – A draft constitution for Sri Lanka Cricket, the governing body for cricket in the island, prepared by a committee headed by retired Supreme Court judge K T Chitrasiri, was presented to President Ranil Wickremesinghe today (15).

The Sri Lanka team were ignominiously knocked out of the Men’s T20 World Cup tournament this week, sparking renewed criticism of the team and the governing body.

Last November, a cabinet sub-committee was appointed to address challenges faced by Sri Lanka Cricket and provide recommendations after consecutive losses became a hot topic in parliament.

After parliament decided to remove the administrators of the sport, the International Cricket Council (ICC) Board suspended Sri Lanka Cricket’s membership.

Based on the sub-committee’s recommendations in its report, the Cabinet then appointed an expert committee to draft a new constitution for Sri Lanka Cricket.

The committee headed by judge K T Chitrasiri includes President’s Counsel Harsha Amarasekara, Attorney-at-Law Dr Aritha Wickramanayake and Chairman of the Sri Lanka Chamber of Commerce Duminda Hulangamuwa.

Deputy Solicitor General Manohara Jayasinghe, and Shamila Krishanthi, Assistant Draftsman representing the Legal Draftsman’s Department, and Loshini Peiris, Additional Secretary to the President were also on the committee. (Colombo/Jun14/2024)

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