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Sri Lankan women discriminated against because of Mat Leave benefits – Verité

ECONOMYNEXT -Sri Lanka’s women between the ages of 20-40 are most likely to be unemployed because hiring them is expensive for the private sector, mostly because employers have to bear the full cost of maternity leave benefits (MLB) Verité Research has found.

Verité, a Colombo based think tank and research body said that this is a problem unique “in terms of opportunities for young women to effectively participate and contribute to the labour force.”

Dr Nishan de Mel, head of Verité said they discovered the issue during research into finding solutions to reduce youth unemployment in the country.

“One of the things we investigated was the laws and rules governing employment requires employers to pay 12-week MLBs however there is no equivalent paternity leave which means hiring women between the ages of 20-40 becomes more expensive in the private sector,” De Mel said.

A law in Sri Lanka mandates that the employer provide 12-week maternity benefit which is a 3-months fully paid leave. However, the country does not have paternity leave.

Sri Lankan women only participate at half the rate of men in the labour workforce and their unemployment rate is twice that of men and their disadvantage increases when they enter this age group while they only secure 30 per cent of the jobs in the private sector compared to 45 per cent in the public sector.

If there was a paternity leave as well, De Mel says the outcome would have been equal.

Verité Research in partnership with YouLead-USAID’s Youth Employment and Business Start-up program conducted this research as part of USAID’s initiative to reduce youth unemployment in the country.

Women’s disadvantage increases when they enter this age group while they only secure 30 per cent of the jobs in the private sector compared to 45 per cent in the public sector.

According to Sri Lanka’s Annual Labour Force Survey published in 2018, women in the 20-40 age group are 6.6 times more likely to be unemployed than women outside this age group.

The Department of Census and Statistics, Labour Force Survey Annual Report 2018 indicates that out of the 4.4 per cent unemployment in the country, 208,667 or 7.1 per cent are women. Unemployment rates for specific ages groups – 20-24 is 29.4 per cent female (14.7 per cent male), 25-29 is 19.8 per cent female (5.4 per cent male) and 30-39 is 5.9 per cent female and 1.4 per cent, male.

According to a Labour Demand Survey (2017), 41 per cent of the employers out of 3,500 private sector entities had claimed that “maternity leave and working hour relaxation” is a factor they consider when recruiting.

A recent World Bank report suggests the following main factors as hindrances to women’s participation in Sri Lanka’s paid workforce: marriage, childrearing, and related household chores that fall disproportionately on women.

Globally, the gap in female participation in the workforce has closed 57.8 per cent according to the Global Gender Report of 2020 by World Economic Forum. Women holding senior managerial posts has increased 2 per cent to 36 per cent in the private sector and public sector.
“Despite this progress, the gap to close on this aspect remains substantial as only a handful of countries are approaching parity,” said the report.

A state-supported maternity leave benefits

In Sri Lanka, gender parity is also a factor to raise its gross domestic product (GDP) by as much as 20 per cent in the long run by closing the gender gap in the workforce, an IMF assessment of Sri Lanka’s program said in 2018.
“For Sri Lanka’s economy to grow, it needs to maximize the potential of its workforce.”

Verité Research proposes that to reduce these disadvantages the government should set off the exorbitant cost borne by the private sector via tax incentives.

1. Tax relief for MLBs translate into positive economic and labour market outcomes.
Increased female participation in the labour force will increase income flow into households
and cushion post-Covid19 job-losses.

2. Tax relief for MLBs cost less than other welfare initiatives. Based on 2018 data, Verité
Research estimates the annual cost of MLBs to be LKR 4.2 Billion. This amounts to
approximately 0.25% of tax revenue. In contrast, Samurdhi subsidies amounted to 2.3%
(LKR 39.2 Billion) of tax revenue.

3. Tax relief for MLBs is more cost-effective than the government’s recent initiative to
boost employment. Verité Research estimates that the government’s plan to recruit 160,000
workers will cost approximately LKR 58.67 Billion annually. State-supported MLBs will
boost the employment of women for less than one-tenth of this cost.

4. State support for MLBs is consistent with existing MLB practices across the world. 129
states either fully (96 states) or partially (33 states) fund MLBs.

5. The 2019 budget included a proposal for the state to partially support MLBs through
tax deductibility, but the proposal was not implemented. Subsequently, the tax cuts
implemented at the beginning of 2020 were worth LKR 52 Billion – ten times the value of
tax concessions necessary to support MLBs. Yet the opportunity to structure these tax
concessions in a manner that would fund MLBs was lost.

Society and the state have an obligation to ensure that women have equal opportunities in the labour

While employers must bear the cost of MLBs, women will continue to be disadvantaged.

The state can boost female economic participation and combat this unfair disadvantage against women
in the 20-40 age group by including MLBs in the forthcoming 2020/2021 budget, Verite proposed.

(Colombo, October 1, 2020)

Reported by Mahadiya Hamza

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UAE investors express interest in Sri Lanka’s energy, tourism, ports, real estate: Ali Sabry

ECONOMYNEXT – A group of investors based in the United Arab Emirates have expressed their interest in renewable energy, tourism, ports, and real estates, Foreign Minister Ali Sabry told Economy Next.

A Sri Lankan delegation led by President Ranil Wickremesinghe is in Dubai to take part in the 2023 United Nations Climate Change Conference (COP28).

Sabry said a group of large investors met the President on Friday and discussed possible opportunities in Sri Lanka.

“We met big investors here particularly on renewable energy, tourism, port development and also infrastructure development and real estate. That’s where they are doing very well,” Foreign Minister told Economy Next.

“Our embassy will organize a higher-level business delegation to visit Sri Lanka to look at the available opportunities.”

“There is a lot of traction and interest in Sri Lanka.”

Sri Lanka has been exploring to attract investors to crisis hit Sri Lanka which declared bankruptcy in April last year with sovereign debt default.

Since then, most investors have taken a step back from investing in the island nation due to its inability to serve debts and uncertainty over such investments.

Several government officials said investors may start pouring dollars into Sri Lanka very carefully after they see some certainty of debt repayments. (Dubai/Dec 3/2023)

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Sri Lanka to push for green initiative investment “after OCC finalizing” debt deals – President

ECONOMYNEXT – Sri Lanka will push for investment into green initiatives globally after the Official Creditor Committee (OCC) finalizing on the island nation’s debt restructuring, President Ranil Wickremesinghe told Economy Next at the 2023 United Nations Climate Change Conference (COP28).

President Wickremesinghe along with local and global advisors has inaugurated three ambitious projects to convert climate change-led disaster funding, which is mostly seen as donations, into viable commercial enterprises involving private sector investments.

The idea is to rally all the global nations in the Tropical Belt threatened by disasters related to climate change and bargain collectively with advanced economies which emit more greenhouse gases into the environment resulting in global warming for more green initiatives like renewable energy projects.

Wickremesinghe initiated a Climate Justice Forum (CJF), Tropical Belt Initiative (TBI), and called on the world to help establish the International Climate Change University in Sri Lanka.

His moves have been welcomed by global leaders, though analysts said an initiative like TBI is a “bold and imaginary” step.

“This is the first step. We have now put forward the proposal,” Wickremesinghe told Economy Next on Sunday on the sideline of the COP28 in Dubai’s EXPO 2020.

“There is an interest. We have to wait for OCC finalizing (debt restructuring) before pushing for investments.”


Global investors are hesitant to invest in Sri Lanka due to its bankruptcy and sovereign debt default.

Sri Lanka is still recovering from an unprecedented economic crisis which has compelled the island nation to declare bankruptcy with sovereign debt default.

President Wickremesinhe during a forum on Saturday said his initiatives would help government in advanced countries not to use tax money of its own people for climate related disasters in other countries and instead, private sector investors could help by investing in renewable energy initiatives.

President Wickremesinghe’s government has been in the process of implementing some tough policies it committed to the International Monetary Fund (IMF) to stabilize the country and ensure sustainability in its borrowing.

Sri Lanka is yet to finalize the debt restructuring fully as it still has to negotiate on repayment schedule of commercial and sovereign bond borrowing.

The OCC and Sri Lanka had agreed on the main parameters of a debt treatment consistent with those of the Extended Fund Facility (EFF) arrangement between Sri Lanka and the IMF.

The members of the Paris Club which are part of the Official Creditor Committee are representatives of countries with eligible claims on Sri Lanka: Australia, Austria, Belgium, Canada, Denmark, France, Germany, Japan, Korea, the Netherlands, Russia, Spain, Sweden, the United Kingdom, the United States of America.

The OCC has said it was expecting other bilateral creditors to consent to sharing, in a transparent manner, the information necessary for the OCC to evaluate comparability of treatment regarding their own bilateral agreement.

The OCC also has said it expects that the Sri Lankan authorities will continue to engage with their private creditors to find as soon as possible an agreement on terms at least as favourable as the terms offered by the OCC. (DUBAI/Dec 3/2023)

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Sri Lanka alcohol regulations may be spurring moonshine: Minister

ECONOMYNEXT – Sri Lanka’s alcohol regulations may be reducing access to legal products and driving illegal moonshine sector, State Minister for Finance Ranjith Siyambalapitiya said amid plans to change opening times of retail outlets.

Sri Lanka is currently discussing changing the opening times of bars (retail alcohol outlets), he said.

Sri Lanka’s excise laws may be contributing to the growth of illegal products, Minister Siyambalapitiya was quoted as saying at the annual meeting of Sri Lanka’s excise officers.

Over 20 years legal alcohol sales have grown 50 percent but illegal products are estimated to have grown 500 percent, he said.

It is not clear where the 500 percent estimate came from.

In Kandy there was a bar for every 6,000 persons but in Mullativu there was one for only 990,000 persons and people had to travel 80 kilometres to get to a legal outlet, Minister Siyambalapitiya had said.

However Sri Lanka has a widespread moonshine or ‘kasippu’ industry driven by high taxes on legal products.

The widely used ‘gal’ or special arrack is now around 3,500 rupees and may go up further with a hike in value added tax. About 2000 rupees of the sale price is taxes.

After a currency collapse and tax hikes legal alcohol sales have fallen, leading to local sugar companies burying ethanol, according to statements made in parliament.

An uneven distribution of bars may also be driving people towards alcohol.

Alcohol sales is controlled on the grounds that it is an addictive product which can lead to poverty, ill-health, bad behaviour and criminal activities, though advocates of high taxes ignore the poverty angle.

High taxes are promoted by temperance movements some of whom have called for outright prohibition in the last century.

Temperance movements spread among evangelical groups in the West and were also embraced by nationalists/moralists and independence movements in colonial authorities.

Prohibition in the US however led to more criminal activity as an organized crime took to bootlegging. (Colombo/Dec03/2023)

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