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Youth, Women Hold the Key to Sri Lanka’s Prosperity

MD Staff

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photo: World Bank

In 2017, Sri Lanka had an estimated 497,000 job vacancies. Critical skills mismatches between the qualifications job seekers possess, and the expectations of employers, have left key industries like tourism feeling the pinch. With the country currently reporting high rates of youth unemployment, the figures underlined the importance of the reform agenda in Sri Lanka.

In a discussion held to mark the launch of the World Bank’s latest edition of the Sri Lanka Development Update [SLDU], panellists noted that when it came to job creation, the island was grappling with complex and interlinked challenges that spanned the spectrum from education to legislation. As technology forced rapid evolution in the world of work, youth would drive change.

We need youths to be at the forefront of creating jobs…We need them to push policy makers, the private sector and the public sector to lift hurdles in their way so they can get on with being tomorrow’s employers and innovators,” said Dr. Idah Z. Pswarayi-Riddihough, World Bank Country Director for Sri Lanka and the Maldives.

As Sri Lanka strove to increase its exports, the island’s workforce would be thrown into competition with global players. Ralph Van Doorn, senior economist and one of the author’s of the SLDU said: “We think that the job agenda is the competitiveness agenda – if you become more competitive, you will create more and better jobs.

Below are highlights from the hour-long panel discussion, moderated by economist Kithmina Hewage.

Realising the potential of women and youth

The SLDU notes that Sri Lanka needs to create jobs opportunities appropriate for its labor force, in particular for youth and women. In 2017, the unemployment rate for those between 15 – 24 years old stood at 18.5 percent – as compared to just 0.9 percent for those aged 40 and over. Among all age groups, women were more at risk of unemployment than men.

The way our tertiary system is structured now, it cannot react to fast enough to changes in the markets. We need to figure out models which can help us produce graduates demanded by the market,” said Dr. Nisha Arunatilake, Director of Research at the Institute for Policy Studies, sharing her conviction that finding a role for the private sector would inject resources and drive innovation in the education system. She emphasized that this must be done while ensuring equity and access to education for all.

Prof. Dayantha Wijesekera, former Vice Chancellor of Open University and University of Moratuwa, suggested that by reintroducing once popular apprenticeship schemes and making course admission criteria more flexible, universities could better support students willing to add new skills and knowledge to their resumes. “We should have more and innovative methods of attracting youth to the already adequate facilities for vocational training, rather than spending more money on infrastructure,” he added.

While such reforms would help young people across the board, more needed to be done to ensure women joined the workforce. The expansion of quality subsidised or community-funded childcare is critical, said Ganeshan Wignaraja, Chair of the Global Economy Programme at the Lakshman Kadirgamar Centre. He added that the level of harassment women faced on public transport and in the workplace was shocking and called for a strong, well-considered response from the state and from employers.

Addressing the legal and policy constraints creating bottlenecks

Critical to creating confidence in foreign investors and improving Sri Lanka’s business environment will be updating Sri Lanka’s labour laws. “Reform to the labour law is essential,” Ayomi Fernando, Industrial Relations Advisor for the Employers Federation of Ceylon noted, adding that efforts have long been underway to update and simplify the relevant laws, some of which date back to 1950s.

Quite a few of them pose huge restrictions to employment generation, to people moving jobs,” she said, explaining that investors naturally baulked.

The laws also weren’t made with the modern market in mind – for instance, many local offices must now consider the working hours of colleagues in other timezones, for which no allowances are made. The rising numbers of freelance and part-time workers, and those wishing to work from home were also not addressed, creating challenges for employers and employees both.

Meanwhile, SMEs in Sri Lanka’s large informal sector needed incentives to formalize said Ralph, pointing out this would in turn give them access to institutional support, market linkages and financial backing that could help them grow. Studies estimate that 60 percent of all employed people work in informal work arrangements. Here, reforms could pave the way for extending the protection of labor laws to such employees.

Designing protections for the most vulnerable

One of the fastest ageing countries in the world, Sri Lanka faces a demographic transition that will leave the country with fewer earners and a larger proportion of dependents. Highlighting that pensions were one of the key deciders for job seekers, Ganeshan pointed out that there was a pressing need to create viable alternatives for the private sector, perhaps by allowing reputed private pension providers to set up shop in Sri Lanka. Ralph added that it was important to gradually expand pension coverage and to increase portability of pension schemes to reduce the bias to public sector employment and protect informal sector workers.

The panel agreed that Sri Lanka’s existing social protection programs lack adequate coverage, and need to be better targeted. Currently, upon retirement private sector employees receive inadequate pension benefits, a lump sum payment at retirement or no pension at all. “Pension reform, as we age, will become the number one issue, otherwise I fear the country will face a crisis of old age poverty…” said Ganeshan.

Ayomi cautioned that the gender aspect of the issue should not be ignored: “One real problem that we have with pensions in Sri Lanka is that they are linked to employment, and what we are seeing is that 50 percent of females never work and they are the ones who live longer – they live eight years longer than men – and they are ones who don’t have access to pensions. So pension reforms should delink pensions from employment.”

In the end, the panel agreed that neither the public sector nor the private sector could rescue the economy alone. “We need to build financial literacy and encourage people to plan for their old age,” said Wignaraja. “The state cannot do everything, not in the macroeconomic situation where we are. I think it’s time that people woke up to this reality.”

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South Asia

What Can the Afghan Government and Taliban Learn from Colombia’s Peace Deal with FARC?

Hamidullah Bamik

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The experience of Colombia’s peace with FARC has always been the subject of Western experts working on the war in Afghanistan due to the characteristics of Afghanistan’s war akin to Colombia’s war.

It is argued that the insurgent movement with a political rivalry to mobilize dissenters to enter the community is a substitute order that rebels attempt to fundamentally change the infrastructure of society. The Revolutionary Armed Forces of Colombia (FARC) and the Afghan Taliban insurgents can be put into such socio-political context.

The FARC, with the full name of Fuerzas Armadas Revolucionarias de Colombia (in Spanish was formed in the 1960s as the armed wing of the Communist Party of Colombia. The FARC officially separated from the Communist Party of Colombia in 1980 but continued its guerrilla war against the Colombian government. The war between FARC and the Government of the Republic of Colombia lasted 55 years and left dead approximately 250,000 people.

Colombia’s Peace Process

The Government of the Republic of Colombia has made three major and important attempts to build peace in the last thirty years, especially in the mid-1980s and late 1990s, but all failed. But peace efforts that began in Havana, the capital of Cuba in 2012, came to fruition five years later. Ultimately, these efforts effectuated in to the signing of a peace agreement between the Colombian government and FARC on November 24, 2016.

The Colombia’s peace agreement with FARC was rejected by less than one percent in a referendum on October 2, 2016. The results of the referendum showed that 50.2 percent of voters opposed the agreement. But later, many Colombians who were anti-FARC rebels became their supporters. To strengthen further the peace and stability in Colombia, the Colombian government allocated 10 seats to FARC in 2018 and 2022 in the Colombia’s Congress elections.

The success of the peace talks between the Government of the Republic of Colombia and FARC is derived from their mutual agreement on key issues. First, they reached a reciprocal agreement on development of rural areas, especially those areas that were damaged more than other areas during the conflict. Second, they talked about the elimination of drugs and reducing high poverty rates in the peace process and agreed mutually. Third, the Government of the Republic of Colombia concurred with political participation of FARC members in the political process. Hence, they could successfully end their chronic conflicts that took many Colombians’ lives.

Afghanistan’s Peace Process

In November 2001, the Taliban regime was overthrown entirely by the United Nation forces led by the US. Subsequently, the Afghan government and the international community stepped up their efforts to support various plans to undermine the expansion of insurgents and ultimately bring them to the peace process. These efforts include programs such as Disarmament, Demobilization, and Reintegration (DDR 2003-2006), United Nation supported Afghanistan New Beginning Programs (ANBP) and its successor the Disbandment of Illegal Armed Groups (DIAG 2005.

When US President Barack Hussein Obama put forward the idea of looking for moderate elements among the insurgent groups in March 2009, the official peace talks in Afghanistan became more important. Unfortunately, all the above peace efforts have not been effective in stabilizing Afghanistan and failed to pursue a meaningful engagement of the involved countries in Afghanistan’s war in the peace process.

Recently, the Government of the Islamic Republic of Afghanistan declared two truces with the Taliban to encourage them to join the peace process. But unluckily, the Taliban groups not only did not welcome the Afghan government’s ceasefire, except the first truce but also responded with atrocity and intensifying their insurgency. Political experts are inclined to argue that the experiences of the Colombian government’s peace deal with FARC insurgents can aid Afghanistan in reaching a permanent peace deal with the Taliban groups.

The Similarities of Afghanistan’s and Colombia’s War

According to Foreign Policy, the current Afghan war is reminiscent of the Drug War in Colombia and requires a Colombian plan for its termination. The insurgency in Afghanistan is nurtured by an ideological war that is being conducted to bring Afghans under the banner of religion. Conversely, in Colombia, FACR fought with the central government for lucrative sources of money and ways to smuggle drugs. However, it is argued that despite having ideological roots, narcotics is the main financial source of Afghanistan’s insurgent groups.

In 2016, the Global Witness reported that the warlords and Taliban’s earnings from a small Badakhshan region are equal to the total income of the Afghan government’s natural resources sector. The report adds that in 2014, armed groups from two mining areas of Deodarra in Kuran and Munjan districts in Badakhshan province earned about $20 million. It echoes that the ongoing war between the Taliban and the Afghan government is also a war on controlling natural sources like the war between FARC and the Colombian government. Thus, the experiences of the Government of the Republic of Colombia in its peace talks with FARC can help the Afghan government in its peace talks with the Taliban.

The Afghan Taliban groups like the FARC in Colombia, are dwindling in Afghanistan. They still have their local supporters in Afghanistan. Theo Farrell, the professor and executive dean of law, humanities, and the arts at the University of Wollongong, Australia argues that the availability of social resources and the elements that drive and enable military adaptation were the main reasons of Taliban’s successful resurgence after 2001. It projects that still, Taliban groups have a large number of adherents among the Afghan communities. Undoubtedly, they will support the Taliban if the group joins in peace talks with the Afghan government and forms its political faction as did the FARC in Colombia.

The FARC opened negotiations with the Colombian government after decades of armed conflicts. Many of FARC insurgents like the Taliban groups did not believe in the usefulness of the talkswith the Colombian government at the beginning. But they tested their trust and succeeded in this regard. Likewise, the best option for the Afghan Taliban to put into practice their demands is joining the negotiating table with the Afghan government.

The Colombia’s Peace Process Takeaways for Afghanistan’s Peace Process

Perhaps the most important innovation to come out of Colombia’s peace process has been the inclusion of victims. Delegations of victims from both sides of the conflict were invited to come to Havana to recount their experiences. In other words, the Colombian peace process was the first in the world that included a formal role for victims of the conflict—they got to interact directly with the negotiators. The inclusion of victims gave the Colombian government’s peace process its best chance of success. Likewise, Afghanistan’s government can emulate a similar way to succeeding in the peace process with the Taliban. The Afghan government should invite the representatives of the victims of war to the negotiating table so that they can share their stories and gain confidence that their voices are heard in the peace process. 

Ultimately, the need for a comprehensive and lasting peace in Afghanistan requires creating a national and international consensus on the peace process with the Taliban. This is what Colombian President; Juan Manuel Santos did about peace with the FARC rebels. Initially, a national consensus regarding the peace deal was created inside Colombia. Then the Colombian government reached an international consensus for peace with the neighboring countries, the regional and international powers. Similarly, the Afghan government should reach a unanimous agreement on peace talks with the Taliban inside Afghanistan, then with Afghanistan’s neighboring countries, regional and international powers. Doing so, the Afghan government might be able to close the war and insurgency chapter of Afghanistan’s modern history.

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Geopolitics, the black swan in Saudi-Indian relations

Dr. James M. Dorsey

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When Saudi Crown Prince Mohammed bin Salman meets Indian Prime Minister Narendra Modi next week, the elephant in the room is likely to be what weighs more: the issues the two men agree on or the ones that divide them.

As a matter of principle, Prince Mohammed and Mr. Modi are likely to take their strategic partnership to a new level as a result of changing energy markets, a decline in American power, the rise of China and the transnational threat of political violence.

Discussions with the crown prince and his delegation of Saudi businessmen on energy and investment will prove to be the easy part. Saudi Arabia is investing US$44 million in a refinery in Maharashtra’s Ratnagiri and supplies 20 percent of India’s crude oil. India, moreover, expects the Saudis to invest in ports and roads while Saudi Arabia is interested in Indian agriculture that would export products to the kingdom.

At first glance, security issues should be a no-brainer. The two countries hold joint military exercises, share intelligence and cooperate on counterterrorism. They are also working to counter money laundering and funding of political violence. Things get complicated, however, when geopolitics kicks in. Prince Mohammed arrives in Delhi on the back of a visit to Pakistan, where he is expected to sign a memorandum of understanding on a framework for $10 billion of investments, primarily in oil refining, petrochemicals, renewable energy and mining.

The memo follows significant Saudi aid to help Pakistan evade a financial crisis that included a $3-billion deposit in Pakistan’s central bank to support the country’s balance of payments and another $3 billion in deferred payments for oil imports.

The tricky part are the investments in the memorandum that include a plan by the Saudi national oil company Aramco to build a refinery at the Chinese-backed port of Gwadar, close to Pakistan’s border with Iran and the Indian-backed Iranian port of Chabahar. Both Pakistan and Saudi Arabia are closely monitoring Chabahar’s progress.

A potential Saudi investment in the troubled Pakistani province of Balochistan’s Reko Diq copper and gold mine would strengthen the kingdom’s hold in the strategic province that both Prince Mohammed and US president Donald J Trump’s hardline national security adviser John Bolton see as a potential launching pad for efforts to destabilise Iran. Taken together, the refinery, an oil reserve in Gwadar and the mine would also help Saudi Arabia in efforts to prevent Chabahar from emerging as a powerful Arabian Sea hub.

Saudi funds are flowing into ultra-conservative anti-Shiite, anti-Iranian Sunni madrassas in Balochistan. It remains unclear whether the money originates with the Saudi government, Saudi nationals of Baloch descent or the two million-strong Pakistani diaspora in the kingdom.

The money helps put in place building blocks for possible covert action should the kingdom or the US — or both — decide to act on proposals to support irredentist action.

Such covert action could jeopardise Indian hopes to use Chabahar to bypass Pakistan, enhance its trade with Afghanistan and Central Asia and create an antidote to Gwadar, a crown jewel in China’s Belt and Road initiative.

Pakistani analysts expect around $5 billion in Afghan trade to flow through Chabahar after India in December started handling the port operations. It could also further strain ties with Pakistan that accuses India of fomenting nationalist unrest in Balochistan.

The funds take on added significance in the face of Saudi concerns about Chabahar and India’s support for the port. The money continues to flow even though the crown prince has significantly cut back on the kingdom’s global funding of ultra-conservative Sunni Muslim groups to bolster his assertion that the kingdom is embracing a more moderate, albeit as yet undefined, form of Islam.
The money started coming in at about the time the Riyadh-based International Institute for Iranian Studies published a study that said Chabahar posed a “direct threat to the Arab Gulf states” that called for “immediate countermeasures”.

Written by Mohammed Hassan Husseinbor, a Washington-based Iranian Baloch lawyer and activist, the study warned that Chabahar would allow Iran to step up oil exports to India at the expense of Saudi Arabia, raise foreign investment in the Islamic Republic, increase government revenues and allow Tehran some muscle-flexing in the Gulf and the Indian Ocean. Noting the expanse of Iran’s Sistan and Balouchestan province, Mr. Husseinbor said “it would be a formidable challenge, if not impossible, for the Iranian government to protect such long distances and secure Chabahar in the face of widespread Baluch opposition, particularly if this opposition is supported by Iran’s regional adversaries and world powers”.

Published in a country that tightly controls the media as well as the output of think tanks, the study stroked with a memorandum drafted a year later by Bolton before he assumed office. The memo envisioned US support “for the democratic Iranian opposition”, including in Balochistan and Iran’s Sistan and Baluchestan province.

Iranian officials believe that Saudi Arabia and the US have a hand in a string of recent attacks by Baloch, Kurdish and Iranian Arab nationalists but have so far refrained from producing anything beyond allegations. Most recently, they point to a rare suicide bombing in Chabahar in December that targeted a Revolutionary Guards headquarters, killing two people and wounding 40.

Writing in the Pakistan Security Report 2018, journalist Muhammad Akbar Notezai said, “to many in Pakistan” concerns about Indian support for the Baloch “were materialized with the arrest of Kulbushan Jadhav, an Indian spy in Balochistan who had come through Iran. Ever since, Pakistani intelligence agencies have been on extra-alert on its border with Iran”.

The journalist warned that “the more Pakistan slips into the Saudi orbit, the more its relations with Iran will worsen… If their borders remain troubled, anyone can fish in the troubled water”.

Mr. Notezai implicitly put his finger on the pitfalls Prince Mohammed and Mr. Modi will have to negotiate to ensure that their ever closer economic, energy and security relations can withstand the challenges posed by the escalating and intertwined rivalries that link West and South Asia.

Author’s note: This article appeared in Firstpost

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Tapping potential of connectivity through BCIM-EC

Sultana Yesmin

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The Bangladesh-China-India-Myanmar economic corridor (BCIM-EC) is a sub-regional initiative, earlier known as “Kunming Initiative”, or BCIM Regional Economic Cooperation, was established in August 1999 in Kunming, capital of China’s south-western Yunnan Province by the scholars from China, India, Bangladesh, and Myanmar.

Chinese Premier Li Keqiang proposed the BCIM-EC initiative during his visit to India in May, 2013. The Joint Statement between China and India officially proposed the establishment of the BCIM-EC, while later Bangladesh and Myanmar offered strong and positive responses towards the development of economic corridor across the sub-region.

The proposed BCIM economic corridor aims to construct a 2,800-km economic corridor connecting 20 major cities and towns of the BCIM countries. Starting from Kolkata, the capital of West Bengal, the corridor is planned to end in Kunming, capital of China’s Yunnan Province via Bangladesh’s Jessore, Dhaka, and Sylhet; Imphal of Manipur and Silchar of Assam in North Eastern part of India, and Myanmar’s Ka Lay, Monywa, Mandalay, Lashio and Muse.

The BCIM Forum was primarily initiated with the aim of building regional cooperation among the four participating countries as well as integrating the BCIM economies through building overland economic corridor along the routes connecting the sub-region of South Asia, Southeast Asia, and East Asia.

The overland connectivity aside, over the years, the objectives of the BCIM-EC expanded in the areas of poverty alleviation, people-to-people connectivity, cross-border energy trade, tourism, human resource development, sustainable development as well as trans-border security.

Significant progresses have already been witnessed towards the achievement of these objectives. As for example, starting from 1999 to 2015, total 12th BCIM Forums have been arranged by the BCIM countries. The idea of the construction of Kunming-Mandalay-Dhaka-Kolkata (K2K) economic corridor was first proposed in the 9th BCIM Forum held in Kunming, China from January 18 to 19, 2011, which marked significant milestone in the development of the economic corridor across the BCIM sub-region.

The 10th BCIM Forum held in Kolkata, India from February 18-19, 2012 was also crucial for taking the decision about the Kolkata to Kunming (K2K) Car Rally along the BCIM routes. As per the consensus, the historical Kolkata to Kunming (K2K) Car Rally in February 2013 was warmly received in four countries that underscored the construction of BCIM economic corridor across the sub-region.

Subsequent to these developments, strengthening the working relationship between Track II and Track I and the initiation of Track I diplomacy through the consensus in 9th Forum and the 11th BCIM Forum respectively injected noteworthy impetus into the development of multimodal connectivity across the BCIM sub-region.

So far, three Joint Study Group (JSG) meetings have been conducted among the representatives of the four countries to foster physical connectivity, facilitate trade in goods, services, and investment; promote economic integration; and also to enhance people-to-people contacts among the BCIM countries.

The 1st JSG was held in Kunming, China from December 18-19, 2013, while the initiative was undertaken for the official launch of intergovernmental process of BCIM-EC. The 2nd JSG held in Bangladesh’s Cox’s Bazar from December 17-18, 2014 gained momentum after the consensus of the four countries to prepare separate country reports on the concept, scope and elements; principles and modalities of cooperation; and framework of cooperation. And, during the 3rd JSG meeting which held on 24- 25 April 2017, in Kolkata, the four countries agreed on upgrading of the talks on BCIM-EC to the intergovernmental level.

The significance of the BCIM-EC is enormous. Geo-strategically, the economic corridor is the gateway to three sub-regions, South Asia, Southeast Asia, and East Asia. It is also the hub of blue economy and international maritime trade with the endowment of the Bay of Bengal and its adjacent areas, Indian Ocean, the Andaman and Nicobar Islands.

The geo-economic significance of the BCIM-EC is also immense. The BCIM sub-region with the enhanced transport connectivity can be a zone for international trade and business. The free flow of goods and services as well as cross-border trade and investment through the seamless connectivity will facilitate equitable sharing of benefits among the BCIM countries.

The proposed BCIM-EC attempts to build multimodal connectivity in order to accelerate all round development across the sub-region, goodwill, peace, and the stability in the sub-region based on the principles of mutual interest, trust and respect, and equitable sharing of benefits.

Though there is a prevalence of some security, economic, and political factors remaining as key challenges, the countries need to come up with concrete measures to fully tap the immense potentials of connectivity through the successful establishment of the BCIM-EC across the sub-region.

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