Disasters such as COVID-19 can significantly impede development. While it is difficult to avoid being affected by disasters, disaster preparedness can reduce the costs, and quicken the recovery.
Unlike the Easter Sunday attacks, COVID-19 is not only affecting Sri Lanka. Its effect is felt by almost all countries across the world. The economic impact of this on Sri Lanka will not only be influenced by what is happening in the country, but also by how the disease is affecting global values chains, markets, and the movement of goods and people across the world. With the COVID-19 pandemic still unfolding, it is too early to estimate the economic impact of the crisis. This blog compares the economic impact of the Easter Sunday attacks to illustrate the likely impact of COVID-19 on Sri Lanka’s economy.
Sri Lanka’s labour market has been riddled with persistent high informality, an unchanging low female labour force participation, and low quality of available jobs. Enhancing exports can be a solution to these intractable problems, according to the findings of the Exports to Jobs – Boosting the Gains from Trade in South Asia report, which shows that boosting exports improves domestic labour markets by creating jobs, increasing wages, and reducing informality.
Climate change and related vagaries of weather have increased the vulnerability of the Sri Lankan population to natural disasters. Rural households and livelihoods are more affected by such calamities, which increases the risk of rural families sliding into poverty. As such, Nisha Arunatilake argues that improving the quality of jobs and livelihoods of the rural population is important to build these communities’ resilience to such natural disasters.
The World Bank’s Human Capital Index (HCI) summarises the ‘amount of human capital a child born today could expect to attain by age 18’. Sri Lanka’s HCI for 2018, the best in the South Asian region, is 0.58. However, there is room for improvement. A closer examination of the sub-indices of the HCI shows that two of the areas that need attention are education and health.