Address child issues, shortfalls in learning for better human capital outcomes: WB

• WB’s Human Capital Index states a child born in SL today will only reach 60% of his/her potential in adulthood
• Notes Sri Lanka will need to further develop its human capital, with a special focus on rural and estate sector regions in reaching upper-middle-income level
•  The report points out that the country also faces high levels of inequalities along geographic dimensions

Sri Lanka’s transitioning to the next level in improving human capital outcomes require focused attention on addressing issues on child stunting and shortfalls in learning, the World Bank (WB) said.

Although the country is acknowledged to have best human development outcomes in the South Asian region despite relatively low spending levels on health, education and social safety nets, the WB stressed the need to focus on the poorer regions of the country.

According to the freshly launched Sri Lanka Human Capital Development (HCD) Report for 2021, a child born in Sri Lanka today will only be 60 percent as productive as she would be with full education and health when she reaches 18 years old. 

“As Sri Lanka strives to become an upper-middle-income economy, it will need to further develop its human capital, with a special focus on rural and estate sector regions, to increase competitiveness and help create a modern, knowledge-based economy and accelerate growth,” the WB said in the latest HCD report.

The WB elaborated that highlighted objectives place an increasing premium on higher-order cognitive skills, socio-behavioural skills, reasoning, and self-efficacy.

“Building these skills requires strong human capital foundations. This means Sri Lanka will have to improve its learning outcomes and reduce stunting rate which is currently about 17 percent,” it added.

According to Education Global Practice Lead Economist Harsha Aturupane, some of the policy initiatives the island nation needs to focus on as future investment priorities include reducing under-nutrition, enabling more equitable improvements in learning outcomes, and creating a more adequate and affordable pension system and programs for the ageing population.

The HCD report on Sri Lanka also pointed out that the country also faces high levels of inequalities along geographic dimensions which would slow down the development aspirations.

The Southern Province has the highest HCI at 63 percent, followed by Western Province at 62 percent, which indicates the country has varying HCI scores. At the other end of the scale, Eastern Province has the lowest HCI of 51 percent, followed by the Northern Province at 52 percent.

Since the Southern, Sabaragamuwa, and North Western, have human capital levels above the national average, and the North Central, Central, Uva, Northern, and Eastern Provinces are below average in both human capital development and income per capita, the report recommends prioritising these regions to create more equitable human capital development outcomes.

With regard to gender dimensions, the report states that all provinces record better learning outcomes for women. 
Women score an HCI value of 67 percent in the Southern Province (60 percent for men) and 65 percent in Western Province (58 percent for men) and the largest gap is in the Eastern province with a score of 55 percent among women and 47 percent for men.

However, the WB stated that higher HCI values and learning outcomes for women are not necessarily reflected in labour inclusivity with women only making up about 34 percent of Sri Lanka’s labour force.

“Policies to facilitate greater female labour force participation, including better childcare and elder care facilities and networks, are needed,” the report suggested. 

The WB’s Human Capital Index (HCI) provides a framework and metric provides economies with a model for understanding the quantity and quality of human capital in a country and aims to help governments navigate a path forward to develop their human capital.