Professor Prasanna Perera of University of Peradeniya attended a media briefing at the headquarters of the Samagi Jana Balawegaya.
Speaking further, he said:
“Economist Dudley Seers has extensively discussed how poverty, inequality, and unemployment correlate with a country’s economic growth. According to him, as the economy grows, poverty should decrease, income gaps should narrow, and solutions to unemployment should be implemented. Dudley Seers’ economic perspective is acknowledged by Opposition Leader and Samagi Jana Balawegaya leader Sajith Premadasa.”
In addition, a labor force participation survey conducted by the government in 2024 shows that the labor force participation rate is 47%, compared with 54% in 2017—a decline of 6.7%. The population of working age in Sri Lanka is 16.8 million, of which only about 8 million actively contribute to the labor supply. The unemployment rate is 4.4%, with male unemployment at 3% and female unemployment at 7.1%. Only 30% of women of working age participate formally in the labor force, leaving 7 out of 10 women unemployed. Higher education levels seem to correspond with higher unemployment rates. Among youth aged 20–24, unemployment reaches 20.7%, meaning one in five young people is without a job. Currently, 150,000 young men and women are seeking employment.
The International Labour Organization (ILO) has highlighted that official statistics underrepresent the true condition of Sri Lanka’s labor market, as many have left the workforce voluntarily.
Moreover, in 2022 and 2023, 515,000 people emigrated abroad, and in 2024, about 300,000 left. According to Dudley Seers’ model, periods of economic growth have coincided with rising unemployment. Poverty rates doubled compared with 2017–2018, with 25–30% of the population living in poverty. The government must intervene immediately to address growing poverty, unemployment, and inequality.
Historically, between 1948 and 1960, governments implemented projects like the Gal Oya scheme to tackle unemployment and inequality. Between 1977 and 1990, large-scale irrigation projects and free trade zones were introduced. The late Ranisinha Premadasa implemented public works programs in 1989–1993 to permanently alleviate poverty, formalize labor participation, and establish programs such as the 200 factories initiative. However, these concepts are currently facing crises, which are directly felt by Opposition Leader Sajith Premadasa.
Currently, the government imposes an 18% VAT, 30% corporate tax, and a 36% income tax cap. Human Rights Watch has criticized the 2025 tax system as destructive. High corporate taxes have reduced job creation, and the government must immediately act to stabilize the labor market. Large-scale and medium-scale industries face closures, with 15.1% of industrial employment lost in 2023 and around 30 medium and small industries shut down. Skilled professionals leaving the country pose a major challenge to Sri Lanka’s future, demanding urgent government attention.
Export-oriented service industries face pressures, and the government’s 2025 target of earning $3 billion has already fallen short. Young people increasingly seek work abroad due to the tax and employment environment. Programs like India’s MGNREGA for rural employment and Germany’s vocational training initiatives should inspire government discussions on youth employment and skill development programs.
The government must act to remove harmful taxes, guarantee national employment, implement emergency youth programs, reduce professional emigration, lower income taxes, and address industrial job losses. Sajith Premadasa emphasizes that employment issues persist and industrial labor disruption is significant. The government must act on accurate data to ensure sustainable long-term economic growth.
Finally, coal procurement mismanagement has caused losses of around LKR 8 billion. Additional costs arise from extra coal purchases for electricity generation and technical failures at plants like Lak Vijaya. While a committee has been established to calculate direct losses, it cannot estimate indirect financial and environmental damages. Samagi Jana Balawegaya urges that economists from Ruhuna University be included to evaluate total losses related to environmental pollution, electricity procurement, power supply continuity, production costs, and transportation. Without such support, accurate loss assessment will not be possible.”
