Programme description

Title: Capacity Building for Competitiveness and Qualified Employment
Commissioned by: Bundesministerium für wirtschaftliche Zusammenarbeit und Entwicklung (BMZ)
Country: Sri Lanka
Lead executing agency: Ministry of Industrial Development and Ministry of Vocational and Technical Training
Overall term: July 2000 to December 2008

Context

To create and secure sustainable employment is Sri Lanka’s main sociopolitical challenge. There is a high official unemployment rate estimated at 15 percent and widespread hidden unemployment especially in the rural areas. Annually around 120 000 youths enter the labor market. This problem is intensified by the prospective demobilization of soldiers as a result of successful peace negotiations and the necessity to reintegrate about 50 000 deserters through gainful employment into mainstream society.

Creating and securing suitable jobs can only be achieved through stable economic growth. As small and medium enterprises (SMEs) account for 70 percent of employment generated in the business sector they play a key role. The modernization of the SME sector is hindered by the lack of qualified personnel and financial capacities as well as competencies and strategies in the public and private sector support institutions.

The programme systematically links the following components 

• labor market oriented human resource development and job oriented further training
• enhanced competitiveness and market access of SME through integration into value chains and
• conducive framework conditions for competitiveness and qualified employment.

Only in this manner can the much needed reforms of the overall sector be effectively addressed thereby contributing significantly towards the poverty reduction strategies of the Government of Sri Lanka.

Objective

The competitiveness of the Small and Medium Enterprises (SMEs) is sustainably improved.

The component goals are: 

• In public private partnerships (PPP) the vocational educational institutions will conduct labour market oriented and efficient vocational training that includes modern job categories.
• The integration of small and medium enterprises into internationally competitive value chains is improved.
• The framework conditions for the development of small and medium enterprises and for qualified employment are improved.

Approach

The programme’s promotion components are advice on all levels, training, provision of equipment as well as on a case to case basis direct local subsidies. The supported intervention measures individually comprise the components of the programme.

On vocational training

• insitutionalization of a network of government and private technical training institutions
• training of instructors
• equipment of training institutions 
• enhancement of planning and implementation capacities of participating institutions 
• establishment of a training agency
• implementation of further training courses in modern technologies
• elaboration of a job oriented training programme linking training courses with hands on production together with the partner organizations National Apprentice and Industrial Training Authority (NAITA) und Vocational Training Authority (VTA) of Sri Lanka
• design of nonformal education training modules
• development of vocational training measures for war affected youth in the North and East (cofinanced by UNICEF).

On small and medium enterprise (SME) promotion 

• the promotion of economic sectors along value chains such as spices, organically produced food crops, alternative tourism and rubber processing
• the establishment of a forum with representatives of enterprises, business associations and chambers as well as government institutions for mutual exchange of information and interests, mutual elaboration of interests, analysis of potentials and planning of agreed interventions
• implementation of linkage programmes for the promotion of cooperation between large and smaller enterprises (together with the Ceylon Chamber of Commerce).

On improved framework conditions

• establishment of a forum composed of representatives of medium enterprises, trade unions and government institutions on issues concerning labor relations to reduce the considerable losses in efficiency and productivity caused by labor conflicts (together with the Federation of Chambers of Commerce and Industries of Sri Lanka)
• training measures, discussion events and public relations work on industrial relations.

Results achieved so far

Small and medium enterprises represented by their associations and chambers actively participate in programme implementation with considerable own contributions.