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Govt needs to spend more on healthcare – Central Bank
Sri Lanka has achieved remarkable standards in healthcare but the Central Bank warns that more government healthcare spending would be needed as an ageing population, widely spreading non-communicable diseases and certain communicable diseases, urbanisation and changing lifestyles are beginning to challenge the country’s health sector for which the government spent 1.5 percent of GDP in 2009.

The Central Bank in its latest annual report said chronic non-communicable diseases mortality rate in Sri Lanka was 20 to 30 percent higher than in many other developed countries. "Cardiovascular diseases, diabetes mellitus, chronic respiratory diseases, renal diseases, and cancer are the major non-communicable diseases reported," the bank said.

"The rising trend in non-communicable diseases demands additional financing for healthcare, pressurising the resource allocation by the government," the Central Bank said adding that the Ministry of Healthcare has formulated a national policy to tackle these issues.

Meanwhile, the spread of communicable diseases is jeopardising the country’s healthcare sector the Central Bank warned. "The outbreak of dengue in 2009 placed a serious strain on the entire health sector," it said.

The total health budget of the government in 2009 amounted to Rs. 71.4 billion which was 1.5 percent of the GDP. There were 555 government hospitals with a little over 68,800 beds which amounted to 3 beds per 1,000 persons.

"There were 13,633 qualified doctors, a doctor for every 1,500 persons, and 25,549 nurses, a nurse for every 800 persons," the Central Bank said.

Private healthcare needs regulation...

The Central Bank has called for better regulation of the private healthcare sector.

"The private sector plays a significant role in providing healthcare. It provides services to about 5 percent of all in-patients annually and 53 percent of out-patients. However, the overall responsibility of consumer protection and assuring the value for money that consumers pay for healthcare services lies with the government," the bank said.

"The private sector regulatory council, which was established in 2007, would need to take necessary measures to strengthen its regulatory framework to ensure consumer protection," it said.

"Sri Lanka has achieved remarkable standards in its health outcome, focusing on communicable diseases, in improving maternal and child health by eliminating vaccine preventable diseases. However, these achievements are now being challenged by certain widely spreading non-communicable diseases," the Central Bank said.

A recent report on labour trends in Sri Lanka co-authored by the Central Bank and Department of Census and Statistics showed that the country’s population was aging and this presented problems for the economy.

Sri Lanka`s population is ageing rapidly. By 2020, the child population would increase by 100,000, or two percent. The youth population is expected to shrink by 300,000. The prime age cohort is expected to increase only marginally by 200,000 and the cohort over the retirement age would increase by 1.7 million, or 45 percent. 

Sri Lanka also has the highest gender disparity in the world between the number of employed males and females, exacerbating this demographic threat. 

The report has come up with three possible scenarios to help policy makers see how demographic changes would affect economic growth. 

Historically Sri Lanka`s labour force has grown by 1.3 percent during 2000-2008 and productivity has grown by 3.3 percent. The economy has grown by 5 percent on average and the labour force participation rate was 55.7 percent. 

Under the first scenario, if nothing changes from as they are, by 2020, the labour force would grow by 0.3, productivity would stay the same, and the economy would record a lower rate of growth at 3.6 percent. 

The labour force participation rate would fall to 52.1 percent. 

In the second scenario, under policies that would increase the rate of participation to 55.7 percent, the labour force would grow by 0.9 percent, productivity would be unchanged and the economy would grow by 4.2 percent. 

The third scenario assumes labour force participation improves to 60.8 percent by 2020 while productivity is improved to 4.9 percent. The Labour force is estimated to grow by 1.6 percent and the economy by 6.6 percent. 

To achieve the third and last scenario, Sri Lanka needs to implement policies that would result in robust employment and productivity improvements. 

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