Sri Lanka is closer to becoming an “aged society” than any other country in South Asia and will reach that threshold in 2030, according to a World Bank report reported by NewsFirst on Tuesday.
The report, Demographic Change in South Asia: From Tailwinds to Headwinds for Development, finds that Sri Lanka became an ageing society as far back as 2008. That makes it an outlier in a region where most countries still have comparatively young populations and large working-age shares.
The dividend already peaked
Much of South Asia is still drawing on what economists call a demographic dividend — a large and growing working-age population that lifts output, broadens the tax base and expands the labour supply.
Sri Lanka’s share of working-age people peaked nearly two decades ago, in 2005, the report says. Since then the advantage has steadily eroded: proportionally fewer people are entering the labour force while the number of older citizens keeps rising.
That inverts the policy problem. Ageing societies must support more retirees from a relatively smaller workforce while still funding social services and sustaining public finances.
The report argues Sri Lanka is past the point of preparing for ageing. It is already living through the transition and needs to accelerate how it adapts.
Firms that do not grow
The report also flags weak business growth as a compounding problem. Researchers found that firms aged between 15 and 24 years are only about 1.5 times larger than younger companies — modest expansion suggesting many businesses struggle to scale as they mature, which limits productivity gains and job creation.
That matters more in an ageing economy, where growth has to come increasingly from higher output per worker rather than from more workers.
The report was presented at a World Bank conference of the same name held in Colombo in late October. A second strand of the findings concerns migration, with the Bank’s South Asia Regional Director for People arguing that the policy answer to skilled emigration is to draw people back rather than to prevent departures.
