Sri Lanka Human Capital Development

Human capital is a central determinant of economic well-being and social advancement in the modern world economy. The concept of human capital covers the knowledge, skills, nutrition, and health that people accumulate over their lives, enabling them to realize their potential as productive members of society. Because of the vital importance of human capital for economic growth, the World Bank has launched the Human Capital Project (HCP), which includes the Human Capital Index (HCI). The objective of the HCP is to accelerate human capital development around the world. The HCI is a cross-country metric designed to measure and forecast a country’s human capital. Sri Lanka is a lower-middle-income country seeking to become an upper-middle-income country. Developing human capital to a new and higher level will be central to achieving this development goal. After the country’s 26-year secessionist conflict ended in 2009, Sri Lanka’s economy enjoyed rapid growth at an average rate of almost 6 percent between 2010 and 2017, reflecting a peace dividend and a determined policy thrust toward reconstruction and growth. However, in more recent years there have been signs of a slowdown. The economy is transitioning from a predominantly rural economy to a more urbanized one. In the context of the HCP and the HCI, Sri Lanka Human Capital Development analyzes the main achievements and challenges of human capital development in this East Asia and Pacific island country in health and nutrition—including stunting—and in education—including the challenges posed by Sri Lankans’ low participation in higher education. The report concludes with a look at the importance of building a consensus among the public and other stakeholders to launch an ambitious human capital development program in Sri Lanka.