How financial crisis of the Sri Lanka, effect on Human Resource Management in garment sector?

 Introduction

Sri Lanka is a lower-middle-income country with a GDP per capita of USD 3,852 (2021-22) and an overall state of 21.8 million. With over six decades of cooperation with Sri Lanka, World Bank Group extends to uphold Sri Lanka’s growth to a better aggressive, inclusive, and volatile country. On the demand surface, many Asian garment firms are still suffering considerable difficulties.(Bala Sumathi ,2022)

 

            Figure 1. (Daily news, 2022)

Country Situation

Growth is required to increase to 3.3 percent in 2022, but the medium-term vision is clouded by pre-extant macroeconomic shortcomings and the economic scarring from the COVID-19 pandemic. With businesses and profits dropped, difficulty is estimated to persist above pre-pandemic grades in 2021. Representative capitals stand insignificant relative to limited-term obligations amid strained market approach. An extreme external commerce shortfall is applying pressure on the stock exchange rate.

 

Sri Lanka is experiencing such a troublesome economic crisis due to the shortsightedness of the politicians, temporary solutions and poor term planning without a visionary control and a good leadership in addition to the intimate agenda of politicians who were extremely responsive in maximizing their self-profit by holding their pockets out of the loan picked up to bear out infrastructure projects.

                                              

                                                    Figure 2. (hirunews.lk, 2016)

 In January 2022, India presented a $400 million swap and again held up an Asian Expanse Union agreement of $500 million. Moreover, India accepted a unique system of wealth worth $500 million for the investment of petroleum productions.

 Finance Minister, Basil Rajapaksa had appealed to all the government laws to replace off all the street lights at least up until the end of March 2022 in an attempt to retain and preserve the electricity. Sri Lanka is also going through one of the worst economic crises in decades and the declining foreign stocks is also held on the electricity consumption, fuel consumption and cooking gas occurring in extreme weaknesses. Nearly, 1000 bakeries have been shut as a feedback to shortages of cooking gas brought about by lawless foreign fund crisis. Long queues have appeared in late months in presence of petrol filling stations due to fuel shortfall incurring to external reserve crisis. Most of the people can’t do their day today works due to heavy power cuts. The growth in overall oil prices significantly enhanced the fuel shortage in Sri Lanka as the country had to bring in extra than before to take the supply of fuel with the risk of over outflow of unfamiliar capitals. Unfortunately, these days most of the people are going through a hard time. (Srinivasan Meera, 2022)

Figure 3. (Alamy, 2021)

 

The importance of HRM

The importance of planning and handling of human resources in a country’s growth process cannot be over-emphasized. This should run support in hand with the process of economic development. Human resource planning involves to the opinion and recognition of human resource obligations of the tasks that are designed in order to find social-economic targets of the community. Efficient human resource strategy suggests that sufficient manpower, with the appropriate blend of talent, is applicable in proper locations, observing their roles when required. (Marxist youth in Sri Lanka, 2022)

                                            Figure 4. (Adeimpe Adebola, 2013)

Impact of HRM in garment field

The Sri Lankan rupee becomes decreased by more than 10% against the US dollar, showing rise to concerns among Indian cloth and textile dealers that payments could become delayed. This shows up after a drop-in export to Sri Lanka.

 

“Exports of cotton texture to Sri Lanka were indicating an uphill tendency due to pent up demand. But it appeared declining from August, and thus moved the industrial difficulty which obstructed commerce” said by the executive director of The Cotton Textiles Export Promotion council.

Sri Lanka’s economic troubles are partially expected to the outbreak of Covid-19, which affected tourism, one of the essential sources of foreign currency earnings. Its producing overseas debt crisis is likewise regarded as one of the essential elemental reasons for the current situation.(Weerasooriya Sahan, 2022)

The following are some key issues / problems affecting human resource planning and development;

 

·        Lack of procedures to support labor production and also a productivity-oriented functioning experience.

 

·        Excessive cost of labor owing to inflated wages cause organizations reluctant to commence new hiring, and to re-train continuing organization. Re-training could be costly in the situation of large diversity of experienced labor.

 

·        Shortage of an executive friendly atmosphere to expedite purchases in different projects.

 

·        Reduction of a process to realize different capabilities in the legal education systems and to support their expansion in specialized situations.

 

·        Weakness of the communal institutional structure to support modernizations, through permitting and excluding, production improvement and market access responsibilities.

 

 

·        Lack of techniques to carry out direct school leavers appreciative of whatever possible facilities for them to continue their legal education at an afterward stage, so creating such individuals under-efficient for growth.

 

·        Career management is not an essential component before the juniors leave schools after secondary education.

 

·        Limitations in the applicable procedures for permission of teaching institutes, limiting the education programs on attempt meet job market needs and foreign requirements.

 

Conclusion

This garment sector issue which arises because of current economic crisis is a serious obstacle to employee, people and which affecting to HRM too. So, government should accept proper decisions and plans to overwhelm these issues in society and redevelop our country.

 

References

 

 "Marxist youth in Sri Lanka protest outside president's office, attempt break-in". EconomyNext. 2022-03-18. Retrieved 2022-03-20

Srinivasan, Meera (2022-03-19). "Adani Group entering country through back door, says Sri Lanka's Opposition". The Hindu. ISSN 0971-751X. Retrieved 2022-03-20

Bala, Sumathi (2022-01-24). "Sri Lanka's central bank governor says country does not need IMF relief amid inflation concerns". CNBC. Retrieved 2022-03-09

Weerasooriya, Sahan. "Russia-Ukraine conflict: Economic implications for Sri Lanka". Retrieved 2022-03-09.