Delivering the keynote address, Jonah Rexer, Economist at the World Bank, noted that while South Asia continues to rank among the fastest-growing emerging-market regions, the gap between labour-force growth and the pace of job creation remains unusually wide.
Sri Lanka’s post-crisis recovery has stabilised macroeconomic indicators, he said, but fundamental employment challenges persist.
Rexer highlighted that the rise of AI introduces a new dimension of disruption.
His research shows that approximately 20% of jobs in South Asia are currently exposed to AI — primarily in higher-skilled sectors such as ICT, finance and business-process management (BPM).
With Sri Lanka’s early adoption of generative AI already at around 10%, higher than most emerging markets, he warned that labour-market impacts may materialise sooner than expected.
He described a “twin pressure point” emerging in Sri Lanka, where AI-driven displacement threatens sectors traditionally relied upon to absorb young, educated workers — particularly export-oriented IT and BPM industries.
At the same time, Sri Lanka’s longstanding trade-protection regime, characterised by heavy tariffs on intermediate inputs and limited labour mobility, continues to constrain competitiveness and hinders the structural transformation needed to translate technological and trade gains into broad-based employment opportunities.
A parallel presentation by Vagisha Gunasekara, Country Economist at UNDP, underscored the risk that digital-public infrastructure (DPI) and trade liberalisation could reinforce existing inequalities if access, mobility and capacity constraints are not addressed from the outset.
She emphasised that only 37% of adults in Sri Lanka are internet users, with significant numbers of households still offline.
Digital literacy, computer skills and device ownership remain low, particularly among women, rural communities and persons with disabilities.
“AI and trade can be powerful drivers of transformation in Sri Lanka,” Gunasekara noted.
“But only if we ensure that everyone has the opportunity to participate.
We must change who is in the digital queue before opening the gate wide.”
She stressed that without targeted investments in digital access, skills development, labour mobility and SME competitiveness, the benefits of AI and trade reforms will likely accrue to a narrow, urban and digitally connected segment of society.
The CEPA-hosted lecture highlighted the urgent need for a coordinated national approach to ensure that emerging technologies and trade reforms support inclusive growth and equitable opportunities for all Sri Lankans.
Photo caption - Vagisha Gunasekara, Country Economist at UNDP; Dr. Sirimal Abeyratne, Executive Director of CEPA; and Jonah Rexer, Economist at the World Bank, at the CEPA Research and Reflection Discussion held at the Kingsbury.