By Nishan Sumanadeera

Post COVID-19 lockdown and a post General Election 2020, most Sri Lankans never thought or hardly imagined of a resurgence of the worst global pandemic in 21^st century that has shaken the economies around the world.

However, it is now a reality that we have to accept our nation is fighting against a resurgence of the COVID-19 pandemic, with a fresh cluster that emerged over the last weekend around an apparel factory that had moved past 1,000 confirmed cases – the single largest yet in the island. This also shows, as a percentage the number of COVID-19 positive cases are higher among the people who have faced the PCR tests recently.

In the first quarter of 2020, due to the surge in the number of infections of COVID-19 in mid-March, the country was forced into a complete lockdown with all-day curfews-imposed country wide. The lockdown was in place for a period of nearly two months. Curfews were gradually eased with social distancing rules still in force. During the initial wave of COVID-19, Sri Lanka faced major impacts, first being the virus itself and its health effects on those infected and the costs of resources deployed to control the virus in the form of medical resources and quarantine centres. The second impact stemmed from the mitigation strategy adopted by the government. By implementing an elimination strategy using extensive indiscriminate curfews, the pandemic response had a substantial effect on livelihoods and the economy according to analysts. Whilst the costs endured in meeting the first impact are largely unavoidable, the costs of the second are dependent on the chosen strategy according to many analysts.

Today, it is obviously impossible for a country that has 22 million people with a less than US$ 90 billion GDP to afford another lockdown amidst a huge external debt portfolio and a bleak global economic outlook.

Whilst the second wave in Sri Lanka has emerged from a larger corporate, it is vital that a solution exist for companies, factories and small businesses to restart their business in COVID-19 free workplace through reliable testing of employees with government or a superannuation fund such as Employees Provident Fund (EPF), the most caring superannuation fund in the region backed relief proposal. Methodology proposed in this regard explained in below details in length could be considered equitable as all participants share the cost of testing.

Testing Methods

COVID-19 testing can identify the SARS-COVID-2 virus and includes methods that detect the presence of the virus itself (RT-PCR, isothermal nucleic acid amplification, antigen) and those that detect antibodies produced in response to infection. Detection of antibodies (serology) can be used both for diagnosis and population surveillance. Antibody tests show how many people have had the disease, including those whose symptoms were minor or who were asymptomatic. Therefore currently available testing methods incldue

Antibody Testing (Self Testing using a Test Kits) and  Antigen Testing/PCR Testing (Laboratory Testing).

It is assumed that Antibody test kits are more convenient, reliable and less cumbersome method to test employees at workplace.

Annual Cost of Testing

There are only four companies approved by the FDA (Food and Drug Authority) of the USA for the manufacture of Antibody Test Kits. It recommended tocarry out one test per month.

Cost of Anybody Test Kit – Rs 2000/=  (Average US$ 10)

Total Cost per Year per Employee = Rs 2,000/= X 12 Months = Rs 24,000/= (Average US$ 120)

Cost Sharing

It is proposed that all employers purchase 12 months of antibody test kits based on the number of employees from a government-approved supplier and carry out the necessary testing on a monthly basis. The cost incurred by the employer for the purchase to be set off against the monthly EPF contribution as illustrated below.

Illustration – Company XYZ

Monthly EPF Contribution

LKR

Name	Salary	EPF Employee 8%	EPF Employer 12%	EPF TOTAL Contribution	Cost of Testing (Per Month)	NET EPF CONTRIBUTION (As per Proposal)
A	15,000	1,200	1,800	3,000	2,000	1,000
B	25,000	2,000	3,000	5,000	2,000	3,000
C	50,000	4,000	6,000	10,000	2,000	8,000
D	75,000	6,000	9,000	15,000	2,000	13,000
E	100,000	8,000	12,000	20,000	2,000	18,000
TOTAL	265,000	21,200	31,800	53,000	10,000	43,000

 

As given in the above illustration Company XYZ total EPF contribution prior to COVID-19 was Rs 53,000/=. Monthly cost of COVID-19 testing via test kits is Rs LKR 10,000/= (5 Employees X Rs 2000/= per test). As per the proposal, the employer will now contribute only Rs 43,000/= to the EPF and balance Rs 10,000/= would be used to purchase test kits for COVID-19 testing of its employees. This method of deduction will continue until country fully recovers from COVID-19 outbreak.

Above illustration can be applied for factories, offices or even a small business irrespective of the number of employees provided that employee’s salary exceeds minimum Rs 10,000/=.

Summary

This proposal offers a cost effective approach to all corporate citizens of Sri Lanka to re-open the economy quickly and avoid a resurgence of infections, which risks prompting further lockdowns and offering stimulus packages by adding to government debt and bank loans which will be costly to both.

The cost of the test kits will be borne by the employee (or employer if they so decide) through EPF deduction, which would not burden the employer or the Government.

The Human Resources (HR) department of a company should hold on to the test kits, have their employee visit HR each month, and tests to be documented and disclosed to the Ministry of Health (courtesy copies to other relevant ministries) every month. If the test results are not proactively documented, and disclosed by the first week of the following month, and there is even one incidence of a COVID-19 positive case involving an employee of that company, the Government reserves the right to shut the company down and enforce quarantine on all employees concerned.

In the first month of testing, if the antibody test kit shows positive results, then the employee must be sent to a hospital for COVID-19 testing, as he/she may have antibodies and floating virus at the same time. If the same happens in the following month, it provides no further risk.

– Nishan Sumanadeera is a veteran investment banker and a legal consultant in Sri Lanka, he can be reached via nishan@sumanadeera.com or www.sumanadeera.com. This article was originally featured on lankabusinessonline.com