Despite the pandemic and related difficulties in remitting, inward remittances to Sri Lanka had picked up by December 2020 to record year-over-year growth of 5.8 %, contrary to all expectations. The reasons for such a quick rebound include catching up on postponed remittances, accumulated terminal employment benefits and savings-related remittances of migrant workers laid off due to the pandemic, receipt of counter-cyclical remittances from less frequent remitters and the shift from informal to formal channels. In the current context of the foreign exchange crisis in Sri Lanka, the latter is the most critical factor to focus on.
High levels of inequality impede sustainable growth and development of a country. Sri Lanka made impressive strides to reach an upper middle-income country (UMIC) status in July 2019, only to slip back a year later. The COVID-19 crisis, amid growing inequities, is likely to make the task of regaining UMIC status even harder. This blog highlights the main sectors and social groups that are adversely affected, and explains the need for inclusive economic growth (IEG) post-COVID-19 for Sri Lanka to emerge as a peaceful and developed country.
Growing pressure on Sri Lanka’s scarce foreign exchange resources, due to the wide spread of COVID-19 across the globe, is now more real than ever before. To ease this pressure, the Central Bank of Sri Lanka (CBSL) has taken many measures to attract as well as retain more foreign exchange in Sri Lanka. Yet, it is uncertain if these efforts alone would be able to address Sri Lanka’s deepening foreign exchange concerns. This blog highlights the importance of remittances to Sri Lanka and outlines how to harness the potential of international remittances to complement other efforts already taken by the CBSL.
Remittances are often considered a stable and reliable source of development financing. In 2017, remittances to Sri Lanka declined by 1.08%, compared to the previous year, while the decline in 2018 was 2.08%. An underexplored reason for the decline in remittances is the recent changes in the composition of migrant workers from Sri Lanka. Bilesha Weeraratne highlights the gender aspect of remittances, to identify strategies to improve the country’s remittances in the future.
Around 28,000 Sri Lankan youth who have migrated to Korea, temporarily, since 2014, under the Employment Permit System (EPS), to work in manufacturing, construction and fisheries sectors – dirty, difficult, and dangerous (3D) jobs in the SME sector. The temporary nature of migration to Korea necessitates that policymakers in both home and host countries look at ways to help migrants maximise savings during their stay abroad.