Remittances make an indispensable contribution to the Sri Lankan economy. In 2018, the country received remittances of over USD 7 billion, accounting for 7.9% of the GDP. Often, remittances to Sri Lanka are attributed to the temporary migrant workers and viewed from a national perspective. Nevertheless, there are more dimensions to remittances. This blog, Bilesha Weeraratne, examines the nuances of receipt of remittances, at the household level in Sri Lanka.
Taking into account the locations immediately affected by the Easter Sunday attacks and its ripple effects, a short- to medium-term impact on foreign exchange earnings is likely to be experienced in Sri Lanka. The tourism industry, despite once being well-positioned to continue its upward trend in foreign exchange earnings, is now likely to experience a temporary downfall, while international remittances, which were experiencing an incipient downward trend, are likely to experience a temporary upturn in the aftermath of these attacks, argues Bilesha Weeraratne.
In 2017, foreign exchange earnings from worker remittances to Sri Lanka stood at USD 7.2 billion, well ahead of other major foreign exchange earners, while they also covered 96% of the trade deficit. Despite a few fluctuations, worker remittances to Sri Lanka have been growing over the years. At the same time, many developments in ICT and FinTech have emerged to facilitate remittance transaction. Nevertheless, whilst simplifying and making remitting more efficient, these developments have made remittances even more complicated.
While Sri Lanka’s 2018 Budget was applauded on many fronts, Bilesha Weeraratne argues that it has ignored an important aspect of the country’s economy: migrants’ remittances. Annually, over 250,000 Sri Lankans leave for foreign employment. Yet, the proposed Blue-Green Budget had no reference to remittances, nor the migrant workers who send them home. Does this mean migration and remittances are not priorities of the Sri Lankan economy?
This article to mark International Migrants Day 2016, explores the decrease in Sri Lanka’s remittances in 2015, with regard to Labour Migration, and takes a look at ways the country can maximize its remittances.