Five per cent of Remittances Eaten Up as Costs

By Paneetha Ameresekere | Published: 2:00 AM Jan 25 2021
FT Five per cent of Remittances Eaten Up as Costs

By Paneetha Ameresekere

Five per cent of remittances value sent by Sri Lankan migrant workers goes as direct and indirect cost of remittances, the Foreign Employment Bureau (FEB) in a report released last month said.  

The report entitled ‘National Policy on Migration for Employment for Sri Lankans and National Action Plan (2020-2023) which the FEB said is a draft, identified the lack of financial literacy as an impediment for migrant workers to fully benefit from their earnings.

Among the associated negativisms vis-à-vis remittances were low, awareness of mobile money transfer technologies such as FinTech, Ezy cash, M-cash; unhealthy competition amongst banks created by exchange houses which dictates fee incomes; rigid procedures in the formal financial sector which push migrant workers towards informal remittance channels and the lack of discussion on remittance use prior to departure resulting in poor remittance management at the household level.

 These findings highlight the lack of awareness amongst migrant workers and their families on remittance channels and management, the FEB said. The study also highlights the need to improve financial management through investments to translate benefits of remittances to economic development. These findings also call for strategic interventions in remittance management, the draft report added.

FEB further said that approximately 200,000 workers (34 per cent women) leave the shores of Sri Lanka annually for foreign employment. However, outwards migration is mostly low skilled with the ‘housemaid’ category constituting a significant proportion of departures annually, it said.

Right Balance 

The report further said that worker migration must be managed to strike a balance between labour demands nationally and supply of labour to foreign markets. 

For instance, with an increase in the ageing population, there is an increased demand for elderly care workers locally, it added.

Therefore, a mismatch between existing domestic employment opportunities and the available supply of domestic labour is discerned, the report said. As such a multi-pronged analysis looking at key sectors is the need of the hour, the report said.

To facilitate this, an analysis of sectors such as education, higher education and vocational training is required to ensure that domestic labour shortages are avoided due to the supply of labour to overseas markets, it said.

Tap Diaspora

The substantial number of Sri Lankans living and working in foreign countries on either temporary or on permanent basis should be tapped to garner information on how migrant worker rights may be protected and enhanced, it further said.

These Sri Lankans, also known as the diaspora, are a rich source of tacit ‘Voices’ of migrant workers. They must be heard and mechanisms to facilitate collective voices must be strengthened,’ the FEB said.

 They can also help us economically and non-economically, through remittances knowhow, inter-cultural experiences and support of domestic and nuclear economies through families, friends and kinship networks. Also, expanding opportunities for export diversification, new business initiatives and human capital formation through exchanging know-how and training, said FEB. 

Meanwhile, to facilitate contributions from these Lankans living and working abroad, an enabling environment must be created to attract international investments by granting dual citizenship and specialised visa categories for investors domiciled in foreign countries, revision and amendments to property laws to facilitate legal rights to own and manage property and specific laws to facilitate them to contribute to development, the FEB said. These opportunities must be developed locally and implemented globally through the active involvement of the Government, it said. This should be undertaken by Lanka’s diplomatic missions under the strategic guidance of the Foreign Affairs Ministry, the report emphasised. 

Migrant Rights

Returning migrants and their families have formed small groups and societies at the village level to voice concerns and lobby for rights, the FEB report added.  These groups must be empowered to realise their full potential and to contribute to promoting rights and protection of migrant workers, the FEB further said

In recent years, it has become evident that the communities of returning migrants and their family members organise themselves into small groups and societies at village level to voice their concerns and lobby for their rights, the FEB reiterated. 

This is a healthy phenomenon and such collective voice is needed to influence policymakers, it said. Strengthening these groups, and empowering them to realise their own potential and supporting their peers would make a significant contribution to the migration sector, the FEB said. 

Local Labour Market

In addition, it is important to improve employability of low-skilled and semi-skilled workers and investigate opportunities for reintegration of experienced low-skilled migrant worker returnees into the local labour market, the FEB added. ‘This circular coupled with reintegration will build human and social capital, the FEB added. 

In the context of domestic labour shortage in specific sectors, the import of labour has become inevitable, the report further said. 

Migrant worker remittances are Sri Lanka’s single largest source of foreign exchange earnings.

By Paneetha Ameresekere | Published: 2:00 AM Jan 25 2021

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