- Sri Lanka is facing unprecedented economic crisis with sovereign debt default
- Debt restructuring discussions are at initial level, IMF loan date unpredictable
- Government is encouraging people to go abroad to boost remittances
ECONOMYNEXT – Sri Lanka is fast-tracking a move to utilise all its resources to send citizens abroad to earn as jobs are lost in an economic contraction in the wake of a forex crisis and domestic salaries have lost value.
Sri Lanka has already raised interest rates and taxes in the run up to a deal with the International Monetary Fund to reduce money printing which created forex shortages. The sovereign debt defaulted island nation is in the initial stage of debt restructuring discussions with its creditors who must agree on a plan for Sri Lanka’s anticipated 2.9 billion US dolalr deal with the International Monetary Fund (IMF) to be approved.
Sri Lanka is now taking some baby steps to raise its dollar earnings within and outside the country.
On Friday, the Ministry of Labour and Foreign Employment conducted a job fair titled “Glocal Fair” to showcase employment opportunities available to Sri Lanknas both globally and locally.
“Our Ministry is responsible for providing a wide range of services such as employment to the country’s youth and directing them for foreign jobs, giving them solutions for the issues faced by the foreign workers and the local workers as well,” Minister of Labour and Foreign Employment Minister of Manusha Nanayakkara said at the job fair.
“We have decided to go the villages and give our services to the people.”
The government has already introduced some incentives to Sri Lankan migrant workers who remit their foreign earnings in dollars. Those incentives include houses, apartments, and electric vehicle import licenses, all of which have now become a luxury.
Sri Lanka’s foreign remittances have declined by over 47 percent to 2.2 billion dollars in the first eight months of 2022 mainly because migrant workers stopped sending their earnings through formal channels as the central bank maintained a peg and a parallel exchange rate until March this year.
Though the central bank has allowed some flexibility, remittances did not recover as migrant workers still do not have confidence in the formal banking system amid speculations of a collapse of the system after the economic crisis, analysts say.
Record number of passports, sportsmen for sale
The Department of Immigration and Emigration has overstretched itself to cater to the unprecedented demand for passports this year partly because more Sri Lankans are leaving the country and partly due to workers seeking jobs abroad.
The department has already issued a record 385,000 passports in the first six months of this year compared to 105,000 in the same period last year.
It was forced to ask the public to make an appointment to visit the the Controller General to obtain passports.
Sri Lanka migrant workers who left the country this year have almost doubled to 221,551 in the first nine months of this year, compared to the same period last year, with workers in skilled, professional, and unskilled categories showing record high numbers.
The foreign ministry this week launched an e-channelling service to do away with long queues for consular services including the authentication of government certificates. The move was to ease the process and help Sri Lankans migrate quickly.
This week, President Ranil Wickremesinghe issued a gazette for Sri Lanka’s China backed Port City’s regulator to acquire operating licenses for an annual fee of 2,000 US dollars.
“We see some liquidity in the dollar market, but it is below the level we saw before the economic crisis,” a currency dealer told EconomyNext.
The island nation has already curbed many imports including some essentials to save dollars and has been encouraging exports of merchandise goods, services, and even sportsmen.
“In March, we trained 120 swimmers in four districts under the Sri Lanka Life Saving (SLLS) for both pool and coast lifeguards, and some were selected for the foreign market,” Amal Edirisuriya, Director of the Department of Sports told reporters in Colombo this week.
“In the future, we are planning to carry out this process within the 25 districts and to give 200 more lifeguard employments to our children.” (Colombo/Sep30/20220)