ECONOMYNEXT – Sri Lanka is targeting $1 billion monthly foreign inflow from worker remittance by end-2023 with more people leaving the island nation for offshore jobs after an unprecedented economic crisis, Foreign Employment and Labour Minister Manusha Nanayakkara said.
Worker’s remittances have fallen 40.2 percent to $2.9 billion in the first 10 months of this year mainly as most Sri Lankan expatriate workers sought informal methods like Undiyal or Hawala to send the money due to higher exchange rate than that offered by the formal banking system in Sri Lanka.
Nanayakkara has introduced several incentives to encourage Sri Lankan workers in foreign countries to send their money through the formal system and the island nation has witnessed a reversal in year-on-year fall in monthly remittances for the first time in September 16 months.
“Since we are giving benefits to the migrant workers, the foreign remittance is increasing and our
target is to achieve the $1 billion per month target at the end of 2023,” Nanayakkara told EconomyNext in a telephone interview.
“In the near future, we will not recruit workers for government service and we will completely limit
it. All the sectors are facing a high shrinkage right now,” he said when asked about the possibility of a labour shortage due to a higher number of Sri Lankans leaving the country seeking foreign jobs.
Sri Lanka saw record high foreign remittances of $7.4 billion in 2020 and analysts believe the minister’s $1 billion monthly target is “highly ambitious” unless the central bank floats the currency and reduces the gap between the formal and informal market exchange rates.
Nanayakkara admitted that “a trust issue was created” due to lower exchange rate in the formal banking system.
“It keeps changing little by little,” he said.
The government has taken some steps including high duty-free allowance, pension benefits, and vehicle imports to boost foreign remittances.
The government has also focused on sending skilled labourers for foreign employment, instead of unskilled, the minister said.
A record 273,988 Sri Lankans have left the country for foreign jobs as of November 14 this year, compared to 203,087 outward labour migration in 2019. (Colombo/Nov18/2022)