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Friday June 14th, 2024

Sri Lanka worker migration, passport issues, begin to decline

ECONOMYNEXT – Sri Lanka’s departures for foreign employment has declined for five straight months, while new passport issues have declined for seven, official data shows.

Departures for foreign employment in August 2022 was 26,394, down from 29,186 in 2022. In September departures fell from 30,104 in 2022 to 25,311, Foreign Employment Bureau data quoted by the central bank shows.

In December 2023, departures were 23,259, down marginally 23,407.

Passport issues began to fall from June 2023.

In 2022, 92,880 passports were issued in June, 100,396 in July and 115,403 in August.

In 2023, 88,308 passports were issued in June, 76,071 in July and 87,433 in August.

In December 2023, 53,431 passports were issued, down from 69,920 in 2022.

Meanwhile, total departures of Sri Lankans from the country for all purposes continued to increase.

This may be due to a gradual recovery in incomes leading to a recovery in outward tourism.

Advertisements for outbound travel including for pilgrimages to India (Dambadiva charika) have started to appear in Sri Lankan media amid monetary stability.

Sri Lanka also clamped down on workers departing for work on tourist visas. There is no information whether some persons were mis-declaring departures.

Sri Lanka saw a spike in outmigration after macro-economists printed large volumes of money to push growth (target potential output), a practice that gained ground after the end of a civil war triggering serial currency crises. In 2022 the rupee collapsed from 200 to 370 to the US dollar.

Currency depreciation, promoted by inflationists for several decades based on Mercantilist ideology (in the belief that it increases exports or decreases imports or both), destroys real wages making it difficult for people to make ends meet.

Most of the worker departures are to countries with superior monetary regimes in the Middle East, based on currency board like principles (cannot cut rates with inflationary open market operations), which require imported labour due to fast growth.

Sri Lanka’s top remittance generating countries are Kuwait, Qatar, UAE, Saudi Arabia, all of which have currency board style regimes.

Sri Lanka also imported labour when the country had a currency board, before a central bank through which inflationist macro-economists could cut rates was set up soon after independence, condemning the country to capital controls, trade restrictions and frequent IMF programs.

Sri Lanka’s central bank has allowed the rupee to re-appreciate, bringing down food and other prices, boosting real wages while firms are also raising salaries amid the monetary stability provided.

Analysts had warned that under the current operational framework, where rates are cut when inflation falls to low levels, the currency will be hit when private credit recovers and inflationary domestic operations are deployed to suppress interest rates.

Sri Lanka’s macro-economists, by promoting various narratives (the budget deficit – blame the politicians), there is a current account deficit – blame the citizens who are net savers and the most widely spread story that there is a ‘structural’ problem) have denied a sound monetary regime to the people, critics say. (Colombo/Apr25/2024)

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Sri Lanka opposition leader proposes Grama Rajya system in addition to 13A

Opposition leader Sajith Premadasa (r) – File photo

ECONOMYNEXT — Sri Lanka opposition leader Sajith Premadasa has proposed devolving power to the village level through a Grama Rajya system in addition to implementing the 13th amendment to the constitution.

Speaking at an event in Jaffna on on Wednesday June 12, Premadasa said all provinces will benefit from the 13th amendment.

“Whatever one’s ethnicity, religion, status or region, this country has citizens of equal level. They’re all Sri Lankan citizens.

“There is no division or grouping.  As we give you and every other province what you should be given through the 13th amendment, we must implement a Grama Rajya system,” Premadasa said, addressing a crowd of school children and other attendees.

Premadasa’s assurance of implementing the 13th amendment has already drawn some protest in the south.

A collective of civil society organisations held a protest outside the office of the leader of the opposition in Colombo on Thursday June 12.

Calling itself the ‘Coalition Against Partition of Sri Lanka’, the group carrying national flags marched up to the opposition leader’s office Thursday June 13 morning and demonstrated against the full implementation of the 13th amendment.

“We arrived here today to hand over a missive against devolving police powers, land powers and judicial powers. If Mr Premadasa is inside, come outside,” Jamuni Kamantha Thushara, Chairman of the Citizen’s Movement Against Fraud, Corruption, and Waste, was seen declaring at the site.

“First of all, tell us what we stand to achieve by dividing and giving away the north and east,” said another protestor, warning against bringing the 13th amendment “anywhere here (paththa palaathe)”.

A police officer at the scene the protestors that a secretary to the opposition leader was ready to accept their letter.

“In Kilonochchi, he says the 13th amendment will be implemented. The votes in the north are going to be decisive this election. To win those votes, President Ranil Wickremesinghe, Sajith and Anura Kumara Dissanayake all say they will implement the 13th. We will not allow this country to be divided into nine pieces,” said Thushara.

Ven Balangoda Kassapa Thero, who was arrested on June 06 during a protest against the new Electricity Act, was also seen at Thursday’s protest. The Buddhist monk requested for a debate with Premadasa on the matter of the 13th amendment. (Colombo/Jun12/2024)

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Sri Lanka rupee closes flat at 303.85/95 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed broadly flat at 303.85/95 to the US dollar on Thursday, from 303.80/304.00 to the dollar the previous day, dealers said. Bond yields were down.

A bond maturing on 15.12.2026 closed at 10.00/30 percent, down from 10.20/40 percent.

A bond maturing on 15.10.2027 closed at 10.60/75 percent.

A bond maturing on 01.07.2028 closed at 11.00/15 percent, down from 11.15/40 percent.

A bond maturing on 15.09.2029 closed at 11.80/85 percent.

A bond maturing on 15.05.2030 closed at 11.85/12.05 percent, down from 11.90/12.05 percent.

A bond maturing on 01.10.2032 closed stable at 11.95/12.15 percent. (Colombo/Jun13/2024)

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Sri Lanka sells Rs295bn in 2027 to 2031 bonds

ECONOMYNEXT – Sri Lanka has sold 295 billion rupees in 2027, 2029 and 2031 bonds, data from the state debt office showed.

The debt office sold an offered 60 billion rupees of 15 October 2027 at an average yield of 10.30 percent.

All offered 125 billion rupees of 15 September 2029 bonds were sold at 11.00 percent.

All 110 billion rupees offered of 01 December 2031 bonds were sold at 12.00 percent. (Colombo/May13/2024)

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