Central Bank choosing to deny reasonable expectations of Sri Lankan migrants

By Dr. Anpudeen Yoonus Lebbe
The Central Bank of Sri Lanka (CBSL) appealed to the Sri Lankan Migrant Community on 2nd of June 2022 that they may channels their remittances through the formal sources  to benefit the country’s economy. The CBSL has taken a good step towards increasing the inflow of foreign currency to the country. While appreciating the move by CBSL, one cannot forget the statement made by the governor of CBSL on 24/05/2022 dashing hope held out by a cabinet minister to the Sri Lankan Migrant Community.
The Sri Lankan economy depends highly on foreign remittance and it had improved significantly within the last decade. The foreign remittance increased from 3.3 billion US dollars in 2009, to 7.19 billion US dollars in 2019. It started to decline from there onwards due to the ill treatment of Sri Lankan diaspora during Covid-19 and the pegging of dollars in September 2021. Sri Lanka had received foreign remittance around 600 million US dollars per month, and it has reduced to 204 million US dollars in February 2022, meaning that the amount dropped by 2/3. The Sri Lankan government has been pleading With the IMF to provide 4 billion US dollars, whereas more than 4 billion US dollars are being lost per year due to mismanagement.
The population of overseas Sri Lankans is nearly three million—that is, one in eight Sri Lankans live abroad. 1 million out of 3 million overseas Sri Lankans are settled abroad as citizens especially in America, Europe and Australia. The rest of the Sri Lankan expatriates mainly live in the Middle East as non residents. 80 – 90 percent of female Sri Lankan diasporas are domestic workers. Politicians, as well as some Sri Lankan citizens, do not understand the intense suffering of the Sri Lankan Migrant Community. All that they comprehend is that the Sri Lankan migrants are money making machines. Everyone’s hard work and investment has value – apart from the Sri Lankan Migrant Community.
The Sri Lankan state or private banks have never provided any benefits or incentives to Sri Lankan Migrants, who send foreign currency to local banks in Sri Lanka. Further, the government has never made any attempt to provide such benefits for their services and hard work to encourage them to send more foreign currency. This is called bilateral benefits. It means that the country and its citizens are benefited. Recently, one of the cabinet ministers brought a proposal to provide a car permit if any Sri Lankan overseas employee sends 100,000 US dollars to Sri Lanka. Everyone, including the above stated minister, assumes that the Sri Lankan Migrant Community is retaining income unreasonably. The minister did not even think of the majority who have been working as domestic and low income workers for years and years, leaving their children and family back home, to send dollars to Sri Lanka. Any incentives or benefits should be shared by everyone according to the duration of time that they stay abroad and the amounts they remit. Further, if anyone possesses a net earning of 100,000 US dollars per year, they will not think of getting a car permit in Sri Lanka. Instead they would choose to invest on something else. Either way, at least someone opened their eyes so that the thought of doing something appreciating the sacrifices they make abroad dawn on the authority, but the governor of CBSL says that it is unfair to pay incentives to migrant workers, as it tantamounts to injustice being meted out to those who pay taxes at home. He further says that “for instance, a migrant now receives Rs.360 for a dollar, compared to Rs.200 received through March 7 before the currency was floated”. The governor forgot to understand that the Sri Lankan Migrants receiving Rs 360 instead of Rs 200 is neither due to their demand nor fortune, it is due to the mismanagement of the economy by the Sri Lankan government and CBSL which devalued Sri Lankan currency. Further, the dollar has appreciated or the rupee has depreciated by 80 percent but the expenses in Sri Lanka have increased by 200 to 300 percent or even more. The best example is the cement price, which was 1350 rupees before the dollar appreciation and is 3000 rupees today. The petrol price was 137 rupees per litre and is 420 rupees at present. No one can predict what the price could be tomorrow.
Foreign currency is like the engine of a vehicle. If the engine fails, the vehicle is of no more use, even if it is the best brand in the world. The crisis in this country is due to the depletion of foreign currency. The foreign currency reserve was 7.5 billion when the new government came to power in November 2019 and it decreased to almost zero by May 2022. The foreign remittance was 7.19 billion US dollars in 2019 and it could have been increased to more than 10 billion US dollars if the government had encouraged foreign migrants through some beneficial means to remit their earnings to the country. This economic crisis wouldn’t have arisen if the government had valued the hard work and suffering of overseas employees and prevented the pegging of dollars in September 2021. Now, everyone is begging the Sri Lankan migrant community to remit foreign currency through formal channels or invest in Sri Lanka in callous this regard to their sweat abroad for their earnings. Almost all politicians and their allies are investing looted money abroad whereas the Sri Lankan migrant community is called upon to send money to Sri Lanka without any a benefits.
The foreign remittance would have been increased to over 12 billion per year if the responsible people had been prompt in taking timely action. Even now, those responsible are making unpleasant and discouraging statements to prevent the inflow of foreign currency to the country with no lesson learned from their past ill-advised actions and utterances. The Sri Lankan government is looking for 500 million US dollars on a credit line from India for fuel and other essential commodities, whereas the government and the responsible authorities do not have any plans to attract the normal flow of foreign remittances which were more than 500 US dollars per month. In fact it even rose to 812.7 US dollars in December 2020. The government and the CBSL have to strategize how to increase the foreign remittances constantly instead of holding a begging bowl to the Sri Lankan migrant community.