New measures to increase FDI, worker remittances
View(s):Sri Lanka’s Finance Ministry, worried about falling levels of migrant worker remittances and foreign investment, is currently devising a streamlined and integrated mechanism to enhance investments and remittances, Finance Ministry sources said.
Finance Minister Basil Rajapaksa has directed ministry officials at a high level meeting to formulate short and long-term policies in accordance with the new mechanism aimed at enhancing the quality and outreach of the rural remittances’ infrastructure system.
A high official of the ministry told the Business Times that “priority will be given to identify fields attractive for investors and create necessary background with the help of proper communication and strategy to propagate the new plan both here and overseas”.
Investor facilities will be enhanced by implementing programmes towards the ease of getting approval and licenses as well as other public and private infrastructure inputs from relevant state institutions and agencies for investment projects.
Special focus at the meeting was mainly on the developmental impact of foreign remittances; the high transaction costs associated with remittances; and the level of transparency and accountability in the remittance process, especially the informal remittance sector, he disclosed.
The Minister also directed officials to identify the present problems faced by Sri Lankans who are expected to leave the country for overseas jobs and provide prompt solutions alleviating their difficulties.
He emphasised the need of removing any obstacles against Sri Lanka foreign employment aspirants as they have a ready demand in the overseas job market.
Mr. Rajapaksa has instructed the officials to immediately settle the issue of booking seats in relevant flights by seeking the assistance of local and foreign travel agents and airlines.
It was stated that the fixed exchange rate system enforced by the Central Bank has increased the transfer of remittances via informal channels causing a considerable loss of foreign exchange to the country.
The new policy strategy will be introduced in accordance with the proposed streamlined and integrated mechanism in the medium term to enhance foreign remittances.
The lockdowns in West Asia and other countries made it difficult for Sri Lankan migrant workers to remit their wages via traditional methods, such as visiting a bank or a money transfer operator (MTO), the official said.
Earnings from worker remittances have come down significantly in June this year ending the 13-month long spell of continued increases in monthly repatriations recorded year-on-year after it began in May last year.
Sri Lankans working overseas have remitted a sum of US$478.4 million in June 2021, compared to $572.5 million sent by them in the same month in 2020. Worker remittances continued its downward trend in July recording a sum of$453.3 million compared to $702 million in 2020 while in August 2021, remittances were recorded at $446.6 million compared to $664.5 million during the same month last year. Treasury estimates say foreign remittances are estimated to fall this year from $7.1 billion in 2020.