Minimum wage of $250 on hold

Budget proposal to raise migrant workers’ wages not viable due to skills issue

Sri Lankan migrant workers hoping for a New Year bonanza in the form of a sharp rise in their minimum wage will have to wait longer as the authorities want to raise the skills of workers, particularly domestics, before negotiating increased wages with other countries.

Labour Minister, Athauda Seneviratne, agreeing with industry concerns, says that more training and improvement of skills of workers are required before the government negotiates with other labour-receiving countries on the 2007 budget proposal of a minimum wage of US$250 per month against a current US$125-130 now.

“We would like to increase the salaries but we need to improve the quality of our workers first. We need to enhance their skills before asking higher salaries for them,” he told The Sunday Times FT. Anwer Illumudeen, President of the Association of Licensed Foreign Employments Agencies (ALFEA), said a lot of the work of the industry has been held up following the proposal which has made it more difficult to market Lankan workers. “The budget has more than doubled the minimum wage limit. Who would want workers at these rates when the Philippines offers better skills and quality workers at similar rates and there are new, cheaper labour supplying countries like Bangladesh and Ethiopia to choose from?” he asked.

Unofficial figures show that this year just over 190,000 of all categories of workers have gone abroad, lower than the 230,000 that found overseas employment in 2005. Securing jobs overseas is becoming more competitive, industry sources say. ALFEA has also put on hold ongoing discussions with the Central Bank on a new scheme for migrant workers to improve remittances.

The Central Bank says more than 50 percent of remittances from the Middle East come through unofficial channels resulting in the country losing valuable foreign exchange

“We want to raise the level of official remittances in 2007 to $3.5 billion compared to an estimated $2.3 billion this year,” according to Central Bank Governor Nivard Cabraal.

The Central Bank has urged local banks to set up exchange houses overseas to steer remittances through official channels. Banking sources said HNB, which has the largest number of NRFC accounts after the Bank of Ceylon, is opening an exchange house in the Middle East next year.Seylan already has a similar operation while other banks deal through financial institutions there.

The Labour Minister is also preparing for the visit of the UAE Labour Minister to Sri Lanka on January 4 to discuss the proposed Memorandum of Understanding (MoU) on Lankan migrant workers.

Seneviratne said the MoU which has been submitted to the Cabinet for sanction deals with welfare, health and insurance issues.
The UAE government recently decided to have negotiations on Memoranda of Understanding (MOUs) with the four major sending countries including Sri Lanka.

Labour activists say that proposed reforms by the UAE authorities and employers to protect the rights of Sri Lankan unskilled workers fall short of the needs, particularly in the context of exploitation which is a big problem.

Sri Lankans constitute 170,000 of the workforce in the UAE, about 65% of whom are women working as domestics.