News
Cash from Sri Lankans overseas remains a pillar in forex inflows
View(s):By Kapila Bandara
Earnings of Sri Lankans up to August add up to US$4.28 billion and surpass tourism earnings of US$2.34b, data released this week show. These remittances bolster domestic consumption, among other factors, reports show.
Remittances from Sri Lankans stand out against tourism and even export earnings, considering the multi-billion dollar outflows from these two sectors every month.
Some of the export earnings are questionable considering the multi-billion dollar frauds exposed by the Customs Department such as the most recent scam to ship copper scrap illegally. Losses from the areca nut (HS Code 0802.80.90) imports and reexports under the ‘Temporary Import for Export Purposes’, by a politically connected cartel of eight are a drain on forex liquidity. The widespread scams undermine the Indo-Sri Lanka Free Trade Agreement, which exporters themselves had lobbied for.
Foreign exchange outflows from tourism are estimated by researchers at US$15m every month, or US$180m a year.
The US$4.28b remittances of Sri Lankans exceeded the US$3.86b in the same period the year before, a 11% rise. That is comparable to forex reserves (US$5.9b) in the country excluding the yuan swap worth nearly US$1.5b. Short term net drain on forex loans, securities and deposits is US$1.42b, data from the Central Bank of Sri Lanka show.
In the merchandise import-export trade, the outflows of forex due to imports of inputs are at US$2.36b up to August and have increased from the year before. That is bigger than all the tourism earnings up to August. Forex outflows for investment goods have jumped to US$654.57 million up to August.
In the first quarter, the biggest chunk of forex remittances, or US$172.3m, came from Kuwait
followed by Saudi Arabia (US$162m), Qatar (157.4), and the United Arab Emirates (154.9m) where most female domestic helpers are.
Sri Lankans in South Korea sent home US$106.2m, compared with the UK (US$98.8m) and Italy (US$75.3m), Maldives (US$41.9m) and Australia (US$30.9m), new data show.
In the first quarter 14,000 women went to Kuwait, far more than that to any other country. A little more than 8,000 went to Saudi Arabia.
Despite suspect claims of economic stability, Sri Lankans still pack their bags for overseas work and they then keep the home fires burning. In January 25,179 left, and in February 25,795 took flights out. In March 24,201 left. From January to March, 81% of those who got jobs went to West Asia. On average 75,000 have left in the first quarter of 2022, 2023, and 2024 in the wake of the economic bankruptcy, the aggravated political rot, and hopelessness.
Every month, in 2022, 2023, and 2024, an average of 25,000 Sri Lankans have left compared with 5,000 a month in 2021.
Many of the women who have left are in the 40 years to 44 years age group.
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