Balancing their interests
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How do you balance the interests of farmers and consumers? If farmers get a good price for mainly rice, consumers complain and then it’s vice versa. If you give farmers subsidies on fertiliser and other inputs at state costs to reduce consumer prices, that puts pressure on public spending and inevitably this cost is met by increasing taxes on goods which then affects both farmers and consumers.So how do you strike a balance or is that even possible? There are more than two million farmers while everyone in the population is a consumer. More than 30 per cent of the total labour force is directly or indirectly involved in the rice sector, according to official data.
The same applies to migrant workers. A strong dollar or other related foreign currency means more rupees for migrant workers. But a strong dollar which helps migrant workers means import costs go up and thus the cost of living rises; how do you strike this balance? Is it possible to give a special dollar rate for remittances of migrant workers or maybe provide a tax free income for recipients – husband, wife, mother, father, etc.?
Again how do we strike a balance to support all sides of the equation? Also it must be recognised that a stronger dollar would lead to more inflows routed through official banking channels but a weaker dollar with a better rate offered in the unofficial market, would see a rise in remittances through unofficial channels. These are not officially recorded as inflows which then impacts the amount of dollars required to meet import costs.
As per statistics, around 250,000 Sri Lankans migrate to West Asia annually with total departures for foreign employment amounting to 75,175 during the first quarter of 2024, according to Central Bank data.
According to the same source, total workers’ remittances during the first quarter of 2024 amounted to US$1,536.1 million. While annually the amount of remittances has been around $7 billion in the best years, it came down during the COVID-19 pandemic and the resulting economic crisis. Last year it totalled $5,969.6 million.
But the bigger picture for Sri Lanka in the context of these valuable remittances by hard-working Sri Lankans in West Asia often in tough conditions – just to help the family income and in most cases the only income for the family – is the emergence and escalation of the conflict in West Asia. This escalation has had an immediate impact: Israel, Palestine, Lebanon and nearby states like Iran are affected or indirectly affected by the ground fighting, rocket fire or attacks on shipping plying these now-treacherous routes.
This was what my friend ‘Koththamalli’ Fernando, the Kokatath Thailaya (oil for any ailment) expert who has a remedy for any issue, wanted to discuss, maybe to offer his ‘thailaya’ concoction to the Arabs and the Jews to stop fighting and make peace.
“I say, what is happening in the Middle East,” he asked, during a WhatsApp call (since I am overseas writing this column) on Tuesday. I am in Berlin, Germany, from October 8-12 on a German government-sponsored programme for journalists to learn about and promote thousands of skilled and professional opportunities in Germany available for nationals of South Asia.
“Well, the main concern for Sri Lanka is what impact it would have on our people working in these danger zones and what protection they would have (apart from being asked to go into bomb shelters when shelling takes place). Are our embassies in Israel and Lebanon able to protect their interests; are they geared to help in a war situation which is unusual as our diplomats there have been mostly trained to help Sri Lankans when they are stranded or have job-related issues which include poor working conditions, failure by employers to abide by contract obligations or other misadventures in their workplace,” I said.
“So are our nationals safe? Should the government make some arrangements to repatriate them if they are uneasy to work in war-like conditions, particularly in Lebanon which has been battered and bruised by shelling from Israel territory? On the reverse side, Hezbollah fighters are also firing dozens of rockets into Israel,” he said.
What is surprising is that the government has been promoting jobs in Israel, while the war is on as nationals of many other countries working there have sought to return to their home countries. This is while there is a ban on thousands of Palestinians working in Israel, which means Israel is facing a massive shortage of labour and thus has reached out to friendly states including Sri Lanka to bridge this gap.
“The government should never have encouraged workers to go to Israel which is fighting a war with Gaza and Lebanon,” I said, adding that Sri Lankan embassies are not geared to handle their nationals if a full-scale war erupts.
Will this become a reality or worse lead to a Third World War? This was a question put to some international experts in Berlin (and the response was that they don’t expect hostilities to escalate or to be cautious, they hope it won’t blow up into a regional crisis drawing many superpowers in Asia (India and China), Europe and North America (the US).
Germans, we are told, are more concerned about the conflict between Russia and Ukraine for economic reasons and as the crisis is closer home, than the hostilities in West Asia.
Being away, I was missing my weekly dose of gossip from the margosa tree trio. Last week though on Friday (after listening to their woes on Wednesday), I found the trio also talking about the West Asian crisis. “Apey meda peradiga weda karana kattiyata arakshawa thiyenawada, mokada ehey yuddayak-ne (Are our workers safe in West Asia as there is a war there,” asked Serapina.
“Aanduwa-nam kiyanawa egollanwa balagannawa kiyala (Well, the government says they are being looked after),” noted Mabel Rasthiyadu.
“Aanduwa kivvama egollanta arakshawa thiyenawa kiyala, api kanassallata pathwenna oney. Niladharin saha deshapalagnayanwa vishwasa karanna bae-ney (When the government says it is safe, then we should start worrying. You cannot trust these officials and politicians),” added Kussi Amma Sera.
A disruption in West Asia, apart from affecting Sri Lankan migrant workers, also impacts oil supplies (which Sri Lanka sources from Singapore which in turn imports from West Asia) and tea exports. It is also impacting flights to and from West Asia which have had to find circuitous routes to their destinations to avoid flying over war zones or potential war zones.
Well……bye from Germany and hope to meet the trio once again in Sri Lanka next week, just as the populace prepares for political campaigning for the November parliamentary elections. Interesting and challenging times ahead!
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