The views expressed in this presentation are the views of the author and do not necessarily reflect the

views or policies of the

Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments
they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any
consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.

Mobilizing Diaspora and Increasing the

Development Impact of Remittances

Presented By : P.P. Weerasekara

Sri Lanka
 Sri Lanka
Population - 20 Million
Estimated 2 Million migrant workers/Diaspora

Highest concentration : Middle East, Western Europe

Canada
Unemployment rate in SL - 4.6 %
GDP - 82.2 US $ Bn (2015)
GDP per Capita - 3637 US $ (2015)

Remittance to Sri Lanka is US $ 7 billion in 2015 which is 8.75% of GDP .

Remittances contributed to support Sri Lankas balance of payments (BOP) in
the wake of relatively weak trade balance.

Sri Lanka is not issuing Diaspora bonds. But Mr. Eric V. Guichard in his
feasibility study report Remittances for Development Program June 2016
proposed to the Government of Sri Lanka the potential of remittances to
finance development sustainably and introduce Sri Lankan Diaspora Bonds.
2
 Sri Lankan Diaspora Distribution

400000
350000
300000
250000
200000
150000
100000
50000
0

(Source : As per SLBFE estimates and Kulasekara Shantha, Migration & National Development, IOM, Migration Profile - IPS)

3
 Departures for Foreign Employment

Year Male Female Total

2012 144,139 138,194 282,333
2013 175,302 118,067 293,369
2014 190,215 110,479 300,694
2015 172,841 90,673 263,514
2016 160,284 82,603 242,887

350000
300000
250000
200000
Female
150000 Male
100000
50000
0
2012 2013 2014 2015 2016
(Source : SLBFE)
4
 Foreign Workers in Sri Lanka
(Major Nationalities)
YEAR INDIAN CHINESE BRITISH - REPUBLIC PHILIPPINES DEUTSCH PAKISTANI
CITIZEN OF KOREA
2011 3054 503 385 256 174 144 135
2012 3271 619 382 239 170 156 151
2013 3256 658 365 200 169 157 135
2014 3344 684 394 289 215 156 130
2015 3578 788 392 298 250 138 116
2016 3857 1052 369 271 235 128 125

4500 INDIAN

4000 CHINESE

3500 BRITISH -
CITIZEN
3000 REPUBLIC OF
KOREA
2500 PHILIPPINES

2000
1500
1000
500
0
2011 2012 2013 2014 2015 2016
5 (Source : Dept. of Immigration & Emigration)
 Remittances to Sri Lanka

US $ Mn.
8000
7000
6000
5000
4000
3000
2000
1000
0
2012 2013 2014 2015 2016
(Jan. Nov.)

Year US $ Mn
2012 5985.26 Impact of Remittances :
2013 6406.96
2014 7017.82 Remittances are going directly to target group, mainly
2015 6980.3
the rural poor at grass root level.
2016
(Jan. Nov.) 6556.9

6
 Remittance inflows to Sri Lanka by Region
South
Australia
Middle European Far East Europe- North South East South and
Year and New Other
East Union Asia Other America Asia Asia Central
Zealand
America

2011 58.9 17.2 7.8 4.5 3.0 4.0 2.0 1.0 0.8 0.8
2012 56.1 17.9 8.5 4.6 2.9 4.4 2.2 1.5 0.8 1.1
2013 55.6 18.1 8.7 4.8 2.9 4.5 2.3 1.3 0.9 0.9
2014 55.6 18.1 8.7 4.8 2.9 4.5 2.3 1.3 0.9 0.9
2015 54 17.5 10 4.4 3.0 5.6 2.3 1.4 0.9 0.9

% 70 Middle East

60 European Union

50 Far East Asia

Europe- Other
40
North America
30
Souorth East Asia
20 Australia and New Zealand

10 South Asia

0 South and Central America

2011 2012 2013 2014 2015 Other

7 (Source : CBSL)
 Major Sources of Foreign Exchange Earnings

Sri Lankas main avenue for foreign exchange earnings is labour migration
and its migrant labour force continues to be a vibrant and vital part of the
countrys economy. It has generated substantial inflows of remittances at the
same time relieving the pressure on unemployment of youth by providing
employment abroad.

US $ Mn

8000
7000 Remittances
6000
Garments
5000
4000 Tourism
3000 Tea
2000
1000 Rubber Products
0
2011 2012 2013 2014 2015

8
 Sri Lankas import expenditure has continuously
outstripped export earnings, placing pressure on the
countrys trade balance. In this context, remittances
have played an import role. In 2010, remittances
contributed to 49 per cent of export earnings, 30 per
cent of import expenditure and 27 per cent of total
current receipts in the BOP.

9
 Contribution of Remittances to National Savings
In Sri Lankas national accounts, worker remittances are treated as a
component of national savings. Thus, national savings are equal to the sum
of domestic savings and net private current transfers from abroad (Marga
Institute, 2010). Sri Lankas has managed to maintain a much higher rate of
national savings and investment as a result of such inflows. While
remittances lead to increased investment and are likely to have an effect on
economic growth, a good investment climate including the presence of a
well-developed financial system will partly determine the extent to which
remittances are able to be used productively in physical and human capital
(Arunatilaka et al., 2011).

Contribution of Remittances to National Savings Investment

% of GDP 1991-1994 1995-1999 2000-2004 2005-2010

Domestic Savings 16.5 17.3 16.0 17.2

National Savings 20.5 21.4 21.0 22.6
Total Investment 19.9 25.4 23.7 27.1
10
 Government effort to support migrant workers on
development Empower migrant workers

1. Pre Departure Training

Sri Lanka provide training for prospective migrant workers who depart at
the first time abroad for employment.

One hour awareness conducted by a bank officer on money transfer and

savings. On the final day of training, participating spouses of migrant
workers, included lecture on financial management.

2. Reintegration projects
Sri Lanka introduce sub policy and National Action Plan on return and
re-integration of migrant workers in 2015.

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 2.1 Promote savings investment and financial management
among migrant workers

Outcome Output
Reduced consumerism and Comprehensive financial management
increased savings for investment and banking information available
by migrant workers for migrant workers.

State and non state financial

institutions step up their services to
migrant workers

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 Cond
Economic reintegration of returnees
Outcome Output
Individual and family incomes District level support networks
increased and stabilized through function promoting and nurturing
small and medium scale enterprises. enterprises of migrant workers.
Easy access to credit schemes
assured for migrant returnees at
banks/financial institutions.
Migrant worker entrepreneur
networks are linked to other business
developers.

Special investment opportunities are

accessible to high income earning
migrant workers.
Women entrepreneur societies and
networks are functioning and
supported with business skills.
13
Cond

Outcome Output
Local employers recognize skills Online information on local job
and accept/support returnee migrant opportunities available for and
workers accessible to migrant returnees.
RPL

Foreign Job

Migration Cycle

Local Job

14
 Thank you.

15