Sri Lanka worker migration, passport issues, begin to decline

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ECONOMYNEXT – Sri Lanka’s departures for foreign employment has declined for five straight months, while new passport issues have declined for seven, official data shows.

Departures for foreign employment in August 2022 was 26,394, down from 29,186 in 2022. In September departures fell from 30,104 in 2022 to 25,311, Foreign Employment Bureau data quoted by the central bank shows.

In December 2023, departures were 23,259, down marginally 23,407.

Passport issues began to fall from June 2023.

In 2022, 92,880 passports were issued in June, 100,396 in July and 115,403 in August.

In 2023, 88,308 passports were issued in June, 76,071 in July and 87,433 in August.

In December 2023, 53,431 passports were issued, down from 69,920 in 2022.

Meanwhile, total departures of Sri Lankans from the country for all purposes continued to increase.

This may be due to a gradual recovery in incomes leading to a recovery in outward tourism.

Advertisements for outbound travel including for pilgrimages to India (Dambadiva charika) have started to appear in Sri Lankan media amid monetary stability.

Sri Lanka also clamped down on workers departing for work on tourist visas. There is no information whether some persons were mis-declaring departures.

Sri Lanka saw a spike in outmigration after macro-economists printed large volumes of money to push growth (target potential output), a practice that gained ground after the end of a civil war triggering serial currency crises. In 2022 the rupee collapsed from 200 to 370 to the US dollar.

Currency depreciation, promoted by inflationists for several decades based on Mercantilist ideology (in the belief that it increases exports or decreases imports or both), destroys real wages making it difficult for people to make ends meet.

Most of the worker departures are to countries with superior monetary regimes in the Middle East, based on currency board like principles (cannot cut rates with inflationary open market operations), which require imported labour due to fast growth.

Sri Lanka’s top remittance generating countries are Kuwait, Qatar, UAE, Saudi Arabia, all of which have currency board style regimes.

Sri Lanka also imported labour when the country had a currency board, before a central bank through which inflationist macro-economists could cut rates was set up soon after independence, condemning the country to capital controls, trade restrictions and frequent IMF programs.

Sri Lanka’s central bank has allowed the rupee to re-appreciate, bringing down food and other prices, boosting real wages while firms are also raising salaries amid the monetary stability provided.

Analysts had warned that under the current operational framework, where rates are cut when inflation falls to low levels, the currency will be hit when private credit recovers and inflationary domestic operations are deployed to suppress interest rates.

Sri Lanka’s macro-economists, by promoting various narratives (the budget deficit – blame the politicians), there is a current account deficit – blame the citizens who are net savers and the most widely spread story that there is a ‘structural’ problem) have denied a sound monetary regime to the people, critics say. (Colombo/Apr25/2024)

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[[{“value”:” ECONOMYNEXT – Sri Lanka’s departures for foreign employment has declined for five straight months, while new passport issues have declined for seven, official data…

[[{“value”:” ECONOMYNEXT – Sri Lanka’s departures for foreign employment has declined for five straight months, while new passport issues have declined for seven, official data…