Business
Record Remittances to Sri Lanka: Hidden Realities Behind the Headlines
BY Dr Bilesha Weeraratne,
Research Fellow and Head of
Migration and Urbanisation Policy Research,
Institute of Policy Studies of Sri Lanka (IPS)
Worker remittances to Sri Lanka have set a new all-time high record with USD 8.076 billion in 2025. This 22.8% growth, compared to the USD 6.6 billion received in 2024, is shaped by the high number of worker departures experienced in recent years.
While migrant workers’ contribution to easing pressure on the country’s balance of payments is widely appreciated, the hardships and sacrifices they endure are often overlooked. This blog highlights the challenges faced by migrant workers, drawing evidence from two recent studies by the Institute of Policy Studies of Sri Lanka (IPS).
Migrant Destinations and Remittance Origins
The composition of the largest remittance-sending countries corresponds with the main destinations of Sri Lankan migrant workers. In 2025, the top destination for Sri Lankan migrant workers continued to be the Middle Eastern region, with Kuwait ranked first, followed by the United Arab Emirates (UAE) and Saudi Arabia.
Similarly, the largest share of remittances to Sri Lanka is sent by migrant workers in the Middle Eastern region. Available data for the first three quarters of 2025 indicate that the highest share of remittances were sent from Kuwait (10.7%), UAE (10.4%) and Saudi Arabia (9.4%). Yet the share of remittances from these countries has either stagnated or declined in recent quarters,while countries that attract more skilled and long-term migrants have increased their contribution to remittances to Sri Lanka. For instance, remittances from countries such as France, Canada, and Australia have doubled their shares between the fourth quarter of 2022 and third quarter of 2025, while shares from Kuwait, Qatar, and Oman have declined in the same period.
As such, one key reason for growth in remittances could be the increase in departures of higher skilled workers in recent years, and their related capacity to remit more with their higher incomes. Other possible reasons include an increase in formal remittances driven by a reduced gap in official and unofficial foreign exchange rates, and an increased confidence in the financial system and the overall economy due to the post-crisis recovery process.
Impact on Families Left Behind
Despite the higher inflows and the undoubted positive impacts of migration and remittance earnings, families left behind make immense sacrifices in coping with the realities of migration. A study to which the IPS contributed highlights the trade-offs between the economic opportunities provided by international migration and the benefits of a mother’s presence for child development.
Although around 9% of households in Sri Lanka receive remittances from abroad, this study, based on data from three waves (2009/10, 2012/13 and 2016) of the Household Income and Expenditure Survey (HIES) finds that the mothers’ presence at home, arising from the Family Background Report (FBR) restriction, contributes to better health and educational outcomes for children. Adherence to this restrictive migration policy reduces outpatient visits for illness among children under 5 years of age by 14% and inpatient stays by 15.2%, relative to similar children whose mothers are not at home.
A possible counterargument is that restricting mothers’ foreign employment—and the resulting decline in overseas remittances—could reduce access to healthcare services, without any real change in the children’s underlying health status. However, the analysis shows that when the FBR restriction lowers remittances from abroad, this is offset by a corresponding increase in domestic remittances, leaving overall household income largely unchanged. Moreover, healthcare in Sri Lanka is largely free. Together this means it is more likely that the improvement in child health comes from the mothers’ presence at home.
This study also shows that among older children, a mother’s presence at home has a causal effect in reducing students from failing/repeating a grade (grade retention) by 60% when compared to a control group. Therefore, women’s migration for foreign employment and related remittances has a trade-off with their children’s health and education-related human capital development outcomes.
Abuse and Exploitation Abroad
Amidst multiple positive implications associated with migration, including improved income, skills development, human capital accumulation, enhanced career mobility, and increased empowerment, migrant workers also make considerable sacrifices and, at times, endure hardship while working abroad. These sacrifices include family separation and, on occasion, debt, financial pressure, limited rights, reduced autonomy, and exposure to exploitation and abuse. One reason for the introduction of the FBR policy was to safeguard female workers against the exposure to exploitation and abuse in the countries of destination.
An IPS study also shows that 7,448 complaints were made in 2024 by migrant workers (equivalent to 2% of departure in same year). Of these, 41% were reported from Saudi Arabia, 34% from Kuwait, and 10% from the UAE. Of all complaints, a majority (76%) were made by female domestic workers originating from Middle Eastern countries.
The study suggests that many Sri Lankan female domestic workers migrate due to dire financial conditions, including high household debt, lack of employment opportunities, and the need to support dependents, which makes them economically dependent on remittances. While underscoring that NOT all female domestic workers experience hardship or sexual and gender-based violence (SGBV), among those who do experience such issues, “this economic dependency increases their vulnerability to abuse”. This is mainly because of delays in or avoidance of reporting abuse due to fear of job loss, related income decline, and their inability to remit earnings.
As such, in “this heightened level of acquired tolerance, female domestic workers often delay seeking support”. For instance, some migrant workers continued their employment despite abuse and non-payment of wages, in the hope of accessing their accumulated wages. Similarly, many were compelled to take up the sub‑optimal choice of changing employers even when their preferred solution was repatriation. In some cases, financial challenges associated with losing the employment opportunity and difficulties in affording repatriation forced them to return to the same employer instead.
Policy Recommendations
As such, while acknowledging the record high remittances sent by migrant workers, it is also important to understand the sacrifices and hardship endured by them and their families and minimise these negative impacts. A key policy recommendation emerging from both these recent studies is to safeguard the rights of female workers. Towards this, it is important to transition from a reactive support structure to a preemptive one. The current support mainly involves warning or changing employers and repatriation of workers after facing and reporting SGBV. A pre-emptive support structure can help identify risk for vulnerability early and provide support to prevent exposure to SGBV. For example, contacting a migrant worker within the first month of employment to assess working and living conditions can help identify the extent to which actual conditions align with the formal employment contract, thereby minimising future issues.
This procedure could be implemented once or routinely, through a telephone interview conducted by an official at the Sri Lanka Bureau of Foreign Employment, the Sri Lankan Embassy, or via a social media survey. Such enhanced safeguarding of female workers’ rights would minimise the trade-offs between the benefits of migration and remittances, and the hardships and sacrifices experienced by migrant workers and their families.
Business
Low-quality coal shipment affects Lakvijaya coal power plant operations
Operations at Sri Lanka’s main coal-fired power facility, the Lakvijaya coal power plant, suffered a significant disruption soon after a new shipment of coal was introduced, raising concerns over generation stability and environmental emissions.
Energy analyst Dr. Vidura Ralapanawa said in a social media post that the plant began using coal from “Ship 11” on Wednesday, following confirmation from officials of the Ceylon Electricity Board (CEB).
However, almost immediately after the new batch of coal was fed into the system, the plant’s generation capacity began to decline due to the poor quality of the fuel.
According to Dr. Ralapanawa, the plant’s output dropped by about 82 megawatts overall. Unit 1 recorded a drop of 45 MW, Unit 2 fell by 15 MW, and Unit 3 declined by 22 MW shortly after the coal was introduced.
The situation worsened later in the night when two coal mills in Unit 3 reportedly became clogged around 11 p.m., causing a rapid fall in generation capacity. Unit 3, which normally operates at a higher output level, was said to be running at around 170 MW following the malfunction.
Coal mills are a crucial component in coal-fired power generation. They grind raw coal into a fine powder before it is fed into the boiler for combustion. Each generating unit at the Norochcholai facility is equipped with five coal mills, and any obstruction in these systems can severely affect plant operations.
When mills become clogged, plant operators often have to rely on diesel-fired burner guns to stabilise the flame inside the boiler. While this helps maintain combustion, it significantly increases operating costs because of the high price of diesel.
The heavy use of diesel has another consequence. According to Dr. Ralapanawa’s post, when diesel firing increases, the plant’s Electro-Static Precipitators (ESPs) must be shut down. ESPs are designed to capture and remove particulate matter such as fly ash before emissions are released through the chimney.
With the ESPs switched off, large amounts of fly ash may be released into the atmosphere, potentially affecting surrounding communities.
Dr. Ralapanawa further noted that the coal shipment appears to have low calorific value, low volatile matter, and high ash content, all of which reduce combustion efficiency. In addition, the coal reportedly has a low grindability index, making it harder to pulverise and increasing the likelihood of mill blockages.
He added that while the immediate clogging of the mills may be cleared within a day, the underlying quality issues with the coal could make the problem persistent.
The development comes amid earlier assurances from officials of the Ceylon Electricity Board that the Norochcholai plant could be operated effectively even with lower-quality coal supplies.
The Norochcholai facility, with an installed capacity of 900 MW, is the largest power station in Sri Lanka and a critical component of the national grid. Any disruption to its operations can have wider implications for the country’s electricity supply, potentially forcing the system to rely on more expensive oil-based power generation.
Engineers are currently working to address the clogged mills and stabilise generation, but energy analysts warn that unless the fuel quality improves, similar operational issues could recur.
By Ifham Nizam
Business
CSE regains some positive terrain but challenges remain
CSE trading yesterday was positive overall on account of local economic growth prospects but concerns deriving from West Asian tensions lingered.
The market is still recovering from previous days’ uncertainties, market analysts said.
The All Share Price Index went up by 256 points, while the S and P SL20 rose by 63.8 points. Turnover stood at Rs 5.68 billion with nine crossings.
Seven crossings were reported in HNB Finance where 130 million shares crossed to the tune of Rs 1.1 billion; its shares traded at Rs 8.50, LMF four million shares crossed for Rs 348 million; its shares traded at Rs 87, Commercial Bank 661,000 shares crossed for Rs 142 million; its shares traded at Rs 215, Seylan Bank (Non-Voting) 750,000 shares crossed for Rs 49 million; its shares sold at Rs 75.50, ACL Cables 500,000 shares crossed for Rs 49 million; its shares traded at Rs 98, HNB 100,000 shares crossed for Rs 43.2 million; its shares sold at Rs 432 and Access Engineering 500,000 shares crossed for Rs 38.5 million and its shares fetched at Rs 77.
In the retail market companies that mainly contributed to the turnover were; HNB Finance Rs 331 million (34.8 million shares traded), Lanka Credit and Business Finance Rs 184 million (21.6 million shares traded), LOLC Holdings Rs 180 million (320,000 shares traded), Commercial Bank Rs 167 million (774,000 shares traded), Softlogic Capital Rs 138 million (twelve million shares traded), Sampath Bank Rs 124 million (789,000 shares traded) and ACL Cables Rs 123 million (1.26 million shares traded). During the day 330 million share volumes changed hands in 36639 transactions.
It is said that the banking and financial sectors performed well. HNB Finance was active in the financial sector, while Commercial Bank and HNB were active in the banking counters.
Further, National Development Bank has received Colombo Stock Exchange approval in principle to list Rs 16 billion of 11.50, 11.04 and 11.85 percent debentures, it said in a CSE filing.
NDB will issue 120 million Tier 2, listed, rated, unsecured, subordinated, redeemable Basel III compliant GSS+ bonds with a non-viability conversion, at Rs 100 each.
Yesterday the rupee was quoted at Rs 310.70/85 to the US dollar in the spot market, weaker from Rs 310.30/60 the previous day, dealers said, while bond yields were broadly steady.
By Hiran H Senewiratne
Business
Indian Ocean under fire: Parliament explodes over the sinking of ‘IRIS Dena’
A new crisis looms with a second Iranian vessel at the doorstep
Sri Lanka’s parliament became a secondary battleground yesterday as the sinking of the Iranian frigate IRIS Dena ignited a fierce debate over national sovereignty, regional maritime priciples, and the government’s perceived ‘strategic paralysis.’
While the Navy’s rescue of 32 sailors was initially painted in shades of heroism, Opposition MPs have now unfurled a narrative of missed warnings and geopolitical betrayal.
In a scathing address, Opposition firebrand Chamara Sampath Dissanayake challenged the circumstances of the vessel’s arrival in Sri Lankan waters. The IRIS Dena had been a guest of the Indian Navy during the MILAN-2026 exercises just days prior. Dissanayake alleged that at the conclusion of the fleet review, the vessel was effectively ‘put out’ of India, leaving the crew with no choice but to steer toward Sri Lanka.
“This was a deliberate attempt by the host to put a guest in harm’s way,” Dissanayake charged, stopping just short of naming India directly while making the implication undeniable. He argued that Sri Lanka had been ‘set up’ to deal with the fallout of a targeted strike that occurred only 11 nautical miles from Galle.
The debate took a darker turn when SJB MP Mujibur Rahman dropped a bombshell regarding the timing of the attack. Rahman alleged that the IRIS Dena had signalled for permission to enter Sri Lankan waters 11 hours before it was struck by U.S. torpedoes.
“Why did the authorities keep silent?” Rahman demanded. He blasted the government for failing to act on humanitarian grounds, suggesting that Colombo’s hesitation provided the necessary window for what U.S. Defense Secretary Pete Hegseth termed a ‘Quiet Death.’ Rahman’s critique painted a picture of a government ensnared in superpower machinations, unable to uphold the principles of the Indian Ocean as a ‘Zone of Peace.’
Responding to the barrage of questions, Cabinet Spokesman Dr. Nalinda Jayatissa confirmed a chilling new development: a second Iranian vessel is currently positioned in the Exclusive Economic Zone (EEZ) off Colombo.
While Jayatissa assured the House that the President and the Security Council are ‘fully aware’ and making ‘necessary interventions’ to protect those on board, the lack of specific details fueled further anxiety. Political analysts suggest that the government’s failure to announce a clear, proactive neutral policy has left it in a state of ‘vacillation,’ unable to decide whether to grant refuge to the second ship or risk another tragedy on its doorstep.
The parliamentary clash was punctuated by the visit of former president Ranil Wickremesinghe to the Iranian Embassy yesterday to offer condolences for the passing of Supreme Leader Ayatollah Ali Khamenei. Wickremesinghe had warned on March 2 – just 48 hours before the sinking – that the current ‘leadership eviction’ methodology in the Middle East could destabilise the Indian Ocean.
As the death toll from the IRIS Dena stands at 87 with 60 still missing, the ‘can of worms’ opened in parliament reveals a nation at a crossroads. The government’s silence during the Dena’s final hours and its current ‘intervention’ with the second vessel will likely define Sri Lanka’s standing in a rapidly fragmenting global order.
As the House adjourned, one question remained hanging in the air: In the face of a superpower conflict, does Sri Lanka have the ‘backbone’ to be truly neutral, or is it merely a spectator to its own maritime destiny?
by Sanath Nanayakkare
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