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Good Riddance to the FBR: What Next to Increase Migrant Remittances to Sri Lanka?

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By Dr Bilesha Weeraratne

The decision by the Cabinet to partially lift the Family Background Report (FBR) requirement for female migrants is long overdue and a welcome move to promote female labour migration from Sri Lanka. The discriminatory FBR policy was introduced in June 2013 in order to restrict females with children under the age of five and to discourage females with older children from taking up foreign employment. The FBR initially covered only female domestic worker departures, but in August 2015, this was expanded to cover all females. As a result, from 2013 onwards the dominance of women among worker departures declined significantly.

The FBR’s Intended Objectives

The FBR requirement was introduced based on the notion that a mother’s absence has negative social implications for the children left behind. Generally, this is an acceptable argument. However, it is important to consider the economic context and income constraints faced by the mother, the related stress and other facets that contribute to the wellbeing of a child. The critical weakness around the introduction of this policy was the absence of sound empirical evidence of the negative social impacts brought about by the absence of the migrant mother, which the policy aimed to address. Similarly, the continuation of the policy lacked empirical evidence to prove any improvement to the wellbeing of children of mothers held back by the policy. Hence, although the FBR purportedly “protected against family breakdown,” it is unclear whether staying together as a family contributed to the greater well-being of the children”.

Outcomes of the FBR Policy

Apart from the absence of evidence confirming any positive outcome of the policy, there was ample evidence of the unintended negative consequences. Research conducted by the Institute of Policy Studies of Sri Lanka (IPS) in 2016 showed that although the FBR was successful in restricting females migrating for domestic work, the policy promoted migration outside Sri Lanka’s legal framework or through visitor visas and thus increasing their vulnerability at destination. Additionally, vulnerability was heightened due to women resorting to corrupt practices to circumvent the FBR requirement by forging documents. In 2015, the price of a forged FBR ranged from LKR 25,000-85,000. Often, these amounts were paid by the sub-agent or the licensed recruitment agent, leading to abuse and exploitation of the potential migrant women during recruitment. Similarly, FBR is also associated with delays in the recruitment process.

More recent evidence from IPS research shows that the FBR policy resulted in decreased departures among lower-skilled groups and increased departures among middle-level and professional workers. This increase in higher-skilled workers is linked to FBR-related corruption and misreporting of skills to avoid the policy. Thus, the policy is associated with greater involvement of lower-skilled workers in recruitment-related corruption, higher exposure to recruitment-related vulnerability, and lower foreign employment opportunities. One of the most critical gaps in this policy as highlighted in previous IPS research was the absence of a mechanism to support those who were “not recommended” for migration under the FBR and were forced to remain in Sri Lanka with their children.

Reluctance to Reverse

Until its removal in June 2022, the FBR policy had been revisited several times. For example, in 2016, as a result of research evidence and lobbying by different stakeholders, a Parliamentary Sub-committee was established to review the policy. As noted by the author in another study for the Global Knowledge Partnership on Migration and Development (KNOMAD), the then ministry-in-charge and the Sri Lanka Bureau of Foreign Employment (SLBFE) encouraged repealing the FBR based on both evidence and stakeholder perceptions. Yet, the Sub-committee favoured continuation of the policy. Despite mounting evidence and support from the relevant stakeholders, the FBR mandate remained for nine years mainly due to the absence of political will to accept evidence-based research and advice by qualified/relevant stakeholders. The underlying reason for this was the possible political backlash for removing a populist policy – though not backed by an iota of evidence.

Increasing Formal Remittances

Migration and remittances can contribute significantly to bridge Sri Lanka’s foreign exchange shortage. Research reveals that compared to men, women are more reliable remitters, although their wages are relatively lower. As such, it is important to facilitate foreign employment opportunities for women. The removal of the FBR requirement is likely to increase female departures by enabling women to make a labour market decision independent of their maternal status, while minimising delays and vulnerability in the recruitment process.

However, to reap the desired outcome of more remittances from higher departures, the new stock of females departing for foreign employment in the absence of the FBR must be convinced to remit through formal channels. Here, it is important to identify the key demographics of this segment of migrants who now face more relaxed regulations for migration (likely to be married women with mostly young children and leaving children in the care of a female extended family member) and design incentives accordingly.

In addition to the traditional incentive schemes proposed in recent weeks to promote formal remittances, a few recommendations targeting female migrants are as follows:

1. Provide unmatched incentives for remittances sent through children’s bank accounts.

a. For every X amount (i.e. USD 100) remitted per month through a child’s bank account

i. Y amount (i.e. USD 5) will be contributed by the state towards an education fund account for that child maintained in the same bank, which can be withdrawn annually for year-end educational expenses.

ii. Tie a children’s medical insurance, where medical reimbursement to the value of Y amount (i.e. LKR 2000) per month can be received.

iii. Receive a child nutrition pack

b. Once remittances sent through the child’s bank account exceed X amount (i.e. USD 1000),

i. The child will receive a free life insurance cover.

ii. Become eligible for an internship at the bank upon reaching the age of 18.

2. Tie incentives for remittances through support towards the children’s caregiver.

a. For every X amount (i.e. USD 100) remitted per month through a bank account

i. Receive a caregiver nutrition pack worth Y amount.

ii. Receive a caregiver medical care insurance coverage.

Link to the blog: https://www.ips.lk/talkingeconomics/2022/07/04/good-riddance-to-the-fbr-what-next-to-increase-migrant-remittances-to-sri-lanka/



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Lanka inflation hit 70.2% in August

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Food prices climbed 84.6 percent, while prices of non-food items rose 57.1 percent in the crisis-hit island nation.

(Al Jazeera) Consumer inflation in Sri Lanka accelerated to 70.2 percent in August, the statistics department has said, as the island nation reels under its worst economic crisis in decades.The National Consumer Price Index (NCPI) rose 70.2 percent last month from a year earlier, after a 66.7 percent increase in July, the Department of Census and Statistics said in a statement on Wednesday.

Food prices climbed 84.6 percent, while prices of non-food items rose 57.1 percent in the tourism-dependent South Asian country of 22 million people.The Central Bank of Sri Lanka (CBSL) in August said the inflation rate would moderate after peaking at about 70 percent as the country’s economy slowed.

The NCPI captures broader retail price inflation and is released with a lag of 21 days every month.The more closely monitored Colombo Consumer Price Index (CCPI), released at the end of each month, rose 64.3 percent in August. It acts as a leading indicator for national prices and shows how inflation is evolving in Sri Lanka’s biggest city.

Sri Lanka’s economy shrank 8.4 percent in the quarter through June from a year ago in one of the steepest declines seen in a three-month period, amid fertiliser and fuel shortages.

“Inflation is expected to taper from September,” said Dimantha Mathew, head of research for Colombo-based investment firm First Capital. “However, inflation is only likely to moderate and reach single digits in the second half of 2023.”

An acute dollar shortage, caused by economic mismanagement and the effects of the COVID-19 pandemic, has left Sri Lanka struggling to pay for essential imports including food, fuel, fertiliser and medicine.

The country earlier this month reached a preliminary deal with the International Monetary Fund for a loan of about $2.9bn, contingent on it receiving financing assurances from official creditors and negotiations with private creditors.

India on Tuesday said it had begun talks with Sri Lanka on restructuring its debt and promised to support the crisis-hit neighbour mainly through long-term investments after providing nearly $4bn of financial aid.

The High Commission of India in Colombo said it held the first round of debt talks with Sri Lankan officials on September 16.

“The discussions held in a cordial atmosphere symbolise India’s support to early conclusion and approval of a suitable IMF programme for Sri Lanka,” the High Commission said.

Sri Lanka will make a presentation to its international creditors on Friday, laying out the full extent of its economic troubles and plans for a debt restructuring.

The Indian High Commission also said New Delhi would continue to support Colombo “in all possible ways, in particular by promoting long-term investments from India in key economic sectors”.

India’s support to Sri Lanka this year has included a $400m currency swap, a $1bn credit line for essential goods and a $500m line for fuel. In addition, India has also deferred payment on Sri Lankan imports of about $1.2bn and given a credit line of $55m for fertiliser imports.

The High Commission said India had continuing development projects worth about $3.5bn in Sri Lanka, whose president earlier this month asked his officials to resolve obstacles to projects backed by India. He did not specify the obstacles or the projects.

President Ranil Wickremesinghe has said Sri Lanka will turn a free trade agreement with India into a comprehensive economic and technological partnership.

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Raigam Wayamba Salterns Group turnover tops 1 bn

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Raigam Wayamba Salterns PLC saw its group turnover increase from Rs. 959.6 million to Rs. 1,147 million recording a growth rate of 19.5% year on year.Despite the fact that the financial year 2021/2022 was filled with many challenges, as a result of prudent management practices implemented and followed, the Raigam Wayamba Group was capable of reporting its ever-highest growth in 2021/2022,” said Chairman, Raigam Group, Dr. Ravi Liyanage.

Raigam Wayamba Salterns PLC, which was listed in the Colombo Stock Exchange (CSE) in 2010 is the front line player in the value added salt market in Sri Lanka and it supplies a range of consumer salt products under the popular brands “Isi”, “Ruchi”, “Welcome” and “Triple Washed” as well as various salt products used as an input for different industries in bulk form.All the consumer products of Raigam Wayamba Salters are SLS certified for its quality and consistency and the processes are ISO certified.’8

The Raigam Wayamba Salterns Group is equipped with salterns, salt refineries and processing plants located in Puttalam and Hambantota districts. In addition to that the raw material supply for these operations has been ensured by the 1,800 Acre saltern established in Kuchchaweli in Trincomalee District by the parent company of the Raigam Group. Further the Puttalam Salt Limited (one of the successor to the National Salt Corporation) is also an associate company of the Raigam Group.

The well-known Raigam brand and state of the art island wide distribution network are distinct strengths of the Raigam Group. The Raigam distribution network operates on a latest IT platform and also includes distribution channels for modern trade, industry and bakery sectors.

Sri Lanka’s economy which was under-performed for two years due to COVID pandemic situation was experiencing the impacts of the foreign exchange crisis in the latter part of the financial year 2021/2022. Despite the fact that the financial year 2021/2022 was filled with many challenges, as a result of prudent management practices implemented and followed, the Raigam Waymba Group was capable of reporting its ever-highest growth in 2021/2022.

The group turnover increased from Rs. 959.6 million to Rs. 1,147 million recording a growth rate of 19.5% Y to Y. At the same time the Profit after Tax grew from Rs. 149.7 million to Rs. 215.6 million at an annual growth rate of 44%. As a result of these successful financial performances the Earning Per share for the year stood at Rs. 0.76 compared to Rs. 0.53 in the corresponding year. This has made a significant impact on the value of the shareholders’ investment increasing the Net Asset Value Per Share form Rs. 5.06 to Rs. 5.74.

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Singer’s legendry sewing industry and Academies developing skills and entrepreneurship in Sri Lanka

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A name synonymous with Singer (Sri Lanka), Singer sewing machine has over the years become an indispensable product at local households, helping thousands of women and men to make a living through a sewing business. For over six decades, Singer has been manufacturing its trademark sewing machines in Sri Lanka. Singer brand has claimed many firsts in sewing machine innovations including the world’s first zig-zag machine and the first electronic sewing machine.

Singer Industries, a subsidiary of Singer (Sri Lanka) manufactures traditional, portable and digital sewing machines at a fully-fledged facility, where it provides direct employment for over 100 factory workers and accommodates around 150 service agents. The traditional sewing machines are of two variants such as the straight stich and the zig-zag sewing machine, while the portable and digital sewing machines cater to the modern customers. Singer Industries is mandated with assembly of sewing machines and manufacturing of cabinets and stands for sewing machines.

The sewing machine stands and cabinets are 100% locally manufactured with the help of local suppliers who also depend from sewing machine manufacturing. Singer Industries also consists of a strong R&D section for sewing machine innovations. All the sewing machines produced by Singer Industries are distributed by its parent company, Singer (Sri Lanka) through their 431 distribution touch points. Currently, Singer sustains its dominance as the market leader for domestic sewing machine industry with a market share of 85%. Among the facilities, Singer Industries provides to its customers, it has deployed special service technicians at island wide service centres for technical assistance and support related to sewing machines. Its YouTube channel has access to over 130 technical assistance videos to further support its valued customers.

The name ‘’Singer’’ is closely associated with sewing. One of its major contributions to the local sewing industry is the Singer Fashion Academy. For more than 60 years, the Academy has helped thousands of individuals to develop sewing skills and become entrepreneurs. The Fashion Academy conducts sewing courses and diplomas while a degree pathway is to be implemented soon to further support students. The Academy is also the first and only institute in the country to receive course validation status from the Chartered Society of Designers (CSD) in the UK.

As of today, the academy consists of 54 branches Island wide and offers 22 sewing courses, 2 diplomas and another 10 courses as part of its Diwi Saviya program for low-income families. Annually, over 5000 – 6000 students get enrolled in Singer Fashion Academy’s courses. In addition to the physical classes, the academy conducts online courses and also provides a recorded version of lessons to further facilitate students. During the last decade, over 60,000 students have successfully completed the Fashion Academy’s courses and some of these students have already started their own sewing businesses. The Fashion Academy has helped in developing the passion of sewing among Sri Lankans and as a result, sewing has become a hobby among many.

Sewing can be considered one of the most feasible self-employment opportunities with its potential to generate a good income. A business of one’s own is a luxury at present due to current economic crisis. Many individuals who started their sewing businesses from scratch have developed their businesses to highly profitable ones. Singer Fashion Academy has all the resources ready to help develop sewing skills and is committed to develop a skilled workforce for the betterment of the country.

(Company news release)

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