Zuhair says restoring worker remittances one way of overcoming crisis

Former People’s Alliance MP M. M. Zuhair, PC, says restoration of worker remittances to pre-2020 level of US $ 7 billion per year can facilitate early economic recovery. The former Senior State Counsel asserted US $ 7 bn can be a better ladder for Sri Lanka to come out of the ‘deep distressing well’ than IMF’s US $ 2.9 billion.

Zuhair issued the following statement: “President Ranil Wickremesinghe has said that the US $ 2.9 billion request to IMF, receivable over a period of four years, is the only ladder for Sri Lanka to come out of the deep well. The President needs to be advised that other additional options do exist for the 22 million Sri Lankans to come out of the deeply distressing well! I wish to deal here with only one such alternative option for the President to work on.

According to Central Bank reports, during the past 20 years, worker remittances had covered around 80% of the country’s foreign exchange deficits. Worker remittances during the six years from 2015 to 2020 had averaged more than US $ 7 billion each year, improving substantially the foreign exchange liquidity in the country and in the banking system.

But in 2021 worker remittances dropped to US $ 5.5 billion and in 2022 dropped further sharply to US $ 3.8 billion! The country lost thereby US $ 1.6 billion in 2021 compared to US 7.1 earned in 2020! In 2022 we lost US $ 3.3 billion compared to 2020 as well as compared with the previous six year annual average earnings!

Sri Lanka is struggling for the past one year to get US $ 2.9 billion from the IMF having lost US $ 1.6 billion and US $ 3.3 billion, almost US $ 5 billion during the past two years, with no organized efforts to restore the forex earnings, from our own countrymen and women to the established national average of US $ 7 billion per year! Should not there be an appeal, at least at the president’s level to the Sri Lankan workforce overseas to enhance direct official remittances and also to the heads of States of countries where they are employed to give preference to Sri Lankans in fresh recruitments, without passing the buck to the Central bank or the Minister?

President Wickremesinghe knows that the IMF 2.9 billion dollars as well as what may come thereafter from the World Bank and other lenders are repayable loans with interest. All those will add up to the national debt of US $ 52 billion compelling the next generation to continue the economic struggle and for-ever be dependent on Western controlled institutions and countries. We can fall from that ladder deeper into the well! Hope not!

Indeed he and his advisors know that forex worker remittances are not repayable debts; do not involve import contents as in garment exports and stabilises the currency exchange rates in favour of Sri Lanka in terms of debt servicing and external trading.

Mr President! Restoring worker remittances to pre 2020 level of US $ 7 billion per year can become a better ladder for Sri Lanka to come out of the ‘deep distressing well’ than IMF’s US $ 2.9 billion!

Tapping and enhancing worker remittances can turn out to be a non-debt creating lasting solution to Sri Lanka’s crisis and to come out of the long term hegemonic control of international money lenders! I am no economist but will those who understand the subject better respond in the national interest to the President’s challenge?”