Foreign remittances, lifeline of economy - Dr. Amunugama
"Foreign Remittances have become a lifeline of the Sri Lanka
Economy", said Senior Minister for International Monetary Cooperation
Dr. Sarath Amunugama.
He was addressing the Asian Forum on Remittances and Development held
in Colombo, last week.
The meeting was organised by the Sarvodaya Economic Development
Division with the participation of senior bankers, migration
institutions and the UNDP.
Dr. Amunugama said that during the difficult days of 2008 and 2009
foreign remittances enabled Sri Lanka to pay for oil imports in spite of
the oil crisis that hit the global economy at that time.
He said that foreign remittances must be looked upon as a part of the
wider phenomena at migration of labour from developing countries to
advanced countries. In the past, in classical economics, we talked of
investment capital going beyond national boundaries. Now labour is also
going beyond national boundaries, creating counter-cyclic movements to
the spread to capital. While capital flows moves eastward, labour flows
today economics of countries such as Sri Lanka, Bangladesh, India,
Pakistan. Thailand, Philippines and Korea have benefited from such mass
migration of labour. These phenomena will be even more noticeable in the
future, as advanced economies will be hit a shortage of labour, due to
ageing processes which are now a major factor in the economies of
The Minister also drew special attention to the fact that while
developing countries gets the benefit of such foreign currency inflows,
the poor also benefitted. About US$ 3 billion brought into the country
is pumped into the local economy, particularly in the small and medium
Dr. Amunugama said that local banks must be more attentive to these
migrant workers, because they formed a large segment of their business.
Banks must come up with more innovative approaches to give better deals
to our local men and women who worked abroad.
Unfortunately, our bureaucracy and banking system are not paying
adequate attention to the enhancement of prosperity and dignity of these
migrants. This is due to the lethargy of the banking system.
Telecommunication has filled that gap today. The challenge to "Illegal
and havela" financial transfers is offered not by the Banks, but by the
telecommunication giants. They make cash transfers very easy and fast.
If the banks do not attend to theses functions properly, the
telecommunication revolution will supplant them. Thus the bank must rise
up this challenge for both business and humanitarian reasons", said Dr.