Crisis-hit Sri Lanka sees record labour migration as rupee collapse, high inflation weigh

ECONOMYNEXT – Sri Lanka saw a record high labour migration in 2022 as tens of thousands of people moved to other countries in search of jobs in foreign currency after the island nation’s currency collapsed and inflation soared to an all-time high, the government data showed.

The island nation’s rupee fell over 60 percent in 2022 – from 200 rupees to 360 rupees – after the central bank printed billions of rupees to finance the government revenue in the face of higher state expenditure and lower government revenue.

The money printing also resulted in the inflation rising to record 73 percent in September – forcing millions of people to cut three meals a day to meet their ends.

Sri Lanka saw 311,269 people leaving the country in 2022, the highest in history. Previously, the country’s annual peak was 300,413 in 2014.

It was more than double of the migrated population of 121,795 in the previous year, the central bank data showed.

President Ranil Wickremesinghe’s government has been encouraging people to leave the shores and to earn in dollars to help the country to move out of the unprecedented economic crisis.

The South Indian island nation saw a steep fall in its foreign currency reserves, shortage of dollars, and failure to import essentials, leaving tens of thousands of people in queues for cooking gas, fuel, and medicines.

The shortages led the country to declare sovereign debt default on April 12 before people started street protests across the country which later ousted both former leader Gotabaya Rajapaksa and his brother, ex-prime minister Mahinda Rajapaksa.

The government has announced a raft of incentives for those who send foreign currency remittances to the country.

But the country is yet to see a significant increase in foreign remittances in proportion to the increase in labour migration last year.

The worker remittances plummuted 36 percent to $3.3 billion in the first 11 months of the year compared to the previous year’s $5.2 billion, the central bank data showed.