23/02/2021

How Sri Lankan remittances are defying COVID-19 | East Asia Forum

Economics, Politics and Public Policy in East Asia and the Paci c

How Sri Lankan remittances are defying COVID-19
28 January 2021

Author: Bilesha Weeraratne, Institute of Policy Studies of Sri Lanka
International migrants have historically been a driving force of the Sri Lankan economy and during the
COVID-19 pandemic their remittances have helped boost the country’s foreign exchange earnings.

In 2019 over 200,000 Sri Lankans left for foreign employment. 85 per cent headed to the Middle East. The
pandemic caused worker migration to decrease by 56 per cent in the rst half of 2020 compared to 2019.
By October 2020 over 54,000 Sri Lankans were repatriated, including nearly 18,000 migrant workers from
the Middle East. Another 43,000 are waiting to be repatriated. Such high returns are due to job losses, wage
cuts and other negative employment outcomes surrounding the pandemic.
With the virus raging across the world, remittances to Sri Lanka for 2020 were projected to decline below
the US$6.7 billion received in 2019. The emerging lockdowns, economic contraction and lay-o s seemed to
hold up these projections, with steep declines in remittances to Sri Lanka in March and April 2020.
But remittances saw a speedy recovery from May 2020. Many viewed May as the calm before the storm,
fearing a huge slump in subsequent months due to the rising economic impact of the pandemic. Defying
expectations, June remittances (US$702 million) surpassed May and July, becoming the third highest
monthly gure since 2009.
Even though August saw a 5 per cent decline relative to July, in September 2020 remittances to Sri Lanka
were US$703 million. In October and November, they fell to US$631 and US$612 million, respectively. But
overall, from January to November 2020, total remittances to Sri Lanka increased by 3.9 per cent compared
to the same period in 2019. Two of the top four monthly remittances since 2009 were recorded during the
COVID-19 pandemic.
The decline in remittances in March and April 2020 had mainly been due to the restrictions on mobility
faced by remitters overseas, who rely on physically visiting remittance service providers. And in March and
April 2020, Sri Lanka experienced a similar scenario. Once restrictions eased, backed-up funds were sent in
addition to regular amounts. The increase in remittances in May and June 2020 are attributed to this catch
up.
https://www.eastasiaforum.org/2021/01/28/how-sri-lankan-remittances-are-defying-covid-19/

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