Kath Noble

Getting Sri Lanka to work

Posted in The Island by kathnoble on May 15, 2013

Why the Government must find a better solution to the country’s unemployment and foreign exchange problems than sending hundreds of thousands of its people overseas 

Rizana NafeekJust when sanity seemed to be prevailing over the Bodu Bala Sena, following the various vigils, rallies and protests that have been organised in the last month, the Government found yet another imaginative way to agitate people – it had Azath Salley arrested. Apparently, the Police are so busy scouring the pages of limited circulation magazines in other countries for potentially disturbing statements by Sri Lankan Muslim politicians that they don’t have time to listen to the bilge that some Buddhist monks are repeating at full volume on a daily basis on the streets of Colombo.

Fortunately, Mahinda Rajapaksa was in a good mood on Friday and Salley was released.

Salley says that he was misquoted. He asserts that he would never advocate or support the taking up of arms against the State since he is all too aware of the consequences, Sri Lanka having only just come out of its three decade long war. Very wise.

Meanwhile, Gotabhaya Rajapaksa has proclaimed that there was more to it than an interview – we await his efforts to prove as much beyond our absolutely reasonable doubts.

When people are not so agitated, they focus on their immediate problems.

The electricity tariff hike was enough of a shock to generate a reaction, and the strike planned for next week should give us an indication of how much trouble the cost of living is going to be for the Government.

But what of other issues?

I was bemused the other day to read an article by a prominent economist suggesting that there was no shortage of jobs in the country. He was arguing that the Government might soon have to ban migration, on the basis that the Sri Lankan economy is near full employment. He was concerned about the implications of such a decision on the Balance of Payments, since remittances from workers overseas are the most important source of foreign exchange for the country.

Of course the Government couldn’t ban migration even if it tried. People would continue to leave the country with or without its blessing.

Why? Because they aren’t satisfied with the employment opportunities at home.

In the 1970s and 1980s, the unemployment rate in Sri Lanka was over 15%. In the 1990s, it was over 10%. Now it is under 5%. However, the most important reason for this ‘improvement’ is the departure of hundreds of thousands of people. In 1990, only 50,000 people left the country for work. Now the figure is 280,000.

The 1.8 million workers currently overseas correspond to 22% of people employed in Sri Lanka. Every year, more people migrate for work than enter the labour market.

If this were to stop, the country would be firmly in the grip of unemployment again.

The Government no doubt understands this very well indeed, and I am quite sure that it has no intention of banning migration. That would lead to a serious increase in dissatisfaction, especially among young people, which the Government knows is dangerous.

But not doing something unhelpful is not the same as doing something helpful. Where are its plans to generate decent jobs at home?

At the moment, the Government’s idea of job creation is maintaining an unnecessarily large military and periodically recruiting unemployed graduates to do anything and everything – or most likely nothing at all – in the public service. Keeping people in non-jobs may be good for them and good for the country in some ways, in the sense that they are less likely to get involved in any more uprisings if they are employed by the State, and they will probably spend their salaries on goods and services produced at least in part in Sri Lanka, but this is not good for the country in other ways. While non-jobs occupy so many people, the economy simply cannot reach full employment.

And the country’s development suffers.

While the reconstruction of the conflict areas has generated a certain amount of employment, this won’t last. And it is clear that the Government’s plans don’t go beyond the building of infrastructure to considering how people in the North and East will actually use it to make a living.

What happens if Sri Lankan refugees come home? That’s another hundred thousand people in Tamil Nadu alone.

The Government doesn’t need to recruit them, but it should ensure that they will be able to work.

In the Vanni, the only businesses that seem to be growing at anything like the required rate are banks, which primarily exist to channel remittances from migrants.

Very few people would go overseas to work if there were satisfactory alternatives. The difficulties that migrants face are well known. Even more importantly, everybody understands that families do better when they are together. Tragedies like the execution of Rizana Nafeek have pushed the Government to introduce more checks and balances in the recruitment process, raising the minimum age for migration – especially for women – and to negotiate agreements with receiving countries that try to guarantee better working conditions. However, while these steps are clearly necessary, they are nowhere near sufficient. Most people would rather the Government made it possible for them to live at home.

Although the Government may think that it can safely ignore this issue, since Sri Lankans are now used to the idea of travelling thousands of miles if they want to earn a reasonable income, doing so is putting the country in a vulnerable position.

In 2009, remittances became the single most important source of foreign exchange for Sri Lanka, overtaking exports of textiles and garments. Now textiles and garments exports earn only $4.0 billion compared to $6.0 billion in remittances, with exports of tea accounting for a mere $ 1.4 billion and tourism receipts amounting to just $ 1.0 billion.

Banning migration is not on the Government’s agenda. But what if it were adopted as an objective by receiving countries?

The Indian press has been full of such concerns in the last month, following the implementation by Saudi Arabia of stricter laws on what it calls ‘Saudisation’. Passed in response to the Arab Spring, which made the authorities in Middle Eastern countries think a bit harder about the well-being of their people, they require all companies to employ a minimum percentage of their citizens, as well as to pay them a fairly substantial minimum wage – exemptions for companies with under ten employees have been removed. Also, a new system that may do better at ensuring compliance has been established.

Kerala expects to be badly hit, with an unusually large share of its population working abroad, and its Chief Minister is already talking about establishing a rehabilitation package.

This is probably an overreaction, but at least they are aware that they are exposed.

With 2.3 million workers abroad out of a population of just 33.4 million, Kerala’s numbers are similar to Sri Lanka, except that it has the rest of India to back it up if required.

Although keeping people’s minds off such problems is no doubt awfully time consuming, it would be nice if Mahinda Rajapaksa could spare one or two members of his administration to come up with a few solutions.

However, the rest of his followers will have to intensify their search for the next Azath Salley. The way things are going in Sri Lanka, the Government is going to need to create a lot more demons if it is to continue distracting people, since every distraction is a reminder of just how far off the right track it has swerved. And each demon has to be more extraordinary than the last. Only a few months ago, people were thinking that it couldn’t get much worse than the absolutely reckless impeachment of the Chief Justice, and then along came the Bodu Bala Sena.

This article was published in The Island on 15th May 2013. The internet version may be accessed here.

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