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Saturday, April 30, 2016

The effective GDP contributions for foreign employment- Sri Lanka

Sustaining Sri Lanka’s economic growth should be the main focus of any government to achieve its plans and vision, whether it is targeting $50 billion exports per annum or generating one million jobs. A whole host of prerequisites need to be met to sustain economic growth. Apart from political and social stability, a number of other factors like increasing savings and investment, reducing public debt, achieving low levels of inflation, increasing foreign exchange reserves, maintaining a stable exchange rate, among others are required for this purpose.


International migration is a major driver of social and economic change in our country. Foreign Employment provided a remittance income having significant economic and social consequences. Foreign employment provided a remittance income of US$ 5.2 billion in 2011 and is on course to send US$ 6 billion in 2012 (this work out to Rs.780 billion in current exchange rates).  As against this, the total revenue of Sri Lanka, is expected to be Rs.1.1 trillion. Remittance from 33% of our foreign exchange, the 1.7 million foreign workers from 24% of our labour force, and remittances flow directly to it. These economic flow have knock-on effects on rural wages while having enormous social consequences, which have not yet been comprehensively studied. 

Trends and Drivers of foreign employment in Sri Lanka.

2014 requested about 300,000 departure. The amount remitted to this country due to migration Remittance inflows have also persistently contributed to support Sri Lanka’s Balance of Payment (BOP) in the wake of a relatively weak trade balance. Due to the low skilled nature of Sri Lankan migrants, the impact of their departure on domestic labour market has been marginal. On the other hand, there is a large mismatch between the international demand for jobs and Sri Lankan’s supply capabilities. Current demand from overseas is mainly for skilled labour, while the Sri Lankan labour supply in concentrated on housemaids and other low skills categories.   Penetration into new skills and geographical markets is one way of enhancing the development impacts of migration. The development of skills in migrant workers will undoubtedly, open the doors to wider market. Especially when we compare with other developing countries’ foreign skilled labour supply is to be improved in Sri Lanka.

In 2015, the skilled labour category accounted for 31.2 per cent of all migrants for foreign employments, while professionals accounted for 2.4 per cent, middle level workers 2.6 per cent, and clerical workers 4.7 per cent. The majority of the migrant workers are comprised of those in the 25-29 year age group and up until the early 2000’s, females were the dominant group of the Sri Lankan migrants. In recent years, with the implementation of the compulsory registration of all migrants at the Sri Lanka Bureau of Foreign Employment (SLBFE) and the establishment of a hot line for complaints, among other measures, Sri Lanka has made reasonable efforts to prevent trafficking.



 Source:         Information Technology Division – SLBFE

Look at the figure-1 there shows the actual number of country and manpower level foreign employment departures in the year 2014. Highest recorded was from Qatar (84,622). There was highest record from unskilled level job categories that was 23,036 and second record from clerical & related level job categories that was 20,099. During the past Saudi Arabia ranked top for Sri Lankan, but in 2014 it took as the second highest destination country and therefore Qatar could change the history of migration pattern, by creating more job opportunities for foreign workers. Saudi Arabia has lost their domination for Sri Lankan housemaid, (35,675). U.A.E. stands as third highest destination country (50,343) and followed by Kuwait (43,528) as the second top country for Sri Lankan housemaids.

  
Table - 1
Departure for Foreign Employment through All Sources by Age Group & Gender, During the Period 2012 - 2015*

The table-1 clearly indicates that the majority of males who departed for foreign employment in the year 2015 were in the age group of 25 to 29 years, while the majority of females were in the age group of 35-39 years. The table also discloses that more than 4,250 females who departed in 2015 were below the age of 25 years, out of which female 381 were in the age of less than 20 years. When consider during the year 2012- 2015 male departed of age 19 and below there have an increased from 3,620 to 3,779. It is an increase of 4.4 per cent. Also the major age group of the male has recorded 25-29 age groups. It was 34,176 male departures. Second highest male departures were record from 30-34 age groups. It was 33,427 male departures in year 2015.

Challenges

During the period under consideration, unemployment rates by the level of education increased across all categories. Unemployment rate among the GCE (A/L) and above qualified category increased to 9.2 per cent during 2015 from 8.1 per cent recorded in the previous year. Unemployment rate among the GCE (O/L) qualified category was 6.4 per cent during 2015 while those who have passed years 6-10 recorded the lowest unemployment rate of 3.5 per cent for the same period.

Accordingly, total departures for foreign employment was recorded at 263,307 in 2015, compared to 300,703 in 2014. Female departures declined by 17.9 per cent, from 110,486 in 2014 to 90,677 in 2015, while male departures also declined by 9.2 per cent from 190,217 in 2014 to 172,630 during 2015. So the reason year (year 2015) foreign employment destination has been change, which was diversion point of the foreign employment industry of Sri Lankans. In the year 2015 Saudi Arabia, Qatar, U.A.E. and Kuwait total departures have been decreased with compare to the year 2014.



Table-2
Job Vacancies & Departures trough Registered Sources by Manpower Level 2011- 2015*        

 (No. of Job vacancies = Demand Departures = Supply)
When foreign employment by manpower level is considered, skilled level job categories continued to remain as the categories having the highest demand among manpower categories of migrant workers. Therefore recorded in year 2015 unskilled level job categories coming second highest job category. And the housemaid job category was highest number of foreign employment departures up to now from 1995. However, the share of housemaids who were usually belong to the lower income groups in the society, has increased up to 54 percent in 2005, but from there onwards the percentage has sharply declined reaching 28 percent in 2015.

Approximately 57 per cent of total departures comprised of unskilled workers and Housemaid categories. Only 2.4 per cent of worker departures were under the Professional category. Nevertheless, the skilled labour category contributed to 31.2 per cent of total departures, which is an encouraging development in the drive to enhance the migrant employment profile of the country[1].
Gross enrolment ratio (GER) at tertiary level 17%, 24,198 (16.7%) was only selected out of 144,816 which qualified for state university entrance.
Ø  Main challenges of the education system are lack of quality, attractive and relevance to job market
Ø  Changing population profile from child to adolescent & youth
Ø  Increase labour force from 7.3 million in 2010 to 8.9 million in 2015
Ø  Annually about 150,000  adolescents and youth join the labour force with low skills or no skills at all
Ø  Unemployment rate is 4.3% but youth unemployment is higher (13%)
Ø  During the period under consideration, unemployment rates by the level of education increased across all categories. Unemployment rate among the GCE (A/L) and above qualified category increased to 9.2 per cent

Demand in other Countries

The opportunities in Middle East, European Countries and Australia are still increasing trend. These countries require new skills people to fulfill their needs to continue their economic growth and economic sustainability. Skills migration are very actives in these countries. There are professional and skills migration required by these countries. Skills professionals are coming who have skills in degree qualification, recognize state qualifications, with good enough work experience and English language.
According the information of SLBFE 2013, the major receivers of Sri Lankan Migrant workers 86 per cent from Saudi Arabia, Quit, U.A.E, and Qatar only 14 per cent of them work in other nations. SLBFE’s report said that, there are about 33.07% were housemaid/ Domestic Housekeeping Assistant and 24.21% were unskilled labour estimated in 2013.

Contribution of Sri Lanka Bureau of Foreign Employment

1. The utility function of the Ministry of Foreign Employment has, so far, been to maximize remittances and reduce unemployment. Sri Lanka succeeded magnificently. Remittances are the highest foreign exchange earner and key link between labour migration and country’s economic development. Therefore the Ministry through its governing body, SLBFE, implement further measures to the volume of remittances, reduce transfer cost and widen the choices of migrant workers to use institutional channels for remitting money.

2. An enabling environment for maximizing migrant savings and utilization of remittances for productive investments will be promoted and incentives and advisory services will be provided in particular for the development of skills demanded in overseas and domestic labour market.

3. The SLBFE has engaged in developing a mechanism for reintegration of the returnee migrant workers with main areas focused on such as,
·         Skills & technology transfer and personal development
·         Promote entrepreneurship among migrant returnees and family members.
·         Secure local employment for returnees through public private partnerships.
4. The present policy for the development of foreign employment sector is to lay greater emphasis to provide more employment abroad to skilled and professional categories which will have a higher earning capacity and less employment related problems. Another policy initiative is to seek new employment sources.

The Ministry of Foreign Employment continuously expands its services and facilities through SLBFE to exploit more employment opportunities while ensuring a labour migration process that adheres to principles of good governance and rights for all men and women to engage in decent and productive employment abroad in conditions of freedom, dignity, security and equity. To facilitate this, the Ministry is keen on achieving regional cooperation and understanding by holding discussions and through international agreements with both sending and receiving countries.

In addition, the SLBFE has taken measures to upgrade the quality of domestic sector employees by introducing the National Vocational Qualification (NVQ) Level 3 and it is mandatory requirement for pre departure training.

Therefore agreement has been signed with the Tertiary and Vocational Education Commission in September 2012, to facilitate NVQ Level 3 of training for Sri Lankans leaving for employment in the Middle Eastern counties as well as in Singapore and Cyprus.

Recommendation.
1.  The number of pass out of skills labour from recognized institute must be increase to fulfill the requirement of other countries. And the curriculum must be internationally recognized and hast to update properly.
2.  Meet the recurrent costs of this sector through a ‘voucher’ system, where students who are qualified to receive this education have freedom to spend it at institutions of their choice.
3.  Motivate the private sector to be education providers in this sector, especially given the availability of the voucher system. Such indirect support of the private sector is acceptable, because it will create competition; also the real support is directly to students.
4.  In addition, institutions will be forced to perform in order to attract students; and also deliver programmes that are relevant[2].
5.  The technical and vocational education and training (TVET) must more efficiently build the skills demanded in the economy. Based on the international labour requirement TVET has to set up its strategies and make aware the youth to upgrade their skills.
6.  Increase the quality and relevance of existing academic programs at the higher educational institutions.
§  Soft skill development of students
§  Updating curriculum
§  Development of new academic programme
§  Staffs development
7.  Awareness programmes should be organized for more females to undertake studies in the fields of nursing, home economics, hotel receptionists, airline ticketing, beautician courses etc.
8.  The formulation of migration policies should be transparent and carried out with meaningful involvement of key stakeholders, especially employers, trade unions, private recruitment agencies and civil society organizations (CSOs) formed by migrants or representing them.
9.  Labour migration policies should also be responsive to the different sectors that migrants work in, especially agriculture, manufacturing, construction, services and domestic work, and the gendered characteristics of each sector.
10. Establishing and operating efficient migration management systems at the international and national level will require the collection, compilation, dissemination and analysis of more comprehensive data on migration than is currently the practice. Ideally, data systems would provide information on migrants throughout the process of recruitment, deployment, employment and return.
11. Plan and implement strategy to ensure skilled, safe migration that would involve promoting skilled migration through better skills training, diversification od destinations, identification of and capitalizing on Sri Lanka’s competitive advantages in this field according to global employment opportunities that are available.

Reference:
1.    Central Bank of Sri Lanka Annual report 2015
2.    Annual statistical report of foreign employment 2015, Sri Lanka bureau of foreign employment.
3.    Details Action Plan to Implement The National Human Recourse and Employment Policy-2013, Secretariat For Senior Minister.
4.    http://www.statistics.gov.lk/samplesurvey/2015Q4report.pdf
http://www.sundaytimes.lk/150816/business-times/building-the-skills-for-economic-growth-and-competitiveness-in-sri-lanka-160533.html



1.    Central bank of Sri Lanka, Annual Report 2015

2. Increasing the allocation for Education to 6% of GDP. http://nhrdc.gov.lk/nhrdc/Increasing.pdf

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