Sri Lanka’s remittances from its overseas expatriate workers rose to a near-record high, increasing by 21.1 percent to $693.3 million in March 2025 compared to the same month last year, helped by more expatriates using official banking channels, according to DELOTITE.
But can we expect this trend to continue for long? With the world changing beyond doubt—or recognition—what are some of the headwinds we are likely to face soon?
Between environmental breakdown, economic crises, and President Donald Trump, there now seems to be little reason to feel hopeful about the days ahead. Yet, life still goes on, regardless.
Countries around the world are beginning to adopt protectionist measures to safeguard their interests, exports, and trade.
Some experiences of working abroad by Indian expatriate workers:
“It has been observed that Indian workers abroad, including in Gulf countries, at times face difficulties due to inhumane working conditions. The majority of complaints pertain to labour disputes such as delayed or unpaid salaries and end-of-service benefits, unauthorised retention of passports, excessive working hours, lack of leave provisions, non-payment of overtime, being offered jobs different to those promised at the time of recruitment, unemployment due to sudden company closures, problems changing employers, issues with accommodation, denial of legitimate labour rights, ill treatment or harassment, non-issuance or renewal of residence permits, failure to cancel visas, refusal to grant exit/re-entry permits to visit India, and denial of final exit permits after contract completion. In some cases, compensation is not paid upon death, and medical and insurance facilities are lacking.”
These labour-import markets are slowly but steadily erecting barriers for foreign workers.
Creating Jobs at Home
In Sri Lanka, the demand for jobs will only be met if several factors come together. Construction activity needs to continue at its current brisk pace. However, for the next year or two, it must be led by public sector investment, as private investment remains sluggish.
Our investment-to-GDP ratio is still well below 10% and has remained below the level inherited by the current government when it came to power months ago. The potential for increased construction employment—a trend seen between 2004 and 2012—over the next five years hinges on a revival of private investment.
Subsidies are essential for generating employment.
If subsidies are redirected from large State Enterprises to smaller enterprises, they may have a greater impact on employment generation. Large State Corporations typically employ capital-intensive methods of production, whereas smaller enterprises tend to be more labour-intensive. Historically, it is these smaller businesses that have generated most non-farm jobs in many developing countries.
A third area for job creation is in services. Public expenditure should prioritise healthcare, education, vocational training, and universities.
These sectors are labour-intensive, contribute to the creation of public goods, and help build the human capital needed in both manufacturing and modern export-oriented services. That is the only way Sri Lanka’s health and education systems can reach the standards observed in East Asia and attract greater foreign investment.
A renewed focus on smaller enterprises across these sectors is essential. Inclusive growth requires providing jobs rapidly at the base of the pyramid, not only at the top of the wage and skills spectrum.
We also need to invest more in our traditional exports—tea, rubber, and coconut. Plantation agriculture must at least keep up with global demand. Unfortunately, agriculture appears to have been downgraded amid our mounting debt crisis.
For all that has been said and done, we need greater participation from our expatriates. Our overseas embassies need to be more actively involved in encouraging and facilitating fresh investment by our countrymen in their homeland.
