Foreign remittances, foreign debt and social fallout on Lankan society

• All governments since the economic collapse in 2022 have attempted to sell our migrant workers to settle our international debts. They have not taken into consideration the social costs of these new-found solutions

All governments of our country have initiated steps to sending more of its citizens to foreign countries to bring in much needed foreign exchange since Lanka declared bankruptcy in 2022. Official remittances rose 22.3 percent to 635.7 million dollars in June 2025. The Sri Lanka Bureau of Foreign Exchange (SLBFE) anticipates remittances from migrant workers to reach over US$ 7 billion by the end of this year.

Central bank data showed remittances reached 3.74 billion dollars in the first half of this year, rising 18.9 percent from a year ago. Governments often trumpet the rising dollar remittances into the country and the role It plays in creating opportunities for our citizens to work in foreign countries.

Over the years foreign remittances have been a crucial component of our country’s economy.These remittances serve as a vital source of foreign currency, contributing significantly to the economic stability of our country. At the same time, it helps offset the country’s trade deficit.

According to the Central Bank (CB) foreign exchange earnings of migrant workers have covered around 80% of the annual trade deficit over the past two decades.  It confirms worker remittances as being a pillar of the country’s foreign currency earnings (FCEs). These FCEs also provide a cushion against the widening trade deficit.

At the same time,  the CB’s data reveals that around 55% of our people live in poverty. It is not surprising therefore that during the first six months of this year (2025), 144,379 Lankans have gone abroad for employment. Of this number, 55,695 have been women.A study carried out by the Faculty of Arts and Culture, South Eastern University of Sri Lanka showed that over 52% of total departures were women who are employed mainly as domestic workers.  A majority of these women are compelled to migrate abroad due to a lack of access to regular and substantial income and the inability to bear the rising cost of living. 

As a result, they are forced to leave their families behind seeking a means of getting out of poverty. At first glance, it appears that government efforts to kill two birds with one stone -- poverty reduction and earning much needed foreign exchange the country needs -- has been successful.

Sadly,  this has not been the case.In fact it has created a plethora of social problems in its wake. Women have been forced to leave their children behind in the care of other family members at home as a mean of getting out of poverty. The migration of mothers for overseas employment impacts children left behind adversely. Studies conducted by ‘Save the Children’ estimates that over a million Lankan children are affected by this phenomenon. 

The reports adds the migration of mothers for overseas employment significantly impacts children left behind, often leading to emotional distress, academic challenges, and increased vulnerability to neglect and abuse. 

 “KALAM” International Journal of Faculty of Arts and Culture, South Eastern University of Sri Lanka, revealed  that children left behind suffer from a wide range of psychological problems related to emotional detachment. The most common psychological problems are feelings of abandonment, sadness, despondency and despair, lack of trust, low self-esteem and inability to concentrate at school.

Girl children of migrant mothers are often subjected to sexual abuse, rape and incest in the hands of male relatives. The absence of mothers is often identified as a main cause for sexual abuse and incest. After women migrated abroad for work, most of their husbands have extra marital relationships. At the same time, some of them turn to their daughters to satisfy their sexual needs. The study of twenty-two reported incest cases showed that in 11 cases (50% of all cases) the mother was away in the Middle East.

All governments since the economic collapse in 2022 have attempted to sell our migrant workers to settle our international debts. They have not taken into consideration the social costs of these new-found solutions. Even our present ‘socialist’ administration seems to be following the same course -- encouraging poverty-stricken Lankans to seek employment in Israel. Plans are underway to send some 40,000 Lankan job seekers to Israel despite the on-going war!

Foreign earnings are important. But we need to pay more attention to the social fallout this source of income could lead our country to.

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