TALKINGECONOMICS

DIGEST

&Migration DevelopmentMigrant Voices: Returning Home

Finally Some Good News about the Ozone Layer?

Quality of Teachers Does Matter in Sri Lanka

What Sri Lanka Should Know about Chinas New Economic Dynamism

July to December 2014

3Editorial

Welcome to 9th edition of the Talking Economics Digest!

In this Edition, the Digest focuses on Migration and Development, one of cross cutting and emerging thematic research areas at the Institute. Over the past decade, the number of people leaving for foreign employment has

surged and there are over 1.5 million Sri Lankans working overseas, according

to the Sri Lanka Bureau of Foreign Employment. Nearly 250,000 Sri Lankans

annually leave for employment abroad and their remittances account for the

largest source of foreign exchange to the country, roughly 9.5 per cent of Gross

Domestic Product (GDP). Remittances also have been a vital source of income

for migrant households, enabling them to improve the socio-economic situation

of their families and their own position. However, migration has social and

physiological costs in terms of family breakdown, physical abuse of workers at

destinations (p.20) etc. Thus, Sri Lanka is struggling to strike a balance between

promoting migration while protecting migrant workers and their families (p.14).

Towards addressing this challenge, the government is interested in promoting

more skilled migration and accessing non-traditional markets (p.18). It is also

paying attention to facilitating the return and reintegration of migrants with

opportunities for skills transfer, productive employment and social integration

(p.22).

Given that migration will continue to play a key role in the development of Sri

Lanka, the IPS has been strengthening its research capacity, policy engagement and

outreach activities on migration in 2014 through training, research, recruitment

(p.29), setting up of Labour Migration Resource Centre (p.28) and hosting an

international conference (p.60). This Digest also features insightful interviews

with international migration experts from India, Pakistan, the Philippines and the

UK (p.26), and two compelling stories of migrants who have returned home and

the challenges they face in reintegrating (p.24).

As usual the Digest features articles by IPS researchers who are working on a

diverse range of policy issues including poverty, agriculture, environment, health

and education, international trade, etc. Some contributions to the Digest are

based on recent publications (p.63), which are now available for purchase.

I would like to acknowledge the contribution of Anushka Wijesinhe to the Talking

Economics Blog and Digest. His initiative, effort, and hard work as the Editor have

enabled us to share our insights with a wider audience beyond policy makers of

the country.

I hope that you find the Digest interesting and look forward to your continuous

support and feedback.

Janaka Wijayasiri, Research Fellow janaka@ips.lk

May 2015

ExEcutivE DirEctor

Saman Kelegama

DEputy DirEctor

Dushni Weerakoon

talking Economics tEam

Janaka Wijayasiri Editor

Anushka Wijesinha Former Editor

Bilesha Weeraratne

Shanika Samarakoon

Dishnika Perera

Charmaine Wijesinghe

Savani Jayasooriya

contributing authors Athula Senaratne

Anushka Wijesinha

Bilesha Weeraratne

Chatura Rodrigo

Dharshani Premaratne

Janaka Wijayasiri

Kanchana Wickremasinghe

Keshini Sritharan

Neluka Gunasekera

Nipuni Perera

Nisal Herath

Nisha Arunatilake

Priyanka Jayawardena

Raveen Ekanayake

Sunimalee Madurawala

Suwendrani Jayaratne

Yolanthika Ellepola

institute of policy studies of sri lanka

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All material published in the Talking Economics Digest are the copyright of the Institute of Policy Studies of Sri Lanka (IPS), unless otherwise specified. It cannot be quoted without due acknowledgement to the IPS and the author. It cannot be reproduced in whole or in part, without the written permission of the IPS. The content, comments and posts of the Talking Economics Digest and the IPS blog represent the views of individual authors and do not necessarily represent the views of the IPS.

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contents04

Poverty and MDGs in Sri Lanka: What More Needs to be Done?

06Better Business Development Services Can Help Sri Lankas Women Entrepreneurs Prosper

08Key Determinants of Sri Lankas Fertilizer Subsidy: Some Research Findings for Policy Makers

10Standards Can Help Sri Lankan SMEs Access New Markets

11Sri Lankas Balancing Act of Promoting International Migration while Protecting the Well-being of Migrants and their Families

14Where Do Migrant Workers Fit in Sri Lankas Population?

16Are Restrictions Imposed on Female Migrant Workers Discriminatory or Improving Family Well-being?

18Accessing Labour Markets Abroad: 6 Key Challenges for Sri Lanka

20Does Foreign Employment through an Agency Minimize Vulnerability of Sri Lankan Female Domestic Workers?

22Sri Lanka Can Gain More from Migration by Helping Returnees Reintegrate Better

24 Migrant Voices

26 Migration Expert Views

28 MED_MIG Search Engine

29 Inside IPS

30Finally Some Good News about the Ozone Layer?

325 Things to Know About Building Resilience from Droughts in Sri Lanka

34Tackling Environmental Challenges in the Indian Ocean Will Require Closer Collaboration in the Region

36Getting Communities Involved in Sri Lankas Nature Tourism

38The Dilemma of Dengue and the Health Economics of It

40A Closer Look at Youth Mental Health in Sri Lanka and Some Consequences

42Sri Lankas Ageing Population and its Health Policy Challenges

44Quality of Teachers Does Matter in Sri Lanka: Lessons from the Best Education Systems

46Open Online Courses Can Help More Sri Lankans Access Higher Education

47 Asias Rise: Undoubted but not Unimpeded

50Laying the BRICS for a New Global Financial Architecture?

52What Sri Lanka Should Know about Chinas New Economic Dynamism

54Aid and Trade Between Sri Lanka and China A Snapshot of IPS Insights

56Looking at Sri Lankas Existing Trade Agreements and Lessons for the FTA with China

58Chinas Approach to FTAs with Other Countries: What Can Sri Lanka Expect?

60 IPS News

63 Latest IPS Publications

64 Talking Economics Crossword Puzzle

65 Fast Facts

Migration & Development

Research. Inform. ImpactThe institute of policy studies of sri lanka (IPS) is an autonomous institution that aims to promote policy-oriented economic research and to strengthen the capacity for medium-term policy analysis in sri lanaka. Its mission is to contribute to the socio-economic development of the country through informed, independent and high quality research that seeks to influence the policy process. With over two decades of substantial research expertise, IPS has emerged as a regional centre of excellence and the most influential think tank in sri lanka.

54

Poverty a condition where peoples basic needs for wellbeing are not being met is a multidimensional issue that affects most, if not all, nations. Despite huge success in reducing poverty in many parts of the world, poverty remains a major development challenge and a multidimensional issue that affects many nations, In fact, in South Asia alone, 31% of the population is still living in poverty.

Poverty is one dimension of development and is interlinked with many other dimensions. As such, it is

Poverty and MDGs in Sri Lanka: What More Needs to be Done?By Nisal Herath

Image courtesy Anushka Wijesinha

Special article marking

International Day of

Eradicating Poverty

important to look at the Millennium Development Goals (MDGs). In Sri Lanka, many of the MDGs are within sight. The national poverty head count ratio the percentage of population who live below the national poverty line has decreased from 8.9% in 2009/2010 to 6.7% in 2012/2013 in Sri Lanka. Compared to the same in neighbouring South Asian Countries, Sri Lankas progress in poverty reduction is remarkable. However, it is time to look beyond the MDGs.

Sri Lankas success in achieving the MDGs is partly due to the social protection policies that the country has implemented since Independence. Also programmes such as free universal health care and education that is provide by the government has contributed towards the goals of universal primary education, promoting gender equality and empowering women, reducing child mortality, improving maternal health and combating HIV, malaria and other diseases. However, sustaining these achievements has become a challenge.

Continued poverty reduction depends on maintaining and updating free healthcare and education in Sri Lanka. The challenge is that on one hand, there is a need to maintain the growing demands for free health and education in a market-oriented economy while on the other hand, expectations of these services are evolving. Literacy should not only be about the ability to read and write any more, it should also include a component of computer literacy which is what matters now. Similarly, improvement of health care standards is required to match that of modern Sri Lankan Society. The public sectors alone cannot expand services while maintaining required quality is evident. It is important to involve the private sector in the provision of healthcare. At the same time, equitable services that have reach to ensure inclusiveness is needed. Availability of healthcare services is not enough, ensuring inclusive accessibility of health services for everyone is important.

Sri Lanka has been a success story in poverty reduction, but the challenges

are not over yet. Although the number of people living below the national poverty line has declined, extreme hunger is still an issue. The prevalence of undernourishment in Sri Lanka was approximately 24% in 2012[i]. Poverty and hunger are interlinked, but it appears that decreased poverty does not necessarily ensure decreased hunger. Why does such a high level of undernourishment exist in a country where income poverty has been reduced significantly? Is it a food affordability issues or misallocation of household incomes? As such it is important to understand food insecurity. Food security can be enhanced by reduction of food price volatility. Food price increases have reduced calorie intake by 8.5% and protein intake by 6% for poor households[ii]. Also, increased use of health care and improved sanitation and water facilities as of 2010, 91% of the population had access to sanitation facilities would help towards decreasing undernourishment and help solve this specific poverty issue in Sri Lanka [iii].

There are other issues that still need to be addressed, however. Foremost among these issues is environmental sustainability. Poverty issues are interlinked with environmental issues as sustainability cannot be achieved without ensuring that natural resources management underpins the development process. In Sri Lanka, the forest cover has decreased from 36.4% in 1990 to 28.8% in 2010[iv]. The forests need to sustainably managed as a part of poverty reduction effort because poor are the first to adversely affected by environmental degradation.

As people are vulnerable to external shocks, natural disaster can push people who were out of poverty back into poverty. Climate related natural disasters such as droughts and floods affect agriculture and fisheries sectors[v]. Livelihoods that depend on these sectors face a major risk factor that could bring back the non-poor people to poverty. Thus, a sound climate adaptation policy should be an integral part of poverty reduction strategy of any country. In the case of Sri Lanka, the Climate Change

Secretariat has been established to address the issues of adaptations to climate change.

Poverty is linked to many other aspects of development. Although the MDGs look at various aspects of development, it is not exhaustive. The MDGs have not looked at inclusive growth and inequality. It is also important to identify a new set of goals after 2015 as the MDGs are due to expire. There is dialogue underway to develop post-2015 agenda with new goals. Significant progress has been made regarding poverty reduction, but continuing work needs to be done to ensure further development. In the case of Sri Lanka, the issues are not necessarily with facilities with regards to MDGs, but the accessibility and inclusiveness of facilities. As such, it is also important to look beyond the MDGs and incorporate missing dimensions in the poverty reduction agenda.

References:

[i] Asia Pacific Aspirations: Perspectives for a Post-2015Development Agenda Asia-Pacific Regional MDGs Report 2012/13 http://www.adb.org/sites/default/files/pub/2013/asia-pacific-regional-mdgs-report.pdf

[ii] Food price spikes, increasing volatility and global economic shocks: coping with challenges to food security in Asia http://www.fao.org/docrep/016/i3031e/i3031e00.pdf

[iii] FAO Country Programming Framework 2013 2017 Sri Lanka. http://www.fao.org/fileadmin/user_upload/faoweb/sri_lanka/docs/CPF_SriLanka.pdf

[iv] Asia Pacific Aspirations: Perspectives for a Post-2015Development Agenda Asia-Pacific Regional MDGs Report 2012/13 http://www.adb.org/sites/default/files/pub/2013/asia-pacific-regional-mdgs-report.pdf

[v]Climate Change Vulnerability Data Book http://www.climatechange.lk/adaptation/Files/Final_Climate_Change_Vulnerability_Databook.pdf

76

potential of women in the development process of Sri Lanka.

Despite these obvious gains, gender biases against women are common. As the National Policy on Human Resource and Employment observes there is a gender bias in small-and-medium enterprises (SME) employment. Workers employed in SMEs are predominantly men. Good equal employment practices are needed to correct the above bias. According to the World Bank Enterprise Surveys for Sri Lanka, regardless of the sizes of the business, fewer women are employed in top managerial positions and less women participate in ownership compared with men.

Business Development ServicesA good way of helping women entrepreneurs start up and grow is through Business Development Services (BDS). According to a recent IPS-Oxfam study, there is enough evidence to argue that BDS providers have to play a much more dynamic role in assisting women entrepreneurs to grow from micro level to the SME level. BDS are non-financial services that provide a variety of services including training, counselling, advice, information provision, facilitating access to markets, etc. These services assist SMEs overcome various internal and external obstacles to their businesses. Financial services alone will not result in business growth in the SME sector.

In fact, in some cases, womens businesses grow slower than that of men even within the same financial support programmes, indicating that women entrepreneurs in particular require more non-financial support. The role of effective and well planned BDS becomes increasingly important in such instances.

There are a number of BDS available in the market catering to the needs of SME strategic level development, such as business development training, technology transfer, creating markets and market linkages, sharing of business information, facilitating access to credit for the business, etc. Generally, three major actors in the BDS sector can be identified BDS providers, BDS facilitators and aid donors supporting BDS. In Sri Lanka, BDS are provided through a range of programmes initiated by both government and non-government institutions. These include training by the Ministry of Traditional Industries and Small Enterprise Development, training and technology services by Industrial Development Board (IDB), Small and Medium Enterprise Developers (SMED)

project, business incubator services by United Nations Industrial Development Organization (UNIDO), services offered by the Sri Lanka Business Development Centre, and assistance with marketing by Laksala and the Sri Lanka Handicraft Board.

Recommendations for Reaping the BenefitsBoth the public sector and the private sector will have to make a significant effort to increase awareness who the providers are, what services they provide, where the providers are located at, etc., on BDS among the small and medium entrepreneurs. BDS providers can learn from financial institutions that often visit villages and meet with entrepreneurs personally to sell loan schemes to them. A similar technique can be adopted by BDS providers, where they personally visit entrepreneurs and inform them about the services available. Government institutions and Chambers of Commerce also need to fulfill their role as BDS facilitators, especially in disseminating information related to available BDS.

There is an unmet demand for BDS such as marketing services, direct marketing methodologies, new technologies, information on banking services, efficient machineries and market opportunities, taxation, and market information. These are areas for BDS providers and facilitators to focus on, in order to improve existing enterprises and to make them more profitable. However, to do so, there should be better information channels regarding these services and how they can be accessed, all of which should be readily available to the entrepreneur.

Aside from improving information on BDS, the issue of appropriateness of available BDS also needs to be addressed. The study revealed that, rather than offering generic BDS that tend to be available everywhere, BDS providers should offer more focused services catering to the needs of entrepreneurs. For instance, they can use mobile phones as effective mediums of communicating with women entrepreneurs in remote areas, as opposed to traditional methods like posters and banners.

An important aspect for consideration is to encourage micro credit-plus BDS. In this, the credit provider organizes and/or provides BDS suitable for entrepreneurs as a way to ensure credit recovery. The entrepreneur herself benefits tremendously through this system as it focuses on individual needs. Such a method would include technological support, input linkages, business counselling, market links, and individual mentoring, that will build up a successful enterprise.

A key observation in the study is that BDS providers need to expand their services and to look for more innovative approaches in providing their services. Overall, the study asserted that fostering female entrepreneurship and encouraging women to act as employers is an important way of unlocking womens potential in contributing to Sri Lankas economy. In the course of the study, the research team met many women entrepreneurs who grew their small enterprises in difficult circumstances. As Karunawathi, an entrepreneur from Anuradhapura asserted that: When it comes to business, it does not matter whether you are a man or a woman; but all you need is talent, determination and dedication. In the interviews with them, entrepreneurs like Kumari and Inoka acknowledged that the BDS help they received from various institutions benefitted them greatly. A good system of support for entrepreneurs like them, which eases the obstacles they face, and helps build on their determination and inherent potential, will surely help women play a stronger role in the SME sector and in the Sri Lankan economy as a whole.

(This article is based on a recently publication Female Entrepreneurship and the Role of Business Development Services in Promoting Small and Medium Women Entrepreneurship in Sri Lanka by IPS and Oxfam GB Sri Lanka. The IPS Research Team included: Kaushalya Attygalle, Dilani Hirimuthugodage, Sunimalee Madurawala, Athula Senaratne, Anushka Wijesinha, and Chopadithya Edirisinghe).

Better Business Development Services

Can Help Sri Lankas

Women Entrepreneurs ProsperBy Sunimalee Madurawala

Women should not restrict themselves to household chores. We have plenty of time to do much more, and this is a time when women have to contribute more to their familys income, says Kumari, a 53 year old entrepreneur, wife and mother of two, living in Matale. Kumari once worked as a typist at the Ceylo n Cement Corporation, but, quit her job due to family commitments. Kumaris story, which is captured in a new study by the IPS and Oxfam on female entrepreneurship in Sri Lanka, is just one of many across the country. Although Sri Lanka has achieved most of the MDGs related human development goals, the active female participation in the economy is relatively low. Females account for as much as 70% of the population that is classified as economically inactive. Even of those who are economically active, the number of women in the workforce (33%) remains far below that of men (67%). Kumari, however, wanted to buck this trend. She felt that she could do more than being a stay at home mother. She started manufacturing detergent products at a very small scale, and despite facing many difficulties and resistance, today she proclaims her success as an entrepreneur with great pride.

Inoka, a successful traditional food producer from Kurunegala, faced similar struggles, but like Kumari, she took up the entrepreneurship challenge. Being

a woman I have several roles to play. I have to be a good mother to my kids, a wife to my husband, a daughter-in-law to my in-laws, and now especially, a good business woman to the society. Im happy with where I am today. I gained all this recognition because I started this business and I am carrying it out successfully.

Like Kumari and Inoka, there are many micro-level women entrepreneurs in Sri Lanka who yearn for a successful career, and help their families, and the country, prosper. Women entrepreneurship can contribute to a countrys development process in number of ways. At an individual level, it creates employment opportunities for women. Women seek entrepreneurship for many reasons. While some women start a business based on an idea or innovation, or due to an unsatisfactory experience as

an employee, others are compelled to start their own business due to forced unemployment either from a layoff or due to lack of marketable skills. Regardless of the reason for women to start up a new business, entrepreneurship not only empowers women economically, but also builds up their dignity and earns social recognition for them as well.

The impact of womens economic empowerment goes beyond the individual level. Research has shown that women are more likely than men to invest a large proportion of their household income in education, nutrition and well-being of their children. It has been estimated that in emerging markets, women reinvest 90% of their earnings in their families and communities.

With the accumulated assets and enhanced economic security, women improve industrial capacity and spur economic growth by creating new jobs, as well as by expanding the pool of human resources and talents available in a country. Its also acknowledged that, female-operated Small and Medium Enterprises (SMEs) could well cater to the demands of the rising middle class important to Sri Lanka now given the countrys move towards an upper middle-income economy. Given the low female labour force participation in the country, fostering women entrepreneurs can be an effective way of capturing the

Image courtesy Rose Charities Sri Lanka

RESEARCH HAS SHOWN THAT WOMEN ARE MORE LIKELY THAN MEN TO INVEST A LARGE PROPORTION OF THEIR HOUSEHOLD INCOME IN EDUCATION, NUTRITION AND WELL-BEING OF THEIR CHILDREN

A KEY OBSERVATION IN THE STUDY IS THAT BDS PROVIDERS NEED TO EXPAND THEIR SERVICES AND TO LOOK FOR MORE INNOVATIVE APPROACHES IN PROVIDING THEIR SERVICES

FINANCIAL SERVICES ALONE WILL NOT RESULT IN BUSINESS GROWTH IN THE SME SECTOR

98

Key Determinants of Sri Lankas Fertilizer Subsidy:

Some Research Findings for Policy Makers

By Chatura Rodrigo

As in many developing countries, fertilizer subsidies represent a major component of agricultural policy in Sri Lanka. This is particularly true of the paddy sector. With rice being the staple food in Sri Lanka, successive governments have provided significant fertilizer subsidies for paddy with the primary aim of increasing the paddy production[1]. Since 2005, the fertilizer subsidy has accounted for 2-2.5% of total government expenditure[ii] and the subsidy is given for all three major fertilizers (Urea, Murate of Potash MoP, and Triple Super Phosphate TSP).

Over the years, the subsidy has significantly contributed to increasing paddy production, stabilizing the milled rice price[iii], and helped the country attain self-sufficiency in rice[iv]. However, there are questions on the effectiveness and sustainability of the programme because of concerns around the overuse of subsidized fertilizer and its use for crops other than paddy. The excessive use of fertilizer has also raised concerns over soil and water pollution, food safety and the burden on the national budget[v] and[vi].

In response to these concerns, especially the burden on the budget, the government of Sri Lanka reduced the fertilizer subsidy by 25% in the 2013 Budget. It further aimed to encourage farmers to adopt organic fertilizer. However, paddy farmers complained to the government that they are not in a position to shift to organic fertilizer

within a short time and announced a possible price hike for rice. After the reduction in the fertilizer subsidy and the consequent price hike, paddy production declined as farmers did not cultivate the full extent[vii]. In response, the government revised their decision in 2014 by reducing the subsidy by only 10% instead of the original 25%[viii]. This shows the inconsistency in recent agricultural policies, and calls for better evidence-based policymaking.

Paddy A Mainstay

Paddy cultivation is a major source of livelihood in Sri Lanka, providing more than 1.8 million people with employment opportunities. So, in terms of food security and rural employment, the government is under constant pressure to continue with the subsidy scheme. Furthermore, the subsidy has become a politically sensitive issue, since paddy farmers are a high share of the voter base[ix]and[x]. This is very common in most developing countries. However, a sufficient and effective decision on the reduction of the subsidy is not possible without a clear understanding of the factors that determine the demand for fertilizer[xi].

A New Study

There are several studies in Sri Lanka that have examined the factors that determine the demand for fertilizer in paddy cultivation. However, these have failed to consider recent data that capture the fertilizer subsidy

implemented since 2005; they only take into account a handful of variables that determine the demand for fertilizer. Moreover, data on fertilizer use in Sri Lanka needs to be studies considering the two main paddy-harvesting seasons. In order to address these limitations, a new study by IPS uses panel data regressions in fixed and random effects scenarios to investigate the factors that affect fertilizer demand in the major paddy producing areas of Sri Lanka between 1990 and 2011. This study uses fertilizer consumption, prices, and cost of cultivation data published by the Department of Agriculture.

Significant Findings

Estimation results suggest that the price of fertilizer, price of seed paddy, price of labour, quantity of paddy output, cost of materials, cost of pest management, provision of fertilizer subsidy and the whether the paddy cultivation is commercial or not, all have significant implications on the demand for fertilizer. However, the use of machinery which represents the degree of mechanization in paddy farming does not have a significant impact of the demand for fertilizer.

The demand for fertilizer decreased as the price of fertilizer and the price of seed paddy increases. However, the increases are relatively inelastic. Both fertilizer and seed paddy do not have close substitutes. Even though organic fertilizer can be used in place of chemical fertilizer, it is not widely practiced in Sri Lanka and commercial

paddy farming is predominantly based on chemical fertilizers. Therefore, simply reducing the fertilizer subsidy would not encourage farmers to adopt organic fertilizer. Adoption of organic fertilizer in the short run may hinder production unless farmers are compensated for possible yield reductions.

The demand for fertilizer increases as the price of labour increases which could possibly be explained by the labour scarcity. An increase in the cost of materials (mainly the cost for weed management) pushes farmers to use more fertilizer while an increase in the cost of pest management reduced the demand for fertilizer. On average, farmers use more fertilizer when the fertilizer subsidy is provided. But the increase in demand, under the subsidy, is significantly smaller. Finally, the study finds that more fertilizer is demanded by commercial paddy cultivating areas.

Policy Recommendations

This study proposes several major policy recommendations based on three major outcomes: self-sufficiency in the production of rice; prevention of the overuse of chemical fertilizer; and the gradual removal of the fertilizer subsidy. The relatively inelastic relationship between the price of and demand for fertilizer, the limited availability of organic fertilizer, and the possible yield drops with organic fertilizer use, all create issues in adoption of organic fertilizer among Sri Lankan paddy farmers. Therefore, the objective of promoting organic fertilizer requires farmer support programs to ensure supply of fertilizer as well as possible production cuts.

The price of seed paddy has a significant impact in sustaining paddy production in Sri Lanka. While increasing the seed price would reduce the farmers incentive to over use fertilizer, this might actually limit farmers full production potential. Therefore measures are needed to stabilize prices of seed paddy. This study recommends that in order to reduce the overuse of the fertilizer, the price of labour needs to be stabilized and there should be measures to reduce the cost of weedicides. Labour is becoming scarcer in paddy farming. There is

an out-migration of labour and the farm workforce is ageing. Therefore, farmers who depend on hired labour would want to make the best out of what they spend and thus apply more fertilizer when the labour is employed. This could potentially lead to an overuse of fertilizer. Mechanization has the potential to reduce this over use while simultaneously tackling the labour constraint. Mechanization was significant in reducing the demand for fertilizer until 2005, however, since then the price of labour has become a more significant factor in determining fertilizer demand.

Way Forward

Undoubtedly, the fertilizer subsidy has greatly influenced the increase in paddy production, and contributed to achieving rice self-sufficiency in Sri Lanka[xii]. However this study recommends the gradual removal of the fertilizer subsidy in the long-run, in a phased manner. The short-run reduction of the fertilizer subsidy can be done for non-commercial paddy producing areas since their fertilizer usage is low. Organic paddy farming is ideal for these areas. While the fertilizer subsidy is more important to commercial paddy producing areas, the amount of subsidy given to them can be reduced in several stages, by gradually introducing organic fertilizer. Yet, for that to happen, farmer awareness and willingness needs to be heightened, while the necessary supply chain is developed as well. The removal of the fertilizer subsidy in the long run will give room for establishing local fertilizer markets, reduce negative environmental externalities, and reduce the burden on public finances. Additionally, it will encourage the growth of cultivation and consumption of organic foods.

References:

[1] Rajapaksa, R. D. D. P., & Karunagoda, K. S. (2009). Factor demand for paddy cultivation in Sri Lanka with special reference to fertilizer subsidy program. Sri Lanka Journal of Agrarian Services, 13 (2), 25-38

[ii] Ministry of Finance and Planning. (2014). Annual Report 2014: Economic perspectives of Sri Lanka. Government of Sri Lanka. Colombo.

[iii] Semasinghe., W., M. 2012. Economics and Social Cost of Fertilizer Subsidy on Paddy Framing in Sri Lanka. International Journal of Science and Research, 3(10), 1261-1267

[iv] Gamawelagedara, W. C., Wickramasinghe, Y. M. & Dissanayake, C. A. K. (2011). Income of rural farmers in Anuradhapura District. The Journal of Agricultural Science, 6(2), 92-99

[v] Weerahewa, J., Kodithuwakku S. S., & Ariyawardana, A. (2010). The fertilizer subsidy programme in Sri Lanka, Case Study No 7-11 of the Program: Food policy for developing countries, The role of government in the global food systems. Cornell University, Ithaca, NY.

[vi] Ministry of Finance and Planning. (2014). Annual Report 2014: Economic perspectives of Sri Lanka. Government of Sri Lanka. Colombo.

[vii] Jayakody., R. 2014. Farmers to Hike Prices Sans Fertilizer Subsidy. Published Article on the Sunday Leader News Paper, Visited Online, 10th September 2014.

[viii] Ministry of Finance and Planning. (2014). Annual Report 2014: Economic perspectives of Sri Lanka. Government of Sri Lanka. Colombo.

[ix] Thenuwara, H. N. (2003). A Policy Rule for the liberalization of agriculture in Sri Lanka. Staff Studies, 33(1), 1-13.

[x] Weerahewa, J., Kodithuwakku S. S., & Ariyawardana, A. (2010). The fertilizer subsidy programme in Sri Lanka, Case Study No 7-11 of the Program: Food policy for developing countries, The role of government in the global food systems. Cornell University, Ithaca, NY.

[xi] Jayne, T. S., & Rashid, S. (2013). Input subsidy programs in Sub-Saharan Africa: A synthesis of recent evidence. Agricultural Economics, 44, 547-562

[xii] Gamawelagedara, W. C., Wickramasinghe, Y. M. & Dissanayake, C. A. K. (2011). Income of rural farmers in Anuradhapura District. The Journal of Agricultural Science, 6(2), 92-99

1110

Standards Can Help Sri Lankan SMEs Access New MarketsBy Raveen Ekanayake

In this special article marking

World Standards Day 2014,

Raveen Ekanayake calls for

government institutions and

regional chambers to take a lead

role in creating more awareness

on standards among SMEs and

help them in implementation.

Standards are a critical element of todays society; they provide a common and repeatable basis for doing things and help bring order to the world we live in.They also play a vital role in the economy, by facilitating business interaction and access to markets. The products we consume today are no longer made in one country; rather they are made in the world. Before ending up with the end consumer, they pass through many countries where people or parts add value to the final product.Adhering to globally relevant standards make it easier for many companies particularly small and medium enterprises (SMEs) to get their products certified and on the shelves in countries around the world, allow them to take part in global value chains, benefit from technology transfer, and compete on a more equal footing. Against this backdrop, this article takes a cursory look at how standards stimulate trade by helping overcome artificial trade barriers, and assist SMEs become more competitive.

What are Standards?

In simple terms, standards are commonly agreed reference documents that help to bring order to the world. Most people know what shoe size they wear, because shoe sizes are standardised. Likewise when purchasing an electrical appliance such as a television it could be reasonably assumed that it would be compatible with the electricity system at home, as the plugs that are fitted to electrical products and the sockets that are installed in our homes have both been designed to meet commonly agreed and widely accepted standards. Standards can be broadly categorized into product, process and management system standards. They work to support industry competitiveness by assisting with the codification and dissemination of new knowledge and innovations, helping to improve products and services, ensuring interoperability and enabling trade. They also help businesses to demonstrate to regulators and customers that their products and services meet defined safety, quality and environmental standards.

How SMEs Benefit from Standards

It is often the case that SMEs view standards as a burden, made by large enterprises, for large enterprises and believe that they have no bearing upon them. In reality however, adhering to standards, provides a number of clear, tangible benefits for SMEs which far exceeds the costs of implementing them. By meeting standards, SMEs can clearly demonstrate their commitment towards quality, leading to enhanced customer satisfaction and repeat business. Standards provide reassurance and inspire trust; consumers view businesses that apply standards more favourably than those that dont, and thereby help to build the companys image.

In the arena of international trade, the use of international standards aids access and entry to international markets, and assists with the marketing and acceptance of a companys products and services in these markets. This is especially vital when seeking access to developed

country markets. Using standards as part of an export strategy can create new business opportunities and increasing sales, while reducing trading costs. More importantly, standards help to open-up markets by allowing customers to compare offers from different suppliers, thereby making it easier for smaller and younger enterprises to compete with larger and much more established enterprises, creating a level playing field with bigger enterprises internationally and to enter new or established markets.

Barriers to Realizing Benefits of Standards

Whilst the benefits of adhering to standards are clear-cut and outweigh costs, especially in the long run, it is most often the case that SMEs are unaware of such benefits. The lack of awareness of standards (either generally, or of specific relevance to their business) prevents SMEs from realizing the full benefits that standards can bring to them. Once SMEs are made aware of existing standards and their usefulness for business expansion and growth they may still face difficulty in identifying the ones most relevant to them. Tracing relevant standards require knowledge of where to look, how to look, and what to look for[2]. In addition, SMEs require the skills to interpret the

information found and to determine whether the standards identified are relevant to them, complete, and the latest versions available.

Once a relevant standard is traced, SMEs face the issue of understanding standards. Standards are written by experts using a lot of technical jargon and SMEs find these difficult to comprehend. To make matters worse, most international standards are either in English, French or German,

thus making it difficult for a non-native English speaker to comprehend. Owing to their complex nature, SMEs also find it difficult to implement standards due to their lack of knowledge, skills and resources to do so.

Helping SMEs Realize the Benefits of Standards

Governments must play a critical supporting role to help SMEs realize the benefits from standards. At the outset, creating awareness amongst SMEs on the costs and benefits of adhering to standards is fundamental. The provision of ongoing training and support is critical to introduce SMEs to standards and to engage these businesses in enhancing their uptake. Another pertinent area of intervention is the provision of information on standards, in an accessible and understandable form, about the content or relevance of standards. Assistance should be provided on how to interpret standards to ensure effective implementation. Acquiring standards entails significant upfront capital outlay, and financial support in the form of subsidized credit to access standards should be considered.

Way Forward for Sri Lanka

Sri Lanka has a gamut of national and regional-level government agencies, development banks and business chambers, with wide geographical coverage geared to service SMEs. However, very little effort on their part has been made in assisting SMEs embrace standards. It is therefore vital that national-level SME institutions such as the Industrial Development Board and the National Enterprise Development Authority, in collaboration with business chambers, take the lead in creating awareness on the benefits of standards and creating an institutional mechanism through which SMEs could be provided continuous information, training and advice on the importance of standards and how to implement them.

CREATING AWARENESS AMONG SMEs ON THE COSTS AND BENEFITS OF ADHERING TO STANDARDS IS FUNDAMENTAL

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Sri Lankas Balancing Act of Promoting International Migration while Protecting the

Well-being of Migrants and their Families

By Bilesha Weeraratne and Janaka Wijayasiri

Every year about 250,000 Sri Lankans migrate for foreign employment. The departure of migrant workers helps the domestic economy by easing the pressure for jobs while pumping in valuable foreign exchange. As such, labour migration is a growing priority amongst policy makers in the country. However, they are often challenged by the trade-off between promoting migration and protecting the welfare of migrants and their families.

Trends in MigrationInternational migration is a cross cutting phenomenon in Sri Lanka. The stock of migrant workers of Sri Lankan origin stood at around 1.9 million in 2010 [1] and they remitted US$ 6.4 billion in 2013 (over 9.5%

of GDP [2]). International labour migration became popular in Sri Lanka in the late 1970s and since then the predominant destinations have been the Middle Eastern countries and most migrants have been unskilled. Over the years, Sri Lankan migrants have gained access to other markets and other skills levels, but unskilled labour into the Middle East continues to account for the bulk of migrants (94% in 2013). Unskilled labour and housemaids together account for nearly 60% of total departures[3].

The Three Phases

Migration involves three consecutive phases pre-migration, migration and post-migration. Characteristics and decisions such as destination, occupation and skills level, which

are relevant in the pre-migration stage, affect outcomes in the subsequent two phases. Specifically, the departure of females leaving their families behind to pursue overseas employment is associated with significant social costs during the migration and post-migration phases. To reduce the number of females pursuing foreign employment, the Government of Sri Lanka is interested in diversifying migration in terms of skills as well as destinations. But this requires a clear understanding of the labour market for temporary migrant workers in potential destinations the market structure there, the skills sets that are in demand and their existing supply of foreign labour, as well as of Sri Lankas supply of migrant labour.

In the migration phase migrants are immersed in a new country and a new culture, which often leads to various adversities like harassment. Among all migrant occupations, it is female domestic workers who are most vulnerable to such hardship because their living quarters overlap with their working environment. In 2012, nearly 80% (10,220) of complaints made by Sri Lankan migrant workers were by female domestic workers. Their vulnerability to many forms of harassment is an ongoing concern among the migration stakeholders.

Post-Migration Needs Greater Focus

While there is a lot of emphasis on the first two phases of migration, there is limited focus on the post-migration phase in Sri Lanka. This phase is important to consider because the majority of Sri Lankan migrants plan to return after working for a few years to accumulate savings (known in migration studies parlance as part of an optimal life-cycle residential location sequence). This temporary nature of departure promotes remittances and eventual return of the migrant, which marks the beginning of the post-migration phase. Attention to the post-migration phase is critical for migrants to achieve the socio-economic objectives of migration, as many return not only with new skills and accumulated savings, but also strained relationships with those they left behind. As much as potential migrants need pre-migration training, returnees need guidance on socio-economic reintegration after their return.

The Balancing Act

Policy makers are often grappling with the trade-off between promoting international migration and protecting the well-being of migrants and their families. Policies on migration would be successful if related policy packages are drawn in consultation with all relevant stakeholders; such as migrants, their families, foreign employment agents, relevant ministries and institutions, and researchers. Dialogue and interaction among stakeholders are important precursors for successful migration policy formation.

References

[1]Central Bank of Sri Lanka (2013), Economic and Social Statistics of Sri Lanka 2013.

[2]Central Bank of Sri Lanka (2013), Annual Report 2013.

[3]Central Bank of Sri Lanka (2013), Annual Report 2013.

Image courtesy www.lankastandard.com

TO REDUCE THE NUMBER OF FEMALES PURSUING FOREIGN EMPLOYMENT, THE GOVERNMENT OF SRI LANKA IS INTERESTED IN DIVERSIFYING MIGRATION IN TERMS OF SKILLS AS WELL AS DESTINATIONS

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Where Do Migrant Workers Fit in Sri Lankas Population?

In Sri Lanka, the projected population growth rate is slowing down and is expected to turn negative around 2031, at which time, the population is expected to peak to approximately 21.883 million. These population estimates reflects the usual resident population in the country those living or intend living in Sri Lanka continuously for more than six months. As such, the number of Sri Lankan migrants is not considered in this population estimate, and there is no updated estimate for the number of Sri Lankans living in the rest of the world. The only available estimates is for migrant workers of Sri Lankan origin (over 1.5 million), which is neither current nor precise. Despite the absence of a clear understanding of the number of migrant worker of Sri Lankan origin, there is a strong nexus between them and the resident population of Sri Lanka.

Temporary Migrant Workers

As per Department of Census and Statistics definition, temporary

migrant workers are those who have migrated for employment, have been living aboard for 6 months or more, and intend returning to Sri Lanka. Presently, there are approximately 497,544 temporary migrant workers in the rest of the world.[1] These temporary migrants are the type of migrants who are most connected to the population in Sri Lanka. They live outside Sri Lanka as part of optimizing their lifecycle residential location sequence and maintain regular connections, and continue to contribute to the domestic population in many ways. Most temporary migrants return to Sri Lanka with improved human capital/skills and accumulated savings, which contribute to the productivity of the local economy upon their return and reintegration.

Social Costs of Migration

Among temporary migrant workers, nearly half are females. The departure of females has significant impact on the population left behind as most female migrant workers are

married and have children. The long-term absence of a maternal figure has emotional, psychological, and social impact on families of migrants.[2] Additionally, spouse and other family members such as elderly parents also find it difficult to cope with the domestic upheaval due to migration.

How vital are Migrant Workers to the Country?

Despite negative implications, migration has tremendous benefits as well. In 2013, migrant workers contributed US$ 6.4 billion in remittances, which accounted for over a third of Sri Lankas foreign earnings, 9.5 % of Gross Domestic Production (GDP), and over 3.5 months worth of goods and services imports. This is clearly highlighted in Figure 1, which shows the increasing importance of remittances toward foreign exchange earnings in Sri Lanka, relative to other contributors such as export of garment, tea, rubber and tourism. Moreover, literature shows that remittances to

Sri Lanka are positively correlated with oil prices. In the context that fuel imports account for nearly a quarter of Sri Lankas total imports, the capacity of remittances to hedge the domestic population against oil shocks is as valuable as remittances.

Another notable contribution by migrant workers to the local economy is through the domestic labour market. In 2013, migrant workers accounted for nearly a quarter of the labour force [3] and have contributed towards keeping unemployment at current low levels in Sri Lanka [4].

Where do Migrant Workers Fit in?

Amidst such prominent socio-economic implications of labour migration on the resident population in Sri Lanka, there is a question of belonging for migrant workers. They are neither here nor there, as the temporary nature of their migration prevents them from fully assimilating to the destination country. Upon returning to Sri Lanka, they often experience difficulties in reintegrating back into the society [5]. During the period they are away from the country, they are

neither counted in censuses nor can they vote at elections in Sri Lanka [6]. Depending on the definition of foreign born persons adopted in destination countries, some Sri Lankan migrants may be counted in censuses at destination, but are

likely to get minimum protection due to their second class citizen status.

As such, Sri Lankan migrant workers are an invisible population of the country. They are so connected to Sri Lanka that their absence is dearly felt while their support is highly appreciated. The mutual support between migrant workers and the resident population of Sri Lanka is so important that both need the other for socio-economic success.

References

[1] This estimate should not be confused with estimated over 1 million Sri Lankan migrant workers, which includes both permanent and temporary migrant workers.

[2] Ukwatte, Swarna. 2010. Sri Lankan female domestic workers overseas: mothering their children from a distance. Journal of Population Research.

[3] Migrants are not in the denominator of this estimate.

[4] However, it should be noted that some migrants especially females, were not prior participants in the labour force in Sri Lanka.

[5] Athukorala, Premachandra. 1990. International contract migration and the reintegration of return migrants: The experience of Sri Lanka. International Migration Review, 323{346.

Gunasinghe, M. 2011. `Abandoned and Forgotten: Returnee Migrant Women Workers in Sri Lanka. Pages 93{152 of: Skanthakumar, B. (ed), Rights, Remittances and Reintegration: Women Migrant Workers and Returnees in Sri Lanka. Colombo: Law & Society Trust.

[6] Even though Sri Lanka ratified the International Convention on the Protection of the Rights of All Migrant Workers and Members of Their Families, which holds that Migrant workers shall have the right to vote and to be elected at elections, absentee voting is not yet materialized in Sri Lanka(IOM, 2006).

Figure 1: Major Sources of Foreign Exchange Earnings in Sri Lanka 2009-2013

Source: Compiled from Central Bank of Sri Lanka (2013)

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Remiances Garments Tea Rubber Tourism

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By Bilesha Weeraratne

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Female migrant workers make a vital contribution to the Sri Lankan economy, mainly through remittances. However, this economic gain often comes at a heavy social cost on the children they leave behind. This article, written to coincide with the International Migrants Day, is aimed at highlighting the discriminatory nature of the recent restriction on labour migration of mothers.

Females dominated migration for employment from Sri Lanka over the last two decades. But since 2010, the number of women departing for foreign employment has been lower than men, declining to 40% in 2013 (CBSL, 2013).

Are restrictions imposed on female migrant workers discriminatory or improving family well-being ?

Marking International Migrants

Day 2014, Bilesha Weeraratne

highlights the discriminatory nature

of the recent restriction on labour

migration of mothers.

This decline can be attributed to the efforts by the Ministry of Foreign Employment Promotion and Welfare (MFEPW) and the Sri Lanka Bureau of Foreign Employment (SLBFE). Circular 13/2013 of June 2013 and its update of December 2013 have been at the heart of this change.

One of the aims of this directive is to minimize the psycho-social cost on children of female migrants, through the Family Background Report (FBR). The FBR, prepared by the Development Officers (DOs) of the MFEPW is a mandatory requirement for female labour migrants from Sri Lanka.

According to the FBR, females with children under the age of 5 years are not recommended for foreign employment, while females with children above 5 years will only be recommended for migration if satisfactory alternative care arrangements are in place to ensure the protection of children.

Discrimination vs. Well-being

The restrictions imposed through the FBR are often perceived as `discrimination against Sri Lankan women in relation to the right to migrate (UN Special Rapporteur on the human rights of migrants). It discriminates migrant mothers of younger children against mothers of older children, and female parents against male parents of young children who can migrate for foreign employment without restrictions.

For many mothers from low income families, migration is the only viable livelihood option. For some it is a strategy to overcome domestic problems, including abusive spouses. In such cases, the FBR requirement perpetuates their difficult situation at home. This system also promotes

corruption, a market for forged FBRs and female migration through clandestine channels, as the FBR only applies when migrating through lawful channels.

It is an established fact that the presence of a mother is critical during a childs key growth years. A survey by the Ministry of Health

and International Organization for Migration (IOM) in 2011 found that 23% of female migrants in Sri Lanka had children between the ages of 1-3 years, while 33% of females had children between the ages of 4-6 years. The well documented negative association between a mothers migration for employment and childrens socio-economic outcomes supports the rationale behind the FBR requirement.

However, as highlighted earlier, if the presence of a mother leads to a trade-off in funds needed to access vital inputs for a childs well-being such as food, shelter, clothing, education and health care, such situations may also lead to a mother being stressed and helpless, which might also negatively contribute towards the childs well-being.

Solution

In this case, what is more important a mothers right to choose her job or a childs need to be raised by her mother?

In this conundrum there is no clear cut answer. As mentioned by the Ambassador/Permanent Representative of the Permanent Mission of Sri Lanka to the United Nations, this is neither an act of discrimination against women, nor a restriction of their freedom of movement and the right to work, but a reasonable classification to promote a more balanced view of all rights involved in the decision to migrate, taking into account the need to safeguard the family unit as the fundamental unit of society. Hence, the FBR should be promoted for its merits while minimizing negative implications.

The blanket nature of this directive could be relaxed, where compelling cases with children under 5 years have an avenue to pursue foreign employment when adequate arrangements are made for alternative care arrangements. This can be done under strict and continuous supervision and guidance provided by the MFEPW and other applicable agencies such as National Child Protection Authority.

In addition, its discriminatory nature could be addressed. At inception, the FBR was expected to be a requirement for all migrant workers. However, limitations in manpower and logistics led to the FBR initially being made mandatory only for females. Therefore, if the FBR is made a requirement for all labour migrants, it would not only minimize its discriminatory aspects but would also contribute more towards the well-being of the children who are left behind. The FBR could recommend that male migrant workers with dependent children provide adequate support to their wives in order to assume the dual roles of parenting. However, such an expansion would revert back to the logistical issue that resulted in the FBR being implemented only for females.

Currently, there are three DOs of the MFEPW for each of the 330 administrative divisions in Sri Lanka, which translates to a little over one FBR per day per officer. If such a workload is unmanageable for these officers amidst their other duties, perhaps they can seek the services of DOs appointed by other ministries. Additionally, family evaluation for FBR could be further streamlined and aligned with duties of the DOs of all ministries, to eliminate duplicate visits to a given neighbourhood by officers appointed by several ministries.

As this article highlights, there is a need to review the way in which the restrictions on female migrant workers are implemented. If the gaps are addressed, it would help minimize the discriminatory nature against female migration workers, while providing balanced opportunities for the well-being of migrant mothers and their children.

IN THIS CASE, WHAT IS MORE IMPORTANT? A MOTHER'S RIGHT TO CHOOSE HER JOB OR A CHILD'S NEED TO BE RAISED BY HER MOTHER?

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fundamental human rights at work is upheld to the highest standards.

Six Challenges in Accessing New Labour Markets

1. Language proficiency

The forthcoming IPS study based on stakeholder interviews with recruitment agents and government officials reveals that a large proportion of unskilled or semi-skilled Sri Lankan migrants possess comparatively inadequate English language skills, which is the primary medium of communication for foreign migrants. As an agent observed, even labourers, they need English. If he has a stomach ache he has to [be able to] tell properly; otherwise they might be treated for something else. So basic English is a must. A half of all the agencies that were interviewed claimed that this creates a host of barriers and restricts foreign employment opportunities.

2. Rules and regulations governing recruitment of migrants in Sri Lanka

Though the rules and regulations that are in place are intended for the protection and welfare of the migrants and their families, it appears that this has made the recruitment process a barrier to the growth of the foreign employment industry. Interviews revealed that some of the rules and regulations governing the recruitment of migrant workers in Sri Lanka appear unnecessary for example, irrelevant documentation requirements must be reviewed and streamlined. For example, females who want to go abroad as housemaids are required to get the permission of their spouse while professionals/skilled workers have to undergo generic training which is not specific to their jobs. So, rules and regulations need to be reviewed to simplify and streamline the recruitment process.

3. Job orders outside traditional markets

Licensed foreign employment agents play a significant role in the labour migration process, but most of them have little or no contacts outside the traditional market the Middle East. Thus, they have difficulty in ensuring that the job orders that they receive and potential employers from other regions are genuine and legitimate, which prevent them from pursuing new opportunities. Almost all agencies interviewed for the

study called for assistance from the relevant authorities in this regard.

4. Salaries abroad

Increasingly, salaries offered for unskilled and skilled workers by some labour receiving countries are not attractive compared to salaries they would receive in Sri Lanka. Moreover, considering other matters such as opportunity cost of sacrificing family life in Sri Lanka, there is little or no incentive in some cases for Sri Lankans to seek foreign employment. According to an agent interviewed, the salary offered must be thrice the wage in Sri Lanka, for there to be an incentive to go abroad for employment. Both traditional markets such as the Middle East and some of the emerging Asian Markets such as Malaysia offer inadequate wages to Sri Lankan migrants, particularly for unskilled and semi-skilled workers and this has made it harder for recruitment agencies from fulfilling the available vacancies.

5. Preferences

Findings reveal that certain preferences of some Sri Lankan migrants act as a barrier to recruitment and fulfilment of job orders. Sri Lankans are reluctant to go to some markets despite the availability of job vacancies due to negative publicity regarding these countries in the media, and also due to restrictions on life styles in countries such as Saudi Arabia. Instead, they prefer to go to developed markets like the EU where obtaining visas are difficult. The study also found that preferences of recruitment agencies and employers abroad can affect the vacancies on offer to Sri Lankans as well. As a result of poor performance or misbehaviour at the place of work, recruiters and employers in destination countries can sometimes hold a negative image of the suitability of Sri Lankan workers for employment. This serves to decrease the recruitment opportunities available for Sri Lankan migrants.

6. Lack of capacity to supply required man-power

Recruitment agencies revealed that there is a lack of manpower in the country, and that the present skill mismatch adversely affects the competitiveness of Sri Lankan migrants. This prevents them from reaching non- traditional markets, creating more constraints to recruitment opportunities. Sri Lanka has not been able to supply the numbers of workers in mid-professional, skilled and semi-

skilled job categories, for whom there was demand from various countries. For instance, in 2009, there was demand for 784,212 positions from all job categories, but Sri Lanka could only supply persons for 247,119 positions.

Lack of unity within the industry, Sri Lanka being uncompetitive compared to other labour sending countries in the region, lack of marketing/promotion to penetrate new markets, bureaucracy, high cost of recruitment, difficulties in obtaining working visas, rules and regulations in labour receiving countries restricting recruitment were also identified as other challenges affecting the country from accessing labour markets abroad.

Way Forward

The scope for addressing some external challenges is limited, as Sri Lanka has little or no power to affect changes in labour receiving countries with regard to rules and regulations, salaries, visas, etc. In this context, more focus should be given to deal with issues within Sri Lanka by improving the relevancy and quality of training programmes, using better marketing strategies, streamlining recruitment processes and enhancing cooperation within the industry. In terms of training, much more attention needs to be given in improving spoken English amongst migrants, which could be done through establishing training institutes in rural areas, upgrading the training course of SLBFE, and conducting courses to develop skills that meet the requirements of destination countries and the job. Further, marketing needs to be done to alter the negative image and attitude surrounding migrant workers and the Middle East, with due consideration given to the important role they play in the economy. This can be done through conducting exhibitions, attending job fairs abroad to promote a more positive image of manpower from Sri Lanka while more support needs to be extended to the SLBFE for it to carry out marketing and promotional activities Also, recruitment for foreign employment could be facilitated through simplification of rules and regulations, removing unnecessary requirements, wider application and usage of IT in the recruitment process to reduce the paperwork/documentation involved, etc. There is also a dire need for the stakeholders to come together for the betterment of the industry, which is lacking at the moment.

Sri Lanka has set itself a target of increasing migrant remittances to US$10 billion by the end of 2016 from US$6.4billion in 2013, and a key element in achieving this figure will be altering the profile of migrant workers and labour markets abroad. This article highlights the key challenges facing Sri Lanka in accessing labour markets abroad.

Diversification of Markets and Occupations

The Middle East is currently the largest foreign employment market for Sri Lankan migrants, with over 94% of Sri Lankan workers employed in the region. According to data from the Sri Lanka Bureau of Foreign Employment (SLBFE),

many migrant workers from the country occupy low-skilled positions. In 2012, housemaids and unskilled workers made up 64% of migrants from the country, while skilled and semi-skilled workers constituted only 25% of all foreign

employment. In the context of Sri Lankas concentration of labour markets (i.e., Middle East) and skill categories (housemaids and unskilled), the National Labor Migration Policy stated that, new

overseas markets and opportunities must be explored and promoted. This will ensure the promotion and development of employment opportunities outside Sri Lanka for Sri Lankans.

As of late, the government has also been encouraging the migration of more skilled migrants as opposed to housemaids and unskilled workers. Evidence shows that, low-skilled workers are more vulnerable compared to skilled workers and professionals and subject to human rights violations, including breach of labour rights, harassment and abuse at the work place. Consequently, the government has been promoting and supporting the migration of skilled men and women to secure work environments where the protection of

Key Challenges for

Sri Lanka

Accessing Labour Markets Abroad:

6This article was co-authored by Janaka Wijayasiri, Dharshani Premaratne and Keshini Sritharan as part of the MED_MIG project and is based on a forthcoming IPS publication on the topic.

Image courtesy http://www.asergeev.com/

LOW-SKILLED WORKERS ARE MORE VULNERABLE COMPARED TO SKILLED WORKERS AND PROFESSIONALS

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Vulnerability and the channel of recruitmentIn Sri Lanka, recruitment of female domestic workers to foreign employment involves various channels, such as through agents, sub-agents, combination of agents and sub-agents, and direct contacts. These various types of recruitment channels protect female domestic workers from specific types of vulnerabilities at destination. A recent study by the IPS investigated the link between the recruitment channel and vulnerability at destination. The study was based on a sample of 1,409 females who were employed as domestic workers in Middle Eastern countries. The findings showed that vulnerability is multifaceted, involving various types of issues. Different aspects of vulnerability can be minimized through different recruitment channels and no recruitment channel will protect a migrant from all types of vulnerabilities. For instance, if a female domestic worker secured employment through a formal recruitment agent, she has lower chance of being forced to work longer hours with no overtime payment, while having a higher chance of being forced to work for a different employer. When a female domestic worker is employed through a combination of an agent and a sub-agent she has a higher chance of being forced to do activities that she had not initially agreed to. As such, the study finds that the effect of recruitment channel is specific to the type of vulnerability faced.

In this context, potential migrants should be well informed about the various types of vulnerabilities associated with domestic employment and how to strike a balance between these conflicting implications, through their choice of recruitment channel. An ideal way to provide such information is through a public awareness campaign, such as the one adopted by the Australian High Commission to discourage illegal immigration to Australia by boat. The benefits of such a public awareness campaign that will highlight the benefits and challenges associated with different recruitment channels and vulnerabilities common to female domestic work, is that it will reach a broad cross section of viewer not limiting to potential female migrants. Then potential female migrants friends, relatives, neighbours, community/religious leaders, etc., will be more knowledgeable and will be able to passively contribute in evaluating each recruitment channel in the context of potential vulnerabilities and in supporting the better informed potential female migrant to make an informed decision about her choice of recruitment channel.

Table 1: Nature of Complaints by Females Received by SLBFE, 2012

Does Foreign Employment through an Agency Minimize Vulnerability of

Sri Lankan Female Domestic Workers?

Female domestic workers are highly vulnerable to adverse situations at the destinations to which they migrate, ranging from issues such as non-payment of agreed wages, to physical and sexual harassment, to confiscation of passports by employers, and denying of communication with family in Sri Lanka. It leads to physical and emotional trauma among female domestic workers. Is there a way to minimize these female domestic workers vulnerability? It is often perceived that recruitment through formal channels minimize vulnerability. Is this true?

Why are female domestic workers so vulnerable?Domestic work is identified as one of the most vulnerable occupations among female migrants, due to multiple reasons. At the country of origin, those who seek female domestic work are often drawn from a vulnerable group in society the poor. In Middle Eastern countries they are vulnerable because

they are females, workers and foreigners, with no party with any interest in them. In some destination countries they are not considered as employees, while households where they work are not considered workplaces, and private persons who hire them are not considered employers. Moreover, their working environment and living quarters overlap blurs the lines that separate the two. Together, all these characteristics of this occupation make female domestic workers highly vulnerable to various forms of difficulties at their work places.

Types of vulnerabilitiesAs depicted in Table 1, the most common complaints among Sri Lankan female migrant workers in 2012 were non-payment of agreed wages, sickness, and physical and sexual harassment. Together, these three issues accounted for over a third of complaints. The nature of complaints varies from issues emanating from specifics of the employment contract, to health issues

to, controlling and abusive nature of the employer.

Protection from employment contractsCertain aspects of vulnerabilities are supposed to be covered by employment contracts. For instance, an employment contract entered through a foreign employment agent normally has a written agreement specifying terms and conditions of employment. Similarly, ILO Convention No.189 requires that migrant domestic workers should receive a written job offer or contract, which is enforceable in the country of destination, prior to their arrival and stipulates that living-in workers have a right to keep their travel and identity documents with them. Employment through other informal channels often does not involve such clear specifications about employment. As such, does recruitment through formal agents minimize vulnerability at destination?

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Sri Lanka Can Gain More from Migration by Helping

Returnees Reintegrate BetterThis article was written by IPS researchers Nisha Arunatilake, Suwendrani Jayaratne,

Nipuni Perera and Neluka Gunasekera , based on the findings from an IPS study Returning Home: Experiences & Challenges.

I have been migrating to Italy since 1993my last job was as a caretaker in a castleI returned to Sri Lanka in 2003 with the intention of becoming a tourist guide. I am fluent in

speaking foreign languages and thought this would be an ideal job for me but I was unable to work out this dream since I received a negative response from the relevant institutions, says

Nihal, a 58 year old father of one, who returned to Sri Lanka once again earlier this year.

Nihal is just one of the many migrants who find the process of economic reintegration a challenge. Many return with minimal savings, and also face difficulties in resuming employment after their return. Migrant workers generally return with accumulated savings and new skills. But the economic implications of migration for the home country depend on how these savings and new skills are utilized. Some studies find that returnees can contribute to the economy more than migrant workers, if the returnees are

successfully reintegrated. However if reintegration is not successful, it can cause destabilizing effects on the country and can result in migrants going back abroad again and again. The ability of returnees to impact a countrys development depends on both the conditions of return as well as their reintegration experiences.

Re-integration Challenges

A recent study by the IPS (based on a survey done by ILO and the SPAARC on returnee migrants), shows that

a majority of the returnee migrants have not successfully reintegrated upon their return. Of the sample of 1,981 respondents in the survey, only 21% improved their familys economic situation, only 6.3% improved the possession of productive assets (Figure 1), only 47% are currently employed, only 26% successfully reintegrated with their immediate families, and only 5% successfully reintegrated with their extended families. Interviews with returnees indicated that some of the key challenges faced by them included difficulties in finding employment, lack

of funds for self-employment, and a lack of information and documentation required to access loans and other business opportunities.

The National Labour Migration Policy (2008) considers reintegration of returnee migrant workers a priority

area, and since then several specific programmes on reintegration have come into operation by several state and non-state entities. Most state-assisted economic reintegration programmes concentrate on providing loans for self-employment ventures or for housing. Meanwhile, non-state actors play an active role in providing vocational training and business

development training for returnee migrants. However, vocational training offered to returnee migrants by government institutions in Sri Lanka is limited to just pre-departure training, and that too mainly for young people. Yet, despite these programmes, the IPS study reveals that that less than 10% of the returnees received any institutional support.

Learning from the Philippines

Compared to the Sri Lankan experience, the Philippines has a more comprehensive reintegration programme from pre-departure, to on-site, and return. This programme addresses both psychological as well as economic aspects of reintegration. To provide psychological support, the programme organizes gatherings for migrants and returnee families, provides counselling services, and assists in managing stress. To provide support for economic reintegration, the programmes provide livelihood projects, community-based income-generating projects, skills training, and credit schemes. Some of these training programmes are conducted at the overseas work places itself, and migrants are provided with information

on investment opportunities available back home, while still working abroad.

As part of the employment facilitation services, returnees can get referral assistance for local or foreign employment through the Overseas Workers Welfare Administration (OWWA). Trainings and scholarships are also awarded for both returnee migrants and their dependents to engage in short-term vocational and technical courses. Further, awards such as the Model Overseas Filipino Workers Family of the Year recognize the achievements of workers as well as their families in managing the impact of overseas employment in family life. This is used as a strategy to exemplify the best practices adopted by families to enhance the benefits of migration. The Philippines also has a National Reintegration Centre, which acts as a one-stop centre for all reintegration services, and coordinates and facilitates the delivery of services by all relevant service providers.

What Can Sri Lanka Do?

Like in the Philippines, reintegration programmes in Sri Lanka should cater to all aspects of reintegration, and recognize the importance of working with migrant families, rather than individuals. Reintegration programmes must start working with migrants before they depart and continue to work with them during their time abroad as well as on their return. Access to reintegration assistance can be facilitated through a one-stop shop. Reintegration programmes should also extend to psychological counselling and support for family members. The key is to improve coordination between different reintegration programmes that are available and to improve the awareness among migrants of the programmes that are on offer.

Nihal, after many failed attempts at starting a business in Sri Lanka, is considering migrating for work yet again. A better business environment would have allowed him to use the skills he has gained and the money he has saved in starting and running a business in Sri Lanka. It would have not only benefitted him, but also the country.

Figure 1 :Reintegration Experience

MOST STATE-ASSISTED ECONOMIC REINTEGRATION PROGRAMMES CONCENTRATE ON PROVIDING LOANS FOR SELF-EMPLOYMENT VENTURES OR FOR HOUSING

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Every year thousands of migrants leave the

shores of Sri Lanka with dreams and aspirations

of a better future for themselves and their

families. Upon return they hope to reunite with

their families and restart their lives in Sri Lanka.

However, they face a number of challenges

which make their reintegration difficult. These

are some of their stories.

Hoping to collect enough money to build a house of her own and uplift her family, Deepthi left Sri Lanka in 2012 to Jordan to be employed as a housemaid. However, the 33 year old mother failed to save anything as her employer refused to pay her due wages. She could not fulfill her dreams of building house back in her hometown of Gampaha. Needless to say her stay overseas was nothing short of unpleasant.

Since returning home, Deepthi has been unemployed for nearly one and a half years. With the added responsibilities of having to take

care of her newborn baby, she is unable to look for employment outside her home. Therefore, she is looking for suitable self-employment opportunities she could engage in. Deepthi claims to have gone to many institutions seeking assistance to start up her own sewing business venture at home, but so far has not been successful in obtaining any assistance due to the inability to show proof of a steady income in the household.

Even though Deepthi is happy to be back, she is still challenged by the inability to raise initial funds for a suitable self-employment opportunity making reintegration difficult.

Name has been changed in order to protect the privacy and identity of the individual.

Deepthi*, Mother from Gampaha

Interested in finding capital to start his own business enterprise, Mahinda left to the Gulf to work as a driver for a company in Saudi Arabia during 2002-2003. Utilizing the remittances earned abroad Mahinda is now a successful entrepreneur and owner of vehicle service and filling stations in Anuradhapura, Eppawela and Thabuththegama. Mahinda who had returned to Sri Lanka with savings of only about Rs. 90,000/-, had invested it in its entirety on starting up his own business in his hometown.

Mahinda began his journey by opening up a small Service Center to wash and repair machines that were used in paddy fields around his

hometown. Working hard towards expanding his business, Mahinda had been successful in introducing several new field equipment and machines to the local market. In 2012, he won the Gold award for Best Young Entrepreneur in Anuradhapura for his exceptional accomplishments.

Commenting about his successful reintegration experience in Sri Lanka, Mahinda claims that the experience he had gained while working abroad is what helped in shaping him into a more hardworking and determined individual. Working in a highly regulated and regimented environment made him realize his

potential in both a physical and mental capacity in starting up his own business back at home.

Drawing lessons from his own experience abroad, Mahinda claims that successful reintegration should start at the pre-migration stage. He states that migrants need to have a clear objective to achieve while working abroad.

Mahinda also states that upon his return he did not receive any type of institutional support for reintegration. However, he feels that although he did not receive such support it is important for government officers to assist migrants in setting objectives prior to migration as well as supporting them through the settling in process upon return.

Mahindas is one of the more successful stories of Sri Lankan migrants who come back home. He is now married and has two children and even owns his own home and vehicle. He also has several employees working under him at his service stations and hopes to further expand his business.

I went abroad with the hopes of building a house, but fortunately I was unsuccessful in fulfilling this I could not save anything. In the end my family had to send money from home for me even for the ticket.

Although I am happy to back at home, we would really appreciate it if someone or some institution could assist us to be self-employed and self-sustained so it would become an effective alternative for overseas employment.

I like to stay at home with the baby. I know how to sew a bit and Id like to get some help to start a business. Peoples Bank was saying that they were giving loans, and I went to check. They said to be eligible for the loan I have to be working in a garment factory. They asked for a pay slip and because we cannot show this sort of document we cannot get the loan.

I started my business on my own. I didnt bring back a lot of money. I brought about Rs. 90,000/= and I spent all of it on the business. I put up a small building to start the business, and bought two machines. I only had a chair and an old table I brought from home to sit and do all my transactions. That is how I started; those were my humble beginnings.

I realized how lazy we were and how much of opportunities and freedom we had back at home that we take for granted. The strict training on working according to a timetable, following rules shaped me into who I am. I feel that I am strong and more determined than I had ever been. The experience I gained abroad was more valuable than money. Going abroad changed my life. It made me complete.

When a person migrates they have to have a clear target as to why they are going abroad

Mahinda, Entrepreneur

from Anuradhapura

Migrant Voices: Returning Home

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What are the best practices Sri Lanka can learn from the Philippines to protect and promote worker welfare for migrants at destination?

We have a licensing system in the Philippines to ensure that only qualified private recruitment agencies could recruit and deploy Filipino workers overseas.

The recruitment of Filipino workers as well as the manpower requests of the foreign employers are duly verified by our Philippine labour offices at the jobsite to ensure that they are truly foreign employers in need of such skills. Also they ensure that there are actual jobs available for our overseas Filipino workers before being deployed.

What are the best practices Sri Lanka can learn from the Philippines to protect and promote welfare for migrants upon return?

We have a national reintegration center for our returnees. This center was created by the Department of Labour and Employment to monitor and support the existing integration programmes available for the returnees. Our integration

programme includes components of counseling, mentoring, and provision of free training on financial literacy, skills and livelihood training. We also provide financial and livelihood assistance which returnees can access to start their micro businesses, immediately upon return. This way they can also contribute to the national economy upon their return.

Do you have any other additional comments with regard to worker welfare of migrant workers?

Yes, the recruitment agencies should deploy people only to accredited foreign employers with approved manpower requests. Also the jobseekers should only deal with duly licensed recruitment agencies so that the welfare would be protected even at the site.

EXPERT INTERVIEWS

Talking Economics caught up with 4 migration experts from India, Pakistan, the Philippines and the UK at the sideline of the International Conference on Policies for Mainstreaming Migration into Development in Sri Lanka, held on 14 August 2014 in Colombo. We were able to obtain their views with regard to accessing new markets, reducing vulnerability of workers at destinations and reintegrating returnees successfully at home.

Dr. S. Irudaya Rajan, Chair Professor, Ministry of Overseas Indian Affairs (MOIA) Research Unit on International Migration at the Centre for Development Studies, Thiruvananthapuram, Kerala shares his insights on how Sri Lanka can use its diaspora communities in developed countries to access emerging labour markets in the world. Dr Rajan has three decades of migration research experience and has coordinated several major migration surveys in Kerala.

In your opinion what do you think Sri Lanka should do to improve access to new markets and job categories?

I think the Sri Lankan governments mindset has to change. They still think that their market is only in the Gulf. I think they

have to move away from oil rich economies to new emerging economies where with small modification of skills, Sri Lanka can reap a lot of benefits. This way Sri Lankas trend of sending women workers can bring more remittances and more development to the Sri Lankan econ