Foreign employment agencies seek access to govt.’s COVID-19 relief

From left: ALFEA Committee Member Nihal Susil Wijeyawardana, ALFEA Committee Member M.M. Mohamed Jameel, ALFEA Treasurer Thaha M.B. Zaman, ALFEA Secretary M.F.M. Arshad, ALFEA Committee Member M.M. Thasleem and ALFEA Committee Member Celine Anjela Anthony Pic by Nisal Baduge

• Industry association ALFEA says many agencies facing bankruptcy as industry remained closed for last 7-8 months
• Want COVID-19 relief package granted to tourism industry to be extended to them as well
• Request 6-month moratorium on loans and 6-month working capital loans at 4%
• Point out, if not for ALFEA, over 300,000 migrant workers would have been forced to return to country 
• ALFEA members facilitate 90-95% of Sri Lanka’s labour migration and employ 10k people directly 
• Warn Sri Lanka could face US $ 11bn shortfall in remittance inflows over next two years

By Nishel Fernando 
Battling bankruptcy amid the coronavirus crisis, Sri Lanka’s foreign employment agencies this week urged the government to extend the COVID-19 relief package granted to the tourism industry to them as well, to ensure the welfare of 1.5 million Sri Lankan migrant workers, future sustainability of worker remittance inflows and job security of their employees. 

“The bankers are refusing to lend us money, citing that we are in their high-risk category. We are struggling to meet our working capital requirements. Consequently, our 800 odd member agencies across the country remained closed for the past seven to eight months,” Association of Licensed Foreign Employment Agencies (ALFEA) Secretary M.F.M. Arshad told reporters in Colombo, yesterday. 

The ALFEA members facilitate 90-95 percent of the country’s labour migration while directly employing 10,000 employees and further 90,000 persons indirectly. 

Arshad noted that the country received US $ 6.7 billion in worker remittances through official channels in 2019, as the top forex earner and assisted covering 84 percent of Sri Lanka’s trade deficit.

In addition, the employers and recruitment agencies in host countries also remit estimated US $ 3 billion per annum to Sri Lanka’s employment agencies, for their services. 

Despite their significant contribution to the economy, the ALFEA members said they were largely marginalised in granting relief, as they were sidelined from the government’s COVID-19 relief schemes, including the Central Bank’s Saubhagya COVID-19 Renaissance facility.

Although the tourism industry generated US $ 3.5 billion in forex earnings in 2019, compared to nearly US $ 10 billion by the foreign employment industry, Arshad noted that the tourism industry was granted a significant amount of relief measures. 

“What we are requesting the government is to grant a six-month moratorium on loans and six-month working capital loans at 4 percent interest while extending the relief measures given to the tourism industry to us as well,” he said. 

In case the country’s foreign employment agencies were to go bankrupt, ALFEA Committee Member M.M. Thasleem cautioned that it could jeopardise the welfare of Sri Lanka’s migrant workers, as these agencies play a crucial role in resolving the issues faced by the migrant workers in their host countries. 

The ALFEA members pointed out that if not for the country’s foreign employment agencies, there would have been over 300,000 migrant workers forced to return to the country, as their employment contracts were to expire during the period, which could have exhausted the country’s healthcare sector. 

“Foreign employment agencies played a critical role in extending or renewing the work contracts of Sri Lankan migrant workers in Gulf countries, when the COVID-19 pandemic started to spread globally. The contract period of 300,000 to 350,000 migrant workers was to expire. However, we were able to negotiate their contracts with their respective employers successfully. Only around 50,000 of them are waiting to return to Sri Lanka now,” Thasleem elaborated. 

Further, the association warned that the country could face a US $ 11 billion shortfall in remittance inflows, over the next two years, as Sri Lankans leaving for overseas employment is expected to decline to 50,000 this year, compared to around 200,000 departures last year. 

According to the ALFEA, 40,000 Sri Lankans left for overseas employment, prior to the closure of Bandaranaike International Airport and they project further 10,000 departures before the end of this year. 

Hence, Arshad stressed that stabilisation of the country’s foreign employment agencies is crucial to promote and attract new businesses, to overcome the expected drastic reduction in departures this year.  

Meanwhile, he noted that the demand for foreign labour is recovering in Gulf countries and in Eastern Europe, which has become the latest destination for Sri Lankan migrant workers. However, the current COVID-19-related travel restrictions and quatrain measures as well high air fares have created a challenging environment for the industry.  

Despite the current challenges, the ALFEA members were optimistic that the foreign employment industry would be one of the first industries to recover, when the border-control measures are lifted. 

They also urged the newly-appointed Foreign Employment Promotions and Market Diversification State Minister Piyankara Jayaratne to look into trimming some regulatory red tape, which is not aligned with the ground realities and hinder the competitiveness of the country. 

With state support, the ALFEA members said they could potentially bring in US $ 15 billion foreign exchange inflows to the country.