Following is an action plan to generate an additional inflow of $ 8 billion per annum from 12 key strategies. These 12 strategies do not incur an additional capital investment for the Government.
1) Increase foreign currency bank deposits by $ 5 billion within 5 years
• Issue a 10-year residence visa for foreign citizens who would deposit $ 100,000 in banks for 10 years in Sri Lanka.
• If this scheme is initiated, Sri Lanka can generate $ 5 billion worth of foreign currency deposits.
• To achieve the target of $ 5 billion in foreign currency deposits, 50,000 residence visas need to be issued within five years, each year 10,000 residence visas to be issued.
• An online application system and an online approval process should be in place for foreign currency bank account openings.
• An additional foreign currency deposit of $ 1 billion per annum can be secured by initiating this action item.
2. Extend the tourist visa validity period to 6 months to increase tourism revenue by 10%
• Permit the issuance of six-month valid tourist visas instead of one-month valid tourist visas.
• If the estimated tourism revenue is $ 4.5 billion, by introducing six-month-valid tourist visas, Sri Lanka’s tourism revenue can increase by 10%, which is an additional revenue of $ 450 million.
| Sri Lanka has an annual shortage of inflows of $ 6 billion to accommodate basic needs such as fuel, gas, medicine, fertiliser, and food. By implementing the proposed 12 key strategies, an additional annual income of $ 8 billion can be generated as future cash inflows. It will be easier to build confidence in Sri Lanka’s macroeconomic stability and unlock international financing from International Financial Institutions such as International Monetary Fund, and World Bank, if additional cash inflows as suggested in the above action plan are generated to reduce the deficit in the balance of payments |
3. $ 2.5 billion outflow from study abroad students to reduce by 20% and recover the current outflow of $ 2.5 billion by attracting more foreign students
• Currently, 35,000 new students are leaving the country for higher studies in a year. In addition, 70,000 students are already engaged in foreign universities for higher studies as 2nd or 3rd-year students.
• Since 105,000 Sri Lankan students have chosen foreign universities for their study purposes, there is a foreign currency outflow of $ 2.5 billion per annum.
• To reduce $ 2.5 billion outflow by 20% and to attract more foreign students, the below actions are to be taken:
a) Local private higher education institutions such as NSBM, SLITT, and E-Soft are to be established under the recognition of the University Grants Commission and to be recognised as private universities in Sri Lanka.
b) Offer tax holidays and other incentives for new private university establishments and existing small-capacity private universities for their expansions.
c) Global rankings of Sri Lanka’s public universities to be improved.
d) Introduce an International Education Strategy to attract more foreign students and under that, initiate a program named “Study in Sri Lanka” to attract foreign students to select Sri Lanka as their higher educational hub.
e) A task force should be formed and targets to be given to attract 35,000 foreign students to Sri Lanka via the “Study in Sri Lanka” program. This will mitigate the current outflow of $ 2.5 billion, which is a cause of 35,000 local students going abroad for higher education.
* An annual saving of $ 500 million can be achieved by initiating this project.
4. Introduce international student visas to earn foreign student fees and increase international education income
• Private higher education institutions such as NSBM, SLITT, CINEC, E-Soft, Horizon, and IIT should be allowed to enrol international students based on 3 to 4-year student visas.
• Following best practices of global student visas issued by countries such as Australia, New Zealand, Canada, UK, and USA, an online student visa application system should be introduced.
• Through this, 35,000 international student visas should be issued as a solution to the current outflow of $ 2.5 billion from 35,000 local study abroad students.
| In order to increase monthly funds from $ 290 to $ 1,000, the unskilled labour force should be given the necessary qualifications and training, targeting foreign countries that offer high-salary jobs. With this implementation, Sri Lanka can earn foreign worker remittances of $ 24 billion per annum within a 10-year period |
5. Increase foreign worker remittances from $ 7 billion (pre-COVID) to $ 24 billion per annum by forming a 10-year plan
a) Increase monthly funds sent by migrant workers from $ 290 to $ 1,000.
• Monthly, 2 million migrant workers on average send $ 290 to their families as funds during the pre-COVID period.
• In order to increase monthly funds from $ 290 to $ 1,000, the unskilled labour force should be given the necessary qualifications and training, targeting foreign countries that offer high-salary jobs. With this implementation, Sri Lanka can earn foreign worker remittances of $ 24 billion per annum within a 10-year period.
b) Due to COVID-19, the number of workers departing from Sri Lanka has decreased when compared to pre COVID-19 period. Form a committee to identify current challenges and find solutions to increase the number of workers departing from Sri Lanka.
c) Maintain Telegram groups per foreign country to improve conditions in the sector of foreign employment for Sri Lankan migrant workers.
• Invite all Sri Lankan migrant workers who are working/used to work in other countries to join the relevant country’s Telegram group.
• The main objective of this group is to collect the above segments’ views, and suggestions they might have for further improvement opportunities within Sri Lanka’s foreign employment.
• A dedicated team should be appointed by the Sri Lanka Foreign Employment Bureau to collect these ideas.
• On a weekly basis conduct meetings to take necessary actions to solve/find solutions to current challenges or to implement various new methods to develop this sector.
• This team should report to the Minister of Foreign Employment on a weekly basis, with the identified challenges and solutions given to those challenges.
• Sri Lankan foreign employment agencies should conduct monthly performance reviews on the number of foreign jobs they may have secured for Sri Lanka with the Minister of Foreign Employment.
d) Initiate a program for all Sri Lankan foreign missions based in various countries to find and share what are the most in-demand and highest paid jobs in their destinations. Ensure Sri Lankan migrant workers are placed at those destinations for high-salary jobs.
• For those jobs, develop teaching and training materials following global best curriculums.
e) Maintain another Telegram group to provide training and improve the skills of migrant workers.
• Short videos on subjects such as personal development, behavioural training, best grooming and hygiene practices, language training opportunities, customer service, etc. to share for all to access.
f) Conduct Government-sponsored workshops for foreign employment agencies in Sri Lanka to increase overseas job placement numbers for Sri Lankan migrant workers.
g) Start a website that would contain details of available global jobs for Sri Lankan migrant workers to access.
h) Develop the existing eldercare assistant vocational program and increase the number of eldercare assistant migrant workers to earn $ 1 billion inward worker remittances.
• Tertiary and Vocational Education Commission and the private sector should collaborate and create a plan to produce 100,000 migrant workers, as eldercare assistants targeting the Europe market.
• Necessary training should be given targeting a monthly salary of $ 1,200 or more for the migrant worker.
• Short courses that can be completed within 3 months’ time should be introduced under the eldercare assistant TVET program.
• For example, the University of Moratuwa, and DP Education launched a free online course on Trainee: Full Stack Development. The website to access the course is https://open.uom.lk
• Advanced Level bio stream students who are competent in the English language can be selected for this program.
• If 100,000 elder care assistants are produced who can receive a monthly salary of $ 1,200, Sri Lanka can earn $ 1 billion worth of inward worker remittances.
i) Identify all other on-demand overseas jobs, such as patient care assistants, drafters, bricklayers, air conditioning and mechanical services plumbers, and hairdressers, and create/update existing TVET curriculums targeting those on-demand jobs. Refer to other countries’ skilled migration occupation lists to identify more high-demand jobs.
j) Collaborate with employment agencies in other countries to find jobs for Sri Lanka migrant workers.
• Yearly, $ 1.3 billion savings can be made by initiating above mentioned activities.
6. Increase foreign direct investments
• Increase regional competitiveness by introducing tax holidays and other incentives.
• Appoint a committee to improve the rankings of,
a) Global Innovation Index
b) Corruption Perception Index
c) Global Competitiveness Index
7. Generate $ 5 billion from ICT earnings
• Existing State university-owned ICT, engineering, and programming degrees are to be made available for private education institutions to use and offer as external degrees for their students.
• Every six months, exams can be held following the procedures of State universities. Over a five-year period, 500,000 students should get educated and enter the IT industry.
• For example, the University of Moratuwa, and DP Education launched a free online course on Trainee: Full Stack Development. Website to access the course is https://open.uom.lk
• Public universities should also make their ICT related courses available online by 10 times, to increase the student enrolment numbers. This will lead to a high number of students getting ICT qualified and industry ready to enter the ICT field.
• As a result, ICT related earnings can reach up to $ 5 billion.
• An additional earning of $ 750 million per annum can be achieved by initiating above mentioned suggestions.
8. Establish budget airline hubs to generate $ 2 billion
• In countries such as Thailand, Singapore, Malaysia, and Vietnam, 50% of tourist arrivals are on budget airlines.
• In Sri Lanka, out of the 80,000 hotel rooms, only 30,000 hotel rooms are classified as 5 or 4 stars or any star category. Balance 50,000 hotel rooms are in the budget accommodation category.
a) Transform Ratmalana and Mattala airports into international budget airline hubs.
b) Attract more budget airlines (low-cost carriers) to arrive in Sri Lanka to accommodate low-cost carrier passengers.
• With such an initiative, 1 million additional tourist arrivals can be expected. This would result in generating $ 2 billion in earnings.
c) Encourage the establishment of domestic airline services.
d) Existing airports in Trincomalee, Batticaloa, Koggala and Digana in Kandy should attract high volumes of domestic aircraft by initiating the following:
• Landing, ground handling, and parking rates are to be revised and reduced for domestic airline carriers to be able to afford.
• As a result, the economic benefits of tourism will spread to far corners of Sri Lanka.
• Annual income generation of $ 2 billion can be achieved through the above-mentioned initiatives.
9. Generate $ 600 million income with coconuts
• Annually, 1.5 million coconut seedlings are planted. Through a 5-year program, 20 million additional new seedlings can be planted. This is achieved by planting an additional 4 million seedlings every year.
• As a result, an additional harvest of 1.2 billion nuts is produced.
• If one coconut product is sold at an export price of $ 0.50 cents. From 1.2 billion coconuts, we can generate $ 600 million of income.
10. Outward payments can be deposited in $ to earn interest payments in USD
• Outward payments such as dividend payments, air and sea transport fees, travel, construction, insurance, royalty fees, telecommunication, and computer service fees can be converted to USD.
• These can be deposited for a three-year period with an interest rate decided by the Sri Lankan Government. For example, at a 6% interest rate.
• Annual deposits of $ 300 million can be received by implementing this action item.
| Public universities should also make their ICT related courses available online by 10 times, to increase the student enrolment numbers. This will lead to a high number of students getting ICT qualified and industry ready to enter the ICT field. As a result, ICT related earnings can reach up to $ 5 billion |
11. Save $ 1 billion by allowing the private sector to invest in new power plants powered by solar or coal in Norochcholai and Sampur
• For the current 900 MW power generation using coal, the total coal consumption cost at the current market price is $ 50 million per month. Thus, the annual coal consumption cost to generate power is $ 600 million.
• In addition, the current 900 MW power generation using diesel and furnace oil cost at the current market price is $ 135 million per month. Thus, the annual cost of fuel is $ 1,620 million.
• As cost-saving power generation solutions, below 2 options are proposed:
Option 1: Solar farms
• To generate 900 MW of power during the daytime, 2,000 MW solar farms are needed.
• To generate 900 MW of power during the night time, diesel and furnace oil plants are to be maintained. (Fuel cost to operate the plant is $ 800 million)
• The private sector should be allowed to invest in the suggested 2,000 MW solar farms.
• By implementing option 1, a saving of $ 800 million can be achieved.
Option 2: Coal power plant
• Current diesel and furnace oil power plants that generate 900 MW can be replaced by constructing an additional new plant for 300 MW in Norochcholai and by constructing a new plant in Sampur for 600 MW. This will lead to a saving of $ 1 billion per annum.
• Therefore, private sector companies should be given the opportunity to invest in constructing the 2 power generating plants in Norochcholai (300MW) and Sampur (600MW).
• Per year, from option 1, $ 800 million and from option 2, $ 1 billion can be saved.
12) Save $ 200 million on palm oil
• The current outflow of $ 200 million can be saved if the ban on planting palm oil trees in Sri Lanka is lifted.
Economic revival of Sri Lanka
• Sri Lanka has an annual shortage of inflows of $ 6 billion to accommodate basic needs such as fuel, gas, medicine, fertiliser, and food.
• By implementing the proposed 12 key strategies, an additional annual income of $ 8 billion can be generated as future cash inflows.
• It will be easier to build confidence in Sri Lanka’s macroeconomic stability and unlock international financing from International Financial Institutions (IFIs) such as International Monetary Fund (IMF), and World Bank (WB), if additional cash inflows as suggested in the above action plan are generated to reduce the deficit in the balance of payments.
DAILY FT
