The migration-development nexus: Sri Lanka case study

Sri Lanka has been the source of large numbers of migrants and the recipient of much development assistance, but what is the nature and extent of the links between development assistance and migration flows in the country? This paper explores these questions in attempting to establish the nature of the relationship between migration and development in Sri Lanka.

A brief survey of the socio-economic context in which both migration and development has taken place in Sri Lanka is given. The causes, scale and features of migration flows from Sri Lanka in recent decades are then discussed. The importance of remittances from migrants to the Sri Lankan economy and the extent to which diaspora activities impact on Sri Lanka are considered. The complex interactions between migration, development assistance, remittances, conflict, and prospects for peace and reconstruction in Sri Lanka are explored and the paper concludes by outlining some of the key points that emerge from the Sri Lankan experience.

The paper concludes that:

• the impact of migration on development has been substantial in terms of the usual macro-economic measures and in terms of the dependence of some households and regions on remittance income as well as the Tamil diaspora emerging as an important player in the resolution of the Sri Lankan conflict
• labour migration seems unlikely to slow as long as demand continues and the relative financial gains remain high, remittances from this source will continue to play an important part in household development and local economies in labour-sending regions
• the lack of development and economic opportunities domestically has been a root cause of large-scale labour migration and contributed in part to political migration
• one of the most urgent policy imperatives in Sri Lanka is the need to end the armed conflict
• ODA and remittances are likely to continue to be important, especially in the immediate post-war reconstruction period as these external injections finance much-needed employment creation and training initiatives, especially for large numbers of military personnel on both sides who may be demobilised in this period
• as ODA levels have fallen and FDI grown only slowly, the absolute and relative importance of private remittances has increased tremendously, much of Sri Lanka’s development spending will continue to be financed directly or indirectly by these remittance flows
• the Sri Lankan diaspora, particularly in the Middle East, is an important contributor to economic prosperity in Sri Lanka