Ebook Remittances in crisis Sri Lanka after the tsunami
Remittances play an increasingly important role in the economies of South Asian countries. In Sri Lanka, migrant remittances constitute the largest source of foreign exchange, bringing in around $1.5 billion. Migrant remittances have contributed to the survival of hundreds of thousands of people in conflictridden areas of the north-east (Van Hear 2002). However, little is known about the role of remittances during emergencies elsewhere. Research has been limited and assessments have tended to underplay importance of remittances in helping people to cope with disasters and emergencies.
Remittances are generally ‘counter-cyclical’: unlike foreign investment, the flow of remittances increases during times of crisis. This is potentially enormously beneficial to poor economies and communities in trouble. Moreover, migrants react faster than international organisations. But remittances do not reach the poorest, because the poorest rarely have enough money to send out a migrant in the first place.
This study aims to improve our understanding of how remittances helped people to recover from the Indian Ocean tsunami in December 2004; which groups benefited from remittances and why; whether remittance mechanisms functioned adequately; and what can be done to improve the situation. The study has attempted to answer the following questions:
- How important are remittances in people’s efforts to survive in crises?
- What social groups benefit from remittances? Are some people excluded, exacerbating existing vulnerabilities?
- Do remittance patterns change in times of crisis – both in terms of how much people receive, and in terms of the channels that people can use?
- How well do assessment methodologies capture the role of remittances, and could they do it better?
- Are there ways in which humanitarian actors could support and facilitate remittance flows?
An improved understanding of the role of remittances in crises is vital to the design of humanitarian assistance programmes. By knowing who gains and who is excluded from remittance flows, it should be possible to improve targeting. The flow of remittances could in some circumstances offset some of the need for other kinds of aid. On the other hand, people who are highly dependent on remittances for their livelihoods could be particularly affected by the disruption of remittance flows following a major disaster. It may also be the case that, in conflict situations, remittances may be a more practical way of reaching beneficiaries than official aid.
This report is based on data collected in two tsunami-affected districts, Kalutara and Galle. Although not the worst affected in terms of loss of property and livelihoods, the damage was nevertheless significant, and both are in high migration areas. Access was relatively easy, which was an important consideration given the time and resources available.
The report begins with a brief account of the impact of the tsunami, followed by a short overview of migration patterns based on available secondary information. Part 2 contains a description of the study areas and the villages selected for case studies, together with the justification for choosing them. Part 3 presents the main findings under headings corresponding with the main research questions listed above. The last section presents the main conclusions, followed by policy recommendations and suggestions for future research.
Contents
1. EXECUTIVE SUMMARY
Acknowledgements
I. INTRODUCTION AND BACKGROUND
1. The impact of the Tsunami
2. The Government response
3. The International response
4. Migration and remittance patterns
5. The feminisation of migration
6. The economic impact of remittances
II. STUDY METHODS AND AREAS
1. Migration patterns at the village level: who migrates and who does not
2. The process and cost of migration
3. Impact of the Tsunami on migrants and their dependents at the district level Total
4. Cessation of new migration and return of migrants immediately after the Tsunami
5. How remittances helped in the aftermath of the Tsunami
6. Migrant remittance channels before the Tsunami
7. How remittances channels were affected by the destruction of infrastructure and loss of documentation caused by the Tsunami
8. How the remittances were use
9. Some people excluded, exacerbating existing vulnerabilities
10. Official Diaspora Remittance flows to Sri Lanka after the Tsunami
11. Delays in disbursement of government cash assistance at the village level
12. Informal Diaspora remittance systems after the Tsunami more efficient
References
- Annex 1. Detailed Checklist and Work Plan
Annex 2 List Of Persons And Organisations Met
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