Sri Lanka suffers sharpest monthly drop in worker remittances

Remittances drive local household expenditure in Sri Lanka, and Central Bank Governor Indrajit Coomaraswamy said recently the decline in money sent by the country’s overseas workers was disturbing. (AFP)
Updated 18 October 2017
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Sri Lanka suffers sharpest monthly drop in worker remittances

COLOMBO: Sri Lankan workers in the Middle East sent back fewer dollars in August, the sharpest monthly drop yet owing to adverse economic and geopolitical conditions in the region, its central bank said Wednesday.
Remittances declined by a record 10 percent to $556.6 million (SR2.08 billion), compared with $618.3 million in August last year, the bank said in a report.
About two million Sri Lankans or 10 percent of the population work overseas, mostly in the Middle East and in construction and hospitality or as household maids.
Money they send back to families is the main source of the country’s foreign exchange and is used to finance nearly 80 percent of its trade deficit.
Remittances in the first eight months of the year also fell by 6.3 percent to $4.5 billion, the bank said, the biggest drop ever seen and significantly more than 2015’s dip of 0.53 percent.
Central Bank Governor Indrajit Coomaraswamy said recently the decline in remittances was disturbing, while pinning his hopes on growth in the country’s small export sector.
Sri Lanka has been an exporter of skilled and unskilled labor for decades.
The fall in remittances is a double blow for the country, which is simultaneously having to shell out more for foreign workers.
That demand comes from a labor shortage at home in sectors such as construction and manufacturing, which have picked up since the decades-long Tamil separatist war ended in May 2009.


Saudi Aramco to shift more crude production to petrochemicals

Updated 23 October 2018
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Saudi Aramco to shift more crude production to petrochemicals

  • Aramco has been boosting its investments in refining and petrochemicals to secure new markets for its crude
  • Aramco hired JP Morgan and Morgan Stanley to advise on a potential acquisition of as much as a 70 percent stake in SABIC

RIYADH: Saudi Aramco aims to allocate some 2-3 million barrels per day of its crude oil production to petrochemicals, CEO Amin Nasser said on Tuesday, a sign the state energy group is hedging its bets against a possible demand slowdown.
Aramco has been boosting its investments in refining and petrochemicals to secure new markets for its crude, as it sees growth in chemicals central to its downstream expansion strategy.
The company is working on buying a stake in Saudi Basic Industries Corp. (SABIC), the world’s fourth largest petrochemical maker, as part of plans to become a leader in the chemical industry, Nasser told an investment conference in Riyadh.
But anti-trust regulations abroad will mean that the company’s planned acquisition of a controlling stake in SABIC will take time, he said, noting that SABIC has a presence in 50 countries around the world.
Aramco hired JP Morgan and Morgan Stanley to advise on a potential acquisition of as much as a 70 percent stake in SABIC, currently held by Saudi Arabia’s Public Investment Fund, sources said in July.
Nasser said the Saudi Arabian government was still committed to an initial public offering of Aramco, while the timing depended on market conditions and other factors. He added that Aramco could not list while the SABIC deal was ongoing.
Nasser also said bankers had not expressed any concerns about a recent rise in Saudi funding costs ahead of the company’s potential acquisition of the SABIC stake.
“Aramco is well positioned financially,” Nasser told reporters on the sidelines of an investment conference in Riyadh. “So far we have no issue to finance any of our projects. I don’t anticipate seeing any issues in financing.”
He also said it would take Aramco three months to reach maximum oil production capacity of 12 million bpd, if needed.
Aramco plans to raise its refining capacity to between 8 million and 10 million barrels per day, from some 5 million bpd now, and double its petrochemicals production by 2030. Aramco pumps around 10.7 million bpd of crude oil.