1 HARTI (2014) Sri Lanka Journal of Agrarian Studies, vol.17, nos. 1 & 2 Economic Implications of Foreign Workers’ Remittances in Sri Lanka W. Wimalaratana 1 A.A.I.N.Wickramasinghe 2 Abstract Since early1970s the number of migrant workersin Sri Lanka have gradually increased and their remittances have also become an important sourcein replenishing the much needed external resources of the country. The importance of the workers’ remittances has been increased due to resilient nature of the workers’ remittances even in turbulent time such as duringcivil unrestsand political uncertainty prevailing in the country, conflicts in the Middle East, fluctuation of oil prices and world economic crises. This articleanalyzes the economic implications of foreign workers’ remittances particularly on national savings and investments and in turn in economic growth, BOP performance, exchange rate movements and debt service payments of Sri Lanka. The data for the study was collected from the secondary sources and the mixed method was used to data analysis. Even though thereare positiverelationships between the workers’ remittances and certain macroeconomicvariables suchas someaccounts of the balance of payments, external reserves and national savings, it is difficult to identify a clear relationship, when it comes to growth, inflation, and exchange rate determinants. It seems that the workers’ remittances cushion the externaldebt servicing burden and also improve the creditworthiness of the country. Key Words: Remittances, Savings, Investments, Growth, Balance of Payments, Exchange Rate and Debt Service Payments 1. Introduction International migration and remittances have a long history in the world economy even though these two forces have become vigorous along with the new waves of globalization. Remittances 1 Professor in Economics, Head-Department of Economics, University of Colombo; PhD (Nijmegen), MA (Colombo), BA (Peradeniya). 2 Doctoral Student in Economics, University of Colombo, LL.M(Colombo), M.LS(Colombo), LL.B.(Colombo), Attorney- at-Law, MICA(UK), International Diploma in Compliance (UK).