By Roy Denish
Kuwait war compensation funds worth billions were mishandled by Sri Lanka’s foreign employment bureau, leaving workers unpaid for years.
Kuwait war compensation funds meant for Sri Lankan migrant workers caught in the 1990 Gulf War were mishandled by the Bureau of Foreign Employment, state audit reports and parliamentary investigations found.
The United Nations Compensation Commission sent 348 million dollars to Sri Lanka to compensate nearly 87,000 citizens who had worked in Kuwait during Iraq’s invasion. After officials paid the main claims, the bureau still held a balance of 3.92 billion rupees.
Kuwait War Compensation Funds Questioned
The Committee on Public Enterprises and the Auditor General found that the bureau had wrongly listed the remaining money as a capital reserve in its financial statements. Instead, auditors said officials should have recorded the balance as a long-term liability. Because the money came through a United Nations compensation scheme, audit officials ruled that the agency could not legally absorb it into its operating budget.
The bureau worked with the Central Bank of Sri Lanka and the General Treasury on a proposal to use the dormant balance. Officials planned to convert the money into a revolving fund that would provide low-interest loans to migrant workers preparing to leave for foreign employment.
However, the capital remained unused for decades. As a result, the General Treasury stepped in to support state liquidity. The bureau reported that it had used 1.2 billion rupees to settle remaining valid claims. Meanwhile, the Treasury requested the transfer of 3 billion rupees from the same pool into the central government budget.
Despite those multi-billion rupee movements, state investigators found that more than 250 war-affected Sri Lankan migrant workers still faced outstanding or delayed payments. Investigators blamed systemic distribution failures for the Kuwait war compensation backlog.
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