Economy needs everyone’s support to regain momentum, says Finance Minister | Sunday Observer

Economy needs everyone’s support to regain momentum, says Finance Minister

Politically bankrupt and racist minded sectors trying hard to push the country back to the 1983 era by harassing the Muslim community - will result in the country’s expatriate workers in the Middle East being pushed out from their jobs, said Finance Minister Mangala Samaraweera addressing the media on the ‘Sancharaka Poddan’ (a loan scheme for the small and medium scale businesses of the hotel sector), last week.

He said extremists forces backed by politicians craving for power do not realise the ramifications of their short sighted actions, on the economy which is undergoing turbulent times and needs everyone’s support to revive and regain momentum.

According to the Minister, there are around 117,000 Sri Lankans employed in Qatar, 140,000 in Saudi Arabia and around 103,000 in Kuwait.

“A backlash similar to the Black July in 1983 will have serious repercussions on the economy with worker remittances dwindling further creating pressure on foreign reserves,” the Minister said.

Worker remittances - the country’s largest foreign exchange earner - were around US$ 7.2 billion in 2017 and since then there has been a sharp dip with the crisis in the Middle East intensifying. Worker remittances dropped 13.8 percent during the first four months of this year to US$ 2.17 billion from US$ 2.51 billion a year ago according to the Central Bank.

The Minister said the businesses run by the Muslim community could be valued at around Rs. 529 billion (USS$ three billion) a year and added that if there is no environment for the moderate members of the Muslim community to exist and carry on their daily business, there will be adverse effects on the economy.

The Minister said that the government has taken all measures to prevent a recurrence of the Easter Sunday attacks with steps to stabilise the economy and its affected sectors such as tourism and tourism-linked businesses.

“We have decided to extend the same benefits offered to large scale hotel operators to the small timers as well,” the Minster said.

‘Sancharaka Poddan’ the small timers of the tourism could avail themselves up to Rs. 500,000 interest free loans under the ‘Enterprise Sri Lanka’ loan scheme (as from June 10) from the Regional Development Bank with a 12-month grace period.

Loans up to Rs. 10 million at a 3.46 percent interest, to purchase luxury buses for tourism where the government will bear 75 percent of the loan concession, working capital for musicians who were affected by the attacks with a two-year grace period from June 10, are some of the relief measures announced by the ministry to revive the tourism industry. The minister said that relief for those who lost income from the cancellation of Vesak celebrations including pandal makers and other decoration manufactures, has been discussed and measures will be proposed soon. “We cannot provide relief to all those who are trying to get on to the bandwagon. We have considered the most affected sectors first,” the minister said.

It has been estimated that the loss to the tourism industry following the Easter attacks is around US$ 1.5 billion with a 30 percent drop in tourist arrivals anticipated this year.

The Finance Ministry declined to put a figure on losses and its impact on GDP growth this year.