As the nation tries to overcome the impact of Covid- 19 with restrictions, full and partial lockdowns of villages and the continuing blackout in four districts, the stall on the growth of the economy seems clearer than at any given period ever in Sri Lanka. In comparison to the global scenario, it is a relief to note that the numbers of confirmed cases and deaths related to the virus in Sri Lanka is satisfactorily under control.
For Sri Lanka, the national economy growth curve has been on a downward trend during the past five years. In that backdrop, the impact of the virus becomes ruthless in many ways. The cost due to the curfew and the halt of day-to-day economic activities is running into billions of rupees each day.
Almost all businesses in the country are adversely affected and the supply chains have fallen victim to the pandemic. If not for the robust leadership at the top, the entire scenario would have been in grave danger. Inspired by President Rajapksas’s leadership, the administration machinery follows suit at the highest capacity.
However, an important criterion to consider is that the Government is suffering an added burden at present to meet the staggering economic costs due to the massive sums spent on subsidies, write-offs and other relief packages for public welfare.
Obviously, the liquidity pressure of the Government is at the highest level after post independence and will add to cash flow pressure on the Treasury. The Government coffers are almost dried up because of the loss of revenue from key institutions such as Customs, Ports and other income generating avenues. Added to the injury is the complete loss of foreign remittances from foreign employment, the apparel industry and tourism, the major income earners.
A British Prime Minister once said ‘’An optimist sees the opportunity in every difficulty”. Many Sri Lankan business leaders are confident that Covid 19 is the silver lining in the dark clouds. They believe Sri Lanka has a golden opportunity to build an economy that is more resilient, diversified and attractive in terms of global trade.
They are also confident that if the Government maintains its stand on a nationalistic economy concept to promote indigenous agriculture and manufacture, the country will become self reliant in many spheres, predominantly in food security.
Despite the fiscal pressure, the Sri Lankan Government, with the health authorities, military establishment, Police and public service has so far managed to keep the infection curve flattened in the battle against the pandemic.
When compared to many countries, it appears that Sri Lanka has the opportunity of pulling off faster than others, with minimal damage. This will emerge favourable for the country for international trade and commerce in the immediate future.
If the available opportunity is managed properly and favourable conditions are provided by the Government, foreign manufacturers may be interested in setting up factories in a range of sectors such as electronics, medicine and textile in Sri Lanka as they perceive the efficiency of the state machinery they witnessed during the coronavirus crisis.
Through a properly planned promotional drive with favourable labour regulations, the Government can implement a system to attract the attention of these foreign manufacturers.
Due to the impact of the corona pandemic, almost all economies are equally worse off, relative to their respective countries. Sri Lanka predominantly has to depend on developed nations to draw investments for the development of various economic sectors such as manufacture, trade or services. However, considering the standards of living of the people in these countries and their cost of living, the recovery of their economies would be long drawn out.
Hence, investments from these sources must be drawn by creating an environment with an easy start up environment for investors (presently a hindrance), friendly information flow and positive labour laws.
In addition, offering a trustworthy political atmosphere where Government policies will remain unchanged even in a regime change must be assured. It is regrettable, in both counts, that the prevailing systems are not exactly favourable to attract foreign investments.
Having discussed the foreign investments, which is known to be important to any country, whether developed or developing, the key factor is to deploy native business elements into action. It is known that Sri Lanka has one of the best entrepreneur fraternities in the world and one of the highest literate citizenry.
The entire world has witnessed the ingenuity and originality of the average Sri Lankan through the novel equipment created during the short pandemic period of just two months. At this crucial time when the country is hungry for positive development and change, the amalgamation of entrepreneurs, business leaders and the entire workforce is imperative and must be mobilized positively.
An important topic widely discussed at present in both electronic and print media is the timely and effective move of restraining and banning non-essential imports. The Government has recently slapped a ban for 111 items and import restrictions on 157 products.
The figures of imports revealed through the media are mind boggling. Just to cite a few, Sri Lanka has spent a staggering sum of 58 Billion rupees on milk powder imports, almost 10 Billion rupees on apples and oranges, and an enormous sum on motor vehicle imports. All these are considered as non-essential products, most of which can be substituted fully or partially with local products.
Many local business leaders, SME entrepreneurs and manufacturers unanimously endorse the curtailing of imports and request the Government to lengthen the list.
They state in unison that they are not only capable of producing these restricted products to supply the prevailing demand but also cater to export markets with the present post pandemic global openings. It is a certainty, assessing the conduct of President Rajapaksa up to now, that he will consider the intentions of such an elite group as extremely important and provide the required legislation and maximum possible concessions.
As pledged in his manifesto initially, and the post pandemic statements made by the President subsequently, it is imperative that he will lead the country out of the coronavirus threat and extend maximum force to strengthen the economy.
Many of his original plans were compelled to pull back due to the unexpected virus attack. Nevertheless, his conduct so far has given hope to the general public that he will ultimately produce the desired result.
It is a stark reality that the citizenry has to make sacrifices at this critical juncture and offer whatever assistance to the Government to face the challenge.