Sri Lanka has perhaps seen the end of one of the most dreadful years in recent history with the ghastly impact of the Covid-19 catastrophe that turned the country into not only a health disaster but also a financial mess. Hence, the foremost priority is to control the pandemic and then manage the economy to prevent further deterioration. The Central Bank has revealed that the GDP shrinkage will be 3.9 percent in the year 2021 and that swift remedial steps are needed.
Pandemic situation
If not for the country’s strong leadership that managed a gruesome pandemic, the situation would have been worse, beyond imagination. Had the previous regime which could not control issues including the Easter Sunday terror attacks and the economic downturn was in power during the past year, the story today would be miserable.
In his New Year message, President Gotabaya Rajapaksa implied that Sri Lankans have the self-determination and courage to overcome the challenges the country would have to face in 2021. He said that he has built confidence in the nation, formulating and implementing plans with a clear perception. He appealed to the citizenry to fulfil their duties in a disciplined manner this year to overcome the challenges.
To say that year 2020 was stressful would be an understatement. The deadly virus has claimed lives, destroyed communities, and wrecked economies throughout the world. With the outbreak of the pandemic, the economic downturn due to prolonged lockdowns, job losses, expenditure on preventive methods, medical treatment, and public welfare have made a negative impact on the day-to-day lives of the people.
Adding to the woes is the current vicious spread of misinformation and disinformation by the opposition parties that create uncertainty in the country. Regrettably, the countermeasures deployed by the Government do not seem to be anywhere close to the social impact created by the miscreants.
Threatened with the unprecedented public health emergency and subsequent economic crisis, President Rajapaksa imposed rigid controls through the relevant authorities to curtail the impact of the pandemic. He acted sternly to control the outflow of foreign exchange, restricting and banning non-essential goods. Both moves were accepted by the masses as timely and prudent. Although there are some negative effects on import restrictions, it was the best possible instantaneous solution available to the Government to manage foreign reserves.
However, at present, realistic global health or economic situations seem uncertain. Even though several anti-virus vaccines were discovered by medical experts, the true efficacy is yet to be proved. The country cannot be in a ‘wait and see’ game anymore. Prompt action is needed by the Government to take the economy and the country forward. The dawning of 2021 will not eliminate the havoc caused by the pandemic and changing of the year will not solve Sri Lanka’s national issues unless the whole country stands together as one family.
The President, however, seems to be following a somewhat soft line yet on many issues. The President, true to his simple behaviour and approach may be considering that the others will fall in line. Even his worst political enemies may have expected him to take a much tougher stance. Nevertheless, the country hopes that with the enormous powers vested in him through the 20th Amendment, President Rajapaksa will act appropriately and timely on the current national issues.
Agro-based economy
The approach of the Government in creating an agro-based modern economy is one of the most fruitful policies to meet the imminent challenges faced by the country. The President’s manifesto pledged a people-centric economy with prominence to develop agriculture. The President and the Government reiterated that they will boost indigenous agriculture and provide all possible assistance. The time has come to concentrate more on domestic farming to help the economy. The establishment of the new Directorate for Agriculture and Livestock displays the Government’s commitment to agriculture.
The temporary loss of foreign exchange revenue earned through the three major sectors, foreign employment, apparel, and tourism, amounting to approximately US$ 17 billion is the biggest challenge the Government will face this year. The Government is exploring all avenues to bridge this enormous gap to build up foreign reserves.
An expert based in the UAE who has over 35 years experience with expatriates in the Middle East is of the view that the full recovery of the sector will take a considerably long time. He said that Sri Lankans are considered expensive compared to Indians, Nepalis, and Pakistanis. Particularly, after the pandemic, job opportunities have become drastically low in the Middle East. Therefore, the authorities must specifically address the issues in the sector for constructive solutions.
The apparel sector seems to be managing its orders to some extent although full recovery will take time. According to industry sources, the order books of apparel manufacturers, especially, the large players are currently somewhat satisfactory. Even amid the ongoing Covid-19 issues, some orders from the USA and Europe have been received as per the sources.
Apparel industry
However, the apparel industry faces two obstacles at present. The severe shortage of factory workers, mainly comprising the female cadre is an issue, the sources said adding that, many of them currently operate with a labour shortage of around 20 percent. The reason is that most of the workers who went to their native places due to the temporary lockdown are not returning.
They also suffer from a critical shortage of containers resulting in delays in the delivery of shipments. The Government still has not properly addressed this grave issue that would severely affect the goodwill of buyers. If the situation continues, the repercussions would be detrimental to the industry and the country.
The third most important sector concerning foreign income is tourism that is currently at the bottom of the pit. The tourism Ministry has taken a timely, sensible, but desperately needed bold decision to open borders and bring in a contingent of tourists from Ukraine. The move offers hope to the tourism industry.
The weak opposition politicians who always act as conspiracy theorists to gain political mileage by hook or by crook are critical about the act. They spread misinformation based on health issues and on Ukraine’s economic conditions. Several of them publicly stated that Ukraine is a poor country and that the Ukrainian tourists are beggars.
With US$ 3,880 GDP per capita, Ukraine is closely behind Sri Lankan per capita income. With a much lower per capita of US$ 1,879, Indians are the largest number of inbound tourists to Sri Lanka (around 450,000 in 2018). Therefore, the accusation is very unreasonable. Regrettably, however, none from the Government has so far publicly declared this fact to counter the criticism.
The revenue generated by tourism is vital for the country to move forward. This large amount of foreign income cannot be earned from any other industry. Hence, the protection of tourism while observing health guidelines is crucial at this juncture.
The year 2021 would be severely demanding and testing to the country as a whole. When confronting challenges in moments of uncertainty, unity, harmony, and individual commitment are necessary. Taking bold actions and at times with certain risks is the only way to move forward. In today’s complex global and national environment, there is no way other than to stand together and stand tall as a country and step into a successful 2021.