UNENDING CATASTROPHES AND THE NEED FOR PLANNING

Over the past few years, this country has been wracked by one catastrophe after another, with almost monotonous regularity. On April 21, 2019, our country was left shell-shocked when Islamic suicide bombers exploded their deadly cache of explosives in three churches and three tourist hotels.

In one fell blow, the terrorists managed to almost kill off the nascent international tourist trade in the country, which after 30 long years of Ltte-inspired terrorism, had scarce begun to raise its head.

The tourism and leisure industry was the third largest foreign exchange earner in the Sri Lankan economy, with governments having positioned tourism as a central pillar.

The terrorist strike saw a sharp drop in foreign tourists at the height of the tourist season. In turn, this led to a large-scale layoff of temporary hotel staff leaving hundreds of families with scarce resources to keep the home fire burning. Additionally, the suicide bombings economically hit thousands of other families dependent on tourism as for example tourist guides, minor tourist operators, and cottage industry entrepreneurs who made a living selling their ware mainly to foreign tourists.

A scarce six months later, the Covid-19 pandemic struck worldwide, stifling travel and the movement of people. It effectively killed the tourist trade, both local and overseas. The Covid-19 pandemic which necessitated a closure of all essential services resulted country-wide job losses, with the then Governor of the Central Bank declaring that over 500,000 temporary workers who comprised a major portion of the workforce had been left unemployed.

It never rains, but pours, and so it was with work places shut and businesses unable to open for business, mercantile firms were soon halving salaries of their employees. While workers were either laid off or had their salaries slashed, the cost of living kept rising rapidly. The average wage prior to the Covid-19 salary cuts stood at around Rs 25,000/- per month.

At that time, the cost of having two basic meals per day was over Rs. 29,000/- per month for a family of four. Today the same two meals costs much more and salaries have been halved. It means the country’s children are facing malnutrition, if they are not already malnourished.

Schools have remained closed for nearly a year or more and education is provided via distant learning facilities (digitally). According to statistics provided by government itself, lesser than 25% of the island’s children are able to access this facility.

The main foreign exchange earning sectors of the country were apparels, tourism, export of tea and remittances from foreign workers. Tourism is almost dead. The pandemic saw a mass return of foreign workers.

The apparel industry was one of the most significant contributors to the country’s economy and the primary foreign exchange earner. The industry earned US$5 billion export revenue in 2018 contributing 44% of the country’s national exports (BOI Sri Lanka 2019). The industry employed more than 990,000 people approximately 15% of the country’s total workforce (Small Enterprise Research Vol. 28, 2021 Issue 1).

The pandemic forced closure of production units as a result of workers falling victim to the disease. It meant a loss of payment to workers, a drop in production and at times an inability to meet targets leading to revenue shortfalls.

Earnings from tea and production of the same have however have continued to grow, as has other agricultural production in the country. However Central Bank statistics reveal Foreign Exchange Reserves in Sri Lanka decreased to Rs. 807,129 million in March from Rs. 889,158 million in February of 2021.

Faced with dwindling foreign reserves and money supply in the country, government’s answer was firstly to ban the import of petroleum-based fertilizer on environmental grounds and claiming saving foreign exchange. Government also claimed it was importing compost-based fertilizer to ensure alternate supplies for meet agricultural needs. It also slapped a huge price increase on fuel claiming a shortage in foreign earnings.

Shortly thereafter, in an abrupt turnaround, the government banned the import of compost fertilizer. A surefire move to cause a drop in agricultural production, and cause further price increases. What is becoming clear is that government does not have in place a plan to tackle the growing problems in the country. It‘s actions have been knee-jerk reactions, with little attention to consequences. It is perhaps time to put experts in the field in charge, rather than handing all responsibility to military personalities.

Imran Khan, Pakistan’s premier said a mouthful when he reiterated, ‘you can tell a military general to capture a hill, and he will do it…’

We need experts to help find appropriate solutions. The military may then be helpful in implementing the plans.