The nation hopes that the ongoing COVID 19 control actions will be successful and life will return to normalcy in the island. And we believe that the nation will be safe again. However the COVID 19 pandemic has left Mother Lanka in danger and our main concern is how we will face the hit once again like what Easter attack gave us back in 2019.
The COVID19 pandemic has left the country with the most dangerous economic shock in history. It could have a major collision on the economic giants in developing countries such as Sri Lanka. The Government has taken adequate measures to lift the country at its worst time. We are always a nation who blooms after every winter. However with self discipline and individual responsibility we should be able to fight the battle.
Let us look at some sectors and the potential economic impact of the ongoing COVID 19 pandemic.
One of the major economic uplifting sectors of Sri Lanka is Tourism. Though the country enjoyed a well established tourism for the past ten years, it took a slight hit in 2019 after the Easter attack and now a major hit after the COVID 19 pandemic. There will be limited tourist arrivals even after the pandemic is controlled as it now faces zero tourist arrivals. A study reveals that this may continue for not less than 8 months. This impact gives the global airlines to face an overnight insolvency or liquidation. Sri Lanka’s airline industry employees too face a situation of work dismissal. However cash rich airlines around the world may survive this hard economic climate. Also the other supporting units such as Hotels and other tourist supporters could face bankruptcy with a chain of impact.
Another important element for the country’s income is the garment exports of which over 75% are to European countries, and this is the period of peak for garment orders from European countries. However due to the prevailing situation these countries are facing a recession which would have an impact on the demand for the export orders. This would in turn result in the deployment of staff in the garments export sector, a key element in creating employment and earnings for the country.
Yet another important sector for the government income is the tea industry. This too is exported to various countries of the world. Due to the COVID 19 pandemic the small scale tea producers may have to face a hit in the international tea prices, which could again result in wages being revised. Rubber production too will experience a massive hit as countries may halt vehicle manufacture so that the need for the export of rubber may not be important as before and can cause work deployment. On the other hand informal sectors such as wayside boutiques ,beauty salons, lottery sellers ,etc. which amount to 48% of employment and a contribution of 40% - 45% to country’s GDP would have to face a hard time financially as they are not protected by the Government like the other major sectors.
The construction sector too will face a major hit as the real estate sector will face difficulty in sales which would impact banks that have lent finance for the construction .Another main concern is the Lankan rupee depreciation of 4.7 % which will lead to inflation.
The banking industry may experience losses due to high Non performing loans NPL, as it will create an imbalance of the accounts. Though the Central Bank has given alternatives to balance the situation the banks may have to reformulate their daily proceedings of the collection of debts.
The only good sight is the agricultural sector which is safe at present, and continues with its daily work even during this situation. However less spending by the people during the pandemic could be a negative impact as prices will rise.
The above study reveals that the country will face a massive economic down turn, large scale unemployment, inflation and a recession, which is normal in a situation like this.
Apart from this the poor struggle to survive the situation, without any money to buy the essentials to feed the family. These people can be categorized as daily wage earners, involved in small scale labour works such as masons, carpenters and wayside boutique keepers. However, many charity workers seem to be involved in various projects to assist them during this time of need, as witnessed in social media.
The government however is handling it efficiently through many measures.
The Samurthi scheme is working round the clock to implement government instructions providing relief measures to the poor. The health sector including ward attendants and the minor staff are doing a tremendous job with the support of the Tri-forces to bring the country back to normalcy.
Considering the prevailing situation let us all join hands to overcome this pandemic by being responsible towards government instructions and bloom back as before.
STAY HOME STAY SAFE