Facing the music
a year ago
After more than one-and-a-half years since the first Covid lockdown was imposed in Sri Lanka, the country finally seems to have turned the corner with the end of the fourth lockdown last week. While the debate on why it took so long for the health authorities to gain control of the pandemic situation will continue into the foreseeable future, especially with local government elections round the corner, the fact of the matter is that citizens can finally heave a sigh of relief. However, one cannot forget or underestimate the fact that this relief comes with a very heavy price tag, that of 13,000 dearly departed souls who paid the supreme price. The blame game will continue on how many of these deaths could have been prevented through early vaccination instead of the touting of mythical solutions as a result of which vaccine procurement was delayed. There are other factors too that will surely weigh on the conscience of the powers that be, such as the decision to delay administering the vaccines to the over 60 age group, with over 75% of the victims being from this group. In a country that is notorious for sweeping issues under the carpet, it is too much to expect the incumbent administration to appoint a Commission of Inquiry to investigate whether the number of deaths could have been reduced or what could have been done better, but the main Opposition party is already on record that such a commission would be a priority of a future government. Then again, if the Yahapalana era inquiries are anything to go by, there is no reason for anyone to hold their breath. Nevertheless, the immediate challenge for the Government is to continue the vaccination drive and ensure that at least 90% of the population is fully vaccinated, a target the Government is confident of achieving by the end of this month. But if it were to think that vaccinating everyone will be the end of its troubles, it is in for a surprise. In fact, the coming days and weeks will herald a bigger and more virulent problem – that of getting the country’s economy off the ventilator. It is with this in mind that the newly appointed controversial Governor of the Central Bank unveiled his six-month roadmap to overcome the more pressing of the myriad issues currently on the Government’s plate. The roadmap broadly outlines three focus areas, namely addressing debt and forex concerns, ensuring macroeconomic stability, and tackling financial sector concerns, the resolution of which is critical for the sustenance of the economy in the short to mid-term. At the top of the list is the mounting debt problem, with the debt-to-GDP ratio currently at around an unsustainable 105%. Total external debt stood at $ 35.1 billion at the end of April this year, with nearly 10% of it falling due within the next two years. According to the roadmap, the Government aims to replace maturing debt with non-debt funding sources as a long-term remedy for the debt issue. With rating downgrades making access to funds difficult as well as cost of funds prohibitively expensive, it will indeed be interesting to see how the Government overcomes this challenge and sticks to the roadmap. In addition, if the administration is serious about attracting non-debt funding, it first needs to clean up its image and present the country as a viable investment destination. Certainly a tall order, considering the rampant corruption allegations that keep multiplying by the day – not forgetting the need to address the rising number of allegations of human rights violations from trading blocs like the EU to the UNHRC, to local and international rights watchdogs, to trade unions and the country’s Opposition parties. The administration also has to come good on its assurances to the international community to do away or amend the contentious Prevention of Terrorism Act. All these are in some way or the other connected to resuscitating the economy. It all sounds good on paper, but as with any plan, its success lies in its implementation. In this particular case, implementation is not likely to be a straightforward affair, with many aspects of it directly dependent on the actions and conduct of the Government. While the Central Bank seems to be banking on tourism and export revenue to ease the forex crisis, with foreign worker remittances continuing to shrink, the plan seems optimistic at best, given the unreliability and fickle nature of tourism earnings and higher export revenue dependent on the extension of the EU’s GSP+ benefit. It was only a few days ago that Ven. Galagoda Aththe Gnanasara Thera warned of an imminent terror attack which was later endorsed by no less than the Minister of Public Security. Last week, naval officers appeared to back the claims by visiting churches in the tourist belt of Uswetakeiyawa to physically convey a warning of an “imminent attack”, it would seem. This was, however, later “clarified” by the Public Security Minister as a “training exercise”. Usually, training exercises, be they at the local or international level, are planned and notified of well in advance, so as to not create panic among the people. Therefore, the Uswetakeiyawa incident is unique, as it was only after the priests and people in the area started panicking that the authorities labelled it as a “training exercise”. Such callousness on the part of the security establishment will inevitably have a negative bearing on the tourism industry that is struggling to stay afloat. Besides, up to now, the Police were yet to record a statement from the Thera on the basis of his revelations. If these issues are not nipped in the bud, there is every likelihood of it impacting the tourist winter season looming on the horizon. In the post-pandemic era, there is no room for error when it comes to the subject of tourism, with every country on Earth going all out to attract travellers. Even well-established travel hotspots like New York, London, and Paris, which never bothered with promotion, are sparing no expense to get a share of the tourism pie with relentless marketing on various platforms. What this indicates is the level of competition Sri Lanka will have to face when borders reopen. What is clear is that the success of the Central Bank’s roadmap is inherently dependent on the Government getting governance right. Just as important as creating the right image for the country in order to attract investment as well as tourists, is the necessity to reassure the people that their wellbeing too is a top priority of the Government. The rice issue that came to a head last week, with the Government forced to reverse yet another one of its gazettes, and the fertiliser import ban causing unprecedented damage to crops already on the fields, as well as threatening the very survival of the country’s main agricultural export, tea, are likely to have far-reaching consequences with the potential to derail even the best of roadmaps. It is, therefore, up to the Government to be wary and conscientious of the decisions it makes and be strong enough to face the consequences of such decisions.