• Arutha Co-Founder and Director – Civic Education, Rehana Thowfeek on weathering the impacts of Middle East tensions

In a world where over 270 million people live amid conflict zones, the ripple effects reach far beyond borders — reshaping economies, energy security, and everyday lives. What do these global tremors mean for Sri Lanka?  

On Kaleidoscope last week was Arutha Co-Founder and Director – Civic Education, Rehana Thowfeek, who helped us explore how shifting geopolitics intersect with local realities and what lessons we can draw for resilience. 

Following are excerpts of the interview:

Given Sri Lanka’s heavy reliance on oil and gas, what contingency strategies do you think are viable if supply disruptions persist the way they are?

It’s been about seven weeks since the closure, and we are facing, to a certain extent, some shortages, and definitely a lot of price hikes. The situation is still very touch and go, so, shortages are likely to become more acute as time goes on. Even if the Strait of Hormuz is to reopen today, it would still take about one to two months for the supply to stabilise. There’s infrastructure damage and oil tankers travel slowly, so, recovery isn’t immediate. 

In terms of contingencies, Sri Lanka has already started sourcing oil from alternative suppliers like the US and India, and we’re also in negotiations with China and Russia. For gas, Oman was our main supplier last year (2025) and it’s relatively unaffected due to its geographic position. But, prices will still rise because of higher shipping and insurance costs. 

If this situation persists long term, then, we’re looking at a much deeper transition — moving towards renewable energy sources like hydro and solar and even shifting household consumption patterns, for example from gas to induction cooking.

We saw massive repatriations during Covid, particularly from the ME. Given our reliance on remittances, could we see something similar now?

It was not just during Covid; even during past Gulf conflicts like the Iraqi invasion of Kuwait in the 1990s, Sri Lankan workers were repatriated due to security risks. 

Remittances from the Gulf account for about 38 per cent of total inflows, which is significant. They’re crucial for reserve accumulation and financing foreign exchange needs. Right now, we’re not seeing major job losses, but, there are signs like job suspensions. If the situation escalates, repatriation could become necessary. And, if businesses in the Gulf operate below capacity, job losses will follow. 

In terms of preparedness, Sri Lanka has historically worked with host Governments and international agencies like the International Organisation for Migration. Compensation packages were also provided in the past. But, many migrant workers are in precarious employment with limited protections. So, if disruptions worsen, the Government will need to step in more actively to support and transition these workers.

If shipping routes remain unstable, what alternative markets or trade corridors can Sri Lanka explore?

Tea is likely to be the most affected export. About 25% goes to Gulf countries and 52% to the wider West Asian region — bringing in around US Dollars ($) 850 million. Unfortunately, there aren’t many easy alternative markets. Black tea faces strong competition from Kenya, India and China. There may be some opportunity to pivot towards premium or value-added products in other regions, but, that’s not a quick fix. There are alternative shipping routes, but, their viability is uncertain due to higher costs, longer transit times and insurance premiums. So overall, the tea industry is likely to face significant challenges.

If fertiliser imports are disrupted, what does that mean for agriculture and food security?

This is a major concern, not just for Sri Lanka, but globally. About 57% of our fertiliser imports come from China and around 22% from West Asia. China has already restricted exports to protect its own food security, which puts us in a vulnerable position. 

We’re entering the cultivation season and need about 200,000 metric tonnes of fertiliser but currently have roughly half of that. Whether that stock is physically available or just contracted is also unclear, and contracts don’t always guarantee delivery. This means difficult decisions: prioritising certain crops over others, possibly focusing on food crops over export crops. The Government has prioritised paddy, so rice production should be relatively stable. 

However, prices will rise. Urea prices, for example, have nearly doubled. Subsidies can cushion the impact in the short term, but, they’re not fiscally sustainable long term.

Food insecurity is already a serious issue. Poverty has increased, malnutrition remains high, and around nine million Sri Lankans cannot afford a healthy diet, so this adds further pressure.

Tourism is often the first to react to global shocks. How is this situation likely to affect Sri Lanka’s tourism sector?

Tourism is extremely fragile and Sri Lanka has faced repeated disruptions in recent years. This situation is another major blow. Airfares have increased significantly due to jet fuel shortages. European tourists, who typically transit through Gulf countries, now face limited access or much higher costs. That reduces arrivals. There’s also a broader psychological factor — global instability reduces people’s willingness to travel. 

However, we’ve already seen some shifts, like the rise in Indian tourists over the past few years. Sri Lanka has started adapting to those changes, and that trend may continue. In the short term, the response will likely remain reactive. But long term, we need a more sustainable tourism strategy — and importantly, we can’t rely too heavily on tourism alone. Economic diversification is key.

With energy and food prices rising, what structural safeguards should Sri Lanka adopt to manage the cost-of-living pressures?

The cost of living will increase, but, Sri Lanka is in a better position now than it was during the 2022 crisis. Back then, we faced an energy shock without the capacity to absorb it. Now, several structural reforms have been implemented — fiscal discipline has improved, the monetary policy is more independent and frameworks like the Public Financial Management Act are in place. 

We also have some financial buffers now. For example, the Government was able to respond to recent shocks using supplementary estimates — something that wasn’t possible earlier. 

The key is to stay the course on reforms. In fact, we could move faster. External shocks shouldn’t derail progress; they make reforms even more important.

Given Sri Lanka’s geographic location, can we capitalise on global supply chain shifts?

We’ve historically relied on our strategic location, especially with the Colombo Port. But, the landscape has changed. For instance, India’s Vizhinjam Port is emerging as a strong competitor. So, we can’t rely solely on geography anymore. We need to invest, modernise and position ourselves competitively. 

There are opportunities, but also domestic bottlenecks in trade and investment that need to be addressed. Progress is being made, but, it needs to accelerate if we want to fully capitalise on these shifts.

Are we likely to see new vulnerabilities — and opportunities — with shifting global alliances and new trading partners like Russia?

Russia has already been a key supplier. It was our largest coal supplier last year. So, this relationship isn’t new. But, the global demand for Russian energy is increasing, even from Europe. So, the competition for those resources will intensify. 

More broadly, the global order is shifting away from a single superpower towards multiple regional powers. Russia will likely be one of them. For Sri Lanka, this means strengthening bilateral relationships across the board. We have the advantage of being relatively neutral — we’re a friend to many countries. But, this also requires a more strategic, informed and coordinated foreign policy approach. It can’t be ad hoc — we need strong institutional capacity and expertise.

Looking ahead, what lessons should Sri Lanka take to better withstand future external shocks?

The biggest lesson is resilience through strong foundations. Compared to four years ago, we are better prepared today because of improved fiscal discipline and structural reforms. A stronger foundation allows us to weather shocks more effectively. But, we can’t slow down. Reforms — whether in State-owned enterprises, trade liberalisation, or fiscal management — must continue and ideally accelerate. 

There also needs to be broad political consensus to sustain these reforms over time. Because ultimately, that structural strength is what will allow Sri Lanka to navigate an increasingly uncertain global environment.

The writer is the host, director, and co-producer of the weekly digital programme ‘Kaleidoscope with Savithri Rodrigo’ which can be viewed on YouTube, Facebook, Instagram, and LinkedIn. She has over three decades of experience in print, electronic, and social media

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The views and opinions expressed in this column are those of the author, and do not necessarily reflect those of this publication