Sri Lanka on an economic volcano: Harin

Colombo, March 19 (Daily Mirror) - Sri Lanka may be sitting on an economic volcano as the Middle East conflict would bring down its foreign remittance, tourism and devaluation of the rupee, a prominent figure in the previous government said yesterday.

Former Minister and UNP Deputy General Secretary Harin Fernando told a media briefing that rising inflation and depreciating Sri Lankan rupee would likely compel Central Bank to revise interest rates.

“We have predicted an economic disaster by April this year. This prediction was made in December last year. It looks like our prediction is coming true today. Around 45 percent of Sri Lanka’s foreign remittance comes from the Middle East. Around 11 percent comes from Dubai, 11 percent from Kuwait, 9 percent from Qatar, 10 percent from Saudi Arabia and 2 percent from Israel. As we have heard Middle Eastern nations are expected to slash jobs in their respective countries. What would happen to Sri Lanka’s economy in such a scenario? In addition a large number of tourists comes to Sri Lanka via Middle East Airports. Some 235,415 tourists comes through Dubai, 226,000 via Doha Qatar, 125,948 via Abu Dhabi. Tourism sector therefore could be affected as a result of the war. Rising global fuel prices and increased shipping costs are likely to trigger a domino effect across the economy. In the event of a protracted war, rising inflation and depreciating Sri Lankan rupee would likely compel Central Bank to revise interest rates,” he said citing some examples of how Sri Lanka would be affected by the Middle East crisis.

Former Minister said the next six months would be decisive for Sri Lanka given the present scenario.

Fernando who is a former tourism minister proposed special packages for Chinese and Indian tourists.

Furthermore he said Sri Lanka should obtain the membership of BRICS, the bloc named after its first five members Brazil, Russia, India, China and South Africa. “The previous government paved the way for obtaining membership but the present regime did not follow it up,” he said in this regard.