CCC calls for urgent economic safeguards as global volatility intensifies

• Says escalating conflict in Middle East requires coordinated measures to safeguard economic stability
• Highlights need for expedited procurement, ensuring adequate fertiliser stocks for upcoming cultivation season and strengthening tourism promotion, particularly in key markets such as India and East Asia
• Stresses importance of accelerating port clearance processes to improve trade efficiency
• Suggests empowering licensed local bunkering companies to procure fuel independently for export-oriented industries and tourism operators
• To reduce fuel demand while maintaining operations, CCC encourages flexible work arrangements, early closure of schools and universities, ahead of Avurudu holidays and temporary online learning

The Ceylon Chamber of Commerce (CCC) yesterday pressed the government to act decisively to shield the economy as international volatility and the Middle East conflict threaten domestic stability.

In its March 11 submission, the CCC said it remains ready to work with the government in addressing the potential economic risks and outlined a series of recommendations aimed at mitigating those risks.

“The evolving global situation and the escalating conflict in the Middle East require coordinated measures to safeguard economic stability,” the CCC said.

It stressed that continuing the International Monetary Fund programme and ensuring the timely receipt of the upcoming tranches is critical to maintaining macroeconomic stability. It welcomed the initial steps taken to introduce a more dynamic fuel pricing mechanism and to reintroduce the QR system for fuel distribution, noting that steps have already been taken towards implementing these fuel-related measures.

Beyond fuel, the CCC highlighted the need for expedited procurement, ensuring adequate fertiliser stocks for the upcoming cultivation season and strengthening tourism promotion, particularly in key markets such as India and East Asia. 

The CCC also underscored the importance of accelerating the port clearance processes to improve trade efficiency and reviewing the policies that could place additional pressure on foreign exchange reserves amid the ongoing global uncertainty.

Building on these measures, the CCC proposed further steps to ensure continuity of economic activity while safeguarding the critical sectors. It recommended the government to clearly define the essential services and priority sectors to guide the allocation of fuel and foreign exchange, in case of supply disruptions and adopt a more strategic approach to fuel procurement, including broadening the pool of international suppliers and ensuring sufficient aviation fuel to support inbound tourism.

The CCC also suggested empowering the licensed local bunkering companies to procure fuel independently for export-oriented industries and tourism operators, potentially on a foreign currency basis, a strategy it said had previously helped sustain the key sectors, without straining the domestic supplies.

To reduce the fuel demand, while maintaining the operations, the CCC encouraged flexible work arrangements, early closure of schools and universities, ahead of the Avurudu holidays and temporary online learning. 

It further recommended temporarily limiting the non-essential foreign currency outflows while prioritising critical imports, including fuel, food, pharmaceuticals and inputs for the export industries.

“Close coordination between the government and private sector will be critical in navigating the potential global shocks and maintaining economic stability,” the CCC said.

It added that it stands ready to support the government and relevant authorities in further refining these measures and facilitating dialogue with the private sector, while also noting the importance of keeping the businesses informed of the policy measures under consideration, to enable effective planning and response.