As ‘economic catastrophe’ looms, private sector demands immediate action from policymakers
- “Without a stable supply of fuel and energy, the economy could lose around USD $50 million a day in export revenue”, industry leaders warn[1]
- Despite several warning signs, policymakers still not prioritising solutions to ongoing economic crisis
23 industry associations, representing private sector firms engaged in export, import and logistics industries warned of catastrophic consequences for Sri Lanka’s economy and the people if the ongoing economic and political crisis was not addressed with urgent and immediate action.
“Parliamentarians must act responsibly and resolutely to implement remedial solutions to halt, and then reverse the rapidly deteriorating situation” they said.
At a joint press conference, the associations warned that their industries, which collectively earn about $16.7 billion each year through merchandise and services exports, would come to a standstill if the current situation continues. Furthermore, they added, the livelihoods of more than 4.2 million workers – or half of Sri Lanka’s entire working population –will be badly affected. Even as the country is struggling to import medicines and fuel, and is in dire need of foreign exchange, this will have disastrous consequences, the associations emphasised.
They also warned that the economy could well be on the brink of complete collapse; essential items could become unavailable, and mass unemployment and social unrest seem imminent. Shipping lines and airlines have indicated reduction in services, which will disrupt supply chains and the operations of both exporters and importers. The associations are also very worried about the potential instability in the financial sector, if the situation remains unaddressed.
The private sector associations also shared a letter sent to the Speaker of the Parliament and parliamentarians during the press briefing. The letter, signed by 38 major associations representing all key sectors of the economy, strongly urged leaders and parliamentarians of all political parties to put aside differences, and immediately form an interim government if necessary, and take necessary actions in the national interest, and that of the Sri Lankan people.
“The current political and economic impasse simply cannot continue any further, we need a cabinet and interim government within a week at most,” said Rohan Masakorala, CEO of Shippers’ Academy Colombo and Director General of Sri Lanka Association of Manufacturers and Exporters of Rubber products. “The private sector is united in demanding an immediate solution from all political parties and parliamentarians once we fully comprehended the dire and potentially catastrophic consequences that would be unleashed on the people and the country if parliamentarians and the government failed to act.”
“Major export sectors like apparel have been doing their utmost to minimise disruptions and continue production, and earn much-needed foreign exchange, while also protecting thousands of jobs and livelihoods,” Joint Apparel Association Forum (JAAF) Secretary General, Yohan Lawrence said. “But these continuous shocks are taking their toll, and no industry, including export sectors, have been spared. We need an immediate solution.”
“This political crisis is taking focus away from addressing Sri Lanka’s daunting economic challenges, which must be given utmost priority in order to protect key sectors, employment and livelihoods,” stated Mr Jayantha Karunaratne, Chairman of the Colombo Tea Traders Association. “While the reforms needed will not be easy, experts have articulated the actions we must implement without further procrastination.” Along with the demand for urgent action, the associations suggested the appointment of advisors for helping Sri Lanka during negotiations with the IMF, and in seeking assistance from other bilateral and multilateral partners to start the debt restructuring process.
LIST OF REPRESENTATIVE ASSOCIATIONS
- Association of Container Deport Operators
- Association of Container Transporters
- Colombo Rubber Traders Association
- Colombo Tea Traders Association
- Diamond exporters Association of Sri Lanka
- Essential food importers and traders Association
- Exporters Association of Sri Lanka
- Free Trade Zone Manufacturers Association
- Hub operators Association of Sri Lanka
- Industrialists Association Minuwangoda
- Joint Apparel Association Forum
- Lanka Fruit and vegetable producers, processors, and exporters association
- National Chamber of Exporters of Sri Lanka
- Plastics & Rubber Institute of Sri Lanka
- Sri Lanka Association for Software and Services Companies
- Sri Lanka Association of Air Express Companies
- Sri Lanka Association of Manufacturers and Exporters of Rubber Products
- Sri Lanka Logistics and Freight Forwarders Association
- Sri Lanka Gem & Jewelry Association
- Sugar Importers Association
- Tea Exporters Association
- The Colombo Brokers’ Association
- Ceylon Association of Shipping Agents
[1] Industry calculations using total private sector export revenue
