Thursday Nov 14, 2024
Thursday Nov 14, 2024
Saturday, 9 April 2022 01:19 - - {{hitsCtrl.values.hits}}
By Charumini de Silva
The current political crisis could cause $ 50 million loss per day or rising, the private sector revealed yesterday, whilst fearing a drop of around 30% from the export revenue from this month onwards.
A total of 23 major associations, representing key industries of the economy in one voice called on the parliamentarians of all political parties to come up with a viable long-term proposal to urgently start negotiations with the International Monetary Fund (IMF) along with debt restructuring plan, to ensure political stability to win the confidence of the world to fix the adversity.
They warned that their industries, which collectively earn about $16.7 billion annually through merchandise and services exports, would come to a standstill if the current situation continues.
In addition, they said livelihoods of over 4.2 million workers or 50% of Sri Lanka’s entire working population will be badly affected.
The private sector champions expressed that they could breathe a sigh of relief with the appointments of new Central Bank Governor Dr. Nandalal Weerasinghe and Finance Ministry Secretary K.M.M. Siriwardena on Thursday.
“We are seeing tremendous challenges which is going into the next level and bringing all industries to a halt. IMF should have been yesterday and not tomorrow or next week. We insist on the Government and Opposition to come up with a politically stable system, so that the world will believe us. The President has all powers through the Constitution and he has to take a call on the next step.
“The Prime Minister and the rest of the MPs need to come up with a solution within a week before the economy collapse completely,” Shippers Academy Colombo CEO and Sri Lanka Association of Manufacturers and Exporters of Rubber Products (SLAMERP) Director General Rohan Masakorala told journalists.
He called on 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 private sector is united in demanding an immediate solution from all political parties and parliamentarians. We are not on a ‘blame game’, but put the economic footing in front. The crisis is going to impact every citizen.
“We are here to underscore the gravity of the economic crisis, before our cogwheels start to stop. We stand together as industries and associations because we strongly believe that it is right path – otherwise the total economy will collapse if nothing is done right now,” he stressed.
Noting that the appointment of the new Central Bank Governor and Treasury Secretary was indeed a relief, Masakorala a said stable political system was essential for the country to move forward.
Joint Apparel Association Forum (JAAF) Secretary General Yohan Lawrence said 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.
“The deep relationships we have maintained for decades are helping our members to continue with the business amidst chaos situations. Our call is to all stakeholders to come together and help to solve this crisis. Come up with a viable long-term solution.
“We look forward to the urgent implementation of the discussions with the IMF to take this forward. Thereby, we can build confidence that the country is on path to recovery because these continuous shocks are have not spared anyone. We need an immediate solution,” he added.
Lawrence also said that the negotiations with the European Union (EU) in terms of the GSP+ concession remains on track.
Exporters Association of Sri Lanka (EASL) Chairman Talal Shums said they anticipate a drop of around 20-30% in export turnover this month, if no immediate action is taken by the policymakers.
“All the associations represented here accounts to about $ 17 billion exports each year. So, a drop of 20-30% is significant. We urge the authorities to help us not come to this drastic decline in turnover,” he added.
Shums pointed out that this political instability has led to a credibility issues with their buyers, where the competitive countries are using the opportunity to increase their market share.
Colombo Tea Traders Association (CTTA) Chairman Jayantha Karunaratne said the current political crisis has taken the focus away from addressing Sri Lanka’s daunting economic challenges, which must be given utmost priority to protect key sectors, employment and livelihoods.
“The prevailing power and energy crises, lack of foreign exchange has hampered the economic activities to a large extent. Unless we collectively find solutions and immediately roll out those plans, it will have an unimaginable adverse impact to the overall economy,” he cautioned.
Karunaratne also said the unstable supply of power has crippled the productivity and output of the tea industry. “If this remains for a month, it will make Sri Lanka uncompetitive because we only produce 5% of the global tea. This will put us out of the business completely. In addition, the inability to serve the 2.5 million dependants will cause social unrest leading to more bigger problems, if it is not addressed now,” he pointed out.
Sri Lanka Association for Software and Services Companies (SLASSCOM) Chairperson Sandra de Zoysa said a sustainable solution for the ongoing power and connectivity crisis is critical to retain employees and employers.
“The IT/BPM industry face the crisis in two major ways. One is that our professionals are high in demand and there is a high tendency that they move out of the country for employment. Secondly, our customers globally are concerned about the prevailing situation in Sri Lanka. Although, we all are managing and meeting the delivery deadlines with utmost difficulties, we cannot sustain it in the medium to short term even now,” she pointed out.
Sri Lanka Shippers Council Chairman Russell Juriansz said the representation of Sri Lanka at the IMF-World Bank Spring Meeting in Washington DC is imperative to start negotiations, noting that the Indian Credit Line will only last till end of this month.
“We need to start discussions with IMF to be able to get over this issue on a long-term basis, while bridging the short-term financing which they could negotiate with the World Bank at the same meeting for essential goods such as medicines, food, fuel and others,” he added.
The private sector associations also shared a letter sent to the Speaker of the Parliament and MPs during the press briefing. The letter, signed by 38 major associations representing all key sectors of the economy, strongly urged political leaders and MPs 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.
Pic by Lasantha Kumara
