Hyderabad: Sri Lanka is on the boil again with protesters forcing the country's president to flee from his residence. The country is facing an unprecedented economic crisis, the fallout of which is being witnessed on its streets.
On Saturday, thousands of protesters stormed into President Gotabaya Rajapaksa's residence forcing the latter to flee. To have an insight into the crisis and know whether there is a light at the end of this dark tunnel, ETV Bharat spoke to Dr Dan Malika Gunasekera, former Executive Director of Ceylon Shipping Corporation.
Gunasekara advocates for an inclusive expert body with all-party representation for course correction which at present appears to be a pipe dream. The economic crisis boils down to the foreign reserve of the island nation. According to him, the country needs a three-pronged approach to be back on its feet.
Here are the excerpts from the interview:
ETB: You have handled the Shipping Corporation. How do you see Sri Lankan exports wade through this crisis?
Dr Gunasekera: In my opinion, the country itself is a gold mine. We have a lot of resources. Our human resources are our strength. Our people have the highest literacy rate in South Asia. Our younger generation is very much into higher education. They are the real driving force in this country. We have been saying that the export industry is the key to the Sri Lankan economy. Unfortunately, exports drastically dropped due to various factors with the Covid pandemic being one of them.
The port of Colombo is ranked 22nd internationally, which is a high ranking on a comparative note. It is one of the key transhipment ports for India, Bangladesh, and other neighbouring countries. Until recently, we were performing quite well. Our TEUs (twenty-foot equivalent units) have been around 7.5 million by the beginning of this year.
ETB: Tourism accounts for 5% of Sri Lanka’s GDP. How is this industry doing now?
Dr Gunasekera: At the moment, we are facing transportation problems due to fuel shortage. Things are not that great too when it comes to the power sector. This energy crisis affects the country on several fronts including the tourism industry. A few days ago, I saw foreign tourists coming to the airport on bicycles. We have never seen such things before. This shows how much tourists like to come to Sri Lanka even when we are in the middle of such a crisis. We have the potential to market, not just history but also several other environment-related assets ranging from beaches to hill country.
ETB: What is the government doing to address the fuel crisis?
Dr Gunasekera: Our ministers, including those holding portfolios of tourism and energy, are visiting foreign countries to promote tourism and also to address the fuel issues. But these steps will not suffice when you do not have the necessary infrastructure to serve the tourists. Recently, some countries from where we have major footfalls have issued advisories against travelling to Sri Lanka because of the hardships we face. We have to promote tourism in line with the available infrastructure and make a turnaround in the transport issue. The transport costs have increased drastically due to the fuel crisis. I’m a lawyer. It is hard for me to even get around. The courts in Colombo are not functioning.
ETB: Everything has come to a standstill. Can we say that?
Dr Gunasekera: Fuel is one of the main considerations. I used to take public transport and a considerable amount of private transport as well. The non-availability of fuel has impacted all walks of life. Yes, you can say that life has come to a standstill.
ETB: You mentioned that Lankan ministers are touring foreign countries to address tourism and fuel crises. What steps have they taken?
Dr Gunasekera: Due to the foreign exchange reserve crisis, it is not easy to purchase oil and other essential commodities for which we need to pay in USD. This has impacted the local market. Unless we have a sound foreign reserve, we will not be able to import the essentials and fuel. The International Monetary Fund as well as the World Bank has not accelerated measures. It is natural. You have to show a sound and strict financial audit which we have been lacking for these few years. (It is) one of the main reasons for the downfall that we are experiencing now.
ETB: You spoke about power cuts. Will the situation improve anytime sooner?
Dr Gunasekera: Sri Lanka is highly dependent on thermal power. We need to import coal. We rely upon the monsoon and water storage level in our reservoirs for power. When we don’t have dollars to pay our sellers, it is not possible to get coal. We need to finance this on priority. We should be quick to address these issues. Transportation is crucial for tourists. They come in groups and we need to provide them with transport. It is a kind of macro situation the government should immediately address.
ETB: How are health services managed without power?
Dr Gunasekera: Scarcity of medicines is another key area. Again, we need dollars to purchase medicine. India has donated medicine. Today, I saw a picture of a child being taken on a cart with saline to the hospital. We have never experienced such things. Sri Lanka has never seen such a situation even when there was a severe war taking place in the north.
ETB: The current situation is worse than the civil war the country had faced?
Dr Gunasekera: That was a real hard time for the people. We could not travel freely. We could not ensure our safety. We did not know at what time a bomb would explode. In the north, insurgencies were rampant. However, now people are not only suffering, but they have also lost their hope.
ETB: The IMF package is expected to take time. What is Sri Lanka’s plan for the immediate requirement?
Dr Gunasekera: I don’t think the government was on track to address these issues in the past few months. The government was just buying fuel and distributing it. I didn’t see them involved at a macro level in bringing in investments to sustain for the long term. The government was at a loss. People couldn’t tolerate it. That is why today everything has blown up. I don’t think anyone sees Sri Lanka as a gold mine. The marine resources alone can ring in a windfall and should be utilised in a proper manner.
ETB: Should the government focus on exploiting the marine resources to bring in more revenue?
Dr Gunasekera: I have conducted research in the “blue economy” sector of Sri Lanka in comparison to other countries like Japan. We have to focus on income generation through such avenues. We could have even survived this economic crisis if we had done that. Our government and our leaders were not focused on it.
ETB: What would you suggest to revive the economy?
Dr Gunasekera: The IMF is focused on debt sustainability and a sustainable economic environment. Sri Lanka owes money to international agencies and foreign countries. We have to maintain the debt in a certain manner so that our economy is also sustainable. No organisation will be willing to pump money to be drained in a country which does not have proper policies in place. We have to move to short-term, mid-term, and long-term strategies to revive the economy. It should not be a mere black-and-white balance sheet with income and expenditure.
For the holistic development of the economy, we have to see how we can generate income in the long term and debt management in the short term. In the mid-term, we need to market our country to outsiders for investment. I do not consider the present government stable at all. Today, we are in a situation where the people have stormed into the Presidential residence and taken over the secretariat. We cannot go into anarchy. We cannot become another Afghanistan where people can storm into the main institutions of government like they did today. We need to think beyond party lines, and symbols, and holistically develop the country. There needs to be proper dialogue and an all-party approach in order to solve these problems.
ETB: So your answer to the problems is an all-party government?
Dr Gunasekera: They should go to parliament. The parliament should appoint a person whom they can trust on these lines. The representatives chosen should not look for mileage. Such leaders should know how to overcome public outcry, and make it a win-win situation. You cannot have autocracy or dictatorship. This country is a republic and policies should be people-centric. Or, else people will keep repeating the protest drill. I am not for selling the assets of the countries to other countries. We need to manage them.
