Sri Lanka is facing a foreign exchange crisis today due to a variety of factors, but prime among them are forex losses from tourism and expatriate workers. Tourism was dealt a double blow by the 2019 Easter Sunday attacks and then the Covid pandemic, which engulfed the entire world exactly two years ago.
Most expat workers returned home, having lost their jobs in the tight lockdowns imposed in their host countries. Around 1.5 million expat workers annually contribute around US$ 7 billion to the national economy, but this was reduced to a trickle at the height of the pandemic.
This sector is yet to recover completely, even though most countries have now opened their doors to workers from other countries. However, there are encouraging signs that the sector is picking up.
The pandemic struck the tourism sector just as it was emerging from the letdown suffered through the Easter attacks. Tourism usually contributes around US$ 5 billion per year to the country’s coffers, a sum equivalent to the import bill for our fossil fuel requirements. Sri Lanka had to keep its air and sea borders closed for nearly 18 months under the Covid lockdown and tourism was decimated for all intents and purposes.
But Sri Lanka’s successful vaccination drive and other Covid control measures enabled the authorities to open the borders fully to vaccinated travellers around six months ago.
In fact, Sri Lanka was one of the first countries in Asia to welcome tourists back, as long as they had the relevant health and vaccination certificates.
In March, Sri Lanka recorded 100,000 arrivals for one month for the first time since the pandemic border closures. Moreover, income from tourism for this year has reached nearly US$ 500 million, leading industry analysts to predict that a revenue of US$ 2 billion could be within reach before year-end.
This will be a great fillip for shoring up Sri Lanka’s depleted foreign reserves, which are hovering around the US$ 3 billion mark.
But many challenges remain. The war in Ukraine could possibly stop the arrival of tourists from both Russia and Ukraine, which are two key source markets for Sri Lanka Tourism. Russia has been hit by sanctions and most airlines including SriLankan have stopped flying to Moscow. Ukrainians will anyway be unable to travel until the war ends.
Covid is not over yet and another global wave could emerge from the Omicron BA.2 subvariant (as seen in South Korea) and/or another new variant which could be even more transmissible, if not more lethal.
Sri Lanka should be on guard against this possibility and the authorities should do their best to coax those who have still not received the Pfizer booster (third) shot to get it as soon as possible. Another Covid wave would be disastrous for Sri Lanka in terms of tourism and the wider economy.
Several Western countries which happen to be major tourism markets have issued travel advisories to their citizens warning against travelling to Sri Lanka, citing the present economic crisis in the country.
Economic, social and political stability are essential for tourism to thrive. While many steps have been taken to shield the tourism industry from the ripple effects of the current crisis, such as issuing fuel to tourist buses and vans from SLTB depots, these efforts have not gone far enough to assuage foreign Governments and travellers.
Tourism Minister Prasanna Ranatunga has urged the Government to spare the major tourism zones from the power cuts, noting that many small-scale hotels, restaurants and guesthouses do not have generators. Even if they do, getting diesel has become a problem.
Even the protests that have erupted from time to time over the economic crisis can keep tourists away and drive out those arriving in the country. The authorities must investigate whether some of these seemingly ‘spontaneous’ protests are being controlled by an unseen hand aiming to destablise the country.
In any case, there should be a campaign to counter the negative sentiments generated by the adverse travel advisories and ensure a safe and enjoyable stay for tourists who come here. Remember, we are not the only pebble on the beach - yet these tourists have made a decision to come specifically to Sri Lanka.
Thus it is vital to ensure that all safety measures and other facilities are provided to tourists who choose a vacation in Sri Lanka.
There have been rather disturbing reports of tourists leaving the island no sooner they arrive here. This is a pity, because tourists were not even affected by the 30-year battle against terrorism which ended in 2009.
If a tourist leaves in disgust because we could not provide fuel for his vehicle or electricity to his room, we have only ourselves to blame for the situation. Therefore, the authorities must attend to these matters immediately as tourism is still the only major answer to the forex crisis.
Sri Lanka Tourism has to amplify its message and take it to more potential markets, rather than relying only on the traditional markets of Western Europe, India, Russia and so on.
Sri Lanka offers a tourism product that only a few other countries in the region can match and the development of new tourism zones countrywide on a concept of the Tourism Minister should widen that appeal. In the meantime, all Sri Lankan political parties and leaders must leave petty differences aside and unite to resolve the current economic impasse for the sake of the nation and the future generations.
That will be a great boon for tourism and all other sectors of the economy emerging from the shadow of Covid.