Shippers’ Council urges govt. to ease biz challenges; address forex shortage

• Highlights economic situation deteriorating at an alarming state
• Says home-grown solutions will not help in the short-term
• Asserts the need for alternative courses of actions
• Points out debt restructuring and reaching out to IMF the most realistic solution

Sri Lanka Shippers’ Council (SLSC) yesterday joined the chorus calling the government to urgently resolve the issues faced by businesses in carrying out day-to-day business activities as there is no indication​ as yet to how the ongoing challenges, particularly due to shortage of foreign exchange, will be overcome in the immediate future.  
In a statement to the media, SLSC said they are in full agreement with the concerns put forward by the business chambers recently.

While appreciating the efforts being taken by the government to mobilise​​ short-term funding through swaps and credit lines, the Council urged the authorities to finalise negotiations on the arrangements made thus far and announce them with credibility and certainty as a matter of urgency. 

The SLSC also called for a clear statement to be issued as to when the proposed facilities will be made available.
“It is now apparent that the anticipated home-grown solutions are not or will not materialise in the short-term. We are strongly of the opinion that negotiating the restructuring of the country’s debt over a period of time would be preferable and would be a viable option as against default,” a SLSC statement said. 

The Council reiterated the need for alternative courses of action available to the country to be put into effect.
Such alternative action include engaging with the International Monetary Fund (IMF) to explore options that are available, which in-turn will give donor agencies and other stakeholders the confidence that the mounting debt situation will come down going forward.

Pointing out some of the issues faced, SLSC said the immediate challenge is to finance the much needed imports due to the critical shortage of foreign currency in the commercial banking system in the country.
Several regular suppliers of imports, who previously extended credit terms, have started asking for confirmed letters of credit, adding to the cost of imports.

Importers are facing delays in honouring letters of credit, again, due to the scarcity of foreign currency. 
Due to such delays importers are currently incurring high demurrage charges for the clearance of goods that have already been dispatched by suppliers and are stationed at the port.

Most of the goods are critical for the manufacture of export orders. Further, this impact is also felt by indirect exporters and firms providing support services for exports, the SLSC noted.

The Council warned that the delays will also affect longstanding relationships built over many years with suppliers, due to delayed payments resulting in a serious and irreversible loss of confidence and credibility between business partners and more importantly, the business credibility of the country itself.

“The country stands to lose if and when buyers decide to move their manufacturing to other countries which are closer to the end user, in order to overcome supply chain bottlenecks due to the inconsistency and inability of local exporters to meet deadlines,” the SLSC warned.