Difficult times ahead for Sri Lanka

It is no secret that the country is facing a plethora of problems; the main among them being the economic meltdown worsened by rapidly dwindling foreign currency reserves with the resultant dollar crunch making it impossible to import essential commodities including milk powder, pharmaceuticals and petroleum products. Sri Lanka’s fuel and power crises are no longer something waiting to happen; it has happened already or will in the next few days if the Government fails to raise US$4 billion urgently needed to ensure an uninterrupted fuel supply at least for this year. 

President Gotabaya Rajapaksa has reportedly summoned a high-level meeting with top officials of key institutions to discuss ways and means of raising the urgently required US$ 4 bn to pay for fuel imports sufficient for at least this year. The meeting follows a request made by the Ceylon Petroleum Corporation (CPC) to the Central Bank for foreign currency to ensure an uninterrupted fuel supply to the transport and power sectors. The CPC is said to have prepared a detailed list of its requirement of petrol (90,000 metric tons), diesel (150,000 metric tons) and crude oil (90,000 metric tons).

Meanwhile, the Sri Lanka Chamber of Pharmaceutical Industry (SLCPI) says the import of pharmaceuticals has reached the point where the import of medicinal drugs is based on the availability of foreign currency and not on the needs of the country or the patients. “In a situation where the foreign exchange crisis is deepening, it is inevitable for there to be shortages of more and more medicines,” the SLCPI said in its statement. 

The shortage and the rising prices of medicinal drugs are bound to be a matter of grave concern to most Sri Lankans, who are under medication, and given the steeply rising cost of living, how many of medicines and at what price can an ordinary person buy and stock up on what he or she requires.  Adding to Sri Lanka’s woes by further aggravating the unprecedented crisis in the power and energy sector is the news that world coal prices were also skyrocketing and a shortage of coal will no doubt result in disruptions caused to the Noraichcholai Coal Power Plant’s power generation.

The situation in the power industry is so precarious, to say the least with even Power Minister Gamini Lokuge not knowing what is really happening on the ground. A case in point is that of this Minister, soon after a meeting with the President last Monday, was heard blithely assuring journalists that there would be no power cuts. The subject Minister appears not to remember that the Ceylon Electricity Board (CEB) had obtained permission from the Public Utilities Commission of Sri Lanka (PUCSL), the power sector regulator, to carry out power cuts lasting one to two hours a day because of a breakdown at the Noraichcholai Coal Power Plant had led to a significant shortfall in power generation. 

The CEB had even published a detailed schedule of power cuts and senior officials had told the media they would be forced to impose power cuts if and when the necessity arose, but the Minister brushed these aside, repeatedly insisting there would be no
power cuts. 

Notwithstanding his misplaced assurances, the very next day, there were power cuts in many areas of Colombo, its suburbs as well as in other parts of the country. It is in the wake of so many loans being taken by the Gotabaya Rajapaksa-led Government from neighbouring countries as a means of providing short-term patch-up solutions to the major problems, which have descended on Sri Lanka, that we ask where Sri Lanka is heading -- hopefully not down the path of self-destruction.

Has the Government forgotten that loans and swaps have to be repaid and that too with interest? It is a matter of interest to know whether the country has attracted the much envisaged foreign investments other than depending largely on remittances from Sri Lankans working abroad and on the tourism industry, which too will have its own load of problems given the foreign currency crisis and the fuel shortage?

Also worth noting is the travel advisory issued by the Canadian Government to its citizens travelling to and living in Sri Lanka of a looming economic crisis that could lead to shortages of basic necessities such as food, medicines, fuel and affect the delivery of public services including healthcare which could, in turn, contribute to a deterioration in the security environment. It also requests them to keep supplies of food, water and fuel on hand in case of lengthy disruptions.

Under the current circumstances, the people are left with no other option but to brace themselves to face the difficult days ahead.