By Arun Kumar Shrivastav
The UN agencies and NGOs working in Sri Lanka have warned that the food crisis in the island nation with 22 million people is worsening. In its June 2022 report, the UN said that at least 1.7 million people need immediate help. Early this week, it said now the number has grown to 3.4 million people.
These organizations are providing life-saving support to the most vulnerable people in Sri Lanka under a joint banner – Humanitarian Needs and Priorities (HNP), which is working in Sri Lanka at the request of the local government that sought UN-backed multi-sector support, especially in tackling food and medicine shortages. Governments and international donor agencies have helped these organizations to provide cash, food, school meals, and medicines to over 1 million most vulnerable people.
HNP had raised $79 million but given the increase in the number of those who need assistance, it requires another $70 million. The food shortage has aggravated due to poor harvests in the last two farming seasons. In its revised plans, the HNP aims to feed 2.1 million people, with priority to pregnant women and school children. It also plans to provide cover 1.5 million farmers and fishermen under its livelihood support program.
Sri Lanka has been granted preliminary approval of a $2.9-billion bailout by IMF to be paid in 4 years. But the IMF bailout will be contingent on a wide-ranging economic reform that the multilateral financial institution wants the Sri Lankan government to implement. Sri Lanka has over 300 state-owned companies and the top 52 of them lost $2.4 billion in the first four months of the current year.
Among the state entities that would face stringent financial scrutiny and choking of funds is the national airline, Sri Lankan Airlines. It’s among the most expensive companies in the long list of state-owned companies that now must face reforms. Sri Lanka’s national carrier has nearly 6,000 staff and it incurred $4.50 of losses for every $1 earned in 2022, so far. Sri Lankan Airlines has not seen profits since 2008 when its CEO was sacked for not off-loading passengers with reservations to accommodate some family members of President Mahinda Rajapaksa on a flight from London to Colombo.
Announcing the need for reforms in Sri Lankan Airlines, government spokesperson Manusha Nanayakkara said recently, “Even those who have never stepped into a Sri Lankan aircraft are paying to subsidize the airline… We can’t continue like this.” The government last month asked the finance ministry to seek outside investment in a bid to restructure the organization. But analysts believe that finding an investor for Sri Lankan airlines can be difficult in the current circumstances.
Apart from loss-making state enterprises, the Sri Lankan economy was hit by the two years of shutdown due to Covid-19. The Russia-Ukraine war also had an impact on the island nation which is heavily import-dependent. A key contributor to the Sri Lankan economy is its tourism sector. In its bid to shore up finances, Sri Lanka is looking to India to boost its tourism sector. India has been a big help to Sri Lanka throughout the current crisis and has extended $ 4 billion worth of support from January till now. Indian tourists constitute 21% of its total tourist arrivals.
“Sri Lanka is fully open and reaching out to tourists. India is our priority market and we are targeting three types of tourists – family, entertainment, and Ramayana. We are also working out special deals for Indian tourists and are in the process of tying up with low-cost carriers,” said Thisum Jayasurya, Chairman of, the Sri Lankan Convention Bureau (SLCB), who is leading Sri Lanka tourism’s roadshows in Indian cities. As per available data, Sri Lanka has crossed $1 billion in tourism earnings in 10 months this year. In October, 42,000 tourists visited the island nation, taking the total figure of tourist arrivals this year to 568,000.
Meanwhile, the construction of the $700-million West Container Terminal of the Colombo Port began on Wednesday. India’s Adani Group is holding a controlling 51% stake in this project, which is also the first Indian investment in Sri Lanka’s port sector. The first stage of this project will be completed by the third quarter of 2023, and the full project will be completed by the end of 2025. Besides Adani’s 51%, John Keells Holdings of Sri Lanka holds 34% and the rest by the Sri Lanka Ports Authority (SLPA). (IPA Service)