Friday, July 1, 2022

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Sri Lanka seeks multilateral donor agency support for tourism revival

Sri Lanka’s tourism authorities plan to approach multilateral donor agencies, including the Asian Development Bank (ADB) and World Bank (WB), to obtain financial assistance for the crisis-hit tourism industry.

Tourism and Lands Minister Harin Fernando revealed that the government is considering approaching ADB to obtain financial assistance for the tourism industry, based on a proposal submitted by the Sri Lanka Association of Inbound Tour Operators (SLAITO).

The Asian Devlopment Bank has assured assistance in the efforts to revive the tourism sector in Sri Lanka and the development of human capital, which has suffered a setback due to the Covid-19 pandemic.

The ADB has provided US $ 750 million as concessional loans last year while  loans worth US $ 2 billion would be allocated for operational projects this year. Part of this allocation of $ 2 billion could be diverted to touris industry revival following negotiations with the bank .

ADB is preparing a new country partnership strategy for Sri Lanka to support its National Policy Framework and medium-term development targets.

The  World Bank under its International  Development Agency  loan scheme will support  Sri lanka Tourism to strengthen the institutional framework for the Tourism Sector to facilitate environmentally and socially sound investments, in particular in the Eastern regions of Sri Lanka. 

The project will provide technical assistance and funding to all institutions including the Ministry of Tourism (MoT); Sri Lanka Tourism Development Authority (SLTDA), Sri Lanka Tourism Promotion Bureau (SLTPB), Sri Lanka Institute of Tourism and Hotel Management (SLITHM) and Sri Lanka Conventions Bureau (SLCB), which will improve the overall efficiency and efficacy of these institutions.

The World Bank said it is currently repurposing resources from previously approved projects to help the government with some essential medicines, temporary cash transfers for poor and vulnerable households, school meals for children of vulnerable families, and support for farmers and small businesses.

 Sri Lanka Association of Inbound Tour Operators (SLAITO) has already submitteda prposal to revive tourism industry indicating the urgency to restructure the bank  loan moratorium given to the industry.  

As of now, the loan moratorium given to the tourism industry is over Rs.500 billion, significantly up from Rs.200 billion in 2020. 

The moratorium, which was originally granted following the Easter Sunday attacks, is set to expire on June 30 2020 . With the current economic and political crises and effects of the Ukraine-Russia war, Sri Lanka’s tourism industry has yet again entered into a crisis period. 

“The SLAITO has come up with a good proposal, where we can go to ADB to seek assistance. But, for that we need to get the IMF programme implemented in the country; it will take a minimum of two to three months,” Tourism Minister said. 

The SLAITO and The Hotels Association of Sri Lanka (THASL) have already requested for an extension to the moratorium. Further, interest waivers and a debt restructuring programme have also been proposed.

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