ECONOMYNEXT – Canada on Friday (14) warned its nationals visiting and living in Sri Lanka of a looming economic crisis that could lead to shortages in food, medicine and fuel and also contribute to deterioration in the security environment.
The Canadian government in its travel advisory issued via its official Twitter account also warned of possible poor delivery of public services including healthcare due to the economic crisis.
Sri Lanka is facing an unprecedented economic crisis due to heavy debt and bad policies in the past. The island nation, which thrived under British colonial rulers before independence in 1948, is grappling with food shortages due to insufficient dollars for imports and lower harvest in its farmlands due to the government’s controversial change in its fertilizer policy.
Though the government has assured no shortages, already the 80 billion US dollar economy is seeing queues for kerosene, cooking gas, rice, milk powder, sugar, and wheat flour among many other commodities.
Prices of many essential goods have skyrocketed in the last six months with inflation hitting record highs and double digits, resulting in a negative rate of returns for risk-free investments.
The Canadian government advised its citizens to take measures due to limited access to resources which “could also contribute to a deterioration in the security environment”.
“Keep supplies of food, water and fuel on hand in case of lengthy disruptions. Long line-ups may be experienced at grocery stores, gas stations, and pharmacies. Monitor local media for information related to food and fuel shortages.” it said.
Canada is the first country to issue a travel advisory on Sri Lanka’s over economic instability and its possible impact on its travellers.
The President Gotabaya Rajapaksa-led ruling Sri Lanka Podujana Peremuna (SLPP) coalition is facing a twin crisis of dent and forex. It has to pay around 6.9 billion US dollars in foreign loans this year while it’s forex reserves were at just 3.1 billion US dollars by end December.
The government shrugged off possible sovereign debt default concerns and requests to seek International Monetary Fund (IMF) assistance. The government has also claimed that it has already been restructuring debts.