Sri Lanka: undeclared war pushes economy to brink of collapse
Colombo (AsiaNews) – The undeclared war under way in Sri Lanka is pushing the country to the brink of economic crisis. A night-time curfew for airports and security alerts issued by foreign governments to their nationals travelling to former Ceylon – which has been dropped as a destination by some airline companies – have led to a drastic drop in tourism. Meanwhile hikes in military spending and inflation are weighing heavily on public expenditure and on citizens’ pockets. The auxiliary bishop of Colombo, Mgr Marius Peiris, gives his analysis on the economic repercussions of the ethnic conflict that has torn the island apart for more than 20 years. He also makes an appeal to Colombo and the Tamil rebels to return to the negotiating table and to quit violence.
The tourism crisis
The bishop explained to AsiaNews: “The ethnic conflict between Tamils and Sinhalese has turned into an undeclared war and has affected the economy drastically over the years. Recently the conflict has taken a new turn with the air raids launched by the Liberation Tigers of Tamil Eelam (LTTE) on special targets in Colombo and around – a military base neighbouring the airport of Colombo, a petroleum installation of the military at Kollonnawa and Muthurajawela – and this is even more worrying”.
To deal with the new threat coming from the skies, the government has adopted new security measures: first of all, it imposed a night-time curfew on the capital’s Katunayake international airport from 10.30pm to 4.30am, from 8 May to 9 August. The airport authorities have warned airline companies to change their flight routes to adapt to the ruling. “Most international flights to and from Sri Lanka operate by night so the curfew will have repercussions on the entire tourism industry, which an important chunk of the national economy is dependent on.” To this scenario must be added the decision taken at the end of April by two leading airline companies, Cathay Pacific and Emirates, to stop flights to Sri Lanka because it is too high-risk. Several foreign governments like Australia and England have issued alerts advising against travel to Sri Lanka, due to an increase in abductions and attacks outside the war zones in the north-east. This has dealt a further blow to tourism.
According to a report published by the Hindustan Times, the flux of tourists dropped by 36% after April’s air attacks by the Tigers, compared to the same period in 2006. Sources from the Colombo airport said there were 500,000 arrivals last year with income for the tourism industry estimated to be around 410 million dollars. Colombo is in fact one of the main hubs of South Asia with four million people passing through Katunayake every year.
Imports, exports at risk
“The nocturnal closure of the airport of the capital also leads to losses in the commercial sector,” cautioned the bishop. “It will be difficult to ensure a regular flow of import and export of goods, with repercussions on income and expenses to be settled. The trade imbalance will lead, according to Mgr Peiris, to devaluation of the local currency, already depreciated with respect to the dollar, sterling, euro and yen. “A serious imbalance will also have an impact on salaries.”
Military costs and inflation
These new economic difficulties come at a time when the country is facing inflation of 17% and the government is stepping up military costs to counter the air raids of the Tigers. Colombo is said to be getting equipped with new surveillance and anti-aircraft systems from Russia. The Defence budget for 2007 has increased by 28%, reaching 1.25 billion dollars.
The bishop said all this had a worrying impact on the daily life of the people: “The prices of basic items like bread and vegetables are sky rocketing and there is a pressing gas shortage.” Mgr Peiris added: “Peace seems to be moving further and further way, and we are on the brink of catastrophe. The only hope for Sri Lanka is to promote national integration between different ethnicities, cultures and religions through dialogue, and a return to negotiations between the government and rebels, quitting the war.”
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