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Sri Lanka's tourism industry looks to new president to rebuild fortunes

Prime Minister Ranil Wickremesinghe, elected by parliament to serve out the rest of Rajapaksa's five-year term, has led a tentative recovery underpinned by a $2.9-billion bailout from the International Monetary Fund (IMF) and restructuring of $25 billion in foreign debt.
Last Updated : 05 September 2024, 09:00 IST

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Tourism in the country of 22 million, famed for its pristine beaches, ancient temples and aromatic tea, was crushed as the crisis drove inflation to 70 per cent, power tariffs jumped 65 per cent and the currency depreciated by 45%.

Protests in Colombo by thousands angered at hours of power cuts, queues at fuel stations and hospitals with scarce medicine forced then president Gotabaya Rajapaksa to flee Sri Lanka, though he has since returned.

Prime Minister Ranil Wickremesinghe, elected by parliament to serve out the rest of Rajapaksa's five-year term, has led a tentative recovery underpinned by a $2.9-billion bailout from the International Monetary Fund (IMF) and restructuring of $25 billion in foreign debt.

Now inflation and interest rates are down to single digits, while growth of 3% is expected in 2024, for the first time since the economy shrank 7.8% during the crisis.

LIST OF DEMANDS

A key contributor to foreign exchange earnings that directly employs 205,000 people, tourism made up 2.5% of gross domestic product (GDP) in 2023. This year, Sri Lanka hopes to earn $3 billion from 2 million tourist arrivals, on par with 2019.

Visitors on Galle Fort's cobbled streets haggled for silver jewellery with vendors, walked the ramparts and posed for pictures outside colonial buildings.

Although pleased at the rebound, Nassim says his income is still half that before the crisis, as few locals have returned to sample his ice-cream.

He wants the new president to strengthen regulations and make the island a more compelling destination to lure longer-staying big spenders.

Topping industry's wish list are better facilities, stronger marketing, and streamlined issue of visas.

"Sri Lanka needs foreign exchange and 85% of tourism earnings remain in the country," said Hiran Cooray, chairman of Jetwing Symphony, which runs about 35 hotels and villas.

"Without doubt safety and stability are most important. If that is lost, then tourism will be a victim."

The main candidates in the fray, from Wickremesinghe to opposition leader Sajith Premadasa and Marxist-leaning parliamentarian Anura Kumara Dissanayake, have all promised to fix the economy, but take different approaches.

Dissanayake has also promised a new agency to govern and grow tourism, as well as direct flights with countries sending the most tourists and support for mid-level businesses.

Wickremesinghe targets infrastructure upgrades to double arrivals to 5 million within five years.

Premadasa has promised to cut red tape, spur investment, and boost safety for travellers.

"We need growth," said Shiran Fernando, of business group the Ceylon Chamber of Commerce. "We can restructure debt, we can improve reserves ... but it only keeps the stability going, it doesn't drive growth."

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Published 05 September 2024, 09:00 IST

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