Post- Lockdown Sri Lanka: Whither Economy?

The immediate challenge would be to avoid a spike of new cases in the post-lockdown period Sri Lanka has to pay $ 4.8 billion in debt and interest payment for this year, the largest in the country’s history

- Ranga Jayasuriya

Sri Lanka would be limping back to normalcy in the coming days as much of the restrictions were relaxed, and a curfew that lasted for seven weeks was finally removed in all but Colombo and Gampaha districts, effective from yesterday.

The immediate challenge would be to avoid a spike of new cases in the post lockdown period. Some countries, most notably Singapore, that relaxed restrictions were bombarded with a massive increase in fresh cases in their immigrant communities. South Korea which opened up after a successful coronavirus suppression campaign is also witnessing a gradual increase in case numbers.

Ensuring adequate social distancing measures in public transport would be extra difficult, even when restrictions are only partially lifted. Ensuring that public transport, especially the private buses, run with only half of the capacity as per health guidelines would be equally hard. Fewer buses would mean greater congestion.

With the collapse of tourism and a substantial decline in foreign remittance and export earnings, the economy would have to rely on the domestic demand for its survival and revival. However, people are out of pocket and disposable income has eroded. And social restrictions keep them at home, and shops closed. There is uncertainty over the fate of self-employed. Current measures would enable the economy to run at a fraction of its full capacity- through a greater economic activity would be possible in two weeks if the country manages to keep the virus under tabs.