Goblins And Real Challenges Of 2021

After the downgrade of sovereign credit ratings to junk, the creditworthiness of domestic financial institutions is currently being lowered by the international rating agencies

- Ranga Jayasuriya

Multiple challenges in multiple fronts await the nation in the year 2021. The economic fallout of weakened public finances would be more intimidating than the previous year. After the downgrade of sovereign credit ratings to junk, the creditworthiness of domestic financial institutions is currently being lowered by the international rating agencies. The Government has to pay $ four billion in foreign loans and interest payments this year against foreign reserves of $ 5.6 billion. The economy is in tatters and recovery after the worst ever contraction in the second quarter of the last year will be compromised by fears over a sovereign default.

The COVID-19 second wave is raging unabated. It does not invoke confidence that 500-600 new cases are discovered daily from around 12,000 PCR tests. Authorities are already cautioning that the virus would be around this year or several years to come.

Elsewhere, the country’s foreign relations are about to get complicated as the United States and other Western nations are planning to bring in a new resolution on Sri Lanka at the UN Human Rights Council. While a UNHRC resolution itself could do little damage, the danger is that it would be the beginning of an end of Sri Lanka’s relations with the West in its current less contentious form.

If the last year was grim due to factors beyond the domestic control, a global pandemic, the choices that are to be made this year are all within the reach of the government. These decisions would define the future of the nation and its place in the international community to many years to come. In many ways, this is a year of transition to better or worse.