On the porch of Tariq Nassim’s residence in the gorgeous Galle Fort in Sri Lanka, tourists were busy scooping out ice cream. The Galle Fort is the center of a tourism boom amid the island nation’s recovery from the worst economic crisis it has had in decades.
Nassim’s ‘Dairy King,’ which serves 22 different flavors of handcrafted ice cream, was just one of the hundreds of enterprises that were destroyed by the crisis that broke out when the value of the foreign currency dropped to critical lows, which had the effect of restricting imports of basics such as gasoline and fertilizer.
“That was the biggest hit we faced,” said Nassim, 62, whose 13-year-old firm was pummeled by the twin whammy of the financial crisis of 2022 and the earlier Covid-19 epidemic. “That was the biggest hit we faced with,” Nassim added.
It was also said by him that “we have not been able to get back the pre-Covid business.” It is impossible for me to predict when it will return.
The reforms and policies that will be implemented by the victor of this month’s presidential election, which is the first election since the disintegration of the economy, will determine the path that leads to a more robust recovery for the island in the Indian Ocean.
“The new president must be able and willing to appoint the right people and run the nation competently because we cannot afford any hiccups,” said M. Shanthikumar, head of the Hotels Association of Sri Lanka, which is an industry association. “We cannot afford any hiccups.”
A nation with a population of 22 million people, which is famous for its gorgeous beaches, ancient temples, and fragrant tea, had a significant decline in tourism as a result of the crisis, which caused inflation to reach 70 percent, electricity rates to increase by 65 percent, and the currency to devalue by 45 percent.
The former president of Sri Lanka, Gotabaya Rajapaksa, was forced to leave the country; however, he has since returned. The protests in Colombo were led by hundreds of people who were upset about the power outages that lasted for hours, the long lines at gas stations, and the lack of medication in hospitals.
A tentative recovery has been led by Prime Minister Ranil Wickremesinghe, who was chosen by parliament to serve out the remainder of Rajapaksa’s five-year tenure. This recovery has been supported by a bailout from the International Monetary Fund (IMF) in the amount of $2.9 billion and the restructuring of $25 billion in foreign debt.
As of right now, both inflation and interest rates have dropped to single digits, and it is anticipated that the economy will expand by three percent in 2024. This will be the first time since the crisis that the GDP shrunk by seven and a half percent.
Twenty-five thousand people were directly employed by the tourist industry in 2023, making it a significant contributor to foreign currency profits and accounting for 2.5 percent of the gross domestic product (GDP). This year, Sri Lanka anticipates that it will receive $3 billion from 2 million tourists, which is comparable to the amount it earned in 2019.
Visitors strolled around the walls of Galle Fort, posed for photographs in front of colonial houses, and bargained with sellers for silver jewelry while they were on the cobblestone lanes of the fort.
According to Nassim, his revenue is still half of what it was before the crisis, despite the fact that he is thrilled with the resurgence. This is because very few residents have returned to try his ice-cream.
He wants the incoming president to tighten restrictions and make the island a more alluring place in order to entice tourists who tend to remain for longer periods of time and spend more money.
The most important things that the sector wants are improved facilities, more marketing, and a more efficient process for issuing visas.
In a statement, Hiran Cooray, chairman of Jetwing Symphony, which manages around 35 hotels and villas, said that Sri Lanka needs foreign currency and that 85 percent of the revenues from tourism are retained inside the nation.
It is beyond a doubt that the most crucial things are safety and stability. In the event that this comes to an end, tourism will be a casualty.
In the race for the presidency, the most prominent contenders, including Wickremesinghe, Sajith Premadasa, the head of the opposition, and Anura Kumara Dissanayake, a legislator with Marxist leanings, have all pledged to improve the economy, but they have taken various tactics to doing so.
In addition, Dissanayake has pledged to establish a new agency that would oversee and expand tourism, as well as to provide assistance for enterprises operating at the middle level and to establish direct flights with nations that send the most visitors.
Within the next five years, Wickremesinghe plans to treble the number of arrivals to 5 million by implementing infrastructural enhancements.
It has been pledged by Premadasa that they would reduce bureaucratic hurdles, encourage investment, and increase traveler safety.
The Ceylon Chamber of Commerce’s Shiran Fernando said that “we need growth,” referring to the organization’s business section. The restructuring of debt and the improvement of reserves are also options; nevertheless, both options only help to maintain stability; they do not stimulate development.
