If 2020 was a year of the pandemic, 2021 will go down as the year of crises with no end in sight to the country’s problems. As we step into 2022, we leave behind a year filled with a plethora of issues and ending on a sombre note with a fuel price hike and growing [...]

Business Times

Stepping into 2022


If 2020 was a year of the pandemic, 2021 will go down

as the year of crises with no end in sight to the
country’s problems.

As we step into 2022, we leave behind a year filled with a plethora of issues and ending on a sombre note with a
fuel price hike and growing dissent in the Cabinet as
cracks emerge.

And that appeared to be the thoughts of the trio as they ventured into a discussion with Karthelis, the fish vendor, who had arrived this Wednesday morning grumbling about rising fuel prices.

Den ape hema baduwakama mila wedi karanna avashyai (Now all the prices of our products have to increase),” Karthelis moaned.

Oya hema dama maalu mila wedi karanawa-ne. Mei palamu wathawa neme (You are always increasing fish prices. This is not the first time),” said Kussi Amma Sera.

Aney Missi, monawa karannada ape wiyadama wedi
wena kota
(Aney Missi, what to do when our costs go up),” pleaded Karthelis.

Amaru kalayak uda wenna yanne 2022 (We are in for difficult times in 2022),” noted Serapina.

Ratata naraka kalayak. Ahara wala mila godak wedi wenna yanne badu hinga ethi wunama saha wawana pramanaya adu wunama me wee waga karana kale (The country is going through a bad period. Food costs will go up sharply as shortages occur and there is a production drop in the current rice season),” added Mabel Rasthiyadu.

As they continued to discuss the woes of the country, the phone rang. It was my jolly-mood economist friend, Sammiya (short for Samson) on the line and he was indeed in a jolly mood this morning.

“I say, I must share something interesting that I saw
on social media. The new joke is that GDP doesn’t stand
for ‘ gross domestic product’ but ‘gas, diesel and petrol’,” he said laughing.

However, on a more serious note, he said everyone is waiting to see whether Central Bank Governor Ajith Nivard Cabraal will deliver on the promise of securing US$3 billion to boost foreign reserves by December 31. “In an interview on Tuesday, Cabraal said he was confident of meeting this target set in a 6-month roadmap announced a few months ago but declined to give details of the accumulation of foreign currency funds,” said Sammiya.

“It will be a saving grace if we are able to build our forex reserves position. At the moment we have hit rock bottom,” I said, adding that with a large foreign currency repayment due next year, economic management would be a challenging task.

At least two ministers have been critical of a cash crisis faced by the government. Labour Minister Nimal Siripala de Silva, at a meeting of the National Labour Advisory Council on Tuesday, had said the government had no money and work at his ministry had suffered as a result of the cash crisis. In a recent interview, State Minister Vidura Wickremanayake said that while they are going through difficult times (due to the cash situation), next year would be even tougher.

I ended the call with Sammiya after discussing many issues facing the country and whether there would be any major political developments next year with the Sri Lanka Freedom Party (SLFP), a key partner in the ruling SLPP-led coalition, threatening to pull out and function as an independent party in Parliament.

The country’s litany of problems appears insurmountable. Galloping food prices, gas explosions, trade union protests, the fertiliser crisis, shortage of milk powder with queues, fuel price hikes, elephant encroachments, shortage of vegetables, a food crisis in the first quarter next year with food production dropping due to fertiliser issues, rising inflation in November at 11.1 per cent – its highest in many years, the dollar shortage crisis and import containers held up in the Colombo Port due to the foreign currency crisis, are among the many issues.

It’s also the year of power cuts. A few weeks back, the Ceylon Electricity Board announced 30-minute power cuts and then a few days later, said they would be discontinued. Then they were re-imposed and lifted again. On Wednesday, the CEB announced power cuts again as the long-standing problem at the Norochcholai power plant has still not been sorted out.

The fuel price hike came as fuel prices have risen to (Brent crude) $74.11 per barrel this month from $50.86 in January 2021. To add to the chaos, Minister Vasudeva Nanayakkara is suggesting a coupon scheme for fuel to restrict purchases per person, another going-back-to-the-1970s kind of decision when shortages were the order of the day and food and foreign exchange were rationed to the people.

In another development, government officials are saying the decision to ban chemical fertiliser was foolhardy and that it was not the President who ordered this but an unnamed official who jumped the gun! Farmers and food producers have to suffer because a so-called official decided to fast-track the shift to organic fertiliser which was slated to take 10 years according to President Gotabaya Rajapaksa’s 2019 election manifesto.

Such is the chaos in a land like no other.

To add to the woes, worker remittances, which the Central Bank is hoping will increase this month with the added bonus of an extra Rs. 10 for each dollar converted to rupees, have been coming down. In October, it fell by a staggering 50 per cent to $317 million from $631million in the same 2020 month, while in November it fell to $271.4 million, a more than 50 per cent drop from $611.7 million recorded in November 2020. So far this year till November, remittances have dropped by 18 per cent.

So what are the positives that have happened in 2021? That we will get the promised $3 billion (loans and credit from China and India) to add to the depleted $1.5 billion foreign reserves and that Sri Lanka will meet its loan repayments without any default?

Another bit of positive news is that earnings from exports recorded the highest monthly export value in history in October 2021 ($1.2 billion, a 40 per cent increase from $854 million recorded in October 2020), while marking the fifth consecutive month of above $1 billion of export earnings.

Oh! What happened to my morning mug of tea? I don’t recall drinking it but saw the empty mug on my table and realised that being a busy morning I may have drunk it in a hurry.

As Kussi Amma Sera brought in my second mug of tea, saying “aluth avuruddak enawa (a new year is coming)”, I reflected on the hopes of most people that the country’s dollar crisis would come to an end in 2022 and most of the other problems would also be resolved, notwithstanding the COVID-19 pandemic which has drained the lives of many people.

Share This Post


Hitad.lk has you covered with quality used or brand new cars for sale that are budget friendly yet reliable! Now is the time to sell your old ride for something more attractive to today's modern automotive market demands. Browse through our selection of affordable options now on Hitad.lk before deciding on what will work best for you!

Advertising Rates

Please contact the advertising office on 011 - 2479521 for the advertising rates.