Columns

The new year that has just dawned is one of formidable challenges to recover, reconstruct and rebuild the country after the devastating Cyclone Ditwah in November last year.

The indomitable spirit that was shown by our people in the face of the extensive cyclonic disaster has to be redoubled in the coming months to reconstruct and rebuild the country.

Foreign assistance

The task of reconstruction and rebuilding is of such magnitude that it cannot be accomplished by the efforts of the country alone. It requires both technical and financial assistance from friendly countries and international organisations. We have received assistance from some countries and international organisations. But we need more.

Costs of rebuilding

The World Bank has estimated the cost of rebuilding to be more than US$6 billion. The rebuilding of the country requires substantial international assistance and relief from our debt repayment. The country cannot bear additional foreign debt obligations.

Even the concessionary financial assistance from the IMF, other financial organisations and friendly countries could lead to a foreign debt trap and bankruptcy once again. Debt relief must be a component of foreign assistance.

Formidable assistance

Although the foreign assistance we have received from international organisations and several countries in funds, personnel, aircraft, food, medicines and equipment was beyond expectations, the UNDP Representative in Colombo has pointed out that much more international assistance is needed.

The cost of rebuilding could be much more than the World Bank estimate.

Economists appeal

Meanwhile, 120 eminent economists, including Nobel Prize Laureate Professor Joseph Stiglitz, have called upon the international community to assist Sri Lanka by restructuring our foreign debt repayment. They have called upon the international community and financial institutions to suspend Sri Lanka’s debt repayments that are unbearable in the current period of reconstruction and economic difficulties.

Furthermore, as the world-renowned economists have pointed out, there is a need for further relief on the country’s foreign debt repayment. Will the international community respond?

Relief

Such relief on foreign debt repayment would be of immense benefit to our external finances. Sri Lanka’s debt repayment obligations, coupled with the weakening of the country’s balance of payments due to adverse impacts on the country’s exports and increased imports of food and other essentials, necessitate financial assistance. Such assistance is needed not only for the reconstruction of the disaster-devastated country but also for the stability and revival of the economy.

As the UNDP Resident Representative said in no uncertain terms, the country requires international financial assistance to stabilise the economy.

Aid consortium

As suggested in a previous column, the government must take steps to convene an aid consortium under the chair or co-chair of a friendly country or an international organisation. Indications are that the government is aware of this need for foreign financial assistance and is currently taking steps to form an international aid consortium.

Silver lining

In this gloomy economic context, two bright spots are that the two strengths of the balance of payments account continue to flourish. Both remittances and tourism earnings are expected to increase. The rise in remittances is owing to the need to assist families left behind, as well as for flood relief and national reconstruction.

Tourism has not been adversely affected, as many had feared. In fact, there has been an increase in earnings from tourism that is likely to continue this year. Tourism earnings are expected to exceed last year’s record earnings.

Agriculture

The new year poses tough challenges for reconstruction and for getting the economy moving, especially in reviving food production. The 2026 Maha Season harvest is likely to be low. Other food crops that were adversely affected by the floods may recover. Fortunately, plantation crops are largely unaffected, particularly tea and rubber production.

Coconut

The coconut crop was also unaffected this year, and there is likely to be a bumper harvest next year.

Exports

Industries are not expected to face production difficulties, but there is considerable uncertainty in access to export markets.

Concluding reflection

A nation progresses not by the self-negation, sacrifices and efforts at times of crises, but by the efforts of people during the humdrum days of a nation’s life. Can we develop such a commitment in the days ahead? Regrettably, in spite of opposition political parties’ rhetoric of supporting the government’s efforts of rehabilitation and reconstruction, the task of relief and reconstruction has been politicised. Opposition parties see an opportunity of eroding the popularity of the government and enhancing their popularity. The reconstruction, rebuilding and recovery of the devastated country and economy cannot be achieved by the efforts of the country alone. It requires substantial foreign assistance. This recognition by the international community will hopefully result in substantial financial assistance, including debt relief.