Unprecedented declines in merchandise trade, foreign direct investment (FDI) flows, tourism and cross-border migration have all been hallmarks of the economic fallout of COVID-19. As a result, growth expectations for countries worldwide dimmed. Nonetheless, thanks in part to substantial expansionary monetary and fiscal policies being rolled out to achieve pre-COVID economic recovery levels and the development of vaccines, the contraction in global trade and economic output are less than what was anticipated. The Sri Lankan economy too has been impacted by these external developments, witnessing fluctuating fortunes in its external sector performance. This blog discusses the impacts of global economic developments on Sri Lanka’s external sector and suggests ways to cushion them.
One year into the pandemic, Sri Lanka’s already tight fiscal space has become further constricted, leaving some tough decisions to be made in the pandemic recovery period. A third wave of COVID-19 that the country is currently experiencing will further delay such recovery efforts. Although some fiscal tools have been included in Sri Lanka’s COVID-19 recovery plan, there is consensus that the size and scale of the country’s fiscal stimulus package have been inadequate against the scale of the crisis. Conversely, wealthier countries have been rolling out some of the historically largest fiscal stimulus packages. This blog discusses the global tilt towards fiscal policy reliance in the aftermath of the pandemic and deliberates on how far the developing world can adopt a similar strategy.
High levels of inequality impede sustainable growth and development of a country. Sri Lanka made impressive strides to reach an upper middle-income country (UMIC) status in July 2019, only to slip back a year later. The COVID-19 crisis, amid growing inequities, is likely to make the task of regaining UMIC status even harder. This blog highlights the main sectors and social groups that are adversely affected, and explains the need for inclusive economic growth (IEG) post-COVID-19 for Sri Lanka to emerge as a peaceful and developed country.
Sri Lanka is experiencing a second wave of the COVID-19 pandemic, and cities and urban centres have become the hotspots of vulnerability. With their relatively favourable economic conditions and extensive transport networks, cities attract migrants from rural areas, frequently resulting in overcrowding and greater vulnerability to external shocks such as COVID-19. Hence, strengthening resilience of cities and urban settlements to meet health emergencies is a critical part of the national response strategy to pandemics. This blog explains why cities should be focal points of pandemic response planning, and discusses ways to build pandemic resilience in Sri Lanka’s urban areas.
As the world responds to the COVID-19 pandemic and works towards recovery, Sri Lanka should explore ways of halting the spread of future pandemics, stimulating recovery, and building resilience in underprivileged urban settings. This blog discusses how Sri Lanka can address these challenges.