FOOD FOR THOUGHT
Ordinary Sri Lankans are pondering on what the future holds, following the government’s debut budget, the IMF’s completion of its third review of the Extended Fund Facility (EFF), a spate of mini crises and spiralling lawlessness, and how developments around the world will affect them.
Meanwhile, abject poverty and youth unemployment continue to be unacceptably high, and the cost of living stubbornly refuses to fall to manageable levels – despite the official rate of inflation reflecting a deflationary milieu in recent months.
Thankfully, the month of February ended on a positive note with the Executive Board of the International Monetary Fund completing its third review of the EFF and granting access to US$ 334 million – which means that 1.3 billion dollars of the US$ 2.9 billion bailout programme has now been disbursed – to support Sri Lanka’s economic policies and reforms.
But the lender of last resort warned that policy reversals will derail the country’s long-term economic aspirations.
At the centre of the IMF’s assessment of risks and rewards is the recently lifted vehicle import ban. While it’s likely to bolster the economy, Sri Lanka’s forex reserves could come under pressure, it asserted.
On the external front, one name – President Donald J. Trump – reverberates across the wider world for, among many other concerns, the tariff wars that are engulfing the globe. It is no secret that they’re threatening to put free trade under the microscope.
So little Sri Lanka could suffer the consequences of a new world trade order – one in which protectionism begins to bite – unless it is capable of forging or strengthening ties with like-minded nations especially in the Asian region.
Whether world trade has reached boiling point is a matter of conjecture but telltale signs are emerging of disruptions like we may not have seen for decades.
– Editor-in-Chief