Any negative impact on tourism caused by Easter Sunday terrorist attacks could be minimized by the security establishment by promptly identifying and eliminating the radicalized elements and communicating the measures effectively, Economic Adviser, Ministry of Finance Deshal De Mel told a press conference held in Colombo on Friday.
De Mel however said that the immediate economic impact of the attacks will be felt by the tourism sector and typically countries that suffer isolated ISIS style attacks see tourism recovering (to high growth) within one to two years (Belgium, France, Spain, and Tunisia).
De Mel said, “We are entering the off-season for Sri Lanka. Any negative impact on tourism can be minimized by the security establishment promptly identifying and eliminating the radicalized elements and communicating the measures effectively”
Meanwhile sources said, ‘the tourism industry which resulted in external earnings of US$ 4.4 billion in 2018 is projected to reach US$ 5 billion in 2019. If there is a 30% reduction in tourist arrivals in the 3 month period May-July, the impact would be around US$ 350 million. A 15% reduction in full-year arrivals would amount to a US$ 750 million impact.’
Prime Minister Ranil Wickremesinghe in a press conference on April 23 said that resort hotels were not targeted during the attacks and were safe. Indrajit Coomaraswamy speaking to Bloomberg the same day said “The tourism sector over the 30 years (civil war) has gained a great deal of experience and expertise on how to keep people safe. Those drills and processes will be switched on again.”
In terms of addressing liquidity shortages, press notes stated: ‘In addition, the government is engaging with stakeholders to help bring down market interest rates by a further 200 basis points in the near term. We will engage with the Chartered Accountants to provide temporary flexibility in applications of IFRS 9. We will engage with the Central Bank to provide some flexibility in the application of Basel 3.’
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