Amid a deepening foreign exchange crisis that forced the Sri Lankan government to impose an indefinite import ban last year to save hard currency, hundreds of businesses are fighting for survival. Smaller ones have shut down, costing many their livelihoods, Nikkei Asia reported.
The news report further said, Since March last year, the government has banned imports ranging from motor vehicles and air conditioners, to beer, clothing items, cosmetics and even spices such as turmeric — an essential cooking item for most of local households.
Sri Lanka’s economy took a thumping last year after the country was forced to lock down following the spread of COVID-19. Tourism is one of the country’s main foreign exchange earners, but with global and local travel restrictions tourism earnings plunged to just $957 million in 2020, down from $3.6 billion the previous year.
Steve Chi, who ran a successful motorcycle dealership as an authorized seller of Suzuki motorbikes in the west coast city of Negombo, has fallen victim to the import ban and was forced to shut down his business last year. “They imposed the ban in March and by around the sixth month we didn’t have stocks to [stay in] business,” he told Nikkei Asia.
According to Chi, the import ban has caused the secondhand market to skyrocket. Used scooters sell for more than 500,000 Sri Lankan rupees ($2,510), where a brand-new scooter of the same model used to go for 350,000 rupees before the ban. He expressed disappointment over the government’s failure to take care of businesses, their owners, and employees who have fallen victim to the ban.
“COVID has [had] a massive impact, but the import ban is a bigger issue for us,” he said.
The country’s leading automotive association, the Ceylon Motor Traders Association (CMTA), is echoing the sentiments of many other businesses that rely on imports. Yasendra Amerasinghe, the group’s chairman, said the impact on the industry has been “drastic.”
“It has been difficult on all our members … because we can’t plan ahead as we don’t know how much longer it will take for normalcy to be restored,” he said. CMTA members directly and indirectly employ over 32,000 people. Sri Lanka typically imports around 50,000 to 60,000 vehicles a year.
“It has been quite a challenge to continue to operate without resorting to mass-scale layoffs, but already we have small dealerships in rural areas who have been forced to close up for now and are engaged in other businesses to survive,” Amerasinghe said.