Shocks from deadly suicide bombings on Easter Day in Sri Lanka are reverberating throughout its economy in the worst crisis since the South Asian island nation’s civil war ended in 2009.
The blasts that killed more than 250 people were blamed on Islamic extremists. They have devastated Sri Lanka’s vital tourism industry, source of jobs for many, and are hindering foreign investment.
Sri Lanka’s economy already was in trouble, dogged by political crisis, its currency under pressure from a growing national deficit and rising debt. The attacks have added to those challenges, reported AP.
Business is the worst it’s been in the 60 years that Ranepura Hewage Jayasena has been doing business in the capital Colombo, where he runs a shop that sells spectacular wooden carvings, wooden elephants and clothing designed for tourisms.
“Almost 100% of my business is gone. There are days without a single sale,” said Jayasena, 76, looking grief-stricken as he went through the previous days accounts.
“We had a war that raged for years, but we had good business. Bombs exploded in Colombo city itself, but that did not affect our business,” he said.
“This is the worst period I have seen in my life.” Seven suicide bombers struck two Catholic and one Protestant church and three luxury hotels on April 21. The Islamic State group claimed responsibility for the attacks, which were carried out by a local radicalized Muslim group known as National Thowheed Jammath.
Among those killed were 45 foreigners, mainly from China, India, the U.S. and Britain.
For days after the attack, many businesses remained shuttered. Tourists fled: the number of arrivals dropped more than 70 per cent from a year earlier in May and nearly 60 per cent in June.
According to a report by AP, The economy is forecast to grow at about a 3 per cent pace this year, according to Central Bank governor Indrajit Coomaraswamy, way below the 6 per cent plus average of recent years and possibly the lowest level in nearly 20 years.
Sri Lanka has made significant progress thanks to a tourism boom and expanding manufacturing after the military defeated separatist Tamil rebels in May 2009, which ended the 25-year civil war.
The country was engulfed in a political crisis late last year, however, when President Maithripala Sirisena suspended Parliament, firing the prime minister and replacing him with former strongman Mahinda Rajapakse , who had ruled Sri Lanka as president for nine years from 2005.
Sirisena eventually backed down, reinstalling Ranil Wickremesinghe as prime minister. But divisions within the leadership are not helping the country overcome its myriad problems in the aftermath of the attacks.