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If Ukraine war continues, impact on Lanka will be astronomical: State Minister
View(s):The economic impact of a prolonged war between Ukraine and Russia would be “astronomical” not only for Sri Lanka but also for many other countries, State Minister of Regional Co-operation Tharaka Balasuriya said.
In an interview with the Sunday Times, he noted there would be both a direct and an indirect impact on Sri Lanka from the war. Russia is one of Sri Lanka’s biggest economic markets in terms of tourism while Ukraine is also a leading tourist market.
Of the 175,000 tourists who visited Sri Lanka in January and February, more than 28,000 were from Russia and 13,000 from Ukraine. The loss of tourism from these countries was not good news for the country, he said.
The state minister said the two countries were top buyers of Sri Lanka’s tea and as such a prolonged war would have a severe impact on the industry. “There is also an indirect impact. Due to the war, oil prices have increased to USD 116 a barrel {from the pre-war price of US$ 97}. Since several countries have imposed sanctions on Russia, Sri Lanka’s trade with Russia could be disrupted,” the state minister said.
Mr. Balasuriya said it was imperative that international measures were intensified to end the hostilities. “We have joined the international community in urging all sides to go for a cessation of hostilities. Sri Lanka has been a Non-Aligned nation. Sri Lanka hopes that there will be diplomatic dialogue to end the war. The spillover effects of the conflict would reverberate not only to smaller economies such as Sri Lanka but even to larger economies, since Russia is the 10th largest economy in the world.”
Irrespective of the war, Sri Lanka’s ties with both Ukraine and Russia have been strong, Mr Balasuriya said.
This week, the Government asked for a USD 300 million credit line from Russia to buy crude oil, gas and coal, raising questions about Sri Lanka’s neutral stance. The state minister said Sri Lanka would explore trade with all countries while maintaining a “dynamic” neutral foreign policy.
Meanwhile, Ukraine’s New Delhi mission, which is concurrently accredited to Sri Lanka, has requested from the Foreign Ministry to grant permission for stranded Ukrainians in Sri Lanka to work in the private sector. If a formal request was made, the state minister said the Government was prepared to look into it.
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