By Shiran Illanperuma
COLOMBO, March 28 (Xinhua) — Global communities and financial institutions must unite to put the world economy back in order amid the COVID-19 pandemic, a senior Sri Lankan economic expert said here Saturday.
Ajith Nivard Cabraal, Senior Economic Advisor to Prime Minister Mahinda Rajapaksa told Xinhua that developing countries like Sri Lanka could face unemployment, low economic growth and debt problems due to the COVID-19 pandemic.
“Sri Lanka is looking at an economic situation created by circumstances beyond our shores. The global community must therefore come together to provide a solution to put the world economy back in shape,” Cabraal said.
Cabraal, who is a former Governor of the Central Bank of Sri Lanka, said that Sri Lanka would attempt to tide over businesses and keep the economy afloat amid precautions taken against the spread of COVID-19 in the country.
However, he noted that Sri Lanka’s biggest foreign exchange earners include apparel manufacturing and tourism, both of which rely on external demand which has been contracting due to the impact of COVID-19 on developed economies in the West.
“No amount of stimulus packages by Sri Lanka can help resurrect these sectors if the global conditions are not right,” Cabraal said.
Similarly, lower oil prices, while beneficial to Sri Lanka’s import bill, could lead to job losses for Sri Lankan migrant workers in West Asia. The resulting loss in remittances could negate the benefit of low oil prices, Cabraal said.
“The current crisis will need an international response similar to the Bretton Woods system which was set up after World War II to promote reconstruction and recovery of demand,” Cabraal said.
“We have to lobby institutions like the G20, IMF, World Bank and UN to create global policies to address these issues,” he added.