By Sugeeswara Senadhira/Daily News
Colombo, January 1: Heaving a sigh of relief over the end of the pandemic-ridden 2020, the people of Sri Lanka and other countries are looking forward to 2021 with great hope. 2020 was one of the worst in living memory. It marked an unprecedented global economic downturn, leading to negative economic growth in most countries.
The New Year has dawned with a positive outlook as several vaccines were invented to prevent the COVID-19 virus from continuing to wreak havoc and bringing economic and social activities to a standstill. After months of economic recession, collapse of production, lockdowns and unemployment, there was a slow but steady recovery in economic activities towards the end of the year, giving hope for substantial recovery in 2021.
Optimism about the New Year was evident from the outpouring of expectations from all segments of the society beginning from President Gotabaya Rajapaksa. He expressed the belief that overcoming challenges in the New Year will not be as hard as in the year that just ended. That is because the government has already planned the pathway needed with a clear perception, he said, confirming his satisfaction over the foundation laid for the rapid implementation of planned programs.
The United States, the worst-hit country by the COVID-19 pandemic, has already introduced two new vaccines (Pfizer and Moderna) and the British Oxford University/AstraZeneca vaccine too has just been approved in the UK giving a new optimism to the people who almost lost hope with rapidly growing gloom and pessimism. These vaccines (and some others that are due to be approved soon) may be more suitable for countries such as Sri Lanka as they can be stored at normal refrigerator temperatures, unlike the Pfizer and Moderna vaccines which call for storage temperatures of -80 Celsius and -20 Celsius respectively.
Most rural hospitals in Sri Lanka do not have the necessary cold chain infrastructure to store such vaccines. China and several other countries have approved the Chinese-made Sinopharm vaccine, which too does not need a cold chain.
In Sri Lanka, the first two phases of the pandemic were well controlled within a short span of time. However, the third attack came with a vehemence that took the health authorities and the people unawares and unprepared. Nevertheless, the government took immediate and effective action to keep the pandemic under control and isolated in a few pockets. Instead of opting for a total countrywide lockdown, the authorities went for selected lockdowns and isolations, a strategy that seems to be working well.
Yet, the crisis is not over and the extent of the impact on the economy and recovery will depend on the duration and spread of the virus which are still uncertain. Sri Lanka should also be on guard against more transmissible variants of the virus circulating elsewhere in the world. The steps taken to revive economic activities while managing the pandemic have already yielded results. Already some of the economic spheres show healthy signs of recovery.
President Gotabaya Rajapaksa said that after the commencement of the journey towards prosperity that the government had initiated, the country was compelled, together with the rest of the world, to fight the COVID-19 pandemic. He pointed out that amidst formidable challenges and obstacles, the government was able to lay the foundation for sustainable development while prioritizing national aspirations.
The Health authorities say there is a glimmer of hope with the use of the vaccine(s). At the same time economists feel that it may be at the end of next year that COVID-19 will be contained for the global economy and economic life to return to normal, or to what has been described as a ‘New Normal’.
One of the most severe impacts of the COVID-19 outbreak was felt in the global tourism sector. Sri Lanka’s tourist arrivals crashed due to COVID-19, with lockdowns and closing of its international airports as well as health regulations enforcing social distancing. Realizing that recovery is dependent on the economic bounce back of Sri Lanka’s main tourism source markets and the opening of international borders, the government has allowed limited tourist arrivals.
The first chartered flight carrying tourists arrived in the country on Tuesday. However, with the detection of three COVID patients in the first two flights from Ukraine and the new virus variant found in the United Kingdom, there is bound to be rethinking on the early opening of doors for tourists.
Investments are vital for Sri Lanka to speed up economic revival. However, there will be potential delays in investment activity over the next couple of months, owing to the uncertain economic conditions. Fortunately for the affected countries, economists expect a gradual but noticeable economic recovery fuelled by a surge in corporate profits, a strong housing market and the successful rollout of various vaccines.
“The COVID-19 recession is over, and the economy is currently in an early-cycle expansion,” says Dr Sophia Koropeckyj, Managing Director of Industry Economics at Moody’s Analytics, a research firm based in Pennsylvania, USA.
However, for most businesses, normality will return only gradually. During the first half of 2021, bankruptcies will increase the number of permanent job losses. But Dr. Koropeckyj is confident that the economy will regain its stride in the second half of the year, when a vaccine or treatment becomes widely available.
According to the forecasts from the International Monetary Fund (IMF), due to COVID-19, Gross Domestic Product (GDP) growth is expected to fall to -0.5 percent in 2020 and pick up to 4.2 percent, subject to the post-pandemic global economic recovery.
President Gotabaya Rajapaksa, in his New Year Message, assured that the government is determined to further strengthen the steps that it had already taken to meet the expectations of the people. The new government was formed with the objective of securing a people-centric development and to protect and preserve the national identity, he said, adding that no room should be left for the erosion of confidence that government will not go against the country and the people’s will.
The dawn of the New Year motivates us to move towards a new meaningful height in life while providing an opportunity to clearly understand the challenges we face at each passing moment, the President said. “We welcome 2021 with positive attitudes, determination and absolute commitment. The prime responsibility of the government is to make the ‘Saubhagyaye Dekma’ policy framework (‘Vistas of Prosperity and Splendour’), a reality,” he said.