Connect with us

Opinion

How to save tourism industry

Published

on

Statement by Opposition Leader Sajith Premadasa on Tourism industry crisis

Leading up to 2019, Sri Lanka was recognized as one of the most exciting travel destinations in the world by numerous prestigious publications, including the ‘Lonely Planet’, The New York Times and Condé Nast. Improvements to the transportation system, the development of infrastructure, world class hotels and facilities and Sri Lanka’s natural beauty and hospitality were all factors. The Tourism Industry, a critical component of Sri Lanka’s economy and a key foreign exchange generator, was left devastated by the 2019 Easter Attacks as well as by the ongoing Global Pandemic.

The resulting lockdowns have impacted every facet of life and every industry, but especially Tourism; research shows that 36% of low-skilled workers and a further 36% of semi-skilled workers have been laid off; 28% of the junior and middle management segments have also been retrenched. 70% of tourism and hospitality specialists estimate that between 41% and 60% of the total industry workforce would be terminated.

Tourist arrivals have dwindled; only 507,704 between January and December 2020 with zero arrivals recorded between April and end December due to the closure of the airport and suspension of flights since the 18th of March 2020. This represents a decline of 73.5% over the previous corresponding period, when arrivals exceeded 1.9 Mn.

There are numerous service providers directly dependent on Tourism; over 500 travel agents, 250 recreational outlets, 300 tourist shops, 5,000 guides and the airlines as well, with employment opportunities within these service sectors severely restricted.

Over 90% of formal sector outlets and 75% of informal sector outlets remain temporarily closed. Over 75% of the informal sector outlets have closed down operations. Dependent industries have suffered due to sectoral linkages, leading to a multiplier effect, with millions of livelihoods left devastated.

Given the importance of Tourism to the economy, the GOSL must prioritise this industry.

In this regard, we consider certain budget proposals to be counterproductive to uplifting this vital sector. Pricing and margins will suffer due to the proposed 2.5% Social Security Contribution in addition to the 1% TDL on turnover. This impacts competitiveness of the Sri Lankan Tourism offering and these taxes are largely regressive in nature. The upcoming moratorium expiry deadlines will only lead to further cash flow constraints, plunging individuals and businesses into further debt. Disposable incomes will be virtually non-existent, fresh investments become unfeasible.

Based on the above critical issues we submit the following proposals

a) To restructure the debts obtained by the tourism sector from Licensed Commercial Banks for a period of ten (10) years with a grace period of two (2) years.

b) To waive-off the total interest portion of the term loans from April 2019 until 30th June 2022 during the moratorium period.

c) Implementation of the debt restructuring plan recommended by the Monetary Board of CBSL.

We further recommend abolishing the Local Government Levy up to 1% of the Turnover and replace it with a trade license fee similar to all other industries. In fact, this proposal was presented at the last budget by the Hon Finance Minister but has not been implemented to date.

Hotels are also subject to higher electricity tariffs. Tariffs applicable to hotels (i.e., H-1, H-2 & H-3) should be matched with Industrial tariffs (i.e., I-1, I-2 & I-3 which is currently a lower rate than “Hotel purposes”).

The restructure of the Tourism industry’s total debt portfolio of Rs. 350 billion as per recommendations of the Monetary Board of CBSL and the full implementation of concessions granted by the Cabinet of Ministers on the 10th of June 2020 are of vital urgency.

As a measure of immediate relief, the industry has requested authorities to intervene by mandating restructuring and rescheduling of loan facilities. The CBSL must provide clear guidelines to all Licensed Commercial Banks and Finance companies regarding the enforcement of contracts and recovery of facilities.

Effective mediation is necessary, unlike the previously ad hoc approach. Facilities need to be extended to new, approved projects in the tourism pipeline.

The main objective was to ensure worker retention, even on reduced salary terms, yet these have not been met, with a continued spike in terminations across all sectors. Many previously employed in the tourist sector also lack formal social security and are thus vulnerable to bankruptcy and destitution.

Revenue from Tourism was Sri Lanka’s second highest net foreign exchange generator in 2018/19 with earnings of USD 4.3 billion. As per the last budget speech presented by the former Finance Minister and present Prime Minister, the valuation of the hotel industry has exceeded over USD 10 billion.

Apart from the above, the following government institutions have benefited from the inflow of LKR 12.6 billion in 2018/19

It is estimated that the public sector will lose approx LKR 12 Bn in revenue from the Tourism sector in 2020 with similar losses expected by the end of 2021.

The loss of public sector revenue through tourism in 2020, based on 2019 earnings is estimated to be around Rs.12, 000.0 million. Even 2021 will see similar losses. Overall, the economy has lost around US$ 3.5 Bn during 2020 and this trend will continue in 2021. At a time when Sri Lanka has depleted foreign exchange reserves, protecting established and proven avenues for the generation of foreign exchange has to be a primary concern of the government.

Please also note that 90% of all tourism sector investments have been implemented by local entrepreneurs, of which 90% belong to the small and medium category.

It is notable that the 2009/10 registered hotel room capacity of 14,461 increased some 71% to 24,757 by 2018/19, a remarkable growth rate that has supported Sri Lanka’s investment portfolio.

Based on industry recommendations to the government, assurances have been given that steps to re-negotiate and re-structure the facilities extended through commercial banks will be favourably considered. However, in reality, this policy has not been equitably implemented and would not on its own be sufficient to support the industry at this crucial juncture. The following factors need urgent consideration to support the industry:

Repayment of accumulated interest on current borrowings once the moratorium has been granted comes to an end by mid-2022

Repayment of any outstanding capital on borrowings by end December, 2021

Repayment of outstanding statutory payments

Assistance to support a minimum of 6 months working capital

Assistance towards maintenance and product upgrading to ensure conformity with required quality and standards in keeping with classification requirements

Assistance for new, approved development projects that are on-hold as a result of increases in development costs, mainly due to depreciation of the Rupee and increase in construction cost – Bridging finance –

Financial assistance to industry stakeholders to be provided through local commercial banks.

Government on obtaining Cabinet approval, to set up a separate unit to plan, structure, evaluate, control and monitor the entire exercise. It could fall under the Ministry of Finance, Ministry of Planning and Implementation, Ministry of Tourism or at the Sri Lanka Tourism Development Authority (SLTDA) falling directly under the Ministry of Tourism.

The government to provide required guarantees to the fund through local banks. Perhaps a mechanism of the individual entities pledging shares to the value of borrowings or similar to be considered.

Though, the offshore funding made available will be in US$, the lending to industry stakeholders to be in Sri Lanka Rupees. (This will also assist the government to strengthen its depleted foreign reserves to some extent)

After careful evaluation of applications against an established criterion, assistance in the form of soft loans to be offered. – Minimum two year grace period on repayment of capital and interest. Preferential interest rates below 4% per annum. Payback period of 7 years. (In total, covering a period of 10 years)

Special Financial package purely meant for promotions for all local inbound tour operators as local inbound tour operator business volumes equal to 65% of the total arrivals to Sri Lanka during the pre-pandemic period.

We are aware of the forthcoming tourism policy document which has been submitted for public observations. It needs to articulate an action plan for all sectors namely: Development, Promotion and Regulations with clear time lines to prevent these policy documents from gathering dust.

We do not believe that this is the appropriate time to enact a rushed Tourism act, replacing the current Tourism Act 38 of 2005. The current act certainly does require changes but this must include adequate private sector participation in decision-making.

It is also an instrument that determines how the tourism fund has to be managed and disbursed. We note with consternation that the proposed Tourism Act leaves governance aspects to representatives

of state bodies with the private sector invited merely as ‘observers’.

It is also transparent that this proposed act has been orchestrated to suit the needs of certain individuals. This is not acceptable.

The Hon Minister of finance indicated the other day that the tourism fund was likely to be revoked and collections will go directly into the consolidated fund. This was the system that we did away with 15 years ago and brought the current act to enhance effective industry participation towards the development of tourism. We should not forget that the payoff was 2.3 million arrivals with tourism receipts hitting over USD 4 billion.

Sri Lanka is one destination out of over 250 competing destinations and hence it is vital that our country is positioned in source markets. We need to reach out to our primary, secondary and emerging markets aggressively to prevent ourselves from falling behind to other destinations.

We are aware of the massive shortage of foreign exchange in the country and tourism is one effective and sustainable remedy.

Indeed, given the above, it is clear that the economic destiny of Sri Lanka as a whole is closely intertwined with the performance of our Tourism Sector. Thus protection of this sector and related aspects, such as protection of the environment, wild life as well as reduction in pollution are vital to our Sri Lankan National project.



Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Opinion

Thoughts for Unduvap Poya

Published

on

Arrival of Arahant Bhikkuni Sangamitta

Unduvap Poya, which falls today, has great historical significance for Sri Lanka, as several important events occurred on that day but before looking into these, as the occasion demands, our first thought should be about impermanence. One of the cornerstones of Buddha’s teachings is impermanence and there is no better time to ponder over it than now, as the unfolding events of the unprecedented natural disaster exemplify it. Who would have imagined, even a few days ago, the scenes of total devastation we are witnessing now; vast swathes of the country under floodwaters due to torrential rain, multitudes of earth slips burying alive entire families with their hard-built properties and closing multiple trunk roads bringing the country to a virtual standstill. The best of human kindness is also amply demonstrated as many risk their own lives to help those in distress.

In the struggle of life, we are attached and accumulate many things, wanted and unwanted, including wealth overlooking the fact that all this could disappear in a flash, as happened to an unfortunate few during this calamitous time. Even the survivors, though they are happy that they survived, are left with anxiety, apprehension, and sorrow, all of which is due to attachment. We are attached to things because we fail to realise the importance of impermanence. If we do, we would be less attached and less affected. Realisation of the impermanent nature of everything is the first step towards ultimate detachment.

It was on a day like this that Arahant Bhikkhuni Sanghamitta arrived in Lanka Deepa bringing with her a sapling of the Sri Maha Bodhi tree under which Prince Siddhartha attained Enlightenment. She was sent by her father Emperor Ashoka, at the request of Arahant Mahinda who had arrived earlier and established Buddhism formally under the royal patronage of King Devanampiyatissa. With the very successful establishment of Bhikkhu Sasana, as there was a strong clamour for the establishment of Bhikkhuni Sasana as well, Arahant Mahinda requested his father to send his sister which was agreed to by Emperor Ashoka, though reluctantly as he would be losing two of his children. In fact, both served Lanka Deepa till their death, never returning to the country of their birth. Though Arahant Sanghamitta’s main mission was otherwise, her bringing a sapling of the Bo tree has left an indelible imprint in the annals of our history.

According to chronicles, King Devanampiyatissa planted the Bo sapling in Mahamevnawa Park in Anuradhapura in 288 BCE, which continues to thrive, making it the oldest living human planted tree in the world with a known planting date. It is a treasure that needs to be respected and protected at all costs. However, not so long ago it was nearly destroyed by the idiocy of worshippers who poured milk on the roots. Devotion clouding reality, they overlooked the fact that a tree needs water, not milk!

A monk developed a new practice of Bodhi Puja, which even today attracts droves of devotees and has become a ritual. This would have been the last thing the Buddha wanted! He expressed gratitude by gazing at the tree, which gave him shelter during the most crucial of times, for a week but did not want his followers to go around worshipping similar trees growing all over. Instead of following the path the Buddha laid for us, we seem keen on inventing new rituals to indulge in!

Arahant Sanghamitta achieved her prime objective by establishing the Bhikkhuni Sasana which thrived for nearly 1200 years till it fell into decline with the fall of the Anuradhapura kingdom. Unfortunately, during the Polonnaruwa period that followed the influence of Hinduism over Buddhism increased and some of the Buddhist values like equality of sexes and anti-casteism were lost. Subsequently, even the Bhikkhu Sasana went into decline. Higher ordination for Bhikkhus was re-established in 1753 CE with the visit of Upali Maha Thera from Siam which formed the basis of Siam Maha Nikaya. Upali Maha Thero is also credited with reorganising Kandy Esala Perahera to be the annual Procession of the Temple of Tooth, which was previously centred around the worship of deities, by getting a royal decree: “Henceforth Gods and men are to follow the Buddha”

In 1764 CE, Siyam Nikaya imposed a ‘Govigama and Radala’ exclusivity, disregarding a fundamental tenet of the Buddha, apparently in response to an order from the King! Fortunately, Buddhism was saved from the idiocy of Siyam Nikaya by the formation of Amarapura Nikaya in 1800 CE and Ramanna Nikaya in 1864 CE, higher ordination for both obtained from Burma. None of these Niakya’s showed any interest in the re-establishment of Bhikkhuni Sasana which was left to a band of interested and determined ladies.

My thoughts and admiration, on the day Bhikkhuni Sasana was originally established, go to these pioneers whose determination knew no bounds. They overcame enormous difficulties and obtained higher ordination from South Korea initially. Fortunately, Ven. Inamaluwe Sri Sumangala Thero, Maha Nayaka of Rangiri Dambulla Chapter of Siyam Maha Nikaya started offering higher ordination to Bhikkhunis in 1998 but state recognition became a sore point. When Venerable Welimada Dhammadinna Bhikkhuni was denied official recognition as a Bhikkhuni on her national identity card she filed action, with the support of Ven. Inamaluwe Sri Sumangala Thero. In a landmark majority judgement delivered on 16 June, the Supreme Court ruled that the fundamental rights of Ven. Dhammadinna were breached and also Bhikkhuni Sasana was re-established in Sri Lanka. As this judgement did not receive wide publicity, I wrote a piece titled “Buddhism, Bhikkhus and Bhikkhunis” (The Island, 10 July 2025) and my wish for this Unduvap Poya is what I stated therein:

“The landmark legal battle won by Bhikkhunis is a victory for common sense more than anything else. I hope it will help Bhikkhuni Sasana flourish in Sri Lanka. The number of devotees inviting Bhikkhunis to religious functions is increasing. May Bhikkhunis receive the recognition they richly deserve.” May there be a rapid return to normalcy from the current tragic situation.”

by Dr Upul Wijayawardhana

Continue Reading

Opinion

Royal Over Eighties

Published

on

Royal College

The gathering was actually of ‘Over Seventies’ but those of my generation present were mostly of the late eighties.

Even of them I shall mention only those whom I know at least by name. But, first, to those few of my years and older with whom speech was possible.

First among them, in more sense than one, was Nihal Seneviratne, at ninety-one probably the oldest present. There is no truth to the story that his state of crisp well-being is attributable to the consumption of gul-bunis in his school days. It is traceable rather to a life well lived. His practice of regular walks around the house and along the lane on which he lives may have contributed to his erect posture. As also to the total absence of a walking stick, a helper, or any other form of assistance as he walked into the Janaki hotel where this gathering took place.

Referencing the published accounts of his several decades-long service in Parliament as head of its administration, it would be moot to recall that his close friend and fellow lawyer, J E D Gooneratne, teased him in the following terms: “You will be a bloody clerk all your life”. He did join service as Second Assistant to the Clerk to the House and moved up, but the Clerk became the Secretary General. Regardless of such matters of nomenclature, it could be said that Nihal Seneviratne ran the show.

Others present included Dr. Ranjith de Silva, Surgeon, who was our cricket Captain and, to the best of my knowledge, has the distinction of never engaging in private practice.

The range of Dr. K L (Lochana) Gunaratne’s interests and his accomplishments within each are indeed remarkable. I would think that somebody who’d received his initial training at the AA School of Architecture in London would continue to have architecture as the foundation of his likes /dislikes. Such would also provide a road map to other pursuits whether immediately related to that field or not. That is evident in the leadership roles he has played in the National Academy of Sciences and the Institute of Town Planners among others. As I recall he has also addressed issues related to the Panadura Vadaya.

My memories of D L Seneviratne at school were associated with tennis. As happens, D L had launched his gift for writing over three decades ago with a history of tennis in Sri Lanka (1991). That is a game with which my acquaintance is limited to sending a couple of serves past his ear (not ‘tossing the ball across’ as he asked me to) while Jothilingam, long much missed, waited for his team mates to come for practices. It is a game at which my father spent much time both at the Railway sports club and at our home-town club. (By some kind of chance, I recovered just a week ago the ‘Fred de Saram Challenge Cup’ which, on his winning the Singles for the third time, Koo de Saram came over to the Kandana Club to hand over to him for keeps. They played an exhibition match which father won). D L would know whether or not, as I have heard, in an exhibition match in Colombo, Koo defeated Frank Sedgman, who was on his triumphant return home to Oz after he had won the Wimbledon tournament in London.

I had no idea that D L has written any books till my son brought home the one on the early history of Royal under Marsh and Boake, (both long-bearded young men in their twenties).

It includes a rich assortment of photographs of great value to those who are interested in the history of the Anglican segment of Christian missionary activity here in the context of its contribution to secondary school education. Among them is one of the school as it appeared on moving to Thurstan road from Mutwal. It has been extracted from the History of Royal, 1931,  done by students (among whom a relative, Palitha Weeraman, had played a significant role).

As D L shows, (in contra-distinction to the Catholic schools) the CMS had engaged in a largely secular practice. Royal remained so through our time – when one could walk into the examination room and answer questions framed to test one’s knowledge of Christianity, Buddhism, Hinduism and Islam; a knowledge derived mostly from the lectures delivered by an Old Boy at general assembly on Friday plus readings from the Dhammapada, the Bhagavad Gita, the St. John’s version of the Bible or the Koran recited by a student at senior assembly on Tuesday / Thursday.

 D L’s history of Royal College had followed in 2006.

His writing is so rich in detail, so precise in formulation, that I would consider this brief note a simple prompt towards a publisher bringing out new editions at different levels of cost.

It was also a pleasure to meet Senaka Amarasinghe, as yet flaunting his Emperor profile, and among the principal organisers of this event.

The encounter with I S de Silva, distinguished attorney, who was on Galle road close to Janaki lane, where I lived then was indeed welcome. As was that with Upali Mendis, who carried out cataract surgery on my mother oh so long ago when he was head of the Eye Hospital. His older brother, L P, was probably the most gifted student in chemistry in our time.

Most serendipitous perhaps was meeting a son of one of our most popular teachers from the 1950s, – Connor Rajaratnam. His cons were a caution.

by Gamini Seneviratne

Continue Reading

Opinion

“Regulatory Impact Assessment – Not a bureaucratic formality but essentially an advocacy tool for smarter governance”: A response

Published

on

Having meticulously read and re-read the above article published in the opinion page of The Island on the 27 Nov, I hasten to make a critical review on the far-reaching proposal made by the co-authors, namely Professor Theekshana Suraweera, Chairman of the Sri Lanka Standards Institution and Dr. Prabath.C.Abeysiriwardana, Director of Ministry of Science and Technology

The aforesaid article provides a timely and compelling critique of Sri Lanka’s long-standing gaps in evidence-based policymaking and argues persuasively for the institutional adoption of Regulatory Impact Assessment (RIA). In a context where policy missteps have led to severe economic and social consequences, the article functions as an essential wake-up call—highlighting RIA not as a bureaucratic formality but as a foundational tool for smarter governance.

One of the article’s strongest contributions is its clear explanation of how regulatory processes currently function in Sri Lanka: legislation is drafted with narrow legal scrutiny focused mainly on constitutional compliance, with little or no structured assessment of economic, social, cultural, or environmental impacts. The author strengthens this argument with well-chosen examples—the sudden ban on chemical fertilizer imports and the consequences of the 1956 Official Language Act—demonstrating how untested regulation can have far-reaching negative outcomes. These cases effectively illustrate the dangers of ad hoc policymaking and underscore the need for a formal review mechanism.

The article also succeeds in demystifying RIA by outlining its core steps—problem definition, option analysis, impact assessment, stakeholder consultation, and post-implementation review. This breakdown makes it clear that RIA is not merely a Western ideal but a practical, structured, and replicable process that could greatly improve policymaking in Sri Lanka. The references to international best practices (such as the role of OIRA in the United States) lend credibility and global context, showing that RIA is not experimental but an established standard in advanced governance systems.

However, the article could have further strengthened its critique by addressing the political economy of reform: the structural incentives, institutional resistance, and political culture that have historically obstructed such tools in Sri Lanka. While the challenges of data availability, quantification, and political pressure are briefly mentioned, a deeper analysis of why evidence-based policymaking has not taken root—and how to overcome these systemic barriers—would have offered greater practical value.

Another potential enhancement would be the inclusion of local micro-level examples where smaller-scale regulations backfired due to insufficient appraisal. This would help illustrate that the problem is not limited to headline-making policy failures but affects governance at every level.

Despite these minor limitations, the article is highly effective as an advocacy piece. It makes a strong case that RIA could transform Sri Lanka’s regulatory landscape by institutionalizing foresight, transparency, and accountability. Its emphasis on aligning RIA with ongoing national initiatives—particularly the strengthening of the National Quality Infrastructure—demonstrates both pragmatism and strategic vision.

At a time, when Chairmen of statutory bodies appointed by the NPP government play a passive voice, the candid opinion expressed by the CEO of SLSI on the necessity of a Regulatory Impact Assessment is an important and insightful contribution. It highlights a critical missing link in Sri Lanka’s policy environment and provides a clear call to action. If widely circulated and taken seriously by policymakers, academics, and civil society, it could indeed become the eye-opener needed to push Sri Lanka toward more rational, responsible, and future-ready governance.

J. A. A. S. Ranasinghe,
Productivity Specialty and Management Consultant
(rathula49@gmail.com)

Continue Reading

Trending