Joint Chambers demand resolution of forex crisis to prevent economic paralysis

The Joint Chambers of Commerce at a Thursday meeting deliberated on the on-going forex crisis in the country and its impact on business activity and the economy. Consequent to this meeting, nine Chambers released a unanimous statement urging the resolution of the crisis to prevent paralysis of the economy.

The text of the release:

“The on-going forex crisis has resulted in daily disruptions to the supply of fuel and electricity which are critical for the functioning of all sectors of the economy. There is also a significant shortage of raw material inputs needed for domestic and export production coupled with an inability to pay suppliers in a timely manner as highlighted in our Joint Chamber release dated December 22, 2021.

“As a result, business activities are coming to a halt and the private sector is deeply concerned of the consequences this would have in terms of business continuity that could reverse some of the gains seen recently in tourism and export sectors. The consequences of the forex shortage are also impacting the public causing severe hardship on a daily basis while disrupting the livelihoods of SMEs and daily wage workers.

“Joint Chambers demand that the Government:

1. Establish a market driven pricing formula for fuel, gas and electricity while also allowing flexibility on the exchange rate. We are of the view that it is better to manage a situation of cost escalations compared to the present shortage of essential items including foreign exchange which is crippling economic activity.

2. Immediately commence a preemptive foreign debt restructuring process in an orderly manner.

This should involve restructuring of both commercial and non-commercial debt. We feel commencing this process soon will provide a breathing space to allocate the scarce dollars towards essential imports such as fuel and medicines.

3. Pursue the support of the IMF and formulate a reform program that would provide confidence to the market and private sector with immediate effect.

“The private sector, as represented by the Joint Chambers, is ready to support the Government in developing and implementing a program that would help Sri Lanka emerge out of this crisis and stage a strong post-pandemic recovery as envisioned by all stakeholders. We are willing to engage with the relevant authorities and policymakers to deliberate this further and take swift action.”

The signatories to the statement are: Ceylon Chamber of Commerce, Federation of Chambers of Commerce and Industries of Sri Lanka (FCCISL), Sri Lanka Apparel, Chamber of Young Lankan Entrepreneurs, International Chamber of Commerce (ICC), National Chamber of Commerce of Sri Lanka, Exporters Association of SL, Chamber of Construction Industry and Women’s Chamber of Industry and Commerce.