Many economic and business leaders opine that the current Ukraine and Russian crisis would not have a severe impact on the Sri Lanka economy but oil prices could increase while tourism receives a negative blow. Russia’s invasion of Ukraine will have a negative impact on Sri Lanka’s tea exports, Tourism industry and oil prices, said Immediate Past Chairman of the International Chamber of Commerce Sri Lanka (ICCSL)- Dinesh Weerakkody.
He said the Russian market for Sri Lankan tea is extremely important and Sri Lanka has received a significant number of Russian and Ukrainian visitors in the last couple of months. In the wake of the Russia-Ukraine crisis, oil prices have surged past USD 100 a barrel.
Tissa Jayaweera Managing Partner of TJ Associates and former President International Business Council said the Russia -Ukraine crisis is not likely to affect Sri Lanka’s tea exports to Russia in a big way.
“Russia accounts for only 3% of our tea sales. I think we should not be making a big fuss about it as there are ways and means of sending shipments to Russia. However, oil prices could rise due to this conflict and because Russia provides about 7 % of the world’s requirements.” Jayaweera said.
Asoka Pieris, Managing Director of Cargills Food City said the ongoing Russia and Ukraine crisis will not have a significant impact as far as their operations are concerned in Sri Lanka. “In the businesses that we are in, we see very little impact but I think if you take the tourism sector and tea exports, there can be an impact.”
A former top export promotional professional in the country also said that there would be an impact on Sri Lanka’s tea exports to Russia if the Russia- Ukraine crisis throws another wrench into supply chains.
Former Assistant governor W.A. Wijerwardane in a tweet said: ‘Russia-Ukraine conflict seems to be drowning longer and Sri Lanka could face the biggest casualty with high fuel and LNG prices on the cards.’
Meanwhile, President, Tourist Hotels Association Shanti Kumara said that the Russian and Ukraine arrivals were steady and due to the crises this will completely stop including some of the charter flights to the Mattala airport.
There are around 4,000 Ukrainian tourists in Sri Lanka and the government should extend their visas and also provide relief to them.
Former Head of Marketing for Sri Lanka Tourism for UK Nalin Perera said that there is a silver lining from this crisis for Sri Lanka as they could try to woo tourists who were planning to visit these former Soviet countries to spend their holiday in Sri Lanka. “Destination management companies should look at this,” he said.
“Also most of the flights from Europe were cancelled to these areas and thought should be given to see if they could fly to Sri Lanka to bring in these tourists. However, as airfares are higher to Sri Lanka careful concessions should be provided by the government to woo these flights.” One hotelier from Unawatuna said that there are around 12,000 Ukrainian tourists in their area and they will look after them. “But we cannot do that all the time since we also have escalating costs and we hope the Sri Lanka Tourism would provide us with ‘cash’ from their CESS fund collected from the industry itself.”
Meanwhile, one of the largest tea exporters said that it’s high time to explore the possibility of trading in Rubles rather than dollars when it comes to trade between Russia and Sri Lanka. The central bank should look at this option now.”
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