Economic crisis in country | Daily News
Proposal to address current :

Economic crisis in country

The Institution of Engineers, Sri Lanka (IESL):
Three-wheeler  drivers queue up to buy petrol.
Three-wheeler drivers queue up to buy petrol.

Needless to say that the economic crisis currently faced by the nation has no parallels in the annals of the recent history and immediate remedial actions need to be implemented to avert inevitable catastrophe.

We all are well aware that, the situation in the country is becoming worst day-by-day due to the crisis situation currently prevailing and as a result, almost all sectors of the society have been badly affected.

As the apex body in Engineering and also as the leading professional institution related to infrastructure energy and transport, we consider it as our prime duty to rise to the occasion at this hour of need of our nation. In this light we wish to volunteer our professional advice and directions to the Government authorities on major sectors with our direct involvement, with the objective of helping the nation in alleviating the current crisis as given below.

In this endeavour, at our disposal are, our membership constituting of more than 24,000 Engineer members and our Sectional Committees related to specific engineering disciplines. Collectively, we come forward with our proposals which need to be implemented with immediate effect, which are submitted herewith for necessary action.

We earnestly believe that, our short term proposals should be implemented immediately by the Government and as a professional institution, we will be available to volunteer assistance to the authorities during the implementation process.

While emphasizing the Government to take immediate actions to ensure political and social stability in the country, we expect that the Government will promptly effect the below mentioned short term proposals which are meant to help the country in crossing the current impasse with the least effort.

Immediate actions to be taken


1.1 As it is apparent, the current crisis associated with Fuel, Electricity, Gas, Food supplies will continue to prevail for some time ahead, as so far there are no concrete plans in place to address those issues. Under these circumstances, it is imperative to make the general public aware through a formal media campaign, the true picture of the current economic crisis and shortage of utility services including Electricity, Fuel, Gas, Food etc. by the relevant authorities. Further, the urgent need for adapting to conservatory and alternative measures are to be highlighted.

1.2 Appointing honest and capable professionals with proven track records and possessing adequate and appropriate educational qualifications to the key positions of Ministries, Statutory Boards, Corporations, Government Departments etc. They must have specialized skills and expertise required to hold the respective portfolios and most importantly they must be persons with highest integrity.

1.3 Appointing special advisory committees comprising experts in the relevant fields on temporary basis to key Ministries to advise on the current crisis situation and to advice on the immediate remedial actions needed in each sector for survival and development. These committees may continue to serve depending on the future requirements.

1.4 Appointing a Special Task Force comprising experts representing all major sectors such as Finance, Energy, Agriculture, Health, Education etc to liaise with the advisory committees mentioned in above 1.3 and to furnish necessary directions in the operations and implementation of the decided plans and to advise the Government.

1.5 To consider the possibility of enforcing ‘Work From Home’ concept and flexible working hours in the government sector (as well as private sector and schools) as appropriate as a means of saving fuel and energy.

1.6 To stop conducting unnecessary ceremonies associated, especially with inauguration of various facilities etc. utilizing State funds with immediate effect.

1.7 With the help of the Advisory Committees proposed in above 1.3, it is required to study and identify the foreign exchange earnings during the last two to three years and how they were spent in different sectors. Based on the findings, we propose to restrict the expenditure of foreign exchange only on essential items such as food, medicine, petroleum products etc. and on imports that have a value addition locally.


The Information Technology (IT) Sector, brings nearly US$ 1 billion annual revenue to the country with a minimal expenditure in terms of raw-materials and energy. Foreign revenue generating IT organisations are relocating to other countries due to the disturbances faced in their regular operations caused by unbearable power crisis and difficulties faced in effecting outward payments to their international service providers (eg. Cloud services).

2.1 In the current situation, IT companies find it extremely difficult to function properly as the electricity supply, network accessibility and communication facilities are affected. As a result, the multi-national companies are attempting to re-locate their facilities to other countries and some have already moved. Such relocation of these companies, who contribute immensely to bring foreign revenues incurring minimal expenditure, will be detrimental to our economy both in the short run as well as in the long run. As a means of addressing this issue, it is proposed to immediately arrange with such companies and relevant bodies to set up declared areas /zones with dedicated power supplies to relocate such companies so that their operations could be continued uninterrupted.

2.2 Special financial arrangements are to be made with the Central Bank and the relevant bodies to give them priority in effecting their transactions associated with their service providers, parent bodies abroad in their regular operations.

2.3 Currently imposed restrictions for importation of IT products and equipment such as software packages, servers, networking equipment, storage systems needed to be relaxed and a fair taxation scheme should be implemented.

2.4 In order to explore the requirement to provide IT services in the overseas markets, an Agency dedicated for the development of an ecosystem for mobile workers/remote workers (digital nomads from both foreign countries and Sri Lanka) providing incentives and removing barriers to seek and acquire work that bring foreign currency revenue to Sri Lanka. Additionally, this action would contribute towards stemming the brain drain issue as well.

2.5 High level policy reforms in finance, taxation, and infrastructure facilities to uplift the IT sector to generate foreign currency revenues.

2.6 Paying serious attention in obtaining services from local IT companies to provide IT services to government organisations, especially on the new projects about to implement. At present such services are provided by foreign IT service providers resulting outflow of most valuable foreign currency in this critical period.

2.7 Encouraging the Foreign missions abroad to secure new business opportunities in IT sector as means of new foreign revenue generating sources.


Construction industry contributes to about 7% of the total GDP of Sri Lanka and directly serves a large number of direct and indirect employees, both in the State and private sector.

3.1 As per a recent government directive, all ongoing public sector construction projects are to be suspended due to the current financial crisis situation in the country. Even though it appears as a good move under the current circumstances, there could be many negative aspects, such as potential claims due to sudden suspensions, and losses due to delay in achieving anticipated benefits of some important projects. Thus, it is extremely important to assess each such project with some set criteria and decide on the course of action to be adopted under the current circumstances. With regard to the private sector projects, those have a direct contribution to the national economy should be well supported by the relevant government authorities.

3.2 Implementing national projects based on unsolicited basis should be stopped forthwith. It is observed that even at present some government agencies are engaged in implementing new projects on unsolicited basis. All such decisions made during the recent past should be revisited and appropriate action should be taken minimizing the losses.

Some of the currently planned projects, those can heavily support the economy in short term, should be identified with priority and special arrangements must be made to implement them without delay.

3.3 Government should direct the respective authorities which are coming under the purview of the Finance Ministry and Public and private financial institutions to facilitate local construction firms and manufactures of construction materials with necessary assistance (in terms of funds and clearances) on priority basis, in importing the required raw material, machinery etc. on priority basis.

3.4 It is noted that a considerable number of foreign workers are employed in local construction companies due to the labour shortage faced locally. This causes a huge outflow of foreign exchange and this practice need to be suspended forthwith. Action must be taken to increase the local labour force immediately. Possibility of using the resources available with the Tri Forces should also be looked into as a solution to the labour shortage.

3.5 Encourage universities to intensify research on the use of alternative cost effective materials and systems in construction work and also conversion of building demolition waste to useful building materials. Form public and private partnerships to create display houses and buildings to showcase the cost effective systems with alternative materials so that those could be popularized as technology of adequate durability and strength.


4.1 It is learnt that several major power plants planned and scheduled to implement as per the country’s Long term Generation Expansion plans have been suspended on ad hoc and arbitrary manner and the currently experienced severe power and energy crisis is a direct result of such decisions. It is strongly recommended to commence the implementation of such major power generation projects immediately as the country is faced with a severe power and energy shortage which cannot be met with the available generation facilities.

4.2 Reducing energy consumption especially in government offices, public places, street lights etc. Still a considerable wastage of energy is observed in the said places. The general public should also be made aware for energy conservatory measures through awareness programmes and introducing incentive/penalty schemes.

4.3 Removing/Reducing the prevailing tax on solar power systems and arrange user friendly and long term loans to fix solar off-grid systems in domestic buildings. To overcome foreign exchange issues, it may be attempted to divert currently enjoying foreign loans to this proposal after getting concurrence from the Lending agencies. It is encouraged to invest more on non-fossil fuel based energy sources to reduce the burden on foreign exchange.


As observed, the Food and Agriculture sector is facing with a serious crisis situation due to the chaos caused by sudden suspension of Chemical fertilizer and the arbitrary manner of introducing Organic fertilizer. Urgent and immediate measures are necessary to revive the Agriculture sector which has been badly affected.

5.1 It is strongly advised to adopt corrective measures such as arranging Chemical fertilizer for the cultivation in the coming session and assisting the farmers with necessary financial support to continue with their cultivation practice.

5.2 Implementing the already developed digital platform for integrating agricultural value chain and supply chain so that production and selling can be streamlined considering fundamental market forces. Regulation of production and market behaviour can be controlled through the platform. This platform can be further extended in the areas of water management and fertilizer allocation with the knowledge of each Farmer’s land characteristics, subsidy allocation, tracking farmers’ income level, connecting with field officers, regulating the market price with annual price review, analysis for wastage control, continuous quality improvement of product and value addition for the product, etc.

5.3 Promoting Delta-D Technology which is a patented process by which all types of organic waste, such as domestic organic waste, sewerage, organic urban solid waste, plant wastes, such as leaves, sawdust, tea waste, straw, paddy husk, Salvinia, weeds, fruit peels, seeds and animal wastes, such as offal, feathers, bones, skin, (in other words any organic waste), etc., can be converted into organic fertilizer, with a high content of Nitrogen (N), Phosphorous (P) and Potassium (K), within 1 to 2 days.

5.4 Introducing locally developed and field proven computer-based model for cultivation scheduling along with real time scheduling facilities is currently available in the country. Which can be highly useful to the Agriculture/Irrigation sectors and it is strongly recommended to put it in to the practice immediately. As this model can be easily customized for different irrigation schemes, attempt must be made to introduce it to other countries in the region as a foreign income generating source.


Currently a considerable number of local manufacturing companies are engaged in the manufacturing of various products both for the local and foreign markets. However with the current economic crisis they have been badly affected and immediate attention is needed to protect them as they immensely contribute in earning and saving previous foreign exchange by supporting exports and discouraging imports.

6.1 Requesting all such local companies to register under a common platform so that their issues can be addressed promptly. A monitoring mechanism should also be established to attend to their needs in conducting their operations smoothly.

6.2 Taking measures to safeguard and strengthen the local Small and Medium Enterprises sector against the situation created with the recently increased interest rates.

6.3 Paying special attention to the leading local manufacturing companies, who earn foreign exchange to the country and to assist them in conducting their operations smoothly, particularly in exporting their finished products and also in the importation of the required raw materials and equipment, under the currently imposed restrictions.

6.4 Promoting locally manufactured products in place of imported ones to assist the local manufacturers while saving foreign exchange.

6.5 Taking actions to provide uninterrupted power and fuel supplies to such local companies so that their production operations are carried out smoothly amidst the crisis situation.


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