Sri Lanka Declares Worst Economic Downturn In 73 years

Sri Lanka’s President Gotabaya Rajapaksa. Photo: ISHARA S. KODIKARA / AFP

 

Sri Lanka announced Friday that its economy shrank 3.6 percent last year due to the Covid-19 pandemic, making it the worst downturn since independence from Britain in 1948.

The unprecedented recession compared with a 2.3 percent GDP growth in 2019, the Central Bank of Sri Lanka said in its annual report for 2020.

It hoped the economy would rebound in 2021 and record an optimistic six percent growth on the back of improved local manufacturing and services.

“The pandemic has also offered an opportunity to reset the economy’s focus and to address longstanding structural weaknesses and establish a production-based, productivity-driven economy,” the bank said.

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The pandemic hit the island’s lucrative tourism sector while sharp contractions were seen in construction, manufacturing as well as in services, the bank said.

It said the central government’s debt also rose to 101 percent of GDP last year, up from 86.8 percent of GDP in the previous year, underscoring the debt crisis faced by the South Asian nation.

International rating agencies have expressed fears for Sri Lanka’s ability to service its huge foreign debt as the country’s foreign reserves fell sharply in the past year.

The island’s economy was trying to recover from the effects of the 2019 Easter Sunday bombings that killed 279 people when the pandemic hit in early 2020.

Two weeks ago, Sri Lanka secured a $500 million loan from China to shore up its foreign exchange reserves as the local currency came under intense pressure and fell to a record low.

Chinese influence in the South Asian nation has been growing in recent years through loans and projects under its vast Belt and Road infrastructure initiative, raising concerns among regional powers and Western nations.

Between 2005 and 2015, Colombo borrowed billions from China, accumulating a mountain of debt for expensive infrastructure projects.

Sri Lanka was forced to hand over its strategic Hambantota port on a 99-year lease to a Chinese company in 2017 after it was unable to service the $1.4 billion debt from Beijing used to build it.

AFP

Ogun Workers End Strike After National Leadership’s Intervention

Workers. Strike, OgunWorkers in Ogun State have agreed to suspend their two weeks industrial action over non-payment of deductions and other demands.

The resolve was reached on Wednesday after a closed door meeting which lasted for about nine hours between the national and state leaders of the organised labour and State government.

Governor Ibikunle Amosun briefed reporters on the outcome of the meeting in Abeokuta, the Ogun State capital in southwest Nigeria.

He reiterated the commitment of his administration towards better conditions of service for the state workforce.

In his submission, the National President of the Nigeria Labour Congress, Ayuba Wabba, commended the two sides for the maturity that led to the signing of the Memorandum of Understanding aimed at resolving the impasse.

The civil servants had on October 20, commenced an indefinite strike to press home their demands over an alleged non-payment of 12 months deductions.

Among other demands, the industrial action was also aimed at putting an immediate end to the contributory pension scheme.

The workers began the strike after Governor Amosun had sent a strong warning to the leadership of labour unions in the state.

The governor had also lauded the people of the state for their understanding and the support shown towards his administration’s policies and programme.

He assured them of more development in the state in the coming fiscal year.

Ogun Workers Begin Indefinite Strike Despite Amosun’s Warnings

workers. strikeWorkers in Ogun state have commenced an indefinite industrial action to press home their demands over an alleged non-payment of 12 months deductions.

Among other demands, the industrial action is also aimed at putting an immediate end to the contributory pension scheme.

When Channels Television visited the state government secretariat at Oke Mosan, Abeokuta, the state capital, it was revealed that some workers reported for work while others abdicated their duty post on the order of their leaders.

Commenting on the development, the Secretary to the State Government, Mr Taiwo Adeoluwa, described the action as illegal and uncalled for, saying that the government may initiate a ‘no work, no pay’ system as a punishment.

Mr Adeoluwa asked the workers to see reasons, especially in the face of the current economic downturn, restating that the government is committed to the welfare and care of the workforce.

Although the town seemed calm, security operatives were stationed at strategic places to maintain law and order as a result of the strike.

Ogun State Governor, Ibikunle Amosun, had earlier sent a strong warning to the leadership of labour unions in the state, over the proposed indefinite industrial action.

He gave the warning in Abeokuta, the state capaital, during a town-hall meeting for the 2017 budget, held at the cultural centre in the state capital.

He thanked residents for their understanding and the support shown towards his administration’s policies and programme, while assuring them of more development in the coming fiscal year.