How to overcome covid 19

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COVID- 19 and Economic and Social Impact in Sri Lanka- 2020
(This article is based on a presentation conducted in a webinar on 30th November 2020 by
Maxwell Ranasinghe – President of Movement of Catholic Graduates and Professionals in
Sri Lanka)
Sri Lanka is a lower-middle-income country with a GDP per capita of USD 3,852 (2019) and a
total population of 21.8 million. As regards to the socio-demographic pattern of the society, the
ethnic composition consists of approximately 75% Sinhalese, 15% Tamil, 9% Moors and
Malays and 1% Other.
Sector-wise, 77.4% of the population live in rural areas, 18.2% in urban and the rest 4.4% in the
Estate sector (CBSL, 2019). The major religions are Buddhism (70%), Hinduism (13%), Islam
(9%), and Christianity (7%).
Following 30 years of civil war that ended in 2009, the economy grew at an average of 5.3
percent during the period 2010-2019, reflecting a peace dividend and a determined policy thrust
towards reconstruction and growth; although growth slowed down in the last few years.
The economy is transitioning from a predominantly rural-based economy towards a more
urbanized economy oriented around manufacturing and services.
The Overall Poverty Headcount Ratio (PHCR) was relatively low (4.1%) (CBSL, 2019) in
contrast to these positive trends of some indicators, however, it can be estimated that
approximately 23% of the population face income or consumption poverty, since many Sri
Lankan households are receiving Samurdhi benefits (Government welfare scheme).
The central government debt-to-GDP ratio rose to over 90 percent (from 86.9 percent at end
2019), with nearly half of the debt denominated in foreign currency.
Outstanding debt as at end of 1H2019 amounted to LKR 12.7 Tn (USD 71.8 Bn) with
approximately 51% being funded from domestic sources. Sri Lanka has USD 1.0 Bn in
International Sovereign Bonds due in October2020. Low fiscal revenues (Tax) combined with
largely non-discretionary expenditure in salary bill, transfers, and interest payments have
constrained critical development spending on health, education and social protection, which is
low compared to peer countries.
There numerous social and economic issues including the following:

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 Unsolved Tamil Ethnic issue and Boiling Muslim- Sinhala issue
 Rampant corruption
 Degradation of family values
 Issues with Democracy and Rule of Law
 Loss of confidence in the judicial system
 Drug menace
 Effect of social media and IT
 Environmental degradation and pollution
 Inequality of income distribution
 Superficial social values
 Aging population
 Negligence of disabled
 Mythological beliefs and pseudo-science
 IT literacy divide
COVID-19 Pandemic
Against the above backdrop, the COVID-19 health crisis is believed to have impacted economic
and social activities severely. First case of a foreigner with COVID-19 was detected in 27th
January and first case of a local (tour guide) was detected in February 2020.
A Task force under military and health authorities has been constituted to fight against Covid19
and Government was able to handle the 1st wave very well. However, the 2nd wave started in
October and it has spread beyond control. By today it has surpassed 20,000 and death rate has
exceeded 100 (most dead are old age and or with other medical complications). Fear psychosis
is made by doctors and health authorities. As we believe, all that matters is protecting the
vulnerable: population over 65 years and people with comorbidities such as diabetes, kidney
disease, hypertension and cardio-cerebrovascular disease. This is because people less than 65
years of age have little risk of death due to COVID-19 even in pandemic epicenters and deaths
for people aged less than 65 years without underlying predisposing conditions are remarkably
uncommon. ( Loannidis et al. 2020)
Recent developments
High frequency indicators suggest that country’s economic growth has faltered in the second
quarter, as curfews impeded economic activity and global demand remained weak. Moreover,
the closure of airports to tourists between April and September brought tourism activity to a
standstill.
Informal workers, about 70 percent of the workforce, are particularly vulnerable as they lack
employment protection or paid leave.
The apparel industry, which employs about half a million workers, has reportedly cut jobs
significantly.
While agricultural production is expected to be largely undisrupted, weak external demand likely
impacted export-oriented subsectors and wages (contribution by Agriculture to GDP is around
8% but about 30% are employed in the sector). High food price inflation, which remains at

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double-digits, is disproportionately affecting the poor who spend a larger share of their budget on
food.
The textiles and garment industry recorded USD 5.6 billion of export earnings in 2019 but the
estimated losses for the 3 months’ period from 15th March to 15th May round up to USD 1,400
million.
The most alarming signal is that 45% of the Sri Lankan export market depends on the USA,
which is the most COVID-19 affected country in the world, followed by UK (14%), Italy (8%),
Germany (6%) which are also severely COVID Hit countries.
The COVID -19 threatened the construction sector
The construction sector was already suffering from delayed payments for government financed
projects and lower demand for high-end condominium developments. On this backdrop the
construction sector would face constraints in meeting contractual agreements on completion
dates and costs.
The COVID-19 limits consumption
The consumer goods sales volume of large-scale institutions crashed while the medium and
small-scale businesses were willing to normalize within several weeks after the lifting of the
curfew and the production capacity dropped by 50% as a result of the working from home
concept.
Travel and Tourism
Travel bans, mobility restrictions, lockdowns and border closures disrupted global travel with the
pandemic outbreak. Sri Lanka’s tourism was also significantly affected.
Tourist arrivals reached bottom line. Zero income resulted in the layoff of temporary and casual
employees. Zero income created a financial distress to investors who were trapped by
indebtedness despite the loan moratorium granted for a few months. Investors are likely to leave
the industry though there are no threats on mortgaged property to foreclose.
The COVID-19 weakened already-fragile fiscal position
With recent amendments in the tax laws, the exact impacts of the COVID-19 economic shock on
revenue collection must be studied carefully. The real impact of the pandemic will be seen
towards the end of the fiscal year as indicated in distribution of tax collection during a year. All
in all, as far as the fiscal policy is concerned, prolonged fiscal deficit is highly likely to further
escalate during the year.
Government relief package kept the aggregate demand from sinking
The fiscal position of the government has weakened following the unexpected allocations for
health facilities, imposing price ceilings for essential food items, relief funds, strengthening
social nets and doubling household transfer payments during the lockdown.

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For two months ending April 2020, the government has printed money more than LKR 200
billion, threatening price stability of the country. However, this helped a lot in sustaining the
aggregate demand at the required level to keep the economy on the move in a distress situation
where the vast majority has lost their income sources.
Banking and finance sector at a risk of increasing NPLs
On the one hand, while the assets quality of the banking sector is expected to decrease, the
demand for credit will also decrease, as almost all leading sectors are confronted by the
pandemic. On the other hand, Non-Performing Loans (NPLs) are expected to increase in the
short and medium terms, which can be risky.
Foreign worker remittances
In 2019, the Sri Lankan economy received USD 6.7 billion as remittance, and The Central Bank
has projected a 14.6 percent decline in the remittance income for the full year 2020 as it revised
its earlier projections due to the virus.
Sociological Impacts of COVID-19 on Sri Lankan Society
 Fear psychosis created by Doctors: Fear psychosis is made by doctors and health
authorities/ politicians as a preventive measure. This may have hidden political motive as
well by distracting from the reality. We believe what matters is protecting the vulnerable.
Total COVID -19 cases in the world is 61.5 Mn. Rate per million 7883, Death rate is 184
per million. The death rate on under 65 years of age is very low. Less than 1 in 300,000
on overall population. In Sri Lankan context, the total infected is 22000 cases (1000
cases per million). Death rate per million is 5. Many other common diseases such as
dengue has more infections and deaths and had prevailed for a long period of time. E.g.
In 2017, a total of 186,101 suspected dengue cases (8660 cases per million population)
and 440 dengue-related deaths were reported to the national surveillance system. A good
example of the extent of the fear psychosis created is demonstrated very well in the
recent Mahara prison riot incident. The reason for the whole commotion that killed more
than six inmates by the shooting of authorities was due to one prison inmate contracting
the virus and another attempted to escape the prison due to fear of contracting the virus.
(Adaderana Nov 30)
 Impact on social capital and interaction- Social distancing is a challenge to the core of
social cohesion. Apart from primary relationship, secondary relationship outside the
world (with peers, colleagues) is center of socialization/interaction. (connected however
digitally)
 Impact on education- loss of student life in school and universities causes psychological
issues. Children staying at home while parents at work causes problems.
 Social Problems/issues generated by COVID 19- resultant lockdown caused domestic
violence and intra and inter-family dispute child abuse.

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 Drug use and alcoholism -The most recent figures on drug use in Sri Lanka come
from the NDDCB. It is estimated that there are currently about 45,000
regular users of heroin and about 600,000 users of cannabis in Sri Lanka. A few
months ago, the Chairman of the National Authority on Tobacco and Alcohol (NATA)
addressing the media said that a total of 35 percent of men and around 3 percent of
women consume liquor in Sri Lanka. Cost wise, he said, the damage caused by alcohol
consumption exceeds 140 billion per year (Daily Mirror, 2017)
 Coping with low income- Economic constrains due to lockdown, how people cope up
with the economic issues/lack income, unemployment-
 Impact on religious activities and rituals- Religious activities and rituals have come to
a grinding halt. It looks like Gods do not answer prayers made at home in isolation thus,
people do not know where to turn to address their problems during this crisis.
 Impact on family and community networks -Social interaction within family,
neighborhood and in communities becomes distanced. Not being able to attend gym,
workplace causes anxiety and frustration.
 Impact on sports and leisure – lack out-door games/sport, how youth spent time,
picnics/trips, parties, adventurism and so on have abruptly stopped.
 Psycho-social impact of COVID-19 - people have had psychological issues, stress,
suicidal attempts
 Social Media and COVID-19- The role of social media, what are main social media
platforms used, what kind of messages promote, are they useful, how such social media
messages help to keep safe etc.
 Impact on cultural and personal events- Deaths, marriages, weddings, -mode of burial,
avoid large gatherings, weddings postponed?
 Impact on vulnerable groups- Poor daily workers, differently abled, susceptible due to
chronic diseases, elderly, repatriated migrant employees, drug addicts suffer
disproportionately due to lack of movement, few employment opportunities and social
ostracisation. They become desperate and may involve in anti-social behavior (theft and
burglary). It creates a sense of insecurity.
Positive dimensions of COVID-19 upon Sri Lankan
 Social distancing promotes a disciplined society- queue,
 Personal hygiene practices and wearing masks promote healthier society
 Crisis ramped up philanthropy (limited)
 Necessity/Crisis creates invention and innovation including online education
 High rate of growth of population can be expected in times to come
 Intra-familial bonds have ramped up during this crisis
 Reduction of environmental pollution due to low carbon emissions from reduced
transportation and industrial activities.
Conclusion

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We have to face the reality and explain to the citizens the real status of the disease and its
implications to the economy and the society. A false positive or negative picture should not be
portrayed. Additionally,we must provide leadership and mobilize resources, educate the society
as to the real status of the virus, its implications, erase the fear psychosis, take evidence based
proven scientific approaches to handle the issue and restart the economy with minimal
lockdowns and restrictions. On the one hand we as a community should help each other,
especially to the vulnerable communities. It should be emphasized that the help should not come
only once or twice but a continuous stream of support. Some of the mainstream churches,
temples and kovils should take up the leadership by sharing the enormous amount of money in
their coffers collected for many projects such as building funds etc., at this stage to support
peoples livelihoods and be an inspiration to their devotees before asking the devotees to donate
money and extend help to the vulnerable communities. The professionals who are trained in
psychosocial support should play a bigger role as the social issues cannot be sorted out from
monetary interventions alone. NGOs who have the capacity and expertise in this connection
should mobilize their resources and commence operations without delay. All in all, it should be a
holistic approach by the government as well as all other religious, social, NGOs, private
institutions and the public to face the issue and overcome it.
Reference
Central Bank of Sri Lanka (CBSL) Available at https://www.cbsl.gov.lk/
ADB Sri Lanka- economic and social data [Available at https://www.adb.org/countries/sri-
lanka/main]
Rameez, A. (2020) “Sociological Impacts of Covid 19 on Sri Lankan Society” faculty of Arts
and Culture, Eastern University, Sri Lanka.
Worldometer Corona Virus Updates ( 2020) [Available at:
https://www.worldometers.info/coronavirus] Accessed 27 Nov 2020.
Daily Mirror (2020) “Are we becoming a nation of alcoholics” [Available at:
https://www.dailymirror.lk/businessopinion/Are-we-becoming-a-nation-of-alcoholics/306-
141618]Accssed 27 Nov 2020.
John P.A. Ioannidis, Cathrine Axfors, and Despina G. Contopoulos-Ioannidis ( 2020)
Population-level COVID-19 mortality risk for non-elderly individuals overall and for non-elderly
individuals without underlying diseases in pandemic epicenters [ Available at:
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7327471/] Accessed 27 Nov 2020