Pathfinder Foundation

Sri Lanka has recently mobilized very substantial loans from China to fund large infrastructure projects (e.g. the Norochcholai power station and the Hambantota port). It would, therefore, be useful to understand better the manner in which the Chinese authorities administer their foreign loan programs.

Tourism has emerged as an extremely important sector in the economy from a number of perspectives in post-conflict Sri Lanka. It is important as a potential source of growth, employment and foreign exchange. The sector has seen impressive recovery since the end of the conflict. Arrivals have increased from 447,890 in 2009 to 855,975 in 2011. In addition, earnings from tourism have risen from $350 Mn to $850 Mn during this period.

Last week saw both the exchange and interest rates come under some pressure, despite the courageous reforms introduced by the Authorities in early February 2012. It is important, however, to learn from the policy mistakes of the recent past and to resist imminent pressure to manipulate these two key economic prices.