Even as Sri Lanka’s Covid-19 containment strategy continues to be challenged, the light at the end of the tunnel is the announcement by at least three global pharmaceutical companies that a vaccine for Covid-19 is a reality. It is now up to the respective governments, including our own, to take their place in the queue and ensure an adequate quota is secured for the country. As to what the quota should be is up to the health and medical professionals to decide. With this development, it is now a foregone conclusion that the blight of 2020 will end sooner than later.
Although much needs to be learnt about the efficacy of the vaccines in varying conditions, including our own tropical climate, duration of the protection it offers, etc., there is bound to be a rush to secure stocks and prices could rise based on demand, if the World Health Organisation (WHO) decides to take a backseat and allow the pharma companies to dictate the rules of engagement. From what has been announced, the unit cost of a vaccine is likely to average around Rs. 3,000 per dose, with two doses being recommended per person.
Based on this rough estimation, the Government will have to make a formidable allocation for the vaccines if the WHO is unable to provide it at no cost to the Government. The financial provision for this purpose will invariably run into billions of rupees, for which no budgetary allocation has been made thus far. As they say, it is better to be prepared with the necessary allocation than be caught off guard, given the likelihood of a stampede to obtain the vaccines once commercial production begins.
For a country like Sri Lanka which depends on tourism to bring in much-needed foreign exchange, mass vaccination could be a game changer in order to claim competitive advantage over other regional contenders. Such an initiative will help Sri Lanka get a head start in the mad scramble for tourist dollars that is likely to occur when travel restrictions are relaxed and airports reopen. Tourists will be assured peace of mind knowing that the likelihood of contracting the virus in the country will be minimal. Therefore, due thought should go into the modalities of initiating such a programme, even though financial considerations may well dictate otherwise.
It is said that every setback is an opportunity for a comeback. Even though Covid-19 has destroyed the economy and our way of life, it is now a matter of time before normalcy returns, thanks to the vaccines. But the fact of the matter is that the new normal will be very different to the one we have grown accustomed to. We now have the opportunity to shape our future. How we choose to do that will define the trajectory of our economic wellbeing for years to come. Many are the opportunities up for grabs for those looking in the right direction.
For instance, if SriLankan Airlines institutes a programme to vaccinate each incoming passenger at the point of departure, then airports can safely reopen even tomorrow and the tourism industry can start breathing once again. The price of the vaccine can easily be incorporated into the ticket price.
We Sri Lankans are well noted for our resilience and it is up to the Government of the day to chart the course for recovery. Inclusive, indigenous, and people-oriented growth based on developing our own resources and manufacturing base is what should be on the Government’s radar if it is serious about fast-tracking economic recovery.
A smart way to get the ball rolling would be the migration of government systems and procedures onto digital platforms which seems inevitable in order to capitalise on the pandemic-driven global digitalisation that has touched people’s lives unlike ever before. In simple terms, the dividend of digitalisation is the ability for any citizen to obtain a required service from the Government without ever having to step outside the house.
Imagine the savings for the State. People will no longer need to make multiple trips to government offices from faraway places just to get a simple thing done. Imagine the reduction in traffic and the consequent saving on fuel which will reduce pressure on oil imports and save foreign exchange. More importantly, it will reduce social gathering and the risk of spreading disease.
The country’s first Minister of Digital Infrastructure, former Minister Harin Fernando, spoke at length on the subject in Parliament last week and drew attention to the need to expedite the process of government digitalisation. President Gotabaya Rajapaksa, having seemed to have taken note of the former Minister’s thoughts, brought the ministerial portfolio of technology under his wing just two days later.
Digitalisation could also help fight Covid better through the seamless distribution of financial aid, also making the eventual distribution of the vaccines more streamlined by keeping track of the process. Eliminating the layers of bureaucratic red tape traditionally associated with government business is no longer an option but a necessity in the post-pandemic world. It will help eliminate systemic corruption that plagues the state sector. It will build investor confidence and push Sri Lanka up the competitive ladder. And if the Government is to follow through on its strategy of swapping costly foreign loans to foreign investment, then digitalisation of government is a prerequisite.
The pandemic has not spared a single nation on the planet, and those who escaped the first wave are now getting caught in the second and third waves. According to a World Bank report published a few months back, the pandemic will cause a 5.2% contraction in global GDP in 2020, the deepest global recession in decades, despite the best efforts of governments to counter the downturn. It states that the deep recessions triggered by the pandemic are expected to leave lasting scars through lower investment, an erosion of human capital through lost work, and fragmentation of global trade and supply linkages.
If the Government is banking on investment to flow in once the pandemic is eventually brought under control, it will need to revisit that thought because investors in the more well-to-do countries have been the hardest hit. According to the World Bank, advanced economies are likely to shrink by 7%. The effect of that will spill over to the emerging economies, which are forecast to contract by 2.5%. This would represent the weakest showing by these economies in at least 60 years.
In this backdrop, Sri Lanka needs to be mindful of the fact that it is not the only girl on the beach. Everyone at the table will be clamouring for their share of the dwindling investment pie. In order to be attractive, the Government must focus on the macro scenario and not just on investment promotion. The macro picture involves full commitment to the rule of law; creating the environment for a vibrant justice system; adherence to human rights; commitment to the eradication of bribery and corruption; outward looking, progressive economic policies that are in tune with modern day reality, such as free trade agreements; among many others.
As the saying goes, it’s the early bird that catches the worm. In the race to build back better in the post-pandemic world, Sri Lanka must not be left behind due to its obsession with petty domestic politics. If attracting investment is the name of the game, the time has come to put our best foot forward on the macro level.
Although much needs to be learnt about the efficacy of the vaccines in varying conditions, including our own tropical climate, duration of the protection it offers, etc., there is bound to be a rush to secure stocks and prices could rise based on demand, if the World Health Organisation (WHO) decides to take a backseat and allow the pharma companies to dictate the rules of engagement. From what has been announced, the unit cost of a vaccine is likely to average around Rs. 3,000 per dose, with two doses being recommended per person.
Based on this rough estimation, the Government will have to make a formidable allocation for the vaccines if the WHO is unable to provide it at no cost to the Government. The financial provision for this purpose will invariably run into billions of rupees, for which no budgetary allocation has been made thus far. As they say, it is better to be prepared with the necessary allocation than be caught off guard, given the likelihood of a stampede to obtain the vaccines once commercial production begins.
For a country like Sri Lanka which depends on tourism to bring in much-needed foreign exchange, mass vaccination could be a game changer in order to claim competitive advantage over other regional contenders. Such an initiative will help Sri Lanka get a head start in the mad scramble for tourist dollars that is likely to occur when travel restrictions are relaxed and airports reopen. Tourists will be assured peace of mind knowing that the likelihood of contracting the virus in the country will be minimal. Therefore, due thought should go into the modalities of initiating such a programme, even though financial considerations may well dictate otherwise.
It is said that every setback is an opportunity for a comeback. Even though Covid-19 has destroyed the economy and our way of life, it is now a matter of time before normalcy returns, thanks to the vaccines. But the fact of the matter is that the new normal will be very different to the one we have grown accustomed to. We now have the opportunity to shape our future. How we choose to do that will define the trajectory of our economic wellbeing for years to come. Many are the opportunities up for grabs for those looking in the right direction.
For instance, if SriLankan Airlines institutes a programme to vaccinate each incoming passenger at the point of departure, then airports can safely reopen even tomorrow and the tourism industry can start breathing once again. The price of the vaccine can easily be incorporated into the ticket price.
We Sri Lankans are well noted for our resilience and it is up to the Government of the day to chart the course for recovery. Inclusive, indigenous, and people-oriented growth based on developing our own resources and manufacturing base is what should be on the Government’s radar if it is serious about fast-tracking economic recovery.
A smart way to get the ball rolling would be the migration of government systems and procedures onto digital platforms which seems inevitable in order to capitalise on the pandemic-driven global digitalisation that has touched people’s lives unlike ever before. In simple terms, the dividend of digitalisation is the ability for any citizen to obtain a required service from the Government without ever having to step outside the house.
Imagine the savings for the State. People will no longer need to make multiple trips to government offices from faraway places just to get a simple thing done. Imagine the reduction in traffic and the consequent saving on fuel which will reduce pressure on oil imports and save foreign exchange. More importantly, it will reduce social gathering and the risk of spreading disease.
The country’s first Minister of Digital Infrastructure, former Minister Harin Fernando, spoke at length on the subject in Parliament last week and drew attention to the need to expedite the process of government digitalisation. President Gotabaya Rajapaksa, having seemed to have taken note of the former Minister’s thoughts, brought the ministerial portfolio of technology under his wing just two days later.
Digitalisation could also help fight Covid better through the seamless distribution of financial aid, also making the eventual distribution of the vaccines more streamlined by keeping track of the process. Eliminating the layers of bureaucratic red tape traditionally associated with government business is no longer an option but a necessity in the post-pandemic world. It will help eliminate systemic corruption that plagues the state sector. It will build investor confidence and push Sri Lanka up the competitive ladder. And if the Government is to follow through on its strategy of swapping costly foreign loans to foreign investment, then digitalisation of government is a prerequisite.
The pandemic has not spared a single nation on the planet, and those who escaped the first wave are now getting caught in the second and third waves. According to a World Bank report published a few months back, the pandemic will cause a 5.2% contraction in global GDP in 2020, the deepest global recession in decades, despite the best efforts of governments to counter the downturn. It states that the deep recessions triggered by the pandemic are expected to leave lasting scars through lower investment, an erosion of human capital through lost work, and fragmentation of global trade and supply linkages.
If the Government is banking on investment to flow in once the pandemic is eventually brought under control, it will need to revisit that thought because investors in the more well-to-do countries have been the hardest hit. According to the World Bank, advanced economies are likely to shrink by 7%. The effect of that will spill over to the emerging economies, which are forecast to contract by 2.5%. This would represent the weakest showing by these economies in at least 60 years.
In this backdrop, Sri Lanka needs to be mindful of the fact that it is not the only girl on the beach. Everyone at the table will be clamouring for their share of the dwindling investment pie. In order to be attractive, the Government must focus on the macro scenario and not just on investment promotion. The macro picture involves full commitment to the rule of law; creating the environment for a vibrant justice system; adherence to human rights; commitment to the eradication of bribery and corruption; outward looking, progressive economic policies that are in tune with modern day reality, such as free trade agreements; among many others.
As the saying goes, it’s the early bird that catches the worm. In the race to build back better in the post-pandemic world, Sri Lanka must not be left behind due to its obsession with petty domestic politics. If attracting investment is the name of the game, the time has come to put our best foot forward on the macro level.