The country’s economists and exporters predicted that in the wake of Britain’s exit from the European Union {EU}, Sri Lanka would face negative consequences across the board in many areas.

On June 24, the British public in an epoch-making referendum voted in favour of moving out of the EU, prompting speculation fuelled by incumbent Conservative Prime Minister, David Cameron himself that he would step down, paving the way for a change of the guard as early as October this year.

Head of the Department of Economics of the Faculty of Arts of the University of Colombo, Prof. Ven. W. Wimalaratana said that the Brexit, which he deemed was a divorce of sorts, which would cause an initial shock in the markets in the short term (one year to one and a half years to a maximum of two years), would locally directly adversely impact the currency market, trade including exports (including textiles), economic growth performance, investments including foreign direct investments (FDIs), tourism, and international aid and other support received by the country, thereby causing mostly negative implications.

He highlighted that while there were a number of Sri Lankans working in Britain and the countries of the EU and some were permanently settled there, their remittances too would be affected.

While we are at present not receiving much in the way of FDIs, we may not be able to expect FDIs as much as we hoped we would, he remarked.

“Demand for our products including commodity exports (including traditional ones) will go down. A large percentage of inbound tourists come from these regions. The net benefit from this to Sri Lanka will be directly affected, especially because of currency fluctuations resulting from the Sterling Pound and the Euro depreciating in the initial stages, thus leading to their outbound tourism being affected,” he pointed out.

In addition, he said that when foreigners change their currency to Sri Lankan Rupees, the amount they receive would be less than what they formerly did. “Economies of scale are driven by psychological factors and therefore the unsettled environment will marginally affect both within and outside the region. In the long run, this transitional phase will lead to a new equilibrium being found between the United Kingdom (UK) and the European economies, all of which are not isolated economies but very much a part of the world economy,” he added.

“The world has come out of a financial crisis and the smooth patch being experienced at present will once again change until the new direction is found in the long run. There will be volatility. There will be gains and losses. It will take two years for things to settle down,” he explained.

Meanwhile, Secretary General of the Joint Apparel Association Forum (JAAF), Tully Cooray said that there would not be immediate changes but added that they were adopting a wait-and-watch approach. “We are also groping in the dark. But we feel that it would take at least one to two years for the changes to be in place,” he said.

He said that they would have to request the UK for a fresh preferential system in the event the country decides to deviate from the current customary practices. “We do not know how it is going to be. But we expect that these changes will take a long time to be in place,” he added.

Government Ministers Dr. Sarath Amunugama, Dr. Harsha de Silva and Eran Wickremaratne were not available for comment.

  • Noor Nizam – Canada.

    There was NO need for Yahapalana Ministers, Deputy Ministers and Parliamentarians to go to UK and campaign the Sri Lanka Britons to vote in favour of PM Cameron’s support for UK to stay in the EU. Sri Lanka has violated the Covenants of International Law and International Relations. No doubt we are having a Foreign Ministry that is malfunctioning and Sri Lankan diplomats posted abroad doing “sweet all nothing” and enjoying the perks provided, educating their children abroad and now trying to gather support from the Sri Lankan diaspora to celebrate a “SRI LANKA DAY” on the 17th., of August 2016, as instructed by the FM in all the capitals in the world. Britons voting to EXIT from the EU is a great blessing to make the political situation in Sri Lanka more stable. The victory to the “EXIT BRITON” group and political peoples forces in the UK to defeat UK’s PM David Cameron should be considered politically in the domestic arena in Sri Lanka as a VICTORY for the Mahinda Rajapaksa group or the “EKAABADDA VIPAKSAYA” and the lovers of Mahinda Rajapaksa and the MAATHRUBOOMIYA who have been tormented by the EU, David Cameron and the PRO-LTTE political R2R factors of the International community, since the commencement of the separatist war in Sri Lanka in 1983 and intensified after the defeat of the LTTE in May 2009. As the saying goes – “Anugta Korade Thamanta Paladei” – Cameroon has been cursed by the God, now to suffer the same feelings and emotions of what Mahinda Rajapaksa went through at the defeat in the Presidential Elections in 2015 (in a Sri Lankan context). Cameron’s defeat should also be considered a defeat (in the same context) for President Maithripala Sirisena and PM Ranil Wickremasinghe, because they (the Yahapalana government) sent a battery of Sri Lanka parliamentarians and Ministers supporting the Yahapalana government, both from the UNP and SLFP/UPFA parliamentarians who were not in the Mahinda Rajapaksa “EKAABADDA VIPAKSAYA” to campaign Sri Lanka domiciled in the UK who had the right to vote in this referendum, during the run-up to yesterday’s elections/REFERUNDUM to support PM Cameron. A weekend newspaper last week listed the following parliamentarians of the Yahapalana government who had visited Britain to urge British citizens of Sri Lankan origin to support PM David Cameron to vote to remain within the union. The name list went as follows: Minister Harin Fernando, Deputy Minister Harsha de Silva, former UNP MP Rosy Senanayake, Minister Dayasiri Jayasekera, Minister Susil Premajayantha and State Minister Dilan Perera. This battery of Sri Lankan politicians have been fully backed and financed from Sri Lankan taxpayers money by the Yahapalan government at a time when the poor citizens in Sri Lanka were burdened with a 15 % VAT TAX on all and every trade, consumer and service provisions in addition to an exorbitant cost of living rise in the economy and deficiencies in government budgetary management that was plaguing the poor ordinary citizens after the defeat of the Mahinda Rajapaksa government in January 2015. Mahinda Rajapaksa’s march forward to power back again and the popularity of the “EKAABADDA VIPAKSAYA” (in the Sri Lankan context) will gain momentum in the coming week and months. Noor Nizam. Peace and Political Activist, Political Communication Researcher, SLFP Stalwart and Convener – The Muslim Voice.

  • GamiGreenGlobe

    The BREXIT was an advisory not a mandatory referendum, means that it
    does not trigger the Article 50 to leave the EU. However, it creates an
    unnecessary panic among those who want to leave the union as well as
    those who want to enter the Euro Zone .. And, Sri Lanka will be indeed
    among the victims labelled as collateral damage of this vote. But, truth
    of the factor is that I do not think the policy makers in the UK are
    that stupid to activate the exit process just like that .. Perhaps, the
    strategy seems like the UK wants to carve special status like Norway
    within the EMU .. ! Cheers .. ‪#‎gamigreenglobe‬ ‪#‎gaminigm‬