Sri Lanka bombings, economic fears and tourism are the biggest losers

Mohammed Afzaz

The bombings that hit Sri Lanka on Sunday began to overshadow the country's economy, which is betting heavily on the tourism sector to bring in hard currency.

According to the information, some travel agencies in the Gulf region, which is geographically close to Sri Lanka, have received requests to cancel travel bookings against the backdrop of events, amid experts' expectations of more negative impacts, especially on the tourism sector and capital and currency markets. Explosions.

On Sunday, eight Sri Lankan explosions rocked churches and hotels, leaving 215 dead and 450 injured, while authorities imposed a curfew, calling the bombings "terrorist acts."

Fears
The head of Regency Travel in Doha, Tariq Abdul Latif Taha, said his company had already received requests to cancel travel bookings to Sri Lanka as soon as their owners learned of the bombings.

He added in an interview with Al Jazeera Net that the tourism sector is very sensitive to events and instability, pointing out that the bombings in Sri Lanka are raising concerns among tourists, as is the security events in most countries in the world.

Tariq warned that if there were no assurances from Sri Lankan officials, the cancellation of the bookings could be extended.

But he stressed at the same time that cancellations did not affect the company's business because Sri Lanka was not a major tourist destination, although it was a "favorite destination" for those who had short holidays near the country from the Gulf region.

The tourism sector is one of the most important sectors on which Sri Lanka is betting to bring in hard currency and support the economy.

It is estimated that about 2.3 million tourists visited Sri Lanka in 2018, compared with 2.1 million in 2017, supported by the markets of India, China, Britain and Germany, and the sector is sending the country about $ 3.5 billion.

Ali Sabri, general manager of Milan Travel and Tourism in Doha, said they had so far received requests to postpone certain bookings by businessmen.

"Because of the unrest, some businessmen have delayed their travel to Sri Lanka, and those who intend to travel there will now consider postponing until the picture is clear," he said in an interview with Al Jazeera Net. Sabri also stressed that tourism is one of the most sensitive and influential sectors of the bombings and emergency events.

He notes that the Sri Lankan market is not as strong as Malaysia and Thailand, and that the current period is not a peak period, and that requests for bookings are active after Eid.

Sri Lanka is famous for the production and export of tea along with rubber, jewelry, precious stones and coconuts. Its domestic product is estimated at more than $ 80 billion and is expected to exceed $ 100 billion in 2020.

Sri Lanka's economy is growing at more than 4 percent, amid efforts to develop port, aviation and trade sectors. According to information, per capita income in Sri Lanka exceeded $ 4,000 in 2017.

Foreign Investment
"The current events will affect Sri Lanka's tourism, and this impact will depend on the way officials handle these events," said Juma al-Muhadi, chief executive officer of Aldar Exchange.

Al-Muhaddadi explained in an interview with Al-Jazeera Net that it is too early to judge whether the exchange rate of the local currency (Rupiah) will be reduced against other currencies, and said: "We are waiting for the situation and demand for the Sri Lankan currency remains confined among members of the community as long as the current period is not a holiday period and a peak on the demand".

From an economic point of view, the general manager of Namaa Financial Consultancy Company Taha Abdel Ghani said that the potential impact of the bombings would quickly include "the tourism sector as a sensitive industry to the issue of security and instability", followed by slower foreign investment flows and then other service sectors.

He added in an interview for Al Jazeera Net that tourism is a major source of hard currency, and that any impact on this sector hurt the local currency of the country and push to rise in inflation and a surge in prices.

He noted that the appetite of European tourists may be affected by the fact that the bombings touched churches specifically, expressing his belief that if a wave of Islam and phobia, it will inevitably affect the Arab tourists as well.

In 2017, Sri Lanka received about $ 1.7 billion in foreign direct investment, compared to only $ 800 million in 2016.

Sri Lanka - the majority Buddhist - has a Catholic minority of 1.2 million people out of a total population of 21 million.

Buddhists make up 70 percent of Sri Lanka's population, 12 percent of Hindus, 10 percent of Muslims and 7 percent of Christians.

The conflict, which lasted from 1972 to 2009, has killed between 80,000 and 100,000 people, according to the United Nations.