Trouble in paradise: Sri Lanka in crisis

Sri Lanka faces the worst economic crisis it has ever known, with 12-hour power cuts and fuel shortages crippling the economy. How does the current situation impact tourism? Let’s take a closer look

Sri Lanka is in turmoil, facing the worst economic crisis it has ever known. The island’s 22 million citizens face 12-hour power cuts, inflation that has soared to an all-time high of 17.5%, and food, fuel, and medicines shortages that are crippling the economy.

A state of emergency was declared on April 1, prompting massive protests by angry Sri Lankans demanding the government’s resignation.

On Tuesday, the government announced it has to temporarily default on $35.5 billion in foreign debt, as reported by the BBC. According to the statement by Sri Lanka’s Finance Ministry, the prolonged impact of the pandemic and the recent war in Ukraine made it impossible for the country to pay its creditors.

Naturally, the current situation keeps many tourists away, and after two long years of a pandemic that has hit Sri Lanka badly. Only in November 2021 did the government remove all quarantine requirements for vaccinated tourists, a significant step for a country relying heavily on tourism – the third-largest source of income and one of the largest employment sectors in Sri Lanka.

And if COVID wasn’t enough, the war in Ukraine was the final straw, as 25% of visitors since the country reopened were Russians and Ukrainians. But, for obvious reasons, these arrivals have now been cut short.

How bad is the situation for tourists visiting Sri Lanka?

We’ve asked Livne Lasch, CEO of Livne Tours from Israel, who is currently visiting the country: “True, there are endless queues at gas stations because of the energy crisis in the country, but we did not have to wait in line because our driver was a professional guide who took care of everything ahead of time.”

While this may sound like good news for tourists, as authorities are trying to prioritize tourist vehicles, it may turn out to be another source of friction: Just last week, a heated argument broke out near Colombo when the police tried to allow a tourist bus to pump fuel ahead of others, as tweeted by the Daily Mirror.

Yet it looks like tourists can still travel and enjoy the country, oblivious of the crisis. “The economic crisis is almost unnoticeable from a foreigner’s point of view,” added Lasch. “On the contrary, the situation makes it easier for tourists to convert dollars to local rupees at an excellent rate, in light of the soaring inflation.

“I happened to be in the vicinity of a demonstration in Colombo, but it was non-violent and not much different from the demonstrations we’ve had in Israel in recent years aiming to replace the government.”


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