Colombo, Aug. 6: Sri Lankan President Ranil Wickremesinghe has said that Sri Lanka’s economic woes will last another year and that it needs to think outside the box and look at new sectors such as logistics and nuclear energy to revive its bankrupt economy.

Speaking at a two-day conference titled “Let’s reset Sri Lanka” held on Friday, Wickremesinghe said reforms in the country also require higher taxation.

“The next six months to a year I think until July next year, we will have to go through a difficult time,” he said, adding that for recovery Sri Lanka must look at new sectors such as logistics and nuclear energy. “One thing I really believe in is logistics, if you look at the growth of the Indian, Bangladeshi and Pakistani economies, logistics can have a big role here in Colombo, in Hambantota and Trincomalee. This is how we use our strategic position,” he said, referring to the two the main port of the island nation.

Sri Lanka is experiencing its worst economic crisis since independence in 1948. The export industry has been badly hit by fuel scarcity caused by the forex crisis.

The tourism industry, which is the backbone of Sri Lanka’s economy, also suffered initially due to the COVID-19 pandemic and continued due to the economic turmoil.

Wickremesinghe, who was elected president last month by Parliament, will serve in the post of Gotabaya Rajapaksa, who fled the country and resigned amid anti-government protests.

Wickremesinghe, who had previously described Sri Lanka’s economy as bankrupt, said economic reforms would require higher taxes.

“Even taxation for wealth, we need to implement that measure, first for economic recovery and second for social stability,” he said.

The president also said that the country should consider entering the nuclear energy sector.

“The more you have the more energy you can sell to India, at the same time keeping more renewable energy. We have to think outside the box,” he said.

After declaring an international debt default in April, Sri Lanka is currently negotiating with the International Monetary Fund for a bailout package.

However, the IMF program has hit a snag in the form of debt restructuring. Even the World Bank has refused to provide assistance until a comprehensive macroeconomic policy.

Referring to the ongoing IMF bailout efforts, Wickremesinghe said legal and technical advisers on debt restructuring are moving forward with the task.

“The first is the foreign debt… and if you look at the official debt, do we get caught up in the geopolitics of the Asian region?,” he said.

“It will be a period that we have not seen before, we will have to look at foreign debt and local debt, of course it will be a difficult time. The first six months will be difficult,” he said.

Wickremesinghe said that more than 6 million of the country’s 21 million people are malnourished.

More are unemployed, he said, adding additional funds were set aside to support them.

Wickremesinghe said political stability was essential to drive the necessary reforms.

“Therefore, we must look at the political, social and economic dimensions of the reform, restructuring that we are going to do. We have seen the economic impact as the oil shortage and inflation in this country. In fact, it came into the political scene as a social scene”, said Wickremesinghe, referring to the month-long street protests that culminated in the ouster of former President Rajapaksa.-Agencies