Sri Lanka: The country famed for pristine beaches and ancient temples hoping to rebuild tourism

Tourists were busy spooning up ice-cream on the verandah of Tariq Nassim’s home at the picturesque Galle Fort in Sri Lanka, the centre of a boom in tourism during the island nation’s recovery from its worst economic crisis in decades.

Nassim’s ‘Dairy King’, which sells 22 flavours of homemade ice-cream, was just one of thousands of businesses crushed by the crisis that erupted after foreign exchange fell to critical lows, squeezing imports of essentials from fuel to fertiliser.

“That was the biggest hit we faced,” said Nassim, 62, whose 13-year-old business was pummelled by the double whammy of the 2022 financial crisis and the earlier COVID-19 pandemic.

“We haven’t been able to get back the pre-COVID business,” he added. “I don’t know when it will come back.”

The route to a firmer rebound for the Indian Ocean island hangs on the reforms and policies that will be adopted by the winner of this month’s presidential election, the first since the economy crumbled.

“The new president must be capable and able to appoint the right people and run the country competently, because we cannot afford any hiccups,” said M. Shanthikumar, president of industry body the Hotels Association of Sri Lanka.

Tourism in the country of 22 million, famed for its pristine beaches, ancient temples and aromatic tea, was crushed as the crisis drove inflation to 70%, power tariffs jumped 65% and the currency depreciated by 45%.

Protests in Colombo by thousands angered at hours of power cuts, queues at fuel stations and hospitals with scarce medicine forced then president Gotabaya Rajapaksa to flee Sri Lanka, though he has since returned.

Prime Minister Ranil Wickremesinghe, elected by parliament to serve out the rest of Rajapaksa’s five-year term, has led a tentative recovery underpinned by a $2.9-billion bailout from the International Monetary Fund (IMF) and restructuring of $25 billion in foreign debt.

Now inflation and interest rates are down to single digits, while growth of 3% is expected in 2024, for the first time since the economy shrank 7.8% during the crisis.

A key…