Beyond COVID19 Sri Lanka is bound to stagnate with a broken supply chain!

In the 1970s queues at UK petrol pumps!

In the 1970s, during my graduation days, together with my colleagues for the first time, attempted to analyze the distribution of inflation in London. With the 1973 Arab-Israeli war, the global economic growth had quadrupled the price of oil, causing the price of commodities to fall.

It was then that UK was forced to introduce for a period the three days working week; to experience the financial market performance that was terrible and with the wage price spiral, that produced an inflationary and slow growth stagnated decade. Something I thought will never come again in my life time.

Now five decades later, in 2020 with country yet to comeout of the COVID19 pandemic, there is a fear that Sri Lanka in the post-Corona scenario, would face the UK experience in the early 1970s, of persistent high inflation combined with high unemployment and stagnant demand in country’s economy.