The Impact of COVID19 on the MSME Sector in Sri Lanka

The Impact of COVID19 on the MSME Sector in Sri Lanka

The Impact of COVID 19 to SME Sector in Sri Lanka - Gunawardena

The Impact of COVID19 on the MSME Sector in Sri Lanka

May, 2020

D.P. Gunawardana National Consultant ? Sri Lanka

UN DESA/DSDG

The Impact of COVID 19 to SME Sector in Sri Lanka - Gunawardena

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Abstract

This report gives an overview of the socio-economic aspects of Sri Lanka which includes sector wise GDP contribution, growth, population and employment by sector. A detail account of the MSME sector including the contribution to the economy, scale wise composition, geographical distribution and employment is also given in the report.

The impact of COVID 19 virus threat to the MSMEs is addressed in detail covering the main sub-sectors. A summary of the relief measures introduced by the Government of Sri Lanka and the present status of the MSMEs are analyzed in detail. The writer in his opinion discuss the measures to build resilience, recommendations for revival and sustenance of the MSME sector.

The Impact of COVID 19 to SME Sector in Sri Lanka - Gunawardena

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Abbreviations

BDS CBSL CRIB DCS EDB GDP GoSL IDB MSME NEDA SME -

Business Development Service Central Bank of Sri Lanka Credit Information Bureau of Sri Lanka Department of Census and Statistics Export Development Board Gross Domestic Product Government of Sri Lanka Industrial Development Board Micro, Small and medium Enterprises National Enterprise Development Authority Small and Medium Enterprises

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Contents

Abstract ................................................................................................................................................................................ ii Abbreviations .................................................................................................................................................................... iii Contents............................................................................................................................................................................... iv List of Figures..................................................................................................................................................................... v List of Tables....................................................................................................................................................................... v 1) Introduction ............................................................................................................................................................ 1 2) An Overview of the Economy of the Country ............................................................................................ 1

2.1. GDP Contribution - Sector wise ..................................................................................................................... 1 2.2. GDP Growth ........................................................................................................................................................... 2 2.3. Comparison of Imports & Exports................................................................................................................ 2 3) The MSME Sector in Sri Lanka......................................................................................................................... 4 3.1. Distribution of establishments ...................................................................................................................... 4 3.2. Distribution of employment ........................................................................................................................... 5 3.3. Distribution of MSMEs by geographic sectors urban, rural and estate ........................................ 5 4) The Impact of COVID 19 Pandemic on MSME Sector of Sri Lanka ................................................... 8 4.1. Tourism Industry ................................................................................................................................................ 8 4.2. Apparel sector....................................................................................................................................................... 9 4.3. Foot wear and Leather sector ........................................................................................................................ 9 4.5. Handloom and Handicraft industry.......................................................................................................... 10 4.6. Other industrial thrust areas....................................................................................................................... 11 5) Relief Measures offered by the Government of Sri Lanka (GOSL)................................................. 12 6) The Present Status of MSMEs ....................................................................................................................... 15 6.1. New opportunities ........................................................................................................................................... 15 7) Building Resilience............................................................................................................................................ 17 8) Conclusion ............................................................................................................................................................ 19 9) Recommendations............................................................................................................................................. 20 10) References ............................................................................................................................................................ 22 11) Annexures ............................................................................................................................................................. 23 11.1. Case Studies ..................................................................................................................................................... 23 11.2. Circular No. 05 of 2020 ............................................................................................................................... 30

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