'CASSANDRAS' AND THE UPCOMING CRISIS

Those like me who warned of the prospect of ending up like Lebanon were called Cassandras by government apologists In 2021-22. The crisis came. Those then in government who ignored the warnings paid the price. But the Sri Lankan public did not suffer as much as the citizens of Lebanon where the manifestations of the crisis Such as unannounced load shedding continue. Those who replaced the politicians and officials who crashed the economy heeded the warnings. Apollo's curse appears to have only partial effect in the 21st Century.

- By Rohan Samarajiva

The next crisis largest Tariffs on goods exported to Sri Lanka's market, the United States, have been increased by 10 percent and may go higher. The trade war may push the US into recession, contracting demand further.

Other apparel exporters may negotiate tariffs lower than ours, leaving us at a relative disadvantage.

Export earnings will decline and jobs will be lost. The economy may contract or grow less than it would have. Tax revenues needed for debt repayments may fall short. The rupee may depreciate making it difficult to repay debt and import necessities. A second default may be our fate.

But it's still 2025. And the 90 days is still not up. Negotiations with the Trump Administration are ongoing. Repayments of the restructured debt are still not due. Should the modernday Cassandras hold their tongues, especially because there is nothing that can be done at this time other than wish the negotiators well.

But there is no reason to be reactive about the threats to the rest of our goods exports. There may be a role for Cassandras in 2025 after all.