Supermarket shelves are bare and restaurants cannot serve meals, but Sri Lanka’s economic crisis is a bonanza for used auto dealers, with vehicle shortages pushing prices higher than a house in a nice area.
The island nation of 22 million is on the brink of bankruptcy, inflation is red hot and the government has barred a range of “non-essential” imports to save US dollars needed to buy food, medicine and fuel.
In the vehicle market, this two-year ban has kept factory-fresh automobiles off local roads, forcing desperate buyers to pay some of the world’s highest prices for beaten-up compacts and no-frills family sedans.
Photo: AFP
Anthony Fernando spent a recent weekend coursing through sales lots in the Colombo outskirts on behalf of his daughter, who has tried to find an affordable set of wheels for nearly a year.
“She was thinking that prices will come down,” but now she is “paying for procrastinating,” the 63-year-old said.
Prices have gone “beyond the reach of a common person,” he said.
Photo: AFP
A five-year-old Toyota Land Cruiser was on offer online for an eye-watering 62.5 million rupees (US$309,654) — triple the pre-ban rate, and enough to buy a house in a middle-class Colombo neighborhood or a new luxury apartment in the city center.
A decade-old Fiat five-seater with a busted engine that might be stripped for parts elsewhere was listed at US$8,250 — more than twice Sri Lanka’s average yearly income.
“A car and a house are symbols of success,” said a grinning Sarath Yapa Bandara, the owner of one of the capital’s biggest dealerships. “That is why most people are willing to buy even at these high prices.”
‘OUT OF THIS WORLD’
Vehicle ownership remains a virtual necessity in the traffic-snarled streets of Colombo, where a ramshackle bus and rail network was already struggling with overcrowding.
The number of taxis has also fallen sharply, with drivers selling their cabs to cash in on the dizzying prices, and those still working charging double their old fares or more.
“You must have your own car,” said Udaya Hegoda Arachchi, another buyer preparing to bite the bullet at a dealership.
“We can’t expect prices to come down anytime soon, given the economic situation in the country,” he said.
COVID-19 has sent Sri Lanka into a tailspin, drying up all-important earnings from tourism and foreign remittances.
In March 2020, the government brought in a wide-ranging import ban, including on new vehicles, to stop foreign currency from leaving the country.
However, the policy has not been able to staunch the outflow of US dollars, and has instead left the nation struggling to source critical goods.
Food retailers have rationed rice, restaurants have shuttered, because they cannot find cooking gas, while cash-strapped power utilities unable to afford oil have imposed rolling blackouts. Farmers have even run out of fertilizer.
CHINESE DEBT
Rating agencies have warned that Sri Lanka might default soon, although the government has pledged to meet its commitments.
It is trying to renegotiate its Chinese debts with Beijing.
The import ban has also left vehicle parts in short supply, meaning drivers are at risk of being stranded after a breakdown.
Ravi Ekanayake said that his Colombo repair garage was doing a roaring trade from owners unable to afford the astronomical costs of switching to a new vehicle.
“But parts are scarce. It is a catch-22: You either get caught with an old car without parts or you don’t have the money to buy a new car,” he said.
JB Securities chief executive and financial analyst Murtaza Jafferjee said the prices also underscored a problem caused by excessive money printing by a cash-strapped central bank, with “too much money chasing too few goods.”
The prices were also increasing transport costs and adding to inflation, which hit a record 14 percent last month, he said.
“When vehicles become unaffordable for a segment of society, their activities will be limited. Then we will also see a loss of economic output,” Jafferjee said. “We are about to collapse and not many people appreciate the depth of the problem.”
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained