Opposition Leader Sajith Premadasa has warned that the growing involvement of Houthi fighters in the Middle East conflict could have serious economic and strategic consequences for Sri Lanka.
Issuing a special statement, Premadasa said the escalation involving Houthi forces controlling parts of northwest Yemen and the capital Sana’a has intensified tensions, particularly around the Bab-el-Mandeb Strait, a key global shipping route.
He noted that the strait connects the Red Sea, Mediterranean Sea, Arabian Sea and the Indian Ocean, making it a critical passage for global trade. Any disruption to this route could directly affect Sri Lanka through delays in shipping, increased insurance premiums and higher transport costs.
Premadasa warned that such developments could lead to rising oil prices, higher electricity and transport costs, and an overall increase in the cost of living.
He further said import costs may increase while export earnings could decline, reducing competitiveness of Sri Lankan exports such as apparel and tea. This, he noted, could also reduce foreign exchange inflows and increase inflationary pressures.
The Opposition Leader also cautioned that higher import costs and reduced export earnings could weaken foreign reserves and lead to currency depreciation. He added that shortages of essential items such as food, medicine and fertiliser could also emerge if supply chains are disrupted.
Premadasa pointed out that between 6 to 9 million barrels of oil and around 8 percent of global LNG shipments pass through the Bab-el-Mandeb Strait, warning that disruptions could increase shipping costs by as much as 30 percent.
He also raised concerns over broader geopolitical implications, warning that the Indian Ocean could face increased military activity, potentially affecting Sri Lanka’s sovereignty and regional stability.
Premadasa urged the Government to present an immediate contingency plan to mitigate potential economic and supply chain disruptions arising from the escalating conflict. (Newswire)