The US attack on an Iranian ship will put pressure on vessels crossing Colombo's territorial waters, Harin Fernando has told RT India

Sri Lanka could take an economic hit from the protracted Middle East conflict, former minister Harin Fernando has said.

In interview with RT India, Fernando cited the US attack on an Iranian frigate on Wednesday as putting pressure on ships crossing Sri Lankan waters.   

"Our country is repositioning ourselves," he said. "Tourism is one of our main sources of income and also foreign remittances, exports of rubber and garments."

Fernando said Sri Lanka would be seriously affected if a full-scale war spread beyond the Middle East. "More than 70% of Sri Lankan expats work in the Middle East," he added. "Therefore, we are in a very vulnerable situation when such a war takes place in our waters close to our economic zone."

Washington's sinking of the Iranian vessel would put pressure on vessels crossing Sri Lankan waters, the former minister said. "I think a diplomatic intervention is definitely needed," he added.

Fernando said Sri Lanka is just emerging from an economic crisis and cannot risk further strains. "A small problem can trigger an economic collapse in Sri Lanka," he added. "The cost of living would go up. Air space in the Middle East is closed which will have a significant impact on our income. Commodities [prices] are going to be high. Therefore, Sri Lanka is at great risk."

Sri Lanka's economic and humanitarian crisis peaked in 2022, as acute shortages of fuel, food, and medicine spurred massive protests that ousted the government.

The country has made a remarkable recovery after a $2.9 billion bailout, the International Monetary Fund said in March last year.

The tourism industry, a major revenue earner, has been affected by the cancellation of flights from the Middle East, and the sinking of the Iranian vessel on Wednesday off the Sri Lankan coast is likely to impact it further.