Features

More on the Russian tea trade – bear traps and an Iron Lady

Published

3 years ago

2023/09/10

(Excerpted from the Merrill, J, Fernando autobiography)

Up to the dissolution of the Soviet Socialist Republic, India had maintained a stranglehold on tea imports into Russia, on account of the existence of a barter agreement between the two nations since 1979. Indian tea imports into the USSR, approximately 10 million kilos per year in 1960, had increased to around 128 million kilos by 1990.

With the dissolution of the Soviet Union, the trade agreement was voided and replaced with an annually-renewable purchasing protocol, allowing tea and other Indian products under a ‘Technical Credit’ scheme. The release of the Indian grip on the Russian tea market was our opportunity to step in, as Ceylon Tea, despite being dwarfed in volume by the cheaper and lower quality Indian tea, still enjoyed an excellent reputation for quality amongst the consumers in the CIS bloc.

Liberalization of the Russian trade resulted in an immediate influx of short-term speculators from various countries, exploiting unsuspecting Russian merchants, who were equally ignorant of both tea quality and market prices. Hundreds of intermediaries from Europe and other regions contracted to supply the Russian distributors with tea, at relatively high prices, for average and low quality tea, purchased from the cheapest possible sources.

Many traders in Colombo, too, temporarily cashed in on this situation, going to the extent of getting the Government to relax the minimum quality standard for exports to Russia. Subsequent events proved that this was a serious error.

With our traders packing cheap tea for Russian labels, what followed was tragic in its predictability. As more and more supermarkets came in to existence, they resorted to the Western, multinational type of retailing. Soon the Russian traders set up their own packaging plants in the country, sourcing cheaper tea from other origins, but still retaining the Ceylon origin on the label, despite the diminution of real Ceylon Tea in the pack.

Today, some of those fully Russian-owned brands, developed on the value proposition of Ceylon Tea, with the support of our own exporters, are competing successfully with our exports, not only in Russia but in our traditional markets in other countries as well.

Consumer loyalty is built around brand names and claims of quality. Brand loyalty, the foundation of branding success, is the customer’s creation. Progressive variations in quality, caused by the gradual diminution of quality tea in the pack, are not detected by the average consumer in the everyday cup of tea, if the brand loyalty is strong. This is exactly what has happened in the case of the market in Russia. Our traders’ venality and greed for short-term profits got them entangled in a race to the bottom and lost us a golden opportunity, for the development of genuine Sri Lankan brands.

Ironically, it was a sad replication of this lack of enterprise and foresight that both our trade and the regulatory institutions demonstrated, just a few years previously, in the case of the Middle East market. Our failure to capitalize on that opening then did not serve as a lesson of history to us, just a few years later, in a different market but under very similar circumstances. Those opportunities will never come our way again.

Warning unheeded

In February 1994, at the invitation of Michael de Zoysa, then Chairman of the Ceylon Tea Traders’ Association, I made a presentation on the `Russian Tea Market’ on the occasion of the Centenary Celebrations Congress of the Association, held in Colombo. Within my allotted 20 minutes, I presented to the gathering, the history, background and the prevailing situation of the Russian market, accompanied by a concise Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis, of and for Ceylon Tea, in relation to that market.

In the presentation, I briefly covered all the issues I have described in greater detail in the preceding paragraphs and elsewhere in this writing as well. I was invited to make the presentation, as it was acknowledged that of all our exporters, I had the widest and the longest experience in the tea trade with Russia. In retrospect, I am inclined to believe that many of my listeners would have agreed with me. However, I have not seen much evidence of the practical implementation of any of the suggestions I made then.

In or around 1995, the Russian Government imposed increased tariff rates on value-added tea imports to the country. That was an indication that investment incentives and other concessions aimed at invigorating the local tea packaging industry were in the pipeline. The State-sponsored protection measures compensated the incompetent Russian tea packaging industry against, the general inefficiency of that operation in its totality, whilst attracting the additional investment required to make the industry more viable. Since then, the development of the Russian local tea packaging industry and the parallel decline of our presence in Russia is a matter of history.

Interesting episodes

My trade with Russia was marked by many interesting episodes, some amusing, and a few fraught with danger the latter occurring during the general lawlessness which engulfed Russian society, arising from the loss of the strong central controls following the break-up of the Soviet Union.

Dilmah had become a household word, with singular demand in tea-drinking circles in Russia. One day, in 1993, the representative of one of our customers, Koncom of Nizhni Novgorod, rang me and said that he wanted to fly to Sri Lanka to purchase a plane-load of tea. I tried to talk him out of it as it seemed a preposterous idea, apart from being a very costly proposition as well.

However, he was insistent, and I found out that he could transport 16 MT of tea in the aircraft model he was planning on bringing in. I then proposed to him a date for arrival, giving myself time to purchase the tea. He agreed and requested me to make visa arrangements for nine passengers.

When I was notified of his arrival at Katunayake, I sent a Dilmah staff coach to collect them from the airport. My driver rang from Katunayake and said that the buyer had arrived with 33 passengers and I had to hastily send a staff bus instead.

I was amazed that they had been able, on their own, to obtain visas for the entire contingent, when my arrangement with immigration was for only nine named crew members. I asked my representative why he had brought so many passengers and his answer was simple: “They paid for the fuel”!

It was a Saturday and I was alone in the office. The group wanted to do some shopping and I sent them to the ‘Night Bazaar’ near the Fort Railway Station, where they negotiated with our traders for local goods, with mostly the vast quantities of Russian vodka they had brought with them, launching what was the first informal barter trade between Russia and Sri Lanka. I also hosted them for lunch and they loved the spicy food. Meanwhile, the plane was loaded with Dilmah tea and they left for Russia immediately thereafter. The next morning The Sunday Observer featured a bold headline: ‘Russians Come to Town’!

Earlier on, sometime in 1984, there was another incident which could have had unpleasant consequences for the company MJF Exports which was then regularly servicing very large Russian orders for bulk tea. During that period, before the dissolution of the Soviet Union, the tea export volumes were determined on a Government-to-Government purchase agreement, and the buying was distributed between six companies. Mine was one of them. The purchases were almost entirely from the High- and Medium-Grown catalogues and at periods of peak Russian buying, the volumes were such that the buying had a significant impact on the auction in its entirety.

One auction day, when we were scheduled to buy extensively from the High-Grown catalogue against an urgent Russian order, I got a call from the auction floor advising me that there was no buyer for MJF Exports and that, as a result, many of the ex-estate lots normally snapped up by me were unsold or being purchased by other traders, cashing in on an unexpected opportunity. I was astounded as my two junior buyers, David Colin-Thome and Hemantha Fernando, should have been active on the floor the former buying the Off-Grades and Hemantha bidding for the quality High-Growns. With some difficulty I managed to get David to the phone a difficult task in the middle of an auction before the mobile phone era and found that Hemantha had failed to turn up at the auction.

I instructed David to immediately switch to the High-Grown catalogue and start buying, pending my arrival at the auction to take over from him. Due to the early warning I managed to avert what would have been a serious embarrassment, resulting from Hemantha’s unpardonable and unexplained absence from the auction. Justifiably, he later felt the full weight of my wrath.

It was an infraction of trade protocol which affected Hemantha’s relationship not only with me but his standing in the trade as well. Our tea trade is a small, insular world, peopled by individuals with long memories.

In another instance several small traders from Russia had flown in to Colombo and, having secured a taxi, requested the driver to take them to the Dilmah office. The driver brought them up to our main gate and had told the security officer on duty that the Russians had actually wanted to go to another company, but that he had persuaded them to come to Dilmah instead. On the strength of this alleged favour to us, he also sought a commission!

This group walked into my office with a large briefcase stuffed full with US Dollars no longer an uncommon occurrence with Russian buyers and I immediately sent them off with one of my accountants to pay the money into the bank. Having finalised the banking, they returned to the office and asked me for the tea. I had to explain to them, much to their irritation, that the delivery of an order would take three to four weeks.

A significant feature of our business with Russia was the receipt of large sums of money into our bank accounts and our inability to immediately trace the source of funding. We would then get a call from a Russian buyer who would advise us that he had paid money into our account and asking why we had not shipped his tea. Then my office would hurriedly set about regularizing the transaction, for which we had developed a standard procedure.

We also received orders from Germany, France, and Italy for shipments of tea destined for Russia. For these orders, which we would meet at our usual FOB prices, the final Russian buyer would pay an additional 25%-30%. To me, these purchases were an affirmation of the strength of the Dilmah brand and the reliability of the service I had provided to Russian buyers over the years.

Russian bear traps

Zara Tolstenkova, of Dora Ltd., Moscow, was another regular buyer of Dilmah tea. She too once visited me with a bag stuffed full of US Dollars and said that she wanted to buy 25 containers of our specialty ‘Fruit Tea’. This variety, which I introduced as a ‘Fun Tea,’ became enormously popular both in Russia and in Western markets. Subsequently, a major competitor introduced 30 different flavours at prices substantially below those of Dilmah.

Zara incurred a huge loss in her business during a period when I was visiting Moscow. We were at lunch together when her warehouse manager called to tell her that it was a good day for them as they had sold a large volume of tea. When the surprised Zara said that she had not received any new orders, her manager advised her that two men had arrived at the warehouse with an order on a company letterhead, and driven away with the tea. Apparently, these two men, through some ploy, had obtained a company letterhead from her office and defrauded her of the tea. Zara was robbed, but in the context of the times in Moscow, she was unable to take any action to recover her losses.

The popularity of Dilmah in Russia caused me much grief as well. In Moscow and in the Ukraine, the Dilmah pack was replicated by fraudsters. The packaging was perfect, but the contents were terrible. When I approached the local Police and asked them to investigate, I was advised that such a course of action could endanger my life! Basically, what they gently told me was, “You could disappear.” As a counter-strategy, I reluctantly placed the image of my face on the packs. Within two months that too was replicated to perfection.

When I discussed this matter with my agent, he suggested that we change the distributor, he too advising me of the physical danger to myself in pursuing legal action against those responsible. However, we managed to counter the threat to an extent by well-orchestrated PR programmes and radio interviews. That was how my face became the focal point of our advertising, thereafter, even in other markets. Though I did not realize it then, my face on the pack later became one of our strongest marketing tools.

Viktor Mikhailchenko, another buyer who owed us a large sum of money which he delayed to settle, met Dilhan, who had agreed to a meeting in his (Dilhan’s) hotel room at the Moscow International, without understanding the implications. Mikhail had not been friendly. However, at my insistence, the discussion was moved to the hotel reception area and Mikhail agreed to produce the bank manager, who would guarantee payment within two weeks. Since he could have brought any individual and identified him as the bank manager, I suggested a meeting at the bank, which Mikhail did not agree to! We had no option but to agree to his verbal assurances of settlement, but surprisingly, he did pay us the outstanding some weeks later. However, despite his repeated requests, we stopped doing business with him thereafter.

When I first started visiting the USSR, in the early 1960s, it was a quiet, orderly society with a rigidly-controlled economy. There were absolutely no public displays of affluence and the only privileged people were Government officials. In the course of my business dealings with tradespeople in Russia, I used to be frequently invited to parties and other social gatherings. Apart from the wonderful array of traditional Russian food, a feature of these parties was the large consumption of vodka, for which my Russian hosts demonstrated an enormous capacity, as well as an inexplicable resistance to its impact.

My maximum would be about three glasses but that was totally insufficient to meet the demands of the innumerable toasts that would be drunk of an evening. I would, in every possible instance, surreptitiously empty my glass into the nearest flowerpot or some other container a move that would not be lost on my friend Rafiq Nishonov!

On my visits to Rafiq’s home in Moscow, an elegantly-appointed official residence, his wife Rano used to prepare a delicious ‘pilaf’ that we call ‘pilau’ with which our plates would be loaded. Whilst in Sri Lanka he had two fierce Doberman dogs, who used to be locked up when visitors were present. The same pair were guarding his household in Moscow as well. Traveling around in Moscow in Rafiq’s beautiful Mercedes 350 was a pleasure, as his official status enabled quick access to any destination, with highly-deferential treatment from security officers.

On one of my visits, with Dilhan also accompanying me, after finishing our work in Moscow we flew to Belarus, where we had direct importers of Dilmah tea. We stayed a couple of nights in a hotel which also had a casino where, in a rare gambling session, we won enough money to pay for our hotel and also purchase an old, traditional Russian tea samovar for around USD 300. I thought that it would be an attractive addition to the Dilmah Tea Archive in Colombo, but, unfortunately, at the Moscow Airport Customs, it was confiscated on the grounds that the samovar was an antique item and therefore not transferable out of the country.

In 2006 Herman Gref, Minister of Economic Affairs and Trade of Russia from 2000 to 2007, made an official visit to Sri Lanka. He first met the then Minister of Trade and Commerce, the late Jeyaraj Fernandopulle, in the latter’s office, in order to sign the WTO protocol. During the meeting he had told the Minister that he would also like to visit the Dilmah factory as he had grown up drinking Dilmah tea in Russia. When Minister Fernandopulle conveyed the request to me, I said I would be quite happy to come over to the Ministry to meet Gref, but the latter insisted on coming over to my office in Peliyagoda on his way to the airport, on the return journey to Russia.

He congratulated me on my trade with Russia and the quality of my products and offered me unconditional assistance, which included land at no cost, to set up a tea packaging operation anywhere in Russia. I had some difficulty in declining this seemingly-magnanimous offer! Gref was subsequently appointed CEO and Chairman of Sberbank, the largest bank in Russia. He still holds these positions.

Eventually, in view of my considerable losses in the trade with Russia, largely owing to illegal intrusions by the Russian mafia, from 1997 onwards I significantly downsized my presence in that market, despite having been a major player with my Dilmah brand since 1988. The devaluation of the ruble also had its impact on the import-export trade, as Russian traders experienced difficulties in obtaining US Dollars from banks. However, in retrospect, despite the difficulties, I feel that moving out of Russia was an error of judgment as when I returned to it, I was not able to recapture the dominance I had been enjoying earlier. In the relatively short period of my limited involvement, many other brands had moved in.

The iron lady becomes a friend

When marketing Dilmah tea in Russia more than a decade later, it was my intention to link up with one of the country’s largest supermarket chains, the X-5 Retail Group, which operated chains of convenience stores, supermarkets, and hypermarkets under different brands right across Russia. The X-5 Group was also Russia’s largest food retailer. In order to re-develop our business in Russia I had, in the meantime, set up a company in Russia called Dilmah Rus, as an associate company of the MJF Group. Megapolis, Russia, was appointed as the Dilmah distributor in the country.

Despite all our preparations, however, our team was facing problems in obtaining listings with the X-5 Group. Though Dilmah tea had previously been widely available in Russia, since we had changed distributors, as was the practice the retailer had de-listed us. Unquestionably, our success in Russia was contingent upon our linking up with the X-5 Group and that was to be determined solely by Olga Ivanovna, the Chief Commercial Buyer of Beverages for the X-5 Group. She was, reputedly, an uncompromising negotiator. Both Dilhan and Roshan Tissaaratchy, my Director, reported to me that Ms. Olga had laid out very rigorous conditions, which included wide-ranging discounts and a stiff listing fee, before she would consider accepting the Dilmah brand.

In 2010 I travelled to Moscow, accompanied by Roshan, for a meeting with this lady. She arrived alone for the discussion and, firstly, insisted that my Russian distributor, who was also present, be asked to leave the meeting as she dealt only with principals. We tried to convince her, without success, that the distributor’s presence was necessary. Fortunately, our distributor resolved the problem by courteously agreeing to withdraw and we commenced our negotiations with her with only me, Roshan, and our Country Manager present.

Olga was extremely business-like, controlled, and gave no indication of her true feelings, but I did get the impression that, inwardly, she was intrigued at having to deal directly with the owner of a brand. My guess was that it was an unusual situation for her, and for me an advantage that I would go on to use as a lever in the negotiation. We laid out our product range for inspection and I described my background in the tea trade in Russia to her. I also explained my business philosophy. I then told her that years before, I had introduced to the Russian market a large-leaf tea pack called OP-COP, which had sold very well and that it continued to be our best seller, along with our Pure Ceylon Tea bags, as I had provided the same product over the years with no change in quality.

However, whilst she was appreciative of our arguments, she still laid out pre-qualification conditions, which included a 50% discount on our price range and a USD 800,000 listing fee. I was startled at the stiffness of her terms, but told her very courteously that the tea I was proposing to deliver was of the finest quality, direct from the plantations and superior to any product that she already had.

I also made it clear to her that I would not be able to provide that package on the bargain-basement terms she was proposing, as that would compel me to compromise on the Dilmah benchmark of product purity and authenticity. I explained to her that those were was not concessions I was prepared to consider, irrespective of the rewards at stake. Having thus stated my position, I thanked her for her time and prepared to withdraw.

She then spoke to the Country Manager in rapid-fire Russian and, at the end of the that exchange, turned to me and asked how quickly we could deliver one million units of Dilmah tea, at my price, for a special promotion. She also agreed to fund part of the promotional expenses. We came away from that meeting with an order for one million X 100 tea bag units. Eventually, we also became great friends with Olga and subsequently, after she had left the X-5 Group, she visited Sri Lanka with her family for a vacation.

To me, the episode in its entirety was the reinforcement of my long-held personal ethos, that if you have a good product and refuse to compromise on quality, at a commensurate price, the buyer-consumer will eventually accept the proposition as a fair bargain. To both Dilhan and Roshan I think it was part of an interesting learning curve, the kind that is not normally reflected in marketing textbooks. Persistence, reinforced by integrity, rarely fails to produce a decent result.

However, the developments and the progression of events described above, were indisputable proof of a prediction and a statement I had made repeatedly, firstly to the Ceylon Tea Propaganda Board and later to the Sri Lanka Tea Board in any market, one must use the opportune moment to enter and establish the dominance of your product or brand. If you fail to do so, another trader-entrepreneur will step in and occupy that space. In large, lucrative markets, that kind of opportunity may come only once, and a belated re-entry carries a massive cost that only a few can afford.

All News Advertisement

Related Topics:Iron Lady Zara Tolstenkova

Up Next

POLICE EXCESSES

Don't Miss

My first visit to China and finding the Chinese people

Click to comment

Features

The NPP Government is more than a JVP offspring:

Published

3 days ago

2026/04/12

Thilina Walpola

Rohana Wijeweera

It is also different from all past governments as it faces new and different challenges

No one knows whether the already broken ceasefire between the US and Iran, with Israel as a reluctant adjunct, will last the full 10 days, or what will come thereafter. The world’s economic woes are not over and the markets are yo-yoing in response to Trump’s twitches and Iran’s gate keeping at the Strait of Hormuz. The gloomy expert foretelling is that full economic normalcy will not return until the year is over even if the war were to end with the ceasefire. That means continuing challenges for Sri Lanka and more of the tough learning in the art of governing for the NPP.

The NPP government has been doing what most governments in Asia have been doing to cope with the current global crisis, which is also an Asian crisis insofar as oil supplies and other supply chains are concerned. What the government can and must do additionally is to be totally candid with the people and keep them informed of everything that it is doing – from monitoring import prices to the timely arranging of supplies, all the details of tender, the tracking of arrivals, and keeping the distribution flow through the market without bottlenecks. That way the government can eliminate upstream tender rackets and downstream hoarding swindles. People do not expect miracles from their government, only honest, sincere and serious effort in difficult circumstances. Backed up by clear communication and constant public engagement.

But nothing is going to stop the flow of criticisms against the NPP government. That is a fact of Sri Lankan politics. Even though the opposition forces are weak and have little traction and even less credibility, there has not been any drought in the criticisms levelled against the still fledgling government. These criticisms can be categorized as ideological, institutional and oppositional criticisms, with each category having its own constituency and/or commentators. The three categories invariably overlap and there are instances of criticisms that excite only the pundits but have no political resonance.

April 5 anniversary nostalgia

There is also a new line of criticism that might be inspired by the April 5 anniversary nostalgia for the 1971 JVP insurrection. This new line traces the NPP government to the distant roots of the JVP – its April 1965 founding “in a working-class home in Akmeemana, Galle” by a 22-year old Rohana Wijeweera and seven others; the short lived 1971 insurrection that was easily defeated; and the much longer and more devastating second (1987 to 1989) insurrection that led to the elimination of the JVP’s frontline leaders including Wijeweera, and brought about a change in the JVP’s political direction with commitment to parliamentary democracy. So far, so good, as history goes.

But where the nostalgic narrative starts to bend is in attempting a straight line connection from the 1965 Akmeemana origins of the JVP to the national electoral victories of the NPP in 2024. And the bend gets broken in trying to bridge the gap between the “founding anti-imperialist economics” of the JVP and the practical imperatives of the NPP government in “governing a debt-laden small open economy.” Yet this line of criticism differs from the other lines of criticism that I have alluded to, but more so for its moral purpose than for its analytical clarity. The search for clarity could begin with question – why is the NPP government more than a JVP offspring? The answer is not so simple, but it is also not too complicated.

For starters, the JVP was a political response to the national and global conditions of the 1960s and 1970s, piggybacking socialism on the bandwagon of ethno-nationalism in a bi-polar world that was ideologically split between status quo capitalism and the alternative of socialism. The NPP government, on the other hand, is not only a response to, but is also a product of the conditions of the 2010s and 2020s. The twain cannot be more different. Nothing is the same between then and now, locally and globally.

A pragmatic way to look at the differences between the origins of the JVP and the circumstances of the NPP government is to look at the very range of criticisms that are levelled against the NPP government. What I categorize as ideological criticisms include criticisms of the government’s pro-IMF and allegedly neo-liberal economic policies, as well as the government’s foreign policy stances – on Israel, on the current US-Israel war against Iran, the geopolitics of the Indian Ocean, and the apparent closeness to the Modi government in India. These criticisms emanate from the non-JVP left and Sinhala Buddhist nationalists.

Strands of nationalism

To digress briefly, there are several strands in the overall bundle of Sri Lankan nationalism. There is the liberal inclusive strand, the left-progressive strand, the exclusive Sinhala Buddhist Nationalist (SBN) strand, and the defensive strands of minority nationalisms. Given Sri Lanka’s historical political formations and alliances, much overlapping goes on between the different strands. The overlapping gets selective on an issue by issue basis, which in itself is not unwelcome insofar as it promotes plurality in place of exclusivity.

Historically as well, and certainly after 1956, the SBN strand has been the dominant strand of nationalism in Sri Lanka and has had the most influential say in every government until now. Past versions of the JVP frequently straddled the dominant SBN space. Currently, however, the dominant SBN strand is in one of its more dormant phases and the NPP government could be a reason for the current dormancy. This is an obvious difference between the old JVP and the new NPP.

A second set of criticisms, or institutional criticisms, emanate from political liberals and human rights activists and these are about the NPP government’s actions or non-actions in regard to constitutional changes, the future of the elected executive presidency, the status of provincial devolution and the timing of provincial council elections, progress on human rights issues, the resolution of unfinished postwar businesses including the amnesia over mass graves. These criticisms and the issues they represent are also in varying ways the primary concerns of the island’s Tamils, Muslims and the Malaiyaka (planntationn) Tamils. As with the overlapping between the left and the non-minority nationalists, there is also overlapping between the liberal activists and minority representatives.

A third category includes what might be called oppositional criticisms and they counterpose the JVP’s past against the NPP’s present, call into question the JVP’s commitment to multi-party democracy and raise alarms about a creeping constitutional dictatorship. This category also includes criticisms of the NPP government’s lack of governmental experience and competence; alleged instances of abuse of power, mismanagement and even corruption; alleged harassment of past politicians; and the failure to find the alleged mastermind behind the 2019 Easter bombings. At a policy and implementational level, there have been criticisms of the government’s educational reforms and electricity reforms, the responses to cyclone Ditwah, and the current global oil and economic crises. The purveyors of oppositional criticisms are drawn from the general political class which includes political parties, current and past parliamentarians, as well as media pundits.

Criticisms as expectations

What is common to all three categories of criticisms is that they collectively represent what were understood to be promises by the NPP before the elections, and have become expectations of the NPP government after the elections. It is the range and nature of these criticisms and the corresponding expectations that make the NPP government a lot more than a mere JVP offspring, and significantly differentiate it from every previous government.

The deliverables that are expected of the NPP government were never a part of the vocabulary of the original JVP platform and programs. The very mode of parliamentary politics was ideologically anathema to the JVP of Akmeemana. And there was no mention of or concern for minority rights, or constitutional reforms. On foreign policy, it was all India phobia without Anglo mania – a halfway variation of Sri Lanka’s mainstream foreign policy of Anglo mania and India phobia. For a party of the rural proletariat, the JVP was virulently opposed to the plantation proletariat. The JVP’s version of anti-imperialist economics would hardly have excited the Sri Lankan electorate at any time, and certainly not at the present time.

At the same time, the NPP government is also the only government that has genealogical antecedents to a political movement or organization like the JVP. That in itself makes the NPP government unique among Sri Lanka’s other governments. The formation of the NPP is the culmination of the evolution of the JVP that began after the second insurrection with the shedding of political violence, acceptance of political plurality and commitment to electoral democracy.

But the evolution was not entirely a process of internal transformation. It was also a response to a rapidly and radically changing circumstances both within Sri Lanka and beyond. This evolution has not been a rejection of the founding socialist purposes of the JVP in 1968, but their adaptation in the endless political search, under constantly changing conditions, for a non-violent, socialist and democratic framework that would facilitate the full development of the human potential of all Sri Lankans.

The burden of expectations is unmistakable, but what is also remarkable is their comprehensiveness and the NPP’s formal commitment to all of them at the same time. No previous government shouldered such an extensive burden or showed such a willing commitment to each and every one of the expectations. In the brewing global economic crisis, the criticisms, expectations and the priorities of the government will invariably be focussed on keeping the economy alive and alleviating the day-to-day difficulties of millions of Sri Lankan families. While what the NPP government can and must do may not differ much from what other Asian governments – from Pakistan to Vietnam – are doing, it could and should do better than what any and all past Sri Lankan governments did when facing economic challenges.

by Rajan Philips

Features

A Fragile Ceasefire: Pakistan’s Glory and Israel’s Sabotage

Published

3 days ago

2026/04/12

Thilina Walpola

Smokes over Beirut: Israel’s Ceasefire Attack on Hezbollah in Lebanon

After threatening to annihilate one of the planet’s oldest civilizations, TACO* Trump chickened out again by grasping the ceasefire lifeline that Pakistan had assiduously prepared. Trump needed the ceasefire badly to stem the mounting opposition to the war in America. Israeli Prime Minister Netanyahu wanted the war to continue because he needed it badly for his political survival. So, he contrived a fiction and convinced Trump that Lebanon is not included in the ceasefire. Trump as usual may not have noticed that Pakistan’s Prime Minister Shehbaz Shariff had clearly indicated Lebanon’s inclusion in his announcement of the ceasefire at 7:50 PM, Tuesday, on X. Ten minutes before Donald Trump’s fake deadline.

True to form on Wednesday, Israel unleashed the heaviest assault by far on Lebanon, reportedly killing over 300 people, the highest single-day death toll in the current war. Iran responded by re-closing the Strait of Hormuz and questioning the need for talks in Islamabad over the weekend. There were other incidents as well, with an oil refinery attacked in Iran, and Iranian drones and missiles slamming oil and gas infrastructure in UAE, Saudi Arabia, Bahrain and Qatar.

The US tried to insist that Lebanon is not part of the ceasefire, with the argumentative US Vice President JD Vance, who was in Budapest, Hungary, campaigning for Viktor Orban, calling the whole thing a matter of “bad faith negotiation” as well as “legitimate misunderstanding” on the part of Iran, and warning Iran that “it would be dumb to jeopardise its ceasefire with Washington over Israel’s attacks in Lebanon.”

But as the attack in Lebanon drew international condemnation – from Pope Leo to UN Secretary General António Guterres, and several world leaders, and amidst fears of Lebanon becoming another Gaza with 1,500 people including 130 children killed and more than a million people displaced, Washington got Israel to stop its “lawn mowing” in southern Lebanon.

Prime Minister Benjamin Netanyahu agreed to “open direct negotiations with Lebanon as soon as possible,”. Lebanese President Joeseph Aoun has also called for “a ceasefire between Israel and Lebanon, followed by direct negotiations between them.” Israel’s involvement in Lebanon remains a wild card that threatens the ceasefire and could scuttle the talks between the US and Iran scheduled for Saturday in Islamabad.

Losers and Winners

After the ceasefire, both the Trump Administration and Iran have claimed total victories while the Israeli government wants the war to continue. The truth is that after more than a month into nonstop bombing of Iran, America and Israel have won nothing. Only Iran has won something it did not have when Trump and Netanyahu started their war. Iran now has not only a say over but control of the Strait of Hormuz. The ceasefire acknowledges this. Both Trump and Netanyahu are under fire in their respective countries and have no allies in the world except one another.

The real diplomatic winner is Pakistan. Salman Rushdie’s palimpsest-country has emerged as a key player in global politics and an influential mediator in a volatile region. Pakistan’s Prime Minister Shehbaz Sharif and Chief of Defence Field Marshal Asim Munir have both been praised by President Trump and credited for achieving the current ceasefire. The Iranian regime has also been effusive in its praise of Pakistan’s efforts.

It is Pakistan that persisted with the effort after initial attempts at backdoor diplomacy by Egypt, Pakistan and Türkiye started floundering. Sharing a 900 km border and deep cultural history with Iran, and having a skirmish of its own on the eastern front with Afghanistan, Pakistan has all the reason to contain and potentially resolve the current conflict in Iran. Although a majority Sunni Muslim country, Pakistan is home to the second largest Shia Muslim population after Iran, and is the easterly terminus of the Shia Arc that stretches from Lebanon. The country also has a mutual defense pact with Saudi Arabia that includes Pakistan’s nuclear cover for the Kingdom. An open conflict between Iran and Saudi Arabia would have put Pakistan in a dangerously awkward position.

It is now known and Trump has acknowledged that China had a hand in helping Iran get to the diplomatic table. Pakistan used its connections well to get Chinese diplomatic reinforcement. Pakistani Foreign Minister Ishaq Dar flew to Beijing to brief his Chinese counterpart and secured China’s public support for the diplomatic efforts. The visit produced a Five-Point Plan that became a sequel to America’s 15-point proposal and the eventual ten-point offer by Iran.

There is no consensus between parties as to which points are where and who is agreeing to what. The chaos is par for the course the way Donald Trumps conducts global affairs. So, all kudos to Pakistan for quietly persisting with old school toing and froing and producing a semblance of an agreement on a tweet without a parchment.

It is also noteworthy that Israel has been excluded from all the diplomatic efforts so far. And it is remarkable, but should not be surprising, the way Trump has sidelined Isreal from the talks. Prime Minister Netanyahu has been enjoying overwhelming support of Israelis for starting the war of his life against Iran and getting the US to spearhead it. But now the country is getting confused and is exposed to Iranian missiles and drones far more than ever before. The Israeli opposition is finally coming alive realizing what little has Netanyahu’s wars have achieved and at what cost. Israel has alienated a majority of Americans and has no ally anywhere else.

It will be a busy Saturday in Islamabad, where the US and Iranian delegations are set to meet. Iran would seem to have insisted and secured the assurance that the US delegation will be led by Vice President Vance, while including Trump’s personal diplomats – Steve Witkoff and son-in-law Jared Kushner. Iran has not announced its team but it is expected to be led, for protocol parity, by Iran’s Speaker Mohammad Bagher Ghalibaf, and will likely include its suave Foreign Minister Abbas Araghchi. Vice President Vance’s attendance will be the most senior US engagement with Iran since Secretary of State John Kerry negotiated the 2015 nuclear deal under President Obama.

The physical arrangements for the talks are still not public although Islamabad has been turned into a security fortress given the stakes and risks involved. The talks are expected to be ‘indirect’, with the two delegations in separate rooms and Pakistani officials shuttling between them. The status of Iran’s enriched uranium and the reopening of the Strait of Hormuz will be the major points of contention. After Netanyahu’s overreach on Wednesday, Lebanon is also on the short list

The 2015 nuclear deal (the Joint Comprehensive Action Plan) took months of negotiations and involved multiple parties besides the US and Iran, including China, France, Germany, UK, Russia and the EU. That served the cause of regional and world peace well until Trump tore up the deal to spite Obama. It would be too much to expect anything similar after a weekend encounter in Islamabad. But if the talks could lead to at least a permanent ceasefire and the return to diplomacy that would be a huge achievement.

(*As of 2025–2026, Donald Trump is nicknamed “TACO Trump” by Wall Street traders and investors as an acronym for “”. This term highlights a perceived pattern of him making strong tariff threats that cause market panic, only to later retreat or weaken them, causing a rebound.)

by Rajan Philips

Features

CIA’s hidden weapon in Iran

Published

3 days ago

2026/04/12

Thilina Walpola

We are passing through the ten-day interregnum called a ceasefire over the War on Iran. The world may breathe briefly, but this pause is not reassurance—it is a deliberate interlude, a vacuum in which every actor positions for the next escalation. Iran is far from secure. Behind the veneer of calm, external powers and local forces are preparing, arming, and coordinating. The United States is unlikely to deploy conventional ground troops; the next moves will be executed through proxies whose behaviour will defy expectation. These insurgents are shaped, guided, and amplified by intelligence and technology, capable of moving silently, striking precisely, and vanishing before retaliation. The ceasefire is not peace—it is the prelude to disruption.

The Kurds, historically instruments of Tehran against Baghdad, are now vectors for the next insurgency inside Iran. This movement is neither organic nor local. It is externally orchestrated, with the CIA as the principal architect. History provides the blueprint: under Mohammad-Reza Shah Pahlavi, Kurdish uprisings were manipulated, never supported out of sympathy. They were instruments of leverage against Iraq, a way to weaken a rival while projecting influence beyond Iran’s borders. Colonel Isa Pejman, Iranian military intelligence officer who played a role in Kurdish affairs, recalled proposing support for a military insurgency in Iraq, only for the Shah to respond coldly: “[Mustafa] Barzani killed my Army soldiers… please forget it. The zeitgeist and regional context have been completely transformed.” The Kurds were pawns, but pawns with strategic weight. Pejman later noted: “When the Shah wrote on the back of the letter ‘Accepted’ to General Pakravan, I felt I was the true leader of the Kurdish movement.” The seeds planted then are now being activated under new, technologically empowered auspices.

Iran’s geographic vulnerabilities make this possible. The Shah understood the trap: a vast territory with porous borders, squeezed by Soviet pressure from the north and radical Arab states from the west. “We are in a really terrible situation since Moscow’s twin pincers coming down through Kabul and Baghdad surround us,” he warned Asadollah Alam. From Soviet support for the Mahabad Republic to Barzani’s dream of a unified Kurdistan, Tehran knew an autonomous Kurdish bloc could destabilize both Iraq and Iran. “Since the formation of the Soviet-backed Mahabad Republic, the Shah had been considerably worried about the Kurdish threat,” a US assessment concluded.

Today, the Kurds’ significance is operational, not symbolic. The CIA’s recent rescue of a downed F-15 airman using Ghost Murmur, a quantum magnetometry system, demonstrated the reach of technology in intelligence operations. The airman survived two days on Iranian soil before extraction. This was not a simple rescue; it was proof that highly mobile, technologically augmented operations can penetrate Iranian territory with surgical precision. The same logic applies to insurgency preparation: when individuals can be tracked through electromagnetic signatures, AI-enhanced surveillance, and drones, proxy forces can be armed, guided, and coordinated with unprecedented efficiency. The Kurds are no longer pawns—they are a living network capable of fracturing Iranian cohesion while providing deniability to foreign powers.

Iran’s engagement with Iraqi Kurds was always containment, not empowerment. The Shah’s goal was never Kurdish independence. “We do not approve an independent [Iraqi] Kurdistan,” he stated explicitly. Yet their utility as instruments of regional strategy was undeniable. The CIA’s revival of these networks continues a long-standing pattern: insurgent groups integrated into the wider calculus of international power. Israel, Iran, and the Kurds formed a triangular strategic relationship that terrified Baghdad. “For Baghdad, an Iranian-Israeli-Kurdish triangular alliance was an existential threat,” contemporary reports noted. This is the template for modern manipulation: a networked insurgency, externally supported, capable of destabilizing regimes from within while giving foreign powers plausible deniability.

Iran today faces fragility. Years of sanctions, repression, and targeted strikes have weakened educational and scientific hubs; Sharif University in Tehran, one of the country’s leading scientific centres, was bombed. Leaders, scholars, and innovators have been eliminated. Military readiness is compromised. Generations-long setbacks leave Iran exposed. Against this backdrop, a Kurdish insurgency armed with drones, AI-supported surveillance, and precision munitions could do more than disrupt—it could fracture the state internally. The current ten-day ceasefire is a mirage; the next wave of revolt is already being orchestrated.

CIA involvement is deliberate. Operations are coordinated with allied intelligence agencies, leveraging Kurdish grievances, mobility, and ethnolinguistic networks. The Kurds’ spread across Iran, Iraq, Turkey, and Syria provides operational depth—allowing insurgents to strike, vanish, and regroup with impunity. Barzani understood leverage decades ago: “We could be useful to the United States… Look at our strategic location on the flank of any possible Soviet advance into the Middle East.” Today, the calculation is inverted: Kurds are no longer instruments against Baghdad; they are potential disruptors inside Tehran itself.

Technology is central. Ghost Murmur’s ability to detect a single heartbeat remotely exemplifies how intelligence can underpin insurgent networks. Drones, satellite communications, AI predictive modeling, and battlefield sensors create an infrastructure that can transform a dispersed Kurdish insurgency into a high-precision operation. Iran can no longer rely on fortifications or loyalty alone; the external environment has been recalibrated by technology.

History provides the roadmap. The Shah’s betrayal of Barzani after the 1975 Algiers Agreement demonstrated that external actors can manipulate both Iranian ambitions and Kurdish loyalties. “The Shah sold out the Kurds,” Yitzhak Rabin told Kissinger. “We could not station our troops there and keep fighting forever,” the Shah explained to Alam. The Kurds are a pivot, not a cause. Networks once acting under Tehran’s influence are now being repurposed against it.

The insurgency exploits societal fissures. Kurdish discontent in Iran, suppressed for decades, provides fertile ground. Historical betrayal fuels modern narratives: “Barzani claimed that ‘Isa Pejman sold us out to the Shah and the Shah sold us out to the US.’” Intelligence agencies weaponize these grievances, pairing them with training, technological augmentation, and covert support.

Geopolitically, the stakes are immense. The Shah’s defensive-offensive doctrine projected Iranian influence outward to neutralize threats. Today, the logic is inverted: the same networks used to contain Iraq are being readied to contain Iran. A technologically augmented Kurdish insurgency, covertly backed, could achieve in months what decades of sanctions, diplomacy, or repression have failed to accomplish.

The operation will be asymmetric, high-tech, and dispersed. UAVs, quantum-enhanced surveillance, encrypted communications, and AI-directed logistics will dominate. Conventional Iranian forces are vulnerable to this type of warfare. As Pejman reflected decades ago, “Our Army was fighting there, rather than the Kurds who were harshly defeated… How could we keep such a place?” Today, the challenge is magnified by intelligence superiority on the insurgents’ side.

This is not a temporary flare-up. The CIA and its allies are constructing a generational network of influence. Experience from Iraq, Syria, and Lebanon proves these networks endure once operationalised. The Shah recognized this: “Iran’s non-state foreign policy under the Shah’s reign left a lasting legacy for the post-Revolution era.” Today, those instruments are being remade as vectors of foreign influence inside Iran.

The future is stark. Iran faces not simply external threats, but a carefully engineered insurgency exploiting historical grievances, technological superiority, and precise intelligence. The Kurds are central. History, technology, and geopolitical calculation converge to create a transformative threat. Tehran’s miscalculations, betrayals, and suppressed grievances now form the lattice for this insurgency. The Kurds are positioned not just as an ethnic minority, but as a vector of international strategy—Tehran may be powerless to stop it.

Iran’s containment strategies have been weaponized, fused with technology, and inverted against it. The ghosts of Barzani’s Peshmerga, the shadows of Algiers, and the Shah’s strategic vision now converge with Ghost Murmur, drones, and AI. Tehran faces a paradox: the instruments it once controlled are now calibrated to undermine its authority. The next Kurdish revolt will not only fight in the mountains but in the electromagnetic shadows where intelligence operates, consequences are lethal, and visibility is scarce.

by Nilantha Ilangamuwa