Features
Domestic Debt Restructuring – An Alternate View
by Romesh Bandaranaike, Ph.D.
There have been substantial and wide spread criticisms of the recently instituted Domestic Debt Restructuring (DDR) scheme carried out by Central Bank of Sri Lanka (CBSL), to reduce the Sri Lanka Government’s requirements for funding. In this article I argue that the scheme, as structured and carried out by CBSL, is appropriate, given the ground realities in the country, and that the critics have ignored a number of factors which forced CBSL to design the scheme as it did. I then suggest additional steps the Government could take to further improve its financial position in connection with past Bond issues.
The DDR Scheme
Faced with massive shortfalls in revenue, the Government recently carried out a “restructuring” of the debts it owed on Sri Lanka Rupee denominated Treasury Bills and Bonds in an effort to substantially improve Government finances, including the funds needed to service these Bills/Bonds. The two key elements of the DDR are a) Converting all Treasury Bills presently owned by CBSL to longer term Treasury Bonds, thereby substantially delaying the payment dates on these Bills; and b) Effectively “forcing” the Employees Provident Fund (EPF) and other superannuation funds to exchange most of the Bonds they hold for 12 year Bonds with somewhat lower interest payments.
They did this by threatening to increase the tax rates that EPF pays on its annual income to 30% from the present 14%, if they did not accept the Bond exchange. Since such an increase was financially worse for EPF compared with the Bond exchange, EPF opted for the latter.
CBSL estimates that the scheme would reduce the Gross Financing Needs (GFN) of the Government by 1.5%, 1% by the CBSL Bill-Bond exchange and 0.5% by the EPF Bond exchange.
The Criticisms
The principal criticisms of the DDR, from the public, Trade Unions, Economic Think Tanks, and numerous “Experts,” is that the entire burden of the DDR is being placed on the backs of the retirement savings of “poor workers” who are the members of EPF.
CBSL has justified the proposed increase in the tax rates for EPF and other superannuation funds to 30% from the present 14% on the basis that the banks have to pay the higher tax rate of 30% plus VAT. Dr. Wijewardena, a former CBSL Deputy Governor, has written several articles criticizing CBSL for not presenting the correct picture in this regard and not disclosing full information on the impacts of the restructuring on EPF members’ returns. Dr. W’s main argument is that, in the case of the banks, the tax rate applies to “net interest”, whereas, in the case of the EPF, it applies to “gross interest.” For the banks, net interest is interest earnings on its loans less the interest it pays to depositors.
In the case of EPF, Dr. W points out that EPF is not allowed to subtract the interest it pays to EPF account holders to determine its income and tax liability, and that CBSL comparison of bank and EPF tax rates is therefore misleading. In a subsequent article by Dr. W, he criticizes CBSL/EPF for not fully disclosing the cost to EPF holders of accepting the proposed DDR compared with an increase in EPF’s tax rate to 30% and the justification for accepting the Bond exchange rather than the tax increase to 30%. He goes on to add that CBSL has a conflict of interest as both the developer of Government policy and as the administrator of EPF.
My Responses to the Criticisms
The criticism that the entire burden of the DDR is on the backs of workers is factually incorrect. As stated above, two-third of the 1.5% reduction in GFN (1%) is being achieved by exchanging the Treasury Bills held by CBSL for long term Bonds. Only 0.5% of the reduction is from the exchange of Bonds held by the EPF and other superannuation funds. In other words, 67% of the restructuring cost is borne by CBSL (in effect by all citizens), while only 33% is borne by EPF account holders. Furthermore, only workers in the formal private sector contribute to the EPF/ETF, while workers in the informal private sector (e.g. farmers, fishermen, small transporters, traders and construction workers) and Government employees do not.
As a result, only about 25-30% of the workers in the country have EPF accounts. Therefore, 70-75% of workers in the country will not suffer any burden due to the EPF bond restructuring. Finally, the workers with EPF accounts also include middle and senior management of companies who cannot be called “poor workers” as referred to in the various criticisms of the present DDR scheme. It is true that this category may only be a very small percentage of those holding EPF accounts. However, their account balances are likely to be very much higher than other EPF members and the impact of the restructuring on them will be proportional to these balances.
It would be ideal if the EPF could release statistics in this regard which will allow an assessment of this element. For example, the fraction of the total EPF funds held by those with EPF balances of over Rs 5 million (say), since such persons cannot be classified as “poor workers.” Workers who have balances in EPF/ETF, built up as a result of deductions from their salaries and additional higher contributions from their employers, at least have a retirement fund they can turn to, even if it is somewhat less because of the DDR. It could conceivably be argued that the 70-75% of workers who do not have such balances, mostly working in the informal sector, are worse off or poorer than those with EPF balances. This would be a justification for placing the burden of part of the DDR on EPF account holders rather than on other, even “poorer”, workers.
In response to Dr. W’s criticisms that EPF and bank tax rates are not comparable the way CBSL has done; each year, EPF determines a percentage it will pay/accrue to the account of each EPF account holder based on the earnings by the EPF that year. This percentage is not an interest similar to that paid by banks to its depositors and is not a cost that is deductible by EPF to calculate its tax liability each year. It is simply a percentage decided by the EPF administrators to allocate the profits after tax earned by the EPF during the year. Calling this percentage an “interest” is a misnomer. Account holders in EPF are akin to shareholders in banks and not depositors.
The amounts credited by EPF to a member’s account each year, based on EPF’s earnings during the year, is not a cost incurred by EPF in generating these earnings. It is something closer to a dividend paid by a bank to its shareholders in the form of additional shares. If EPF is allowed to determine its tax liabilities by subtracting these accrued amounts, banks should be able to deduct dividend costs in determining their tax liabilities. Dr. W’s criticism of the non-comparability of bank and EPF tax rates cannot be sustained.
Dr. W uses CBSL/EPF’s own numbers on the differences in returns under the two scenarios EPF has been offered and simply multiplies it by the total EPF Bond holding value to arrive at the cost to EPF of accepting the Bond exchange. This is something that could have readily been done by anyone and Dr. W’s implication that CBSL/EPF is hiding/not fully disclosing something in its statement cannot be sustained.
The CBSL/EPF analysis is simply to show that the return to EPF is better under the scenario where it accepts the DDR option, compared to rejecting the DDR option and being subject to a 30% tax rate. This information is more than sufficient for EPF to recommend to its Board that it should accept the DDR. Dr. W than goes into the past history of taxation rates applicable to the EPF and points out that as originally envisaged EPF earnings were to be tax exempt.
He shows calculations of the losses to EPF holders of the present DDR, compared with a situation if EPF earnings were tax exempt. This is a straw man put up by Dr. W to be knocked down as part of his criticism of CBSL/EPF. It is the tax rates that are applicable to EPF today, before the DDR, that are relevant and it would have been nonsensical for CBSL to show calculations based on what if the tax rates were those that existed many years ago.
With respect to the criticism that CBSL has a conflict of interest in both being the administrator of EPF and the policy advisor recommending the DDR, I do not see any conflict. CBSL, as advisor to the Government, has made the DDR proposal which allows EPF to choose between two options, accept the proposed DDR Bond exchange or reject it and be subject to a 30% tax rate. As the administrator of the EPF, CBSL has simply analysed these two options and clearly shown that the EPF is better off accepting the Bond exchange compared with rejecting it and being subject to a 30% tax rate.
Other Relevant Issues
It is telling that none of those criticizing the present process have offered any viable alternative DDR arrangement to achieve the same objectives as the present exercise. In saying this, I am ignoring the suggestions by some parties who say there would be no need for the exercise if “The money stolen by the Rajapaksa’s is recovered” or “The large corruption in Government is reduced,” and so on. Such actions, even if they were possible, are not alternatives, because they cannot be achieved in the short or medium term, which is one of the key objectives of the DDR. Verite Research did, some time ago before the announcement of the present DDR, present some analysis on a possible DDR which included sharing the cut across all Bond holders, but, for the reasons I refer to below, this is not a viable arrangement.
CBSL in its original presentation to the Cabinet, and subsequently to the public, argued that it would be prudent to exclude the Banks from the DDR exercise, because these institutions were already under stress as a result of COVID related business failures and because the banks would also be taking a hit from the future restructuring of USD Bonds, some of which are held by them.
CBSL was of the view that such an exclusion was essential to ensure financial system stability. None of those criticizing the present DDR arrangements have objected to this and I concur with that view. Even if the banks are able to bear the burden of some restructuring of the domestic bonds they hold, bank stability is also dependent on public perception, and excluding them from the DDR has certainly had a positive impact on such perception.
There are two unstated conditions applicable to the DDR exercise which have received no mention in the ongoing discussions. First, the DDR should be concluded in a short time frame since it will be a pre-condition to the restructuring of foreign currency debt. Second, it must be carried out in a legally valid manner. A Government Bond is a legal contract between the Government and the holder of the Bond.
The Government is legally obligated to pay the interest coupon and the principal of the Bond on specified dates according to this legal contract. The Government has no legal authority to change the conditions of this Bond. It could, of course, pass a new law in Parliament giving itself the authority to make changes to existing Bonds. In doing so, however, if all Bond holders are not treated equally (in particular, if the bank holdings of Bonds are excluded), there are bound to be legal challenges in the Courts to any such changes, and the changes may well be struck down by the Courts.
Even if such changes are not struck down, this process can take considerable time to be determined and would not be achievable in the time frame required for the DDR process to be concluded as discussed previously. The present DDR has finessed the issue of different treatments of Bond holders by making it “voluntary”, albeit by holding a gun to the head of the EPF and superannuation funds in the manner detailed earlier. This is draconian, but effective.
As per CBSL statistics presented in connection with the original DDR proposal, the total outstanding amount of Treasury Bonds at that time was Rs. 8,700 billion. Of this amount Rs 1,644 billion is held by “Others”, after excluding the banks and EPF and superannuation funds being subject to the DDR. Even if the banks are excluded from the DDR to ensure “financial system stability” reasons mentioned previously, it would have been ideal if the “Others” holding the Rs 1,644 billion in outstanding Bonds were subject to some “restructuring”, in the form of cuts in coupon rates and/or face value, or an extension of the tenor of these Bonds.
If this was done, the benefit of these cuts could have been passed on in the form of a reduction in the burden passed onto EPF and superannuation funds. However, such an unequal treatment where some Bond holders (the banks) are excluded, even if the necessary legislation is passed, would certainly have resulted in legal challenges which would, at the least, have delayed the process as I have pointed out earlier, or even been found unconstitutional by the Courts.
Further Actions in Respect of Bonds
Very high yield rate Bonds (over 20% yield) were issued by the Government during the period prior to the announcement of the DDR (April 8, 2022 to March 13, 2023) as a consequence of severe financial shortages faced by the Government. Bidders for these Bonds added a premium to the bid yield rates, expecting a future restructuring of these Bonds as part of the DDR they knew was coming. By being excluded from the DDR, these Bond holders have enjoyed a “windfall profit.” It is not possible to specifically target these Bonds for a cut in coupons or face value, because many of the original holders may have sold some of these Bonds and have already earned the windfall profits.
[The buyers of the Bonds would only receive a “normal” profit in the form of coupon payments and final redemption.] Furthermore, in the case of individual Bond holders, their windfall profit would be in the form of a capital gain, which only attracts a tax rate of 10%. Corporates/ banks in the same situation would be paying a tax of 30% on their capital gains. I propose that the Government should “claw back” some of these profits by imposing a special windfall tax rate of 50% applicable to all profits derived from these Bonds. If the original purchaser has not sold the Bonds, the coupon interest and the capital gains on final face value redemption should also be taxed at 50%.
There would be some complications in structuring this tax, since some high yield Bonds may have changed hands within the period that high yield Bonds were still being issued, which means that the initial purchaser would only have made a small capital gain and the next buyer would still be enjoying the high coupon rate or subsequently selling the Bond for a large capital gain. A proper structuring of the 50% windfall tax can ensure that the taxes fall on those making the windfall profits. A tax of the type proposed will clearly be borne by the wealthy, who would have been the purchasers of these Bonds, and go some way towards balancing the burden imposed on less wealthy parties as a result of the DDR.
To place this suggestion in perspective, between April 8, 2022 and March 13, 2023 all Bonds issued by CBSL had yield rates in excess of 20%. The total face value of such Bonds was Rs 1,233 billion. The weighted average yield on these Bonds was 27.89% and the weighted average coupons in these Bonds was 19.09%. The latest four-year Bond yield rate is approximately 15% and this is likely to drop further.
As a result, any seller today of an average high yield Bond would make a significant capital gain on the sale and would need to pay substantial taxes to the Government at the proposed 50% windfall tax rate. As per CBSL statistics in the original CBSL presentation to the Cabinet, approximately 63.5% of all Bonds at that time were held by the banks and the “Other” category. If this percentage is also applicable to the high yield Bonds referred to above, the banks and the “Other” category would be holding Rs 777 billion of these Bonds.
Advocata has recently analysed EPF’s Bond portfolio prior to the DDR Bond exchange and concluded that EPF’s share of high yield Bonds was proportionately much less than for other Bond holders. Therefore, banks and “Others” would probably be holding even more than the above mentioned Rs 777 billion in such high yield Bonds which, in turn, will mean that a 50% windfall tax on the profits from these Bonds will result in substantial tax revenues for the Government.
An aside at this point is that for some unclear reason there is no withholding tax (WHT) applied to the interest earnings on Bonds as in the case of interest earnings from deposits in banks and finance companies. I have made inquiries as to why this is so from several senior Government officials and have not received any explanation for the practice.
It may well be that some Bond holders do not even have income tax files and that they are evading all taxes payable on Bond interest. Since Bond holders are all likely to be at the highest tax bracket given the minimum sizes of Bond investments, I suggest that a WHT of 30% be applied to all Bond interest payments. Holders are free to file tax returns and seek a refund if they have been taxed in excess of their liability due to such a WHT. I have been told there is some complication in applying WHT to Bond interest held by foreigners. If that is indeed the case, foreign holdings of Bonds could be excluded.
Conclusions
The economy of the country is in dire straits as a result primarily of bad/foolish policies of recent past Governments (including those by CBSL under its previous two Governors and Monetary Boards at that time) coupled with the endemic corruption inherent in the system. The present Governor of CBSL and his professional colleagues are facing very difficult conditions and are striving to get the country’s finances back on track.
I can understand trade unions, workers and other similar entities objecting to the implementation of policies which directly impact them, irrespective of whether such policies are needed to solve the country’s issues. But, why is it that so called “experts” and think tanks do not recognize the ground realities of what is practically achievable and support the efforts of CBSL rather than criticizing these efforts in print and at discussion forums?
(The author is an economist with wide experience in policy formulation and implementation in the Ministry of Finance and has worked at CEO level in both public and private sectors.
Features
Addressing human rights needs multi-pronged approach
by Jehan Perera
The ongoing 63rd session of the United Nations Human Rights Council, which runs from September 7 to October 7, 2026, in Geneva is important to Sri Lanka. Its outcome will send a signal to other international actors, including the European Union, as to whether Sri Lanka’s reform policy is on track. The written update on Sri Lanka, prepared by the Office of the United Nations High Commissioner for Human Rights under High Commissioner Volker Türk and presented by Deputy High Commissioner Nada Al-Nashif, has taken a more holistic approach to the government’s performance over the past year. It acknowledged the progress Sri Lanka has made under the NPP government in relation to accountability for financial fraud and other economic crimes. At the same time, the High Commissioner’s update made clear that progress in relation to economic crime cannot be equated with progress in relation to accountability for grave human rights violations committed during the armed conflict and in other periods of political violence.
The government may have felt sufficiently confident that its response to the High Commissioner’s update could be handled by its representative in Geneva and did not require the attendance of Foreign Minister Vijitha Herath. Sri Lanka’s representative Sumith Dassanayake called for a fundamental review of country-specific mandates within the UN Human Rights Council. Sri Lanka has been facing repeated scrutiny in the form of successive UNHRC resolutions from 2012 onwards. Ambassador Dassanayake argued that such mandates should not continue indefinitely and must be regularly assessed against measurable objectives and tangible outcomes. This may reflect confidence that its record of reform is beginning to receive recognition internationally. The reports and statements at the Human Rights Council acknowledged progress in the government’s efforts to address corruption and economic crime.
The government’s anti-corruption drive has included investigations into allegations involving individuals who held the highest political offices in the country. The arrest of former President Ranil Wickremesinghe in connection with alleged misuse of public funds, and the investigation into the controversial SriLankan Airlines Airbus transaction involving former President Mahinda Rajapaksa’s son, are examples of the reach of these investigations. The arrest of SLPP National Organiser and Member of Parliament Namal Rajapaksa in connection with allegations relating to the Airbus purchase scandal has also demonstrated that the government is willing to pursue cases involving politically powerful figures.
Wide Range
The ongoing investigations appear to encompass a wide range of parliamentarians and government members, both past and present. They suggest that accountability for corruption is not being confined to lower-level officials or to individuals who lack political influence. This is precisely the kind of accountability that the public has long demanded and that previous governments have too often failed to deliver. The government is also reaching into the upper levels of the military hierarchies of the past. The case in which 11 young men, most of them Tamil, disappeared after being abducted in Colombo between 2008 and 2009 involved allegations that some families were asked to pay ransoms. The investigation into this case has reached senior military figures. The willingness to pursue such cases is important because it challenges the assumption that those who exercised power during the war are beyond the reach of the law. Such cases would provide a practical test of whether the government’s commitment to accountability for economic crimes is part of a broader commitment to the rule of law.
Success in prosecuting corruption cannot substitute for justice for those who were unlawfully killed, disappeared, tortured or otherwise victimised. The UN report noted that there had been no recognition or accountability for crimes under international law, gross human rights violations and serious violations of international humanitarian law committed by all parties during the war. The government has yet to establish a credible and effective process to address the many cases of enforced disappearance, extrajudicial killing, torture and other serious violations. The government needs to take the international commitments it has inherited on human rights issues seriously. It needs to adopt a multi-pronged approach and go beyond focusing primarily on financial and corruption-related accountability.
Need Action
As a member of the international community, Sri Lanka has a responsibility to abide by the commitments it has made. It cannot selectively uphold international obligations postponing those that are politically difficult. Also, as a small country, Sri Lanka has a self-interest in ensuring the survival of international law, which is all that it has to protect it from the depredations of the bigger international actors. The erosion of international law by powerful states makes it all the more important that smaller states uphold the principles on which the international system is based. Sri Lanka cannot credibly appeal to international law when it is threatened from outside while disregarding its own obligations within. Sri Lanka also needs to win the confidence of its own population that it is committed to justice and equality for all. Public opinion polls and community-level research have disclosed that ethnic and religious minorities are appreciative of the sense of greater security they enjoy under the present government from ethnic or religious extremists.
But a sense of security is not the same as the fulfilment of rights. As far as the Tamil people are concerned, the government has yet to deliver on several of its specific promises. These include the long-standing problems of missing persons, the release of political prisoners who have been members of Tamil militant organisations, and the return of land taken over for military purposes during the war. The issue of Buddhist statues and archaeological sites found on their properties which are then taken from their control continue to trouble them especially as they see no signs of resolution of those disputes. The issue of pastureland in the east of the country in Mylathamadu is particularly concerning to them as they see orders by successive presidents, both President Ranil Wickremesinghe and President Anura Kumara Dissanayake, being disregarded on the ground. The Mylathamadu pastureland dispute is where traditional Tamil dairy farmers have engaged in multi-year protests against the ongoing encroachment of their ancestral grazing lands by Sinhalese crop cultivators relocated under government development schemes.
The government’s failure to hold Provincial Council elections is particularly troubling. The provincial council system is the only one that can provide the Tamil people and other ethnic minorities the opportunity to wield political power and exercise a measure of self-determination in the areas in which they are the numerical majority. The continued postponement of Provincial Council elections therefore has consequences that go beyond an ordinary electoral delay. It deprives communities of an important constitutional avenue for democratic participation and power-sharing. The ethnic and religious minorities appreciate what the government is doing in the larger national interest, but they must not be made to feel that their special concerns are being ignored. The government cannot resolve Sri Lanka’s entire legacy of rights violations overnight. But it does need to demonstrate that it is willing to move forward on multiple fronts, not only on a few.
Features
The emptying university: why are academics leaving?
by Hasini Lecamwasam
Brain drain in Sri Lanka is at an all-time high. The latest Human Flight and Brain Drain Index for 2024 shows that we are 16th of 175 countries on this count, and first in South Asia. That this is a crisis goes without saying. Brain drain affects all sectors, and is a huge strain on the resources of a developing country. Particularly in Sri Lanka, where considerable public investment is made in the moulding of professionals through the system of free education, this amounts to transferring the resources of poorer countries to richer ones with top migration destinations. It is, therefore, important to consider the push and pull factors behind skilled outmigration, specifically from the public university system of Sri Lanka, a key focus of the Kuppi column.
From frustration to exit
Several bitter realities in our crumbling public university system act as push factors in the migration decisions of academics. Many essays on this column have, over several years, attempted to highlight numerous aspects of this erosion. Perhaps, primary among them is the lack of adequate funding, which has debilitating ramifications for the system: very little investment is made in the up-keep of infrastructure (and even less in its expansion), resulting in serious constraints in accommodating growing batches of students and the wellbeing of the staff (particularly in regional universities); research funding is negligible, severely curtailing academics’ ability to effectively discharge their primary duty of teaching which should ideally be informed by their research (and the research of others, access to which is also, unfortunately, mediated by funding); a funding crunch also means a slash in (or greater constraints on) recruitments, increasing the workloads of academics, currently in service, and eating into the quality of their teaching and research.
What recruitments are done frustrate those with any faith in merit. As many of our interventions in this column have shown, recruitment processes are characterised by archaic selection criteria that place very little weight on a candidate’s postgraduate growth and the advantages of interdisciplinary training. Added to this is the general preference for ‘culturally compliant’ candidates who would not rock the boat too much. The combined effect is that those with the capacity and spirit to try out innovations in education are discouraged from joining or staying on in the public university system. Some, or many, of them may instead seek appointments abroad.
A thread that binds all of these problems together is pervasive hierarchy which, again, many interventions on this column have sought to highlight. It is the interest in preserving hierarchy that leads to the preference for alumni in recruitment processes. Hierarchy within universities can be particularly frustrating for younger faculty and women, who typically have to bear the brunt of the workload of their senior, often male, colleagues. In a context of funding, and, therefore, recruitment, restrictions, this translates into a disproportionate burden being placed on junior (usually female) faculty, seriously hindering their prospects of growing into successful academics due to the time constraints within which they have to operate. Junior academics, therefore, are more likely to look to educational institutions abroad for what they hope would be a different work culture that respects them more.
Ideological ruses
On top of these structural frustrations are also the workings of neoliberal ideology. For one, the nature of relations between the global metropole and peripheral countries like Sri Lanka largely dictates what is desirable and what is not. The apparent lifestyles of Western countries – from food to clothing, housing, appliances, and so on – have continued to lure people from the periphery with the promise of a ‘better’ life, alongside better career advancement opportunities. This, of course, masks much of the struggle that goes on behind the scenes to survive in Western societies. For instance, in most cases highly attractive public infrastructure such as roads, public transport, clean air, quality control of food, and so on belie the astronomical privatised costs of healthcare and education. Health insurance is usually mandatory and steep in most high-income settings, while even subsidised education (for which eligibility criteria are strict) creates a serious dent in household earnings. Of course, the happy images of glossy trams and gleeful international travellers don’t convey this.
A second ideological ruse is the myth of greater opportunities and recognition abroad. While there is no denying that local skilled sectors – be it higher education, health, civil service, or private white-collar positions – are replete with issues that inhibit merit-based professional advancement, the notion that things are fundamentally different in Western countries stems from an uninformed optimism. As is now increasingly known and discussed, Western labour markets are notoriously racialised, and equivalent skills are rarely treated as such. Instead, it is usually demanded that skilled migrants clear certain formal examinations in their host countries. In fields like medicine, this is followed by an interview that may also be racially prejudiced. Once these initial steps are cleared, remuneration reverts to square one irrespective of experience accumulated abroad, not to mention the many subtle aggressions, rejections, and trials one has to go through in the negotiation of everyday life. In the many cases where professional qualifications are used as leverage for a move abroad, sights are set on a better future for one’s children, which again is informed by the misplaced faith in greater opportunities and a lack of awareness of the factors outlined above. Needless to say, in the global swing to the Right, things have become even more challenging. In such a context, considering the few rare cases where skilled migrants live extremely comfortable lives as the norm becomes a dangerous misconception.
The two ideological pull factors mentioned above are complemented by a push factor, which has to do with a highly classed understanding of what a white-collar professional is due in their society. Many of these aspirations are clearly articulated in academic trade union action demanding separate quotas for school entry, increased fuel allowances, winning back the presently stalled vehicle permit scheme, salary hikes, and so on. While working people have every right to agitate for better material conditions, insofar as it remains unconnected to a broader movement for improving the conditions of the lot of the working class, it remains self-serving and very much within the class logic of capitalist society. Since these demands are articulated as a means of maintaining distinction, it is clear that they are not envisaged as part of a class movement. The frustration of not having these needs for distinction satisfied may push some to seek greener pastures abroad, at least financially, (perhaps as a means of social mobility based on it), only to be disappointed on most occasions.
What is to be done?
Addressing the systemic push factors listed above requires, first and foremost, greater allocations for free public higher education. This would immediately translate into more recruitments and less work per academic, and better research and teaching in the long haul. An increase in funding would also ideally lead to greater infrastructural investments, especially including improving the living conditions of those who work in regional universities amid untold hardships. Next, fairer, more creative, and, therefore, more effective recruitment policies are badly needed to attract talented individuals to university positions. Rather than carving out a ‘special category’ for academics to achieve this purpose, which is informed by a classed logic, this needs to be done through fundamental reforms in recruitment processes. Third, a persistent attack on the entrenched hierarchy within universities through internal reform is much called for. Reforming recruitment practices will go a long way towards addressing this. Measures should also be taken to introduce more stringent policies against SGBV (not to mention ragging, even though it is not directly connected to brain drain). Such measures would create a safer, fairer, and more attractive workplace, which would give more reasons for people to stay.
On top of greater allocations, we also need a transformation of our aspirations themselves if this situation is to change. That necessitates a kind of education capable of questioning the ‘paradise’ conception of Western societies, and lays bare their colonial material and ideological dimensions, in both their historical and contemporary manifestations. These colonial understandings of the ‘good life’, moreover, have devastating ecological implications for the planet, not to mention social justice. An education with the ability to transform this mindset would hopefully prove to be more than a mere path to social mobility, rather being a tool of social emancipation that renders mobility moot.
(Hasini Lecamwasam is with the Department of Political Science, University of Peradeniya)
Kuppi is a politics and pedagogy happening on the margins of the lecture hall that parodies, subverts, and simultaneously reaffirms social hierarchies.
Features
Friends favourite Suzi Croner returns for Oktoberfest 2026
Charming audiences in Switzerland as Suzi Flückiger, Sri Lanka’s own Suzi Croner is coming home… for a very special occasion.
The bubbly former frontline vocalist of 90s band Friends will take the stage at a popular venue in Colombo for Oktoberfest 2026.
Known in Europe for her country and classic hits, Suzi has remained a much-loved name back home. This will be a rare chance for local fans to see her live and celebrate the voice behind so many Friends memories.
Oktoberfest 2026 in Colombo promises an evening of live music, traditional Bavarian food and beer, colourful dirndls and lederhosen, folk dancing, and plenty of community cheer.

Suzi Croner (Flückiger)
Against this lively backdrop, Suzi will take the stage for a special solo set, featuring her own pre-recorded music. She performed at the event last year too, as a solo artiste, but a German band providing the music.
This year, however she says, it’s a different scene.
“The novel attraction will be the dancers from Germany — all girls, clad in German outfits,” Suzi said. She added that the event will also highlight the activities generally connected with Oktoberfest, which should generate a lot of fun and excitement for those who join her in Colombo next month.
Suzi has become a much-in-demand artiste in Europe, and has even performed Down Under, in Melbourne.
In Switzerland, where she has been based for the past 42 years, she continues to charm audiences with country and classic hits, performing at private events and community nights across Europe.
“My weekends are generally loaded with my work as a singer,” she said. “And I also play tennis three times a week, because I need to keep fit to entertain my audience in an active way.”
Her repertoire is made up mainly of Swiss, German and English songs.
And true to form, Suzi loves springing surprises.
“So watch out when you join me at Oktoberfest 2026, in Colombo!” she said.
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