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Editorial

Cushioning tariff shock

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Thursday 10th April, 2025

President Anura Kumara Dissanayake’s letter to US President Donald Trump over the US tariff hikes has received much publicity. The NPP government is reportedly sanguine about a positive response from Washington to its request for lower tariff on Sri Lanka’s exports, especially apparels. Hope is said to spring eternal, and there is nothing wrong with being optimistic, but it behoves Sri Lanka to prepare for the worst-case scenario. President Trump’s mind is so elusive that it is not possible to predict his moves, much less guess what he expects the smaller economies to do if they are to qualify for US tariff reductions, if any. He is eyeing mineral resources in Ukraine in return for US military aid to that war-torn nation. Sri Lanka has no such resources to offer. Is the Trump administration trying to pressure it into going out of its way to help further Washington’s geostrategic interests in this part of the world?

China has retaliated by increasing tariffs on imports from the US thereby aggravating global economic uncertainty. Washington says its tariff increases are reciprocal, and therefore the countries affected by them may think they can gain relief by reducing duties on US exports. But the question is whether such action will help the US rectify its massive trade imbalance significantly. The demand for American exports will not increase substantially even if countries like Sri Lanka lower duties thereon, for factors such as cost and quality basically drive demand. Imports from the West, especially input materials, are not in high demand in the developing world because of the availability of cost-effective alternatives.

So, the Trump administration is likely to insist that apparel producing nations like Sri Lanka import commodities such as cotton fabric from the US so as to give a fillip to the American industries. This is what US Ambassador Julie Chung told former Minister Mano Ganeshan at a recent meeting, according to a report we published on 27 March. Such a move is bound to increase the cost of Sri Lankan apparels because US products are very expensive and will adversely affect the competitiveness of Sri Lanka’s apparels in the global market.

President Trump is hopeful that ‘jobs and factories will come roaring back’ because of the tariff hikes at issue, but he does not seem to have factored in the high cost of production in the US and increases in the prices of imports due to high tariff hikes. Tech analysts have pointed out that Apple iPhone prices would soar if they were to be made in the US, and even if the existing supply chains are maintained, their prices will increase substantially. The same may hold true for other commodities, whose prices remain low in the US at present owing to cheap labour and lax environmental laws in the other countries where they are produced.

The countries hit by the US tariff increases have adopted different strategies to cushion the blow from the drastic US action, which has led to a global stock market rout, and sparked protests in the US itself. India is seeking to strike more trade deals with other nations, according to Indian Finance Minister Nirmala Sitharaman, who says such measures have become necessary in view of prevailing global uncertainty. Sri Lanka can learn from how India is trying to mitigate the impact of the US tariff hikes.

Prof. C. A. Saliya, a senior banker turned academic, has pointed out in his latest column, Out of the Box, in this newspaper that if the emerging economies get their act together, they may be able to turn disruptions caused by the isolationist, protectionist, and coercive US trade practices into an opportunity to diversify their exports and trade relations, invest in technology and undertake structural reforms to ensure their economic resilience.

Meanwhile, the formulation of Sri Lanka’s strategy to navigate the new US tariff regime should arise from a tripartite effort if it is to be effective. The government, industrialists and workers should be represented in discussions on the issue. It is high time trade unions shifted their focus from their demand-oriented activism to the pressing need to play a crucial role in protecting the domestic industrial sector. The government should do everything in its power to help industrialists keep costs manageable, ensuring the competitiveness of their products in the global market, and the captains of industry must carry out their export operations in a transparent manner without resorting to sordid practices such as parking most of their export proceeds overseas.



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Editorial

Farmers’ protests

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Monday 29th June, 2026

Rice growers are up in arms, unable to sell their produce at fair prices. They are also demanding that fertiliser be made available at affordable prices. Instead of listening to them and making a serious effort to redress their grievances, the government has claimed that their protests are politically motivated; a deputy minister has gone to the extent of provoking protesting farmers by calling them rotgut addicts. The JVP/NPP has totally mismanaged farmers’ protests, which are likely to snowball. One may recall that it was farmers who launched the opening salvo against President Gotabaya Rajapaksa’s government, whose experiment with organic farming created a severe shortage of fertiliser.

Farmers’ associations are flaying the government for having imported a large amount of rice while locally produced rice stocks remain unsold, instead of buying their produce through the Paddy Marketing Board (PMD), whose warehouses they say remain closed. The government claims that it has imported only the varieties of rice that are in short supply in the local market, but farmers are convinced otherwise.

Why farmers are so resentful is understandable. They are complaining of exploitation by a cartel of rice millers, with the government doing nothing to safeguard their interests. Rice growers are struggling to make ends meet. Most of them are neck deep in debt. But the big-time rice millers are becoming richer. They are buying Rolls-Royces and even helicopters and indulging in a vulgar display of wealth while some paddy cultivators are losing their houses put up as collateral for loans. The JVP-led NPP, which promised to liberate the farming community from the clutches of powerful millers and ruthless microfinance companies and enable them to obtain bank loans without collateral, has reneged on its pledge.

Successive governments have furthered the interests of big-time millers by importing rice close to the commencement of harvesting seasons, according to farmers’ associations and independent researchers. Unfortunately, the JVP-NPP government, which came to power, with the help of farmers among others, promising them the stars and the moon, stands accused of helping large-scale millers maximise their profits at the expense of both cultivators and consumers. We have written extensively about how haphazard rice imports which governments resort to, claiming to overcome rice shortages, affect the interests of the farming community.

As harvesting seasons near, millers create shortages of rice. Instead of taking action to trace hoarded rice, governments readily import rice for the benefit of politicians and bureaucrats rather than anyone else. When the imported rice arrives, millers slowly release their stocks into the market bringing the prices of rice down temporarily and using that opportunity to purchase paddy for a song. The PMD, which the JVP/NPP promised to revitalise to compete with private millers, does precious little to help farmers. When locally produced rice reaches the market, the demand for imported rice decreases, as Sri Lankans prefer local rice. Eventually, the stocks of imported rice rot in government warehouses and end up as animal feed. Allegations that rice is used as a primary brewing ingredient by beer manufactures have sparked a major controversy and economic concerns.

Allegations also abound that influential millers delay the release of bank loans that small and medium scale millers apply for to purchase paddy so that they can buy most of the paddy at uncompetitive prices. No government has done anything about these practices detrimental to the interests of rice growers and consumers, for obvious reasons, according to researchers. Wealthy rice millers bankroll election campaigns and have politicians eating out of their hands. The incumbent government launched a programme to clear unauthorised structures in the reservations of the irrigation tanks in the North Central province. But that initiative has withered on the vine for all intents and purposes because a hotel belonging to a powerful rice miller has encroached on the reservation of a tank in Polonnaruwa.

The government, like its predecessors, claims that it has to be mindful of the interests of consumers and keep the prices of rice at reasonable levels and therefore cannot meet farmers’ demand for increasing the threshold price of paddy. On the face of it, this argument does not look wholly untenable, but the fact remains that it is mostly market manipulations by powerful rice millers and high mark-ups that keep the prices of rice high. Governments do not dare address these issues.

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Editorial

Exchanging ginger for chillies?

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President Anura Kumara Dissanayake told Parliament on Thursday that the Prevention of Terrorism Act (PTA) would be repealed before the end of 2026. He said the PTA, introduced as a temporary measure, had lasted for 46 long years despite calls for its abolition. It is not clear from media reports on the President’s parliamentary speech how the government will set about the task of doing away with the PTA. However, one may recall that the Ministry of Justice published a proposal for a new anti-terrorism law, the Protection of the State from Terrorism Act (PSTA) in December 2025, seeking public views.

If the government is allowed to replace the PTA with the proposed PSTA, it will be a textbook case of ‘exchanging ginger for chillies’, as a local saying goes. The solution will be as bad as or perhaps even worse than the problem.

President Dissanayake’s admission in Parliament that the PTA is draconian and his government is planning to abolish it in response to concerns expressed by human rights campaigners and other stakeholders can be considered a self-indictment; suspects continue to be arrested and detained under the PTA and Dissanayake himself signs detention orders in his capacity as the Minister of Defence. Perhaps, the JVP leaders know better than others what it is like to be arrested and detained under the PTA. They are among those who bore the brunt of this repressive law, which has been abused by successive governments whose self-righteous leaders condemn it only when they are out of power. Their hypocrisy has resulted in the perpetuation of the PTA.

Sri Lanka will incur much international opprobrium if the proposed PSTA replaces the PTA. The PSTA has already drawn heavy criticism from international human rights organisations, including the Office of the United Nations High Commissioner for Human Rights (OHCHR), which has warned that several provisions of the draft law remain inconsistent with Sri Lanka’s obligations under international human rights law. According to OHCHR’s preliminary analysis, the proposed legislation risks enabling broad criminalisation through vague definitions of terrorism, restrictions on freedom of expression, assembly and association, substantial executive powers with limited safeguards or oversight, arbitrary arrest and prolonged detention, exposure to torture, ill-treatment and enforced disappearance. OHCHR has therefore urged the government to revise the draft legislation substantially “to ensure that Sri Lanka’s counter-terrorism framework complies with international law and does not replicate the serious human rights violations associated with the PTA”.

Various human rights groups, civil society organisations, political activists and the media, too, have pointed out why the PSTA cannot be accepted as an alternative to the PTA. They have echoed OHCHR’s view that the PSTA has not defined terrorism properly, and this fact runs counter to international law. An overly broad definition allows the PSTA to be misused.

Having neutralised three formidable terrorist outfits, the LTTE, the JVP and the National Thowheed Jamaath, Sri Lanka needs robust anti-terror laws to protect itself against terrorism. Nothing must be left to chance. Similarly, all precautions must be taken to ensure that anti-terror laws do not contain structural flaws that can be abused to suppress civil liberties in the name of fighting terrorism.

The PSTA has also been criticised for seeking to empower senior police officers to issue detention orders and authorise pre-charge detention for renewable periods of up to two months for a total of up to one year. It has been pointed out by international human rights organisations, such as Amnesty International, that the PSTA has retained untrammeled executive powers; the presidential powers are so extensive that the sole avenue for appeal against Proscription Orders lies with the Executive itself so much so that they undermine the International Covenant on Civil and Political Rights (ICCPR).

The present-day leaders will do themselves a favour by abolishing the PTA, for it may be used against them when they lose power. The PTA, by its very nature, lends itself to abuse. The same is true of the proposed PSTA. Hence the pressing need to deep-six the PTA and the draft PSTA, and introduce new anti-terror laws that comply with international law.

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Editorial

Justice, hypocrisy and politics

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Saturday 27th June, 2026

Governments of all political hues in Sri Lanka usually do not uphold the foundational legal principle of the presumption of innocence when their political rivals happen to be arrested. The JVP-NPP administration has failed to be different despite its election pledge to usher in a new political culture. Its politicians and propagandists ruthlessly vilify their political opponents who are taken into custody. They apparently consider their rivals held on remand guilty until proven innocent.

The inversion of the presumption of innocence could have disastrous consequences, as evident from a large number of summary executions and political assassinations during the past armed conflicts in this country. The SLFP, the UNP and the JVP have committed the sin of physically eliminating their political opponents.

The current SLPP leaders, while they were in the SLFP-led UPFA government from 2010 to 2015, turned a parliamentary select committee into a kangaroo court against a Chief Justice, and hounded her out of office. The UNP also launched witch-hunts against upright public officials and judges and treated suspects as convicts. The JVP-led NPP has prejudged the guilt of three suspects, including former Justice Minister Wijeyadasa Rajapakshe’s son, Rakitha, and SJB organiser for Horana Charith Abeysinghe, arrested on Thursday on suspicion of seeking a bribe from the wife of a drug dealer in custody.

There is no gainsaying that the law must apply to everyone equally, and all allegations of transgressions must be probed. So, nobody should protest against the arrest of the aforementioned trio unless their legitimate rights are violated while in custody. If they are found guilty after a fair trial, stringent punishment must be meted out to them. This task is best left to learned judges. The government must not seek to gain political mileage out of their arrests. What one gathers from various statements the JVP/NPP politicians, including ministers, have been making about Rajapakshe and Abeysinghe is that the government is labouring under the misconception that they should be considered guilty simply because they have been arrested.

The SJB has suspended Abeysinghe’s party membership and launched a disciplinary inquiry. Such action is welcome. However, Abeysinghe should be given an opportunity to tell his side of the story and defend himself. The principle of natural justice must be upheld. That is how such matters are handled in the civilised world.

JVP/NPP politicians and propagandists continue to blame the SJB for having individuals with underworld links within its ranks. It should put its own house in order before telling other political parties how to deal with their members facing allegations.

Former Energy Minister Kumara Jayakody has been indicted for corruption before the Colombo High Court. The JVP/NPP unashamedly defended him to the hilt when the Opposition moved a motion of no confidence against him in Parliament. He stepped down when it became too embarrassing for the government to keep him in the Cabinet. What action has the JVP/NPP taken against him over charges of corruption? Has it at least held a disciplinary inquiry against him? Why hasn’t it suspended his party membership?

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