Editorial
A long way to go: Bragging can wait
Monday 4th August, 2025
The NPP government is on cloud nine, following a further reduction in the US tariff rate for Sri Lanka from 30% to 20%. President Donald Trump initially fixed it at a staggering 44%! Obviously, the Trump administration did not act out of altruism when it agreed to tariff reductions for Sri Lanka as well as other countries.
What are the specific conditions that the US laid down for a downward revision of its reciprocal tariff for Sri Lanka? Secretary to the Ministry of Finance Dr. Harshana Suriyapperuma has said the NPP government’s anti-corruption drive and efforts to improve the country’s ease of doing business ranking helped obtain the US tariff reduction. This may be true, but surely there are other reasons.
President Trump and his team are known to think after leaping, as it were. They have made a host of humiliating about-turns. It was obvious that the Trump tariffs would yield short-term benefits to the US economy, particularly to some key industries, such as metal, but Washington must have realised subsequently that those gains would come at steep hidden costs.
The intended benefits of the US tariff hikes include, inter alia, the protection of select US industries, and increase in revenue for the federal coffers, trade negotiation leverage, encouraging reshoring and domestic investment, focusing attention on unfair trade practices. However, the cons of the Trump tariffs outweigh the pros thereof, according to economic analysts, and some of them are higher prices, disadvantages to exporters, especially farmers, job losses in industries such as steel, supply chain disruptions and reduced investment and strained global alliances. More importantly, developed countries, such as the UK, have come forward to offer a helping hand to the developing nations adversely affected by the US tariff hikes. This is a disturbing proposition for the US, which is facing challenges to its global dominance from trans-Atlantic rivalries, China’s rise as an economic and military power, and formidable strategic alliances, such as BIRCS, which is reportedly working towards a common currency as an alternative to the US dollar. Thus, one can argue that the US found itself in a situation where it had to reduce its proposed tariffs to safeguard its own interests.
Sri Lanka will now be able to retain the competitiveness of its exports to a considerable extent, given the US tariff rates for its competitors in the region—Bangladesh (20%), India (25%), Pakistan (19%), Vietnam (19%), Thailand (19%) and Cambodia (19%). However, if other countries succeed in obtaining more favourable tariff rates from the US, through trade agreements, etc., Sri Lanka will have its work cut out to remain competitive. Hence, the need for the NPP government to have further negotiations with Washington on tariffs, without resting on its oars.
Most of all, Sri Lanka should realise its increasing vulnerability in global trade and lessen its dependence on a few major export destinations. It should redouble its efforts to diversify its exports and find new markets for them while enabling its exporters to keep their production costs low thereby making their products and services competitive globally. This goal will remain unattainable unless the government takes steps to lower the power tariffs by boosting the generation of electricity from renewable sources, and keep taxes on the export sector at affordable levels.
The latest US tariff reduction is certainly welcome, but there are no grounds for complacency, especially for countries like Sri Lanka, troubled by severe foreign currency woes. The recalibration of global trade in line with the Trump tariffs is bound to deliver shocks and pose new challenges to the developing world. Prudence demands that Sri Lanka brace itself for a possible decrease in its forex inflow. It should therefore make a serious effort to reduce its import bill substantially and increase foreign currency earnings from non-traditional sources such as digital services, etc., instead of imposing heavy taxes thereon. There is a need for some import restrictions as well. It does not make sense to import rice as a solution to the problem of hoarding by large-scale millers or to flood the local market with imported sugar while huge stocks of locally produced sugar are rotting in warehouses. Solar power producers complain of step-motherly treatment from the government. If the thermal power generation is reduced, a great deal of forex currently spent on oil and coal can be saved. A dollar saved is a dollar earned.
In trying to resolve any crisis, it always pays to be prepared for the worst-case scenario. So, the NPP government would do well to anticipate possible adverse effects of the new US tariffs on the Sri Lankan economy, and strategise to mitigate them. There is a long way to go. Bragging can wait.
Editorial
No-shows, ‘witch-hunt’ and waste of energy
Teachers’ trade unions are protesting against what they describe as a political witch-hunt against some of their members who did not attend a meeting chaired by Prime Minister and Minister of Education Dr. Harini Amarasuriya in Tangalle on Sunday, 15 March, 2026. Many seats in the Tangalle Municipal Council auditorium, where the meeting was held, were left empty by no-shows. The trade unions have taken exception to a letter sent by the Tangalle Zonal Education Office to the school principals in the area, asking them to explain why their staff members did not attend the aforesaid meeting. Their consternation is understandable. When the show cause letter, dated 24 March 2026, became public and got bad press, some trade unionists speculated that the government politicians might try to dissociate themselves from it. There is reason to believe that the letter at issue would not have been issued if the absence of teachers had not become a matter of concern to the government, and therefore it is unlikely that the Zonal Education Director who called for explanation from the school principals has done so unbeknownst to her superiors in the Education Ministry.
Teachers or other state workers should be free to decide whether to attend meetings, etc., held outside their regular working hours, especially during weekends, and they must not be penalised for skipping such events. In a way, the above-mentioned show cause letter can be considered a kind of comeuppance for the state-sector teachers who, together with their trade union leaders, went out of their way to bring the JVP/NPP to power. So did other state employees and their trade unions, as evident from the postal vote results in 2024. Now, it is mandatory for them to attend even unofficial meetings chaired by the ruling party politicians!
Why should government politicians travel all the way from Colombo to faraway places to chair meetings while the country is facing a crippling energy crisis, which has prompted the ruling party politicians to urge the public to reduce fuel consumption. Shouldn’t they practise what they preach?
VIP motorcades consist of dozens of vehicles, some which operate undercover, blending into traffic at present as the current leaders came to power, promising to disband VIP security divisions and do away with huge security contingents. Whenever they travel, one can see lead cars, pilot vehicles, decoy cars and many other vehicles carrying counter-assault teams. They ought to travel less and help save state funds and precious fuel these days. They must follow the energy-saving guidelines issued by the Commissioner General of Essential Services to the state sector. Almost all the meetings attended by the government leaders can be held online. State officials also have to travel long distances in official vehicles to attend the events ‘graced’ by politicians in power. Nothing usually comes of such meetings, which only help politicians wax eloquent and say very little in many words.
In Pakistan, fuel allocation for the state sector has been halved as an energy crisis management measure; 60% of the state-owned vehicles have been taken off the roads, and, most of all, fuel quotas for ministers have been abolished. Sri Lanka must adopt such austerity measures, and ensure that the politicians share in the hardships faced by the public. After all, the present-day leaders came to power, promising to use public transport. This is the best time for them to make good on their election promises, and travel with the ordinary people in crowded buses and trains. They claim to be very popular, and a research organisation would have the public believe that the approval rating of the incumbent government has increased to a whopping 65%. So, there is no reason why the ruling party politicians should hesitate to travel with hapless commuters.
About two months ago, President Anura Kumara Dissanayake went out for a constitutional with only a single security officer, in Jaffna, and the government released a video of his famous walk to gain political mileage. If the former war zone is safe for the Head of State and Commander-in-Chief to move about without heavy security, why can’t other government politicians travel in buses and trains or cycle to work? Above all, they insist in Parliament and elsewhere that the law-abiding citizens do not have to worry about frequent shooting incidents, which they describe as turf wars among drug dealers. They need not worry about their safety at all, for they say they have no underworld links. Shouldn’t they set an example to the public at least during the current fuel crisis by cancelling meetings and using public transport?
Editorial
More surprises in the Gulf War
Saturday 28th March, 2026
US President Donald Trump has postponed his much-advertised plan to attack Iran’s national grid and critical energy infrastructure for 10 more days as part of his efforts to find an off-ramp with Tehran. He has asked Tehran to declare a ceasefire and come for talks on his own terms or face a series of attacks of unprecedented ferocity. One of his main conditions for negotiations has left the world puzzled; he wants Iran to abandon its nuclear programme, while insisting that he has obliterated Iran’s nuclear potential by destroying all its nuclear facilities and neutralising the threat of the nuclearisation of the Islamic state. If so, he has already achieved his goal, and there is absolutely no need for him to have negotiations with Iran on its nuclear programme, keep on pouring US taxpayers’ money into an endless war, deploy US ground troops to the region and, most of all, continue to cause more economic hardships to the rest of the world.
Trump is apparently without a specific goal or an exit strategy in the ongoing war. He is now trying to have the world believe that he has won the war, and is claiming that Tehran has allowed some oil tankers flying the Pakistan flag to sail through the Strait of Hormuz to appease him! Turning down Trump’s offer to talk, Iran has derisively said the US has been negotiating with itself. Tehran is leveraging everything possible to crank up economic pressure on the US and Israel. It has already made the world economy scream in a bid to turn international opinion against Washington and Tel Aviv. According to unverified reports, it has also threatened to go so far as to target the submarine internet cables in the Red Sea and disrupt global connectivity unless the US and Israel stop attacks. Iran has made no official statement about this issue, but it is capable of severing the undersea fibre-optic cables in case of other Gulf nations continuing to back the US in the ongoing conflict and/or its power and energy facilities coming under attack again. These undersea cables are used for global financial transactions worth trillions of dollars, international communication and data flows, cloud devices, etc., according to media reports. The White House must be under tremendous pressure from the US tech giants and other multinationals to ensure the safety of the submarine cables in the Red Sea.
Meanwhile, the latest developments on the Middle East front may have reminded Trump of former US President Dwight D. Eisenhower’s words of wisdom. An ex-Supreme Commander of the Allied Expeditionary Force in Europe during World War II, Eisenhower famously said, “Every war is going to astonish you in the way it occurred and in the way it is carried out.” While Trump is trying to have the Strait of Hormuz reopened for international navigation, the threat of another vital chokepoint in the Gulf region being closed has emerged.
The Houthis of Yemen have threatened to close the Bab el-Mandeb Strait, which connects the Red Sea to vital international shipping lanes. The geographical location of this chokepoint has made it vulnerable to Houthi attacks. The Houthis say they are ready to join the war any time. Trump and Netanyahu have already bitten off more they can chew in the Persian Gulf, and how they are going to face the emerging threat is anybody’s guess. The Houthis have a history of disrupting shipping routes.
Airstrikes alone will not help the US, Israel and its allies keep the Hormuz Strait and Bab el-Mandeb Strait open for international navigation. It will be a huge gamble for the US to send its warships and ground troops to gain control of them, for they will be within the Iranian and Houthi missile range.
There seems to be no end to threats and challenges the US and Israel are facing in their war on Iran, and they have plunged the entire world into chaos in the name of their leaders’ dreams. Unacceptable as what Iran is doing by way of retaliation may be, that is the way the cookie crumbles in military conflicts, especially in asymmetrical warfare. The US carried out atomic bomb attacks on Japan purportedly to end a war. Israel has already bombed Gaza back to the Stone Age, but continues to carry out airstrikes in that part of Palestine.
It is up to the US and Israel to make a serious effort to put the genie back into the bottle in the Persian Gulf. Other nations are suffering for no fault of theirs, and eminent economists fear that the world is heading for a global recession.
Editorial
Farmers’ woes signal food shortages
Friday 27th March, 2026
Vegetable prices have plummeted at the special economic centres, which serve as collection hubs in predominantly agricultural areas, such as Dambulla, because most trucks cannot operate for want of diesel. Farmers are unable to dispose of their produce due to transport problems. Usually, it is in February, March and early April that farmers save some money for the traditional New Year. However, vegetable prices have increased elsewhere due to high transport costs and supply disruptions caused by a diesel scarcity, but farmers gain nothing from these price hikes, which benefit only traders. The prices of imported food items are also soaring due to increasing shipping costs caused by the Middle East war. Importers who have built stocks in view of the Avurudu season will laugh all the way to the bank.
Unsold vegetable stocks are discarded as there are no storage facilities. It is a crime to let food items go to waste. Successive governments have ignored the need to help farmers store their produce properly and reduce post-harvest waste. In April 2025, President Anura Kumara Dissanayake and Indian Prime Minister Narendra Modi opened the Dambulla Agricultural Storage Complex with a capacity of 5,000 metric tons. It is reportedly equipped with temperature and humidity control mechanisms to reduce post-harvest losses by approximately 40%, stabilise fluctuations in agricultural product prices, ensure the supply of high-quality food to consumers and enhance agricultural sustainability. This storage facility, which would have been a boon to farmers in the area, is still not operational, some Opposition politicians who visited it have told the media.
The transport problems faced by the farming community are not due to high fuel prices alone. Transporters and farmers cannot obtain diesel because the government is supplying huge amounts of diesel to the oil-fired power plants, which are working overtime to make up for a shortfall in coal-fired electricity generation due to the procurement of substandard coal for the Norochcholai power plant. Paddy farmers have been left without diesel for harvesting and therefore the cost of harvesting has increased, and this increase is bound to reflect in the prices of rice.
Former Director of Agriculture K. B. Herath told the media yesterday that the prices of parboiled rice and samba may increase to Rs. 300 and Rs. 400, respectively in June/July due to a sharp drop in the paddy yield, and the situation would take a turn for the worse owing to a fertiliser shortage.
The government has been compelled to restrict the distribution of fertiliser for paddy cultivation. Commissioner General of the Department of Agrarian Development said yesterday fertiliser would be issued only through the Agrarian Service Centres to prevent hoarding. Such measures become unavoidable during crises. However, the irony of the proposed method of restricting fertiliser distribution may not have been lost on the discerning public. The JVP, which leads the incumbent government, has become reliant on the Agrarian Service Centres, 240 of which it destroyed in the late 1980s. If only it had realised the value of these institutions at that time and spared them!
Meanwhile, the closure of the Hormuz Strait has adversely impacted the global fertiliser supply. The Persian Gulf is also a major hub of global fertiliser production and exports. Iran, Qatar, Saudi Arabia, and Oman are among the world’s leading exporters of nitrogen fertilisers, including urea and ammonia, accounting for roughly 30–35 percent of global urea exports and around 20–30 percent of ammonia exports, according to the Food and Agriculture Organization (FAO) of the UN. Overall, up to 30 percent of global fertiliser exports are channelled through the Strait of Hormuz, the closure of which has severely affected international fertiliser supply chains. Production cuts and shipping constraints have stalled an estimated 3–4 million tonnes of fertiliser trade per month, and global fertiliser prices could average 15–20 percent higher during the first half of 2026 if the crisis continues, FAO says. This is a frightening proposition, as we said in a previous editorial comment. There is no gainsaying that Sri Lanka has to manage the available fertiliser stocks carefully in view of the global supply disruptions, but a drop in the fertiliser application will surely cause a countrywide yield decline.
If the current fertiliser scarcity persists, the farming community will have to combine the application of available chemical fertiliser with organic amendments, which the incumbent government leaders berated the previous administration for promoting.
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