Features
THE PHOENIX RISES
CHAPTER 15
(Excerpted from N.U. JAYAWARDENAThe first five decades)
I am like that elastic piece of rubber which bounces up highest when it is pressed and trampled most.
(NU’s letter to his father-in-law Norman Wickramasinghe, Dec. 1931)
Finding Solace in Religion and Community
Earlier, when NU’s workload was so enormous, he found little time for religion. However, during the difficult time associated with the Commission of Inquiry, this changed. As Neiliya relates:
At this time, he became seriously involved with religion and a great supporter of the Lunava Temple. This gave him great strength and courage in his work no matter what crisis he faced.
This temple was located on the outskirts of Colombo in Lunava, where NU had lived until the mid-1930s. Its chief monk was Thero Galkisse Sri Visuddhananda of the Amarapura Nikaya. The temple had a devale devoted to the deities, Kataragama and Suniyam. NU took part in the pujas and rituals of the temple, humbling himself as required by sweeping the temple grounds. He also visited the Rector of St. Aloysius’, Father Morelli, who boosted his morale and restored his confidence (N.U. Jayawardena, 1990, “Down Memory Lane”). It is interesting to note that, according to S.W.R.D. Bandaranaike’s biographer, James Manor (1989, p.307-8), SWRD and his wife Sirimavo, too, frequented this temple in times of crisis during SWRD’s premiership.
Although NU had been the only one of the Durava caste to reach the top of the administrative hierarchy at the time (de Silva & Wriggins, 1988, p.286), caste did not play a part in his way of thinking; but throughout his life, it was to him whom relatives and clan members turned for help. Now, when in his hour of crisis they rallied around to support him, he learned to fully appreciate the value of community.
Bouncing Back – Move to the Private Sector
If Kotelawala had intended to crush and humiliate NU, the former underestimated NU’s resilience and tenacity – as well as how indispensable he was to others. As Neiliya observed, “The Central Bank crisis was an event that changed the future of our family for the better in a way.” A mere six months after NU’s removal from the Bank, announcements appeared in the local and British press that NU had been appointed as the joint managing director of the J.H. Vavasseur Trading Company. This was another landmark in his life and career, and a major turning point. He became the first Sri Lankan to be given such a position in a British-owned company.

Newly-elected Prime Minister S.W.R.D. Bandaranaike crossing the floor of the House of Representatives to greet John Kotelawala
Vavasseur, an old established British firm founded in 1884, was the first in Sri Lanka to process and export coconut products. The firm’s Colombo office was engaged in the production of desiccated coconut, coconut fibre, and shell charcoal for its parent company in London to export to Europe (Villiers, 1940, pp.230-31). Geoffrey Buxton, Chairman of the UK company, had heard that NU was available to take up an appointment in the private sector, and he was recommended by C.F. Cobbold, Governor of the Bank of England. Vavasseur was looking for a managing director for their Colombo office and offered the post to NU. Before accepting the position, NU went to London to study the internal systems of the company. While there, NU suggested several changes, which Buxton and his Board accepted.
At the age of 48, NU then embarked upon a new career in the private sector – another realm in which he would dominate for several decades, with what Exter termed his “unrivalled view of the economy.” NU’s long participation at both the ground and policy levels, provided him with insight into banking, finance, and commerce, enabling him to extrapolate beyond the present, and forge new trails. The private sector gave him far more scope for the exercise of his energy and acumen than his 28 years in the public service had. He was no longer hemmed in by a web of regulations and controls, which curbed quick decisions and action. The marketplace was
where one could sink or swim, and NU found this challenging. In NU’s career in the world of business, 1956 was a landmark year. With the help and advice of F.C. Rowan, Chairman of the law firm, Julius & Creasy, NU formed Mercantile Credit Limited as a finance company, while remaining Managing Director of Vavasseur. NU recognized the need for an institution that would provide finance to small businesses and individuals, and Mercantile Credit would become the leading private-sector institution offering hirepurchase finance for several decades to come. The private sector gave
him scope to apply his knowledge of finance towards the development of this sector.
In the same year, NU became Chairman of the Wellawatte Spinning and Weaving Mills, which had been established in the late 19th century. The mills had been engaged primarily in the production of cheap fabrics, mainly for estate workers, and had become rundown. The main shareholder of the mills was the Maharajah of Gwalior, who was anxious to ‘Ceylonize’ his company in view of the changing times. NU, with the knowledge he had obtained from his time in the Department of Commerce overseeing the running of several factories, found local subscribers who had confidence in his managerial abilities, who along with him took up the majority of shares held by the Maharajah. NU then set out to improve and expand production
by introducing new products and engaging the services of a foreign technologist (de Zoysa, pp.74 & 78).(NU would later manufacture synthetic textiles in 1960, when – fortuitously for NU – the government banned the import of synthetic fabrics. However, the tables would be turned in 1970, when Mrs. Sirimavo Bandaranaike’s government took over the factory, which had over 5,000 employees at the time. Sadly, shortly after nationalization, the mills were permanently closed down.)
The Fall of Kotelawala
While NU’s fortunes revived swiftly, John Kotelawala’s were beginning to wane. Kotelawala’s disposition and political style did not match the times, and he made some serious miscalculations, which resulted in the UNP’s crushing defeat at the polls. According to Wriggins: “There was a growing popular feeling of irritation and impatience at the U.N.P. leadership in general and [Kotelawala] in particular” (Wriggins, 1960, p.336). Kotelawala’s lifestyle and apparent disregard and lack of sensitivity for Buddhist values caused much consternation and indignation among the population. His memoirs, which were published at the time, aggravated the situation further. They “depicted him as a playboy of Western European capitals rather than a serious-minded statesman.” Buddhist monks read chapters from Kotelawala’s memoirs at temple gatherings, to “show how unfitted the prime minister was to rule Buddhist Ceylon”
(Wriggins, 1960, pp.336 & 346).
During the election campaign of 1956, a “devastating political cartoon” attacking the UNP appeared, effectively capturing the popular perception of the UNP among many Buddhists and galvanizing public opinion for the Opposition. The cartoon bore clear allusions to the Mara Yuddhaya (War of Mara) – a pivotal event in the life of the Buddha – depicting Kotelawala as Mara, the evil adversary of the Buddha. ( This episode, well known to any Sri Lankan Buddhist schoolchild and often depicted in temple wall paintings, represents the triumph of the Buddha through his purity and righteousness, over the evil of Mara. For an explanation of the context and figures
depicted in the cartoon, see Wriggins, 1960, p.356. After the UNP’s sweeping defeat in June 1956, Kotelawala left for England, and began what would turn into “regular summer and autumn visits to England,” becoming a “mere part-timer in Sri Lankan politics” (de Silva & Wriggins, 1994, p.16). S.W.R.D. Bandaranaike had allowed Kotelawala to “bend currency regulations” to
purchase a farm in England (Manor, 1989, p.255).
Exoneration
With the coming to power of the SLFP government (and its allies forming the MEP), NU lost no time in seeking to clear his name. In January 1957, he drafted a 17-page appeal to Governor-General Sir Oliver Goonetilleke, protesting the “perverse” findings of the 1953 Commission of Inquiry. As NU wrote, it had been a “grave miscarriage of justice”:
The Commissioners have not found any single instance in which it was established that I had received an illegal gratification for showing favour in the official discharge of my duties not only while I was in the Central Bank, first as Deputy Governor and later as Governor, but also in my long and varied career in the public service, the entirety of which came within the ambit of the inquiry… I wish to urge, that the findings of the Commissioners are perverse and are based on a prejudiced view of the facts established. (N.U. Jayawardena, Personal Files)
NU claimed he was a “victim of [Kotelawala’s] private revenge,” because of the latter’s “grave displeasure at [NU’s] official actions… when he was Minister of Transport and Works, and later when he was Prime Minister.”
In regard to loans NU and his wife had taken from banks, he held that there had been no necessary impropriety, in that “such transactions [are] an ordinary feature of normal life in every country today,” and that overdrafts and loans are taken by:
…even Prime Ministers, Finance Ministers and others having authority over banks, [without allowing] such transactions to influence their judgment and official conduct in relation to these institutions.
He argued that abroad, even officers of Central Banks borrow money from these Banks, and that: …in the absence of such a provision, no law or rule of practice has been laid down anywhere that the Governor of a Central Bank cannot resort to normal banking facilities ordinarily available to the general public, including other members of the Governing Body of the Central Bank, whether it be a Monetary Board, as is the case in Ceylon, or the Court or Board of Directors as may be elsewhere.
NU stressed the point that:
It is also significant that no evidence that such transactions are against any unwritten code of conduct in any country was placed before the Commissioners; nor was any precedent to this effect from any country cited.
NU detailed some of his reasons for resorting to overdraft facilities and his expenditure on building for his family:
My wife and I had obtained overdrafts and Bank facilities even during the period as Deputy Governor of the Central Bank. In fact, I had occasion to apprise the then Governor, Mr. John Exter, and also the then Minister of Finance and even other Ministers of these transactions. No one made any secret of this fact. Not one of them made any adverse comment on, or warned me, against these transactions, all of which had been undertaken purely for the purpose of financing the purchase of two building sites, and the construction eventually of a dwelling house for our own occupation and, later, of another house convertible into two flats in case of need, so providing three housing units for the benefit for the three children composing our family. Neither was it considered then that the action of my wife or myself in availing ourselves of these facilities constituted a breach of some unwritten code of conduct, which the Commissioners hold up against me in their report.
NU lucidly summed up his early struggles and meteoric rise in the public service through his own abilities – an achievement undone by one stroke of injustice:
I had risen from very humble beginnings, indeed, to one of the highest offices that the State can offer its nationals and I had achieved this, not through influential connections or patronage, but by sheer dint of industry, intelligence, ability and character and, without being immodest, I believe I could claim that I had won the respect abroad of those in a position to judge my competence in Central Banking. But everything that I had striven for in my working life was destroyed by perverse justice meted out to me.
On 7 March 1957, he wrote again to the Governor-General, pressing for justice against this “great wrong”: if it be that there is no provision in law to annul this order, I should be grateful… your Excellency… grant me a measure of redress for the great wrong done to me, by causing a public statement to be issued exonerating me altogether from any imputations of blameworthy conduct.
NU reassured him with these words:
I wish to say that I have no intention of taking legal action of any kind in respect of the order removing me from office or making any claim on the footing that the order of removal was illegal and to give your Excellency the assurance that I shall not take such action or make such claims.
In reply, N.W. Atukorale, the Secretary to the Governor-General, on 20 March 1957 wrote that, despite a different view, which the new Prime Minister might hold from his predecessor:
His Excellency has no power to annul the order of removal from officemade… before the present Prime Minister assumes office.
NU’s case was sent to the Attorney-General, Noel Gratiaen, QC, whose opinion stated that an injustice had been done. On 10 August 1957, Atukorale announced the news of NU’s exoneration:
I am directed by the Governor General to inform you that the Prime Minister has carefully considered all the relevant material regarding this case and is of the opinion that you, as Governor of the Central Bank, had not done any act or thing which was of a fraudulent or illegal character or was manifestly opposed to the objects and interest of the Bank. (the above correspondence is from N.U. Jayawardena Personal Files)
This was the redress for which NU had been waiting. The news was flashed locally, and in Britain in the Daily Telegraph and Times. Letters and telegrams poured in from people who had known and supported him. Cyril Hawker of the Bank of England wrote to NU, that he was: … delighted to read in the press that you had been cleared of any improper conduct during your Governorship of the Central Bank of Ceylon… I can assure you that everybody in the Bank of England who knew you feels the same as I do. (N.U. Jayawardena, Personal Files)
An influential local left-wing journal, Tribune (30 Aug. 1957), expressed its approval:
We welcome the present ‘exoneration’ because it became clear in the course of the proceedings of that Commission (in the way inquiries were limited and circumscribed) and in the verdict, which was pronounced, that NUJ had been made a scapegoat to shield the activities of bigger fish. (emphasis added)
NU the Senator
While making significant strides in the private sector, NU also made his political debut. In December 1957, Prime Minister S.W.R.D. Bandaranaike appointed him to the Upper House (Senate), bringing NU for the first time into the arena of political debate and providing him with a public platform from which he could expound on his ideas for economic reform and many other issues. A condition for NU’s acceptance of the senatorship was that, if he disagreed with any of Prime Minister Bandaranaike’s policies, he should be at liberty to say so (de Zoysa manuscript, p.72). NU added lively and outspoken comment in the debates. As a senator he was now able to express his views freely, unconstrained by the restrictions he had been formerly bound by as a government servant.
The Hansard from his five-year term in the Senate is full of NU’s thoughtful and well-researched contributions to the various debates. He spoke authoritatively on a wide range of political and economic issues, such as fiscal and monetary matters, insurance, the banking system, and the development of tourism; and his views and participation on government committees were also widely solicited. It is interesting to note that, as far back as 1959, NU had proposed that the electoral system be changed from one based on “first-past- the-post” to one based on proportional representation. He did emphasize, however, that the proportional representation system could bring two disadvantages – the “loss of contact” between elected representatives
and the electorate, as well as the creation of “splinter groups”; noting, however, that these could be overcome through different measures (N.U. Jayawardena, 1959, p.3). He also submitted a memorandum in which he outlined his proposed changes to the composition of the Senate by electing a certain percentage of senators on a functional basis to represent specific interests, such as Education, Arts and Sciences, Agriculture, and Law (N.U. Jayawardena, April 1959, p.5). In this memorandum he noted that:
There is an obligation cast on a society calling itself a Social Democracy… to make the fullest use of those willing and competent to contribute to the process of political decision-making, instead of limiting that contribution only to those who happen to subscribe to a particular political creed. (ibid, p.5)
This was just the beginning of a new life for N.U. Jayawardena, the pragmatist, man of action and visionary. He would soon dominate the emerging private sector, providing the lead for its development. He was eager to create the institutions, which would help stimulate the economy and take the country forward. For NU, this heralded a still newer phase in the world of business, a sector that he had helped to develop during his many years in government service. He had, as one wag said, moved from “Resthouse to Bank House,” and now became both the chief of a Financial House, and a member of the “Upper House.”
EPILOGUE
In the next four decades of his working life, NU continued his relentless pace of work. He went on to establish a large business conglomerate, which included financing, leasing, tea-broking, stockbroking, shipping, logistics, tourism and travel. The companies he founded included Sampath Bank, National Enterprise Bank (now DFCC Vardhana Bank), Union Assurance, Mercantile Shipping, Mercantile Leasing, and Mercantile Credit. He was instrumental in opening up the island’s financial-services and commodity-broking sectors – which had been long closed except to a few companies. In 1982, he became a founding member of the Colombo Securities Exchange, serving as its second Chairman from 1988 to 1989. During these years, NU was in constant demand and served on an extraordinary number of government and private-sector committees as well as boards, contributing to the formulation of legislation and policy in a large number of areas, including banking, finance, capital markets, tourism, housing, and insurance. He was Governor of the Central Cultural Fund from 1987 to 1994.
NU proved to be a prolific writer, commenting on economic and political issues, and participating in the controversies of his time, writing over 200 monographs, essays and speeches over his lifetime. He became the private sector’s foremost champion as well as a vocal
advocate for open-market policies. His copious output included analytical commentary on government economic and fiscal policy which he circulated among policy-makers; his yearly analysis of the government budget became a well-established tradition, forming the basis for intellectual discussion and debate. In recognition of his outstanding service to the country, NU was conferred the title of “Deshamanya” in 1991. He continued to be active, working in his office almost up to the last days of his life. N.U. Jayawardena died, at the age of 94, on April 24, 2002.
N.U. JAYAWARDENA T H E F I R S T F I V E D E C A D E S Chapter 14 can read online on- https://island.lk/power-politics-2/
By Kumari Jayawardena and Jennifer Moragoda ✍️
Features
Sri Lanka’s vanishing wetlands put elusive otter under growing threat
The world marked World Otter Day 2026 recently. Conservationists are warning that Sri Lanka’s rapidly disappearing wetlands, polluted waterways and unplanned development are placing increasing pressure on one of the island’s most elusive freshwater predators, the Eurasian otter (Lutra lutra).
The species, locally known as “Diya Balla”, is the only otter found in Sri Lanka and is regarded as a key indicator of healthy freshwater ecosystems. Yet despite its ecological importance, experts say the animal remains poorly studied and largely overlooked in national conservation planning.
Naturalist and conservationist Chaminda Jayasekara, who has spent years documenting otters in Sri Lanka, said the species is facing mounting environmental pressures across the island.
Speaking to The Island, Jayasekara said habitat destruction, chemical pollution, road kills, sand mining, and increasing human disturbance are fragmenting the waterways on which otters depend.
“Otters are extremely sensitive animals. When wetlands are degraded or rivers become polluted, they disappear very quickly. Their survival is directly linked to the health of freshwater ecosystems,” he said.
Jayasekara, who specialised in MSc Environmental Management at the University of Hertfordshire, noted that while the species has been recorded across Sri Lanka’s wet zone, dry zone and coastal wetlands, scientific data on population numbers and distribution remain limited.
According to him, the decline of wetlands has become one of the most serious environmental issues facing Sri Lanka. Marshes, mangroves, irrigation tanks and riverine habitats are increasingly being altered by urban expansion, tourism infrastructure, encroachment and agricultural runoff.
He warns that the loss of these habitats not only threatens otters, but also weakens flood control systems, freshwater security and biodiversity resilience at a time when climate-related disasters are becoming more frequent.
Jayasekara said otters play a vital ecological role by helping maintain balanced fish populations and healthy aquatic ecosystems.
“When otters thrive, it tells us the river system is functioning properly. Their presence is a sign that water quality, fish diversity and habitat conditions remain healthy,” he explained.
One of the best-known locations for otter sightings in Sri Lanka is Aranga Pond, within the Horton Plains National Park, where the species has adapted to the island’s cold montane ecosystem.
However, conservationists stress that even protected areas are not immune to broader environmental degradation occurring outside park boundaries.
Jayasekara’s own work on otters gained prominence through long-term conservation efforts at Jetwing Vil Uyana, where a former degraded chena landscape was restored into a functioning wetland ecosystem.
The restored habitat eventually attracted Eurasian otters, fishing cats, grey slender lorises and numerous wetland bird species.
Over 14 years, Jayasekara carried out field observations, camera trapping and awareness programmes involving hotel staff, surrounding schools and local communities.
“What happened at Vil Uyana clearly showed that habitat restoration works. If degraded ecosystems are given time to recover, wildlife can return naturally,” he said.
He added that wetland restoration should become a central component of Sri Lanka’s environmental policy, particularly as climate change intensifies droughts, floods and biodiversity loss.

Chaminda collecting scat for research purposes in Sigiriya
He says wetlands are among the planet’s most productive ecosystems, functioning as natural water filters and carbon sinks while providing breeding grounds for fish, amphibians and aquatic mammals.
Yet globally, wetlands are disappearing at an alarming rate, and Sri Lanka is no exception.
Conservation groups have repeatedly warned that illegal waste disposal, pesticide contamination and poorly planned infrastructure projects are severely affecting freshwater ecosystems throughout the country.
Jayasekara also highlighted the importance of stronger environmental education and community participation in conservation.
“Awareness is still very limited. Many people living close to wetlands do not realise the ecological importance of otters or the threats they face,” he said.
According to him, involving local communities in conservation monitoring is essential if Sri Lanka hopes to safeguard the species in the long term.
He also pointed to the growing international interest in otter conservation.
In November 2025, Jayasekara represented Sri Lanka at the International Eurasian Otter Conservation Workshop held at Colchester Zoo and organised by the International Otter Survival Fund.
The workshop brought together nearly 100 researchers, conservationists and wildlife experts from 33 countries to discuss emerging threats facing Eurasian otter populations.
Jayasekara presented Sri Lanka’s experience under the theme Rewilding Through Hospitality, focusing on how habitat restoration and sustainable tourism practices at Vil Uyana contributed to otter conservation.
“The international response was extremely encouraging. Many delegates were surprised that a tourism property in Sri Lanka had quietly carried out wetland conservation work for more than a decade,” he said.
Discussions at the workshop also examined wider environmental concerns including river pollution, declining fish stocks, illegal killings and habitat fragmentation affecting otter populations across Europe and Asia.
New conservation technologies such as AI-assisted wildlife tracking and environmental DNA surveys were also highlighted as emerging tools for monitoring elusive species.
Jayasekara said Sri Lanka urgently requires more scientific surveys, stronger environmental law enforcement and greater investment in freshwater conservation research.
He warned that unless wetlands and waterways are protected, several lesser-known freshwater species could face severe decline in the coming decades.
Environmentalists say otter conservation should not be viewed in isolation but as part of a broader effort to protect entire freshwater ecosystems that millions of Sri Lankans depend on for drinking water, irrigation and livelihoods.
He further noted that healthy wetlands also strengthen climate resilience by absorbing floodwaters, reducing soil erosion and supporting groundwater recharge.
As Sri Lanka experiences increasingly erratic weather patterns linked to climate change, conservationists argue that protecting wetlands is becoming both an ecological and economic necessity.
Jayasekara believes Sri Lanka still has an opportunity to become a regional example in balancing tourism, biodiversity conservation and habitat restoration.
“The otter teaches us an important lesson,” he said. “If rivers are protected and wetlands are respected, nature has an incredible ability to recover.”
This year’s observance of World Otter Day 2026 is, therefore, serving not only as a celebration of one of the world’s most charismatic mammals, but also as a reminder of the urgent need to conserve the fragile freshwater ecosystems upon which both wildlife and human communities ultimately depend.

Eurasian otter
By Ifham Nizam
Features
Malaiyaha Tamil people: Healing the Oldest Wound of Independence
In their Vesak messages this year, President Anura Kumara Dissanayake and Prime Minister Harini Amarasuriya highlighted the values of reconciliation, coexistence and justice as essential to Sri Lanka’s future. President Dissanayake emphasised that Buddhism’s teachings remain deeply relevant to contemporary society and described Vesak as a symbol of “mutual understanding, unity and coexistence among all communities” and of reconciliation itself. Prime Minister Amarasuriya similarly called for the building of a society in which justice is assured to all irrespective of caste, race or religion. These messages were not merely religious aspirations, they were a direct challenge to the most serious failures in Sri Lanka’s post-independence history. These include the three-decade-long war, its human rights violations and the inability to implement a political solution.
These have been and continue to be the challenges that have prevented Sri Lanka from reaching its full potential. Added to this have been the persistence of social and economic inequalities that continue to marginalise communities at the bottom of the social hierarchy. One of the most enduring examples of such injustice is the experience of the Malaiyaha Tamil community. The scale of the original exclusion is worth understanding clearly. According to the 1946 Census, the Malaiyaha Tamil community numbered approximately 780,600 persons and constituted 11.73 percent of the country’s population making them the second largest ethnic community, larger than the Sri Lankan Tamil community who numbered 733,700 or 11.02 percent of the population at the time
The denial of citizenship and voting rights to the Malaiyaha Tamil community was the first major injustice inflicted on an ethnic minority in post-independence Sri Lanka. The consequences were devastating and long-lasting. A community that had contributed enormously to the country’s economy through its labour on the plantations was excluded from political participation and denied basic rights. This was a political and moral failure that cast a long shadow over the country’s post-independence history. Responsibility for that injustice needs to be shared widely. Political leaders across ethnic lines failed to resist it. The result was the marginalisation of a community whose contribution to national prosperity far exceeded the recognition it received. Today, nearly eight decades later, Sri Lanka has an opportunity to correct that historic wrong but only if economic reform is matched by genuine social inclusion.
Longstanding Grievances
The NPP government has repeatedly acknowledged the need to address the longstanding grievances of the Malaiyaha Tamil people. In its election manifesto, the NPP pledged to improve living conditions in plantation areas, strengthen land and housing rights, ensure equal access to education and public services, and integrate plantation communities more fully into national development. The NPP’s Nuwara Eliya Declaration of 2023 similarly recognised that the plantation community had suffered generations of exclusion and promised measures to address disparities in housing, land ownership, infrastructure, education and economic opportunity. The need for such action is plain to see. While citizenship issues have largely been resolved over time, the socio-economic consequences of decades of exclusion remain deeply entrenched and continue to shape daily life in plantation communities. A conference organised by the Institute of Social Development to mark International Tea Day on May 21 at the BMICH brought out this and many other salient issues. Headed by P Muthulingam the organisation has advocated for the rights of the Malaiyaha Tamil people for the past 35 years to be equal citizens who enjoy social and economic justice.
The central problem facing many plantation workers is the low level of income they receive. Daily wages remain among the lowest in the country relative to the difficulty and intensity of the work. Plantation labour continues to depend heavily on methods that have changed little over generations. Productivity remains low compared to competing tea-producing countries — not because workers lack capability, but because sustained investment in their welfare, skills and economic mobility has been withheld. Workers consequently remain trapped in a cycle of low wages and limited economic mobility. Their housing situation compounds these difficulties. Many plantation families continue to live in housing owned either by plantation companies or the state. Lack of secure ownership limits their ability to accumulate assets, access credit or make independent decisions regarding their future. When Cyclone Ditwah damaged plantation housing, it exposed the inability of those living in that housing to access state compensation as they did not own the housing in which they lived.
The problems extend beyond the central highlands. Plantation workers living in private estates and smallholdings in other parts of the country face similar challenges. A recent Amnesty International report documented serious abuses affecting Malaiyaha Tamil workers in private tea estates in the Southern Province. These include wage withholding, debt dependency, restrictions on movement and intimidation and practices the report argued correspond to internationally recognised indicators of forced labour. These findings are not peripheral. They reveal that the structural exclusion of the Malaiyaha Tamil community is not a relic of the past but an active, ongoing condition. Economic vulnerability and social marginalisation continue to leave many plantation workers without effective protection or access to justice. It is against this backdrop that the government’s recent plantation reform initiative assumes special significance.
Second Phase
The government has announced the second phase of a programme to make underutilised plantation lands and assets available for investment. The objective is to transform underperforming assets into productive enterprises capable of generating employment, attracting investment and revitalising regional economies. The programme seeks to modernise the plantation sector, improve productivity and create new opportunities in tourism, renewable energy and export-oriented industries. These objectives are necessary and welcome. However, economic reform alone will not be sufficient and Sri Lanka’s own history provides the warning. Previous rounds of plantation modernisation pursued productivity gains without addressing the structural disempowerment of the people at the centre of the industry. The result was investment that generated wealth without distributing it. The workers who produced the wealth were once again treated as labour inputs rather than as beneficiaries. If the current reform follows the same logic, it risks reproducing the same failure.
For reform to succeed, plantation workers must be recognised not merely as a labour force but as stakeholders with rights, aspirations and a legitimate claim to share in the benefits of development. Housing ownership, secure land tenure, quality education, vocational training and entrepreneurship need to be built into the reform process from the outset. The government’s commitments to the Malaiyaha Tamil community therefore need to be incorporated into every stage of the reform process. On the contentious question of land, the government should consider establishing an independent national land commission. Such a body should include respected government officials, professionals and representatives from all ethnic and religious communities. It should review land policy comprehensively, develop transparent principles for allocation and use, ensure fairness in decision making and provide a trusted mechanism for resolving disputes. A credible land commission would help build public confidence that land reforms are being undertaken in the national interest rather than for the benefit of particular groups.
The correction of historic injustices should not be viewed as a concession to one community. It should be understood as an investment in national unity, because societies do not become stronger by maintaining the exclusion of those they have wronged. On the contrary, they become stronger by ending it. The first great injustice committed against an ethnic minority after independence cannot be undone. But its consequences can be addressed, and doing so would strengthen reconciliation, enhance social cohesion and bring Sri Lanka closer to the vision of a country in which all communities live with equal dignity and equal hope. This is what the Vesak messages of the President and Prime Minister promised. The plantation reform now underway is the moment to make good on that promise not in words alone, but in sustained policy that endures beyond any single government and reaches the people who have waited longest for it.
by Jehan Perera
Features
IMF relief is not economic recovery: Sri Lanka’s real test begins now
The IMF’s latest decision to release approximately US$695 million to Sri Lanka provides an important measure of financial relief, but it should not be mistaken for full economic recovery. While the approval reflects progress in stabilisation, fiscal discipline, and reform implementation, the country still faces deep structural weaknesses, social pressures, and external risks. The real test begins now: whether Sri Lanka can convert this temporary breathing space into lasting reform, productive growth, stronger institutions, and national resilience. This moment should not be used for political celebration, but for serious national reflection and responsible action. Sri Lanka must now resolve to support a clear policy direction, a practical reform programme, and a long-term national development path — not merely an individual, a party, or a political camp.
1. IMF Relief: A Necessary Step, but Not a Final Solution
The IMF Executive Board recently completed the combined Fifth and Sixth Reviews under Sri Lanka’s Extended Fund Facility, allowing the country immediate access to SDR 508 million, approximately US$695 million. This decision represents an important step in Sri Lanka’s ongoing economic recovery process following the severe crisis that led to sovereign debt default, shortages of essential goods, high inflation, and the collapse of foreign reserves in 2022.
However, this decision must be understood with great sensitivity. IMF relief is not the same as full economic recovery. It gives Sri Lanka temporary breathing space, helps rebuild a certain level of international confidence, and supports the continuation of the reform programme. However, this relief is not a magic solution that can automatically resolve the country’s deep-rooted economic problems. Fundamental challenges such as the debt burden, weak productive capacity, low export earnings, poor public revenue performance, weak fiscal management, excessive dependence on imports, corruption, and inefficient state-owned enterprises still remain unresolved. Addressing these challenges requires domestic reforms, disciplined policies, stronger production and export capacity, and a long-term national development programme. Therefore, the IMF decision should not be treated as a political victory or as proof of complete economic success. Rather, it should be seen as a reminder that Sri Lanka still has a long and difficult journey ahead.
2. Sri Lanka’s Progress Recognised by the IMF and Its Limits
The IMF’s approval indicates that Sri Lanka has made progress in several important areas. Inflation has been brought under control compared to the extreme levels experienced during the crisis. Foreign reserves have improved, the exchange rate has shown greater stability, and fiscal management has become more disciplined. The government has also continued to implement reforms in taxation, public finance, energy pricing, and debt restructuring.
According to the IMF assessment, performance under the programme has generally been strong. Several quantitative performance targets have been met, while many structural benchmarks have either been achieved or implemented with some delay. This shows that Sri Lanka has remained broadly committed to the reform path agreed under the IMF-supported programme.
Yet this progress remains fragile. Stability achieved through external support must now be converted into genuine economic strength.
3. Conditions and Responsibilities Attached to the IMF Programme
IMF support does not come merely as financial relief; it comes with a set of important reform conditions and responsibilities that Sri Lanka must fulfil. Key among them are maintaining fiscal discipline, improving government revenue, continuing cost-reflective pricing for fuel and electricity, strengthening public financial management, restructuring state-owned enterprises, protecting institutional independence, and preventing the accumulation of new external payment arrears.
The main objective of these conditions is to restore macroeconomic stability, strengthen fiscal credibility, and rebuild international confidence in Sri Lanka. However, these reforms also carry social and political consequences. Higher taxes, market-based utility pricing, and strict expenditure controls can place a heavy burden on ordinary citizens, especially low-income families, small businesses, pensioners, and salaried workers. Therefore, in implementing reforms, economic discipline alone is not enough. Fairness, transparency, and social sensitivity towards vulnerable groups must also be treated as essential priorities.
4.The Impact of IMF Conditions on People and the Economy
One major social consequence of the IMF programme is the increased pressure it can place on household incomes and living standards. When electricity, fuel, and other essential services are priced on a cost-recovery basis, people may have to face a higher cost of living. Although such reforms are necessary to reduce the losses of state-owned enterprises and maintain fiscal discipline, they can weaken the purchasing power of ordinary citizens if strong social protection programmes are not in place.
Another important consequence is the pressure placed on the operating costs and stability of small and medium-sized enterprises. Higher taxes, increased utility costs, fuel and electricity expenses, and the rising cost of borrowing can affect business survival, job creation, and new investment decisions. If reforms are implemented without sufficient attention to production, exports, and small businesses, the country may achieve short-term fiscal stability, but long-term economic growth could remain weak.
There is also a political risk that cannot be ignored. If people feel that the burden of reform is not being shared fairly, reform fatigue and public frustration may emerge. If ordinary citizens are expected to make sacrifices while corruption, waste, and political privileges continue, public confidence in the reform process will decline. Therefore, for IMF-supported reforms to succeed, fairness, transparency, and social sensitivity must be firmly ensured alongside economic discipline.
5. The Real Test Before Sri Lanka
Sri Lanka’s real test begins now. Beyond temporary financial relief, the country must now prove that it can build a strong economy that generates income and can withstand external shocks. Therefore, our objective should not be limited to securing the next IMF tranche. While an IMF tranche may provide short-term breathing space, it does not guarantee long-term economic independence or stability. The real objective should be to create an economy that does not have to return to the IMF repeatedly during every crisis, but can stand on its own productive strength, export earnings, and fiscal discipline.
This requires fiscal discipline. However, discipline alone is not enough; economic growth is also necessary. Taxation is necessary. But increasing taxes alone is not a solution; production, investment, and exports must also be expanded. Debt restructuring is necessary. But beyond reducing the debt burden, Sri Lanka must also build an economic foundation that does not depend excessively on borrowing in the future. Sacrifices may be asked of the people. But for those sacrifices to be fair, accountability, transparency, and exemplary conduct from leaders are also essential.
Economic recovery cannot be sustained in the long term through financial assistance alone. Such support can provide breathing space during a crisis, but a country is rebuilt on the strength of its own institutions, productive capacity, export competitiveness, and public trust. Therefore, what Sri Lanka needs today is strong institutions, income-generating industries, a broader export base, food security, energy security, and a system of governance that people can trust.
6. Policy Priorities for Sustainable Recovery
Sri Lanka must now move from crisis management to national transformation. First, fiscal discipline should continue, but it must be fair. Revenue mobilisation should not rely only on increasing taxes on the same groups of people. The tax base must be broadened, tax administration must be improved, and tax evasion must be reduced.
Second, social protection must be strengthened. The most vulnerable groups should be protected through well-targeted assistance. Reforms will be more acceptable if people feel that the poor, elderly, disabled, and low-income families are not abandoned.
Third, state-owned enterprise reform should be carried out with transparency and public accountability. The objective should not merely be privatisation, but efficiency, professionalism, financial discipline, and better service delivery.
Fourth, Sri Lanka must prioritise export-led growth. The country cannot build a stable future by depending mainly on borrowing, remittances, and consumption. Agriculture, tourism, manufacturing, IT services, logistics, education, and value-added exports must become central pillars of national development.
Fifth, governance reform is essential. Without reducing corruption, political interference, wasteful expenditure, and weak implementation, no IMF programme can create lasting recovery. Economic reform and governance reform must move together.
7. From Temporary Relief to Lasting Recovery
The IMF decision gives Sri Lanka an important opportunity. It provides the country with space to strengthen economic stability, rebuild international confidence, and move forward with essential reforms. However, it is not a guarantee of success. It is only a step that gives the country some breathing space. It is now Sri Lanka’s responsibility to use that space wisely, with discipline and accountability to the people.
The country must now decide whether it will continue the old cycle of crises, debt, temporary relief, and political blame, or whether it will build a new national programme based on discipline, productive capacity, fairness, and accountability.
At this moment, true success cannot be measured by the amount of money received. It must be measured by whether Sri Lanka can build an economy that produces more, exports more, saves more, is governed better, and protects its people more effectively. The real victory is not receiving IMF relief, but building a strong national economy that will not depend excessively on such relief in the future.
Public Appeal: Let Us Choose a Programme, Not a Personality
This US$695 million will not solve every problem in our country. It may provide temporary financial relief and support the continuation of reforms, but it cannot replace the hard work required to build a productive, disciplined, inclusive, and self-reliant economy.
Therefore, this is the right time for all Sri Lankans to rise above narrow political loyalties and support a clear policy direction, a practical reform programme, and a long-term national development agenda — not merely an individual, a party, or a political camp. What Sri Lanka needs today is not the victory of a personality, but the victory of a responsible national programme that can restore confidence, protect the vulnerable, promote production, strengthen exports, ensure accountability, and secure a better future for the next generation. The question before us is simple but decisive: are we ready to make that choice?
by Prof. Ranjith Bandara,
PhD (Qld.,)
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