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Arvind Subramanian: Why hasn’t Sri Lanka’s democracy acted as a hedge against economic chaos?

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Dr. Arvind Subramanian

In a sobering and intellectually provocative lecture delivered yesterday at the Central Bank of Sri Lanka, Dr. Arvind Subramanian, former Chief Economic Advisor to the Government of India, posed a “haunting” question to the nation’s policymakers: Why has one of the world’s oldest democracies outside the West failed to leverage its political system to ensure economic stability?

Titled ‘Reviving Growth While Maintaining Stability,’ the lecture moved beyond technical prescriptions. Dr. Subramanian, now a Senior Fellow at the Peterson Institute for International Economics, admitted that his experience with the complexities of the Indian economy had made him “humble and somber,” leading him to focus on the broader socio-political structures that dictate a nation’s fate.

Dr. Subramanian argued that in India, democracy acted as a vital pressure valve that prevented both extreme political violence and economic chaos. He noted that while the process of nation-building is historically violent – citing the West’s decimation of populations and China’s estimated 40–75 million deaths between 1950 and 1976 – India managed to maintain a relatively low degree of mass violence.

“Democracy had a key role to play in that,” he asserted. “It is one of India’s major achievements.”

The speaker extended this logic to the economic sphere, suggesting that Indian democracy created a “societal demand” for low inflation.

In India, he noted, there is a pervasive political belief that if inflation crosses the 5 percent threshold, the government is likely to lose the next election. This political accountability forced the Central Bank and the State to maintain macro-stability.

The crux of Dr. Subramanian’s address was the “intellectual puzzle” of why Sri Lanka, which received universal franchise well before India, did not experience the same stabilising effects of democracy.

He presented two charts that he described as “haunting.” The first revealed that Sri Lanka has spent 60 percent of its time under IMF programmes, indicating a state of “perennial macro-economic stress.” In contrast, India has not sought an IMF programme in the 35 years following its 1991 reforms.

“Why does Indian society demand low inflation and macro-stability, while the same doesn’t happen in Sri Lanka?” he asked. Despite its long democratic tradition, Sri Lanka has consistently seen higher inflation and greater financial instability than its neighbour.

Dr. Subramanian also highlighted a stark difference in how both nations treat foreign capital. Pointing to data on external debt stock as a share of Gross National Income (GNI), he illustrated that Sri Lanka has been consistently and significantly more reliant on foreign capital than India or China.

While some argue that Sri Lanka’s small size necessitates a reliance on foreign capital, Dr. Subramanian remained unconvinced, noting that India also suffered from low domestic savings for decades but chose a more cautious path.

“India has been much more cautious in opening up to foreign capital,” he explained. While foreign capital can drive growth, it brings the “downside of risk and volatility” as capital flows in and out – a reality that came to haunt Sri Lanka in recent years through its high exposure to foreign currency-denominated debt.

The lecture concluded not with a list of “1, 2, 3 points” for recovery as the wider audience had expected, but with a challenge to the Sri Lankan intelligentsia. If democracy is meant to be a safeguard against political and economic disorder, the breakdown of that mechanism in Sri Lanka requires deep introspection.

“Different societies differ,” Dr. Subramanian concluded. “But if democracy had a key role in avoiding volatility in India, why shouldn’t it have been so in such an old democracy as Sri Lanka? It is worth pondering over,” he said.

By Sanath Nanayakkare



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APHNH aims to make Sri Lanka more competitive for healthcare investment

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Deputy Minister of Health and Mass Media, Dr. Hansaka Wijemuni addresses the audience

Sri Lanka private healthcare leaders recently pledged an action plan with timelines to address the practical priorities of Sri Lanka’s healthcare sector while making it more viable for local and foreign investments.

The Association of Private Hospitals and Nursing Homes (APHNH) has committed to converting recommendations from its first Healthcare Leadership Summit into a trackable outcome document with defined actions, responsibilities, and timelines, marking a shift from discussion to implementation in sector reform efforts.

The summit held on March 9 at Waters Edge, Colombo, brought together hospital leaders, policymakers, regulators, insurers, and international experts to address practical priorities for Sri Lanka’s healthcare sector.

A key outcome of the summit was APHNH’s plan to consolidate recommendations into a single, trackable charter that will outline specific actions, assign responsibilities, establish timelines, and provide periodic progress updates.

“Our objective is to bring the right decision-makers into one room and focus on what can be implemented, not only what can be discussed, ” said Raveen Wickremesinghe, President of APHNH. “We are committed to taking the inputs from today and converting them into a clear, trackable set of actions that strengthens quality, transparency and public confidence, while supporting national health priorities. “

The summit featured insights from Dr. Hafeez Rahman Padiyath, Dr. Hamdani Anver, and Chandana L. Aluthgama on scaling quality and operational discipline. A keynote and fireside discussion with Dr. Paiboon Eksangsri, President of the Private Hospital Association of Thailand, explored lessons from Thailand’s private healthcare development and conditions for making Sri Lanka more competitive for healthcare investment.

By Sanath Nanayakkare

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Atlas SipSavi Naththal Poronduwa records positive public participation, benefiting 10,000 students

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Atlas, Sri Lanka’s No. 1 learning brand, successfully concluded Atlas SipSavi Naththal Poronduwa, a national initiative that saw strong public participation in supporting children at risk of dropping out of school due to financial hardship. At a time when more than 22,000 Sri Lankan children leave school each year due to rising economic challenges, the initiative reinforced Atlas Sipsavi’s long-standing ‘No Child Left Behind’ promise by turning seasonal generosity into meaningful educational support.

The initiative reached 10,000 students, with beneficiary schools carefully selected to ensure support reached those most in need. The collected books were distributed to children at risk of dropping out, including those whose education had been disrupted by recent adverse weather, ensuring students had essential learning resources at the start of the new school term. Through its flagship Atlas SipSavi programme, the brand focused on improving access to education by providing essential learning tools, scholarships, and infrastructure to create better learning environments, bringing its purpose of ‘making learning fun’ to life in a meaningful way. As part of the initiative, the public was invited to donate schoolbooks, with each contribution matched one-for-one by Atlas. Donation boxes were placed at all Keells outlets island-wide and at Sarvodaya District Offices, making it easy for communities to take part.

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John Keells Logistics expands strategic engagement with CWIT through inter-terminal transport operations

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Representing JKLL: Lasitha Manchanayake: CEO, Dilum Liyanage: Snr. Manager - Transport Operations, Kavinda Jayasinghe: Manager - Operations and Randi Peiris: Asst. Manager - Commercial. Representing the John Keells Group: Zafir Hashim: President - Transportation, Plantations and IT Sectors and Asha Perera: CFO. Representing CWIT: Munish Kanwar: CEO, Iresh Siriwardena: COO, Devanshu Bhatia: Head of Techno Commercial, Madhuranga Wijesekara: In Charge - GATE Process, Sandun Niroshan: Duty Manager.

John Keells Logistics (Pvt) Ltd (JKLL), one of Sri Lanka’s leading third-party logistics solutions providers, has successfully expanded its operational engagement with Colombo West International Terminal (Private) Limited (CWIT), through inter-terminal transport services within the Port of Colombo. This enhanced engagement further strengthens CWIT’s efforts to improve operational efficiency, reliability, and scalability across terminal activities.

Inter-terminal transport plays a critical role in modern port operations, requiring high levels of coordination, precision, and operational discipline. JKLL’s appointment for ITT operations reflects CWIT’s confidence in the company’s demonstrated capabilities in managing complex transport operations within a high-throughput port environment.

The ITT operations are underpinned by JKLL’s technology-enabled logistics framework, incorporating real-time fleet tracking, performance monitoring systems, and data-driven operational planning. These capabilities provide enhanced visibility and control over transport movements, while ensuring compliance with established safety, productivity, and service quality standards.

The awarding of this engagement to JKLL is a testament to the successful implementation of the Inter-Terminal Vehicle (ITV) operations undertaken by John Keells Logistics at CWIT during the previous year. The ITV assignment was executed through structured operating procedures and disciplined service delivery, contributing to improved cargo movement, operational coordination, and service continuity within the terminal. The performance outcomes of the ITV operations provided the basis for the subsequent expansion of the partnership into ITT services.

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