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Midweek Review

Crisis choices: Economic fundamentalism or economic realism?

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By DR. DAYAN JAYATILLEKA

Economics is not a hard science. There are no scientific axioms in economics that can be universally accepted. It all depends upon the economic paradigm or episteme one operates with and within.

Economic policy is a matter of choices. There is no one, single, correct answer that is self-evident. It all depends on where you are coming from and want to get to.

Unlike in the case of hard science, where the correct methodology applied to the data points you in a certain direction, in the case of economic policy the choices you make can take you into the minefield of civil war.

UNP-NOMICS, POHOTTU-NOMICS, JVP-NOMICS

In economics, the dogmatic rightwing liberal school of economic thought has never figured out what happened to the periods of Ceylonese/Sri Lankan history they applaud and approved of:

1. The UNP of the 1950s, which ended with the hartal of August 1953 and Sinhala Only 1956

2. The UNP of 1965-1970 which ended with the rise of the armed JVP and a two-thirds majority for the SLFP-led coalition;

3. The UNP of 1977-1988 which led to a massive Southern insurrection and the near-decapitation of the UNP (and had to be rescued by Premadasa through a shift to a very different economic paradigm);

4. The UNP of 2001-4 which ended with the Presidential ouster of the PM and the electoral victory for Mahinda Rajapaksa;

5. The UNP of 2015-2020, which ended with the electoral extinction of the UNP.

This is why I do not trust for a moment, the prescriptions of those who belong to that same school of economic thought and have made no public criticism of and rupture with the policies of those times.

When these successive experiments have ended in sociopolitical backlashes, it would be suicidal to approach the same doctors for the same diagnoses and prescriptions.

Sri Lanka has experienced twin disasters:

(A) Statist closed economy/low growth (SLFP 1970-1977, SLPP 2019-) and

(B) Open economy/rapid growth/trickle-down/free-market fundamentalism (UNP)

The JVP-NPP’s discourse and printed proposals so far, take as a starting point the denunciation and rejection of the Open Economy of 1977. That alone tells us that they cannot offer a solution to the present crisis or a better future for Sri Lanka. the JVP’s rejection of the Open economy instead of a progressive reform OF the Open Economy will lead us to the kind of abyss that has given socialism a bad name as an economic system.

Thus, three options we are offered, namely the current regime’s policy which is a throwback to that of Sirimavo Bandaranaike -NM Perera, the Ranilist UNP’s economic policy –summed up in the ‘IMF First!’ approach—and the JVP’s rejection of the Open economy, are all disastrous.

PROGRESSIVE PRAGMATISM

Based upon empirical evidence, it is only the paradigm of President Premadasa that gave us high growth including rapid industrialization, high inflows of foreign investment, a lively stock market and zero-socioeconomic polarization/backlash, because it also witnessed rapid decline in inequality. I do not trust anyone who fails to recognize that fact.

That is also why I insist that any discussion of ‘exits’ from the crisis and an economic strategy for Sri Lanka’s future, takes as a start-line, the economic paradigm and policies of President Premadasa.

It is only that combination of ‘growth with equity’; of state-led social and economic intervention and an Open Economy, that can avoid social instability and ensure a better future. That is what Sri Lankan Social Democracy looks like.

Thanks to the Rajapaksa regime’s policies we are poised on a volcano. The wrong policy prescription will make the coming explosion far worse than it needs to be. The problem is not the IMF as such. The problem is the austerity programme that will be presented as a solution either by the IMF or this Government or its successor.

This country has seen far too much turmoil and bloodshed, and I have been in and around too much of it, that I tend to fight against anything that would cause more of it.

In the context of a grave and deepening economic crisis, if we are to avoid further social and political polarization, the political leaders and policy-makers, current and aspirant, must look for the Middle Path or Golden Mean, because this provides and has almost always provided the best solution.

The economic paradigm of John Maynard Keynes is an excellent example of a middle path between free-market capitalism and state-controlled communism. Keynesianism was the animating spirit of the Beveridge plan and the welfare state erected by the Labour government of postwar Britain.

If we move into the realm of economic reform at times of grave crises we have President Roosevelt’s New Deal, which was a middle path between unreconstructed capitalism and Marxist socialism. While many countries were succumbing to the lures of either Fascism or Communism, the Rooseveltian New Deal saved US democracy from being rent by civil conflict and class struggle during the great depression.

If anyone thinks that these are old-fashioned ideas, I would suggest he/she reads the writings of Nobel prize winner Joseph Stiglitz and Paul Krugman, not to mention Jeffrey Sachs and Robert Reich. In the USA today, the economics of President Joe Biden represents, in his own words, a return to the philosophy of Roosevelt’s New Deal.

How has the Middle Path in economics and especially in the context of economic crisis, worked in Sri Lanka? At a time of devastation through civil wars and interventions, Presidential candidate Ranasinghe Premadasa deliberately struck a neo-Rooseveltian chord, entitling his 1988 election manifesto “A New Vision and A New Deal.” In his policy practice he eschewed the twin extremes of, on the one hand, the establishment thinking of rapid growth which awaits ‘trickle-down’, and on the other hand, and on the other, the crassly egalitarian socialism that the JVP stood for.

The Premadasa paradigm was of growth with equity, which succeeded in reviving growth rapidly, attracting foreign investment, rejuvenating the stock market while simultaneously—not sequentially—reducing inequality through a plethora of programmes such as Janasaviya, free school uniforms, free mid-day meal, etc.

In a recent speech on the ongoing economic crisis, Prof Howard Nicholas of the ISS at the Hague, and the University of Rotterdam, emphasized that industrialization was the only solution, and pointed to President Premadasa as the only leader who actually embarked successfully on that path.

Premadasa consistently took a Middle Path and did so creatively. In 1992, he addressed the problem of loss-making plantations neither by maintaining the status-quo nor by selling the plantations to foreign corporates as President CBK did in 1995. Instead, Premadasa granted five-year renewable management contracts to Sri Lankan private companies.

Another example of the Middle Path in economics is that of East Asia, namely Japan, China, South Korea and ASEAN, most notably Vietnam. Theirs was not the path of relying excessively on the free-market to work its magic, as in the West. The role of the state is much greater in the East Asian model than in the neoliberal one. Therefore, the formulae of Lankan neoliberals, to slash state expenditure, has to be looked at more closely and with greater discrimination.

At a moment when the JVP’s Anura Kumara Dissanayake and the FSP’s Pubudu Jagoda and Duminda Nagamuwa have attacked the IMF as a solution, and given that these parties drive a powerful union movement, I renew my call for an Economic Roundtable to arrive through consultation at a broad consensus, based on mutual trade-offs, so as to manage the economic crisis.

The country must go to the IMF only having agreed on the parameters and red-lines as pertains to austerity measures which will impact upon the working people and the poor.

Where should the cutbacks be? Where should they land? Those are choices. Who will make them and for what reasons? To put it bluntly, who should carry the burden of the crisis and the so-called solution? Is it the 99% of the citizenry or the 1%?

There are no axiomatic solutions. Take the issue of State-Owned Enterprises. From the neoliberal right to the regime’s tough Ministers such as Dilum Amunugama, there is an advocacy of privatisation, but is this the only solution? The unions can help identify where the cuts can come.

Any attempt at slashing public expenditure without consultation and the coming storm will turn into a tornado. This in turn could provide the opportunity for the installation of military rule.

Social Democracy is a Middle Path between Right and Left, consisting of a synthesis of ideas of Right and Left.

To sum up, I would use the markers ‘Keynes’, ‘Roosevelt’, ‘Social Democracy’, ‘East Asian model’ and ‘Premadasa’ to demarcate the third space in economics and economic policy; the Middle Path which Sri Lanka should follow.

The Middle Path or Golden Mean is the only approach that will get the citizenry on board the adjustments that are necessary in the context of this crisis. It is a Middle Path between what the minimum that economic policy planners, local or foreign, propose as imperative reforms, and the maximum that the citizens, starting with the working people and the poor, are willing to accept. No economy reforms deemed as fundamental by policy wonks, will be implementable without the consent of the citizens. That consent has to be obtained by the willingness of policy-makers to come halfway.

What the economic fundamentalists utterly fail to realize is that for any policy package or measure to work, the people, starting with those are directly affected, are willing to co-own those reforms. They will do so only if they have been consulted and have participated in the design of policy. Once they feel they co-own the policy they will participate with some degree of voluntary discipline.

A leader with the track record of the most spectacular development success in rapid growth with simultaneous equity, explained the fundamental approach with the following words:

“We as a government cannot claim credit for this. It was and is a people’s effort. We mobilised. We assisted. But it was …the people who participated with unprecedented commitment. Why is that? Why are the people so keen to participate? The answer is very simple. It is because they are consulted. It is because they are involved. It is because they benefit directly.”

(President Premadasa’s, Speech at Gam Udawa 91 exhibition, Kamburupitiya, July 23rd 1991)

Contrary to the approach of neoliberal economic fundamentalists, those are the three practical criteria that any successful economic policy programme must meet: Are the people consulted? Are they involved? Do they benefit directly? These are the criteria that any programme of adjustment and stabilisation, be it by the IMF or the Government – this one or its successor—must meet if a sociopolitical explosion is not to result.



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Midweek Review

July 09: An inexcusable overall security failure and exceptional contingency plan

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A massive throng of people inside the President's House after mobs forced Gotabaya Rajapaksa to flee on 09 July, 2022

Ulugetenne

The Sri Lanka Navy, on 04 June, commissioned SLNS Samudravijaya, formerly United States Coast Guard Cutter Decisive. It is the fourth mothballed US Coast Guard cutter transferred to the SLN through the US Excess Defence Articles Programme. President Anura Kumara Dissanayake attended the ceremony at the Colombo Port. The US Embassy in Colombo, in a statement issued on the same day, quoted Defence Attaché Lieutenant Colonel Matthew House as having said: “Few partners have demonstrated the commitment to maintaining and operating these vessels as successfully as the Sri Lanka Navy. The outstanding condition and operational performance of SLNS Samudura, SLNS Gajabahu, and SLNS Vijayabahu are a testament to the professionalism and technical expertise of Sri Lankan sailors. Their stewardship of these vessels helped build the confidence that made this fourth transfer possible.” The first of the four vessels SLNS Samudura was commissioned on 19 February, 2005, during Chandrika Bandaranaike Kumaratunga’s tenure as the President. Milinda Moragoda, Economic Reforms and Science and Technology Minister of the previous UNP-led UNF government, played a significant role in acquiring that vessel. SLNS Samudura boosted SLN and participated in numerous operations, including the high profile hunt for LTTE floating warehouses, during the Eelam War IV. But, the US refrained from transferring any more big ships during the war though on the then Navy Commander Vice Admiral Wsantha Karannagoda’s request to provide intelligence and Washington obliging, made the successful hunt for LTTE floating arsenals in the last stages of the war possible. The transfer of the second vessel took place 19 years after the end of the war. Ex USCG Sherman was commissioned 06 June, 2019, as SLNS Gajabahu (P626). The third vessel was transferred to the Sri Lanka Navy on October 26, 2021, as the country was heading towards an unprecedented economic crisis. That vessel was commissioned as SLNS Vijayabahu at the Colombo Port with the participation of President Ranil Wickramasinghe and US Ambassador to Sri Lanka Julie Chung on November 20, 2022. Ironically SLNS Gajabahu, one of the ex-US vessels prominently figured in the contingency plan to save President Gotabaya Rajapaksa, but whose downfall was engineered by the US.

By Shamindra Ferdinando

The moment President Gotabaya Rajapaksa decided to take up residence at the President’s House (Janadhipathi Mandiraya), Fort, in the first week of April, 2022, the Navy had no option but to prepare a thorough contingency plan, in case the regime change project posed a realistic threat to the life of the President.

The President, in consultation with senior military officers, made his move within 48 hours after violence erupted outside his private residence at Pangiriwatte, Mirihana, on the night of 31 March, 2022. That decision seemed realistic and sensible at that time.

But, in the wake of the disastrous overall armed forces response to the coordinated violence unleashed by the regime change project on 09 May, 2022, in the aftermath of the Temple Trees ordered attack on Galle Face protesters, the top brass must have recognised the urgent need for total overhauling of security strategy. But, unfortunately, that hadn’t been the case. With violent crowds overwhelming the armed forces, deployed to block them, rapidly approaching the President’s House, those who had been at the makeshift Operations Room there were stunned.

In hindsight, the President’s decision to remain at the President’s House, regardless of the near failure on the part of the armed forces to repulse the raid on Temple Trees, on 09 May, seemed unwise. The rescue operation could have gone wrong and the war-winning President Mahinda Rajapaksa could have ended up in the hands of an angry mob.

Perhaps, the conspirators envisaged the President’s move, from Pangiriwatte to the President’s House, situated walking distance away from the Galle Face protest site, where they could draw additional strength.

The failure on the part of the government to take tangible measures, in the wake of the President’s House becoming the sole target on that fateful day, is a contentious issue that needs to be properly investigated. Don’t forget that the court case filed over the 09 May attacks on the residences and properties belonging to SLPP politicians, and some supporters ,was later withdrawn. The Wickremesinghe-Rajapaksa government never investigated the 09 May incidents.

Exactly two months after the mobs almost succeeded in breaking through defences at Temple Trees, on the night of 09 May/10, where Prime Minister Mahinda Rajapaksa was residing, they mounted the assault on the President’s House.

In the wake of the 09 May mayhem, President Gotabaya Rajapaksa named Lt. Gen. Vikum Liyanage as the Commander of the Army. He succeeded General Shavendra Silva who served as the CDS but was out of the country when all-out mayhem was unleashed by the Aragalaya mobs on 09 July, 2022, to oust the sitting government.

In spite of a direct and growing threat to the President’s House, on 09 July, 2022, the President felt confident in meeting the challenge. The President issued a directive to the Secretary, Ministry of Defence, General (retd.) Kamal Gunaratne, to shift the Operations Room from the Defence Force Headquarters, at Akuregoda, to the President’s House. Having shifted the Operations Room on 08 July, 2022, to the President’s House, as directed by the President, the top brass prepared to face the challenge.

Maj. General K.B. Egodawela, who served as an Additional Secretary (Administration) to the President, from the day the President moved to the President’s House, till he vacated on 09 July, 2022, in his memoirs ‘Aragalaya: Adarayen Prachandathwayata’ (From Love to Violence) revealed that though the top brass opposed the shifting of the Operations Room they carried out the directive. While the President felt that the top brass could collectively work at the President’s House to bring the situation under control, Gen Gunaratne proposed that the President should move to Akuregoda Defence Forces Headquarters, according to Egodawela. In fact, Gunaratne, who had been with Gotabaya Rajapaksa from the very beginning of the sinister campaign, strongly opposed the President’s decision to remain there.

Obviously, the President’s House pathetically failed to ascertain the scale of the protest and the rapidity with which protesters overwhelmed troops deployed outside the President’s House stunned the top brass. Had they swiftly reached consensus on Gen. Gunaratne’s suggestion, perhaps the 09 July regime change operation could have been thwarted. The armed forces could have resorted to tougher measures to prevent a march on Akuregoda Defence Forces Headquarters had the President agreed to move there.

Within two hours after the protest, targeting the President’s House began, video footage provided by drones indicated that troops couldn’t hold the rampaging mobs any longer. According to Egodawela, the top brass had been prepared to remove the President, even without his consent, by landing a helicopter in the Colombo harbor or by ship. Finally, they resorted to the second option. As the President and First Lady Ayoma got into a vehicle and took the rear exit into the adjoining former Navy Headquarters, mobs entered the President’s House. Another vehicle carrying several other persons followed.

The then Navy Commander Vice Admiral Nishantha Ulugetenne who had been with the President at the President’s House got into the vehicle carrying the President. Had they stayed at the President’s House for 10 more minutes, the consequences could have been devastating. https://island.lk/gotabayas-escape-from-aragalaya-mob-in-rti-spotlight/

Egodawela, who had been with the President from the very beginning of the presidential term, alleged that the raiders planned to kill the President and several others and display their bodies. The author quoted an unidentified intelligence officer as having told him that the raiders wanted to display the bodies the way LTTE leader Velupillai Prabhakaran’s body was shown.

Perhaps shifting the Operations Room from Akuregoda Defence Force Headquarters to the President’s House had been a risky move that, in a way, facilitated the regime change operation. The rationale in bringing those who had been tasked with countering the impending threat to one place (President’s House) to be with the target (Gotabaya Rajapaksa) seems unbelievably a dicey move. The President had been influenced by what he described as inordinate and unforgivable delay on the part of the Akuregoda Operations Room to carry out timely evacuation of Prime Minister Mahinda Rajapaksa on the night of 09 May from Temple Trees. Most probably, the President wanted to oversee the 09 July counter operation personally. But, in hindsight, the decision to shift the Operations Room from Akuregoda to the President’s House obviously hadn’t been a clever move.

SLN preparations

When mobs threatened to overwhelm the President’s security at Pangiriwattta, on 31 March, additional police and STF contingents were brought in. They were followed by the Navy and Air Force. The Army arrived at the scene, subsequently.

As pointed out by the President himself, the situation at Temple Trees, on 09 May, had been far worse and the combined police and armed forces response revealed that they hadn’t taken precautionary/counter measures, even after the Pangiriwatta fiasco.

At the time of the incidents, the overall Temple Trees security deployment included about 60 elite Special Boat Squadron (SBS) personnel deployed within the premises and were supplemented by seven SLN platoons. The Army also moved in to strengthen Temple Trees defences but the mobs pressed on till troops fired blank ammunition.

The top brass, directing counter measures from Akuregoda Defence Force Headquarters, had to act swiftly and decisively to evacuate those at the Temple Trees or face the consequences. As there hadn’t been any other alternative place of living proposed, Prime Minister Mahinda Rajapaksa, wife Shiranthi and their eldest son Namal were escorted to nearby former Air Force Headquarters and from there flown to the Trincomalee Navy base. VA Ulugetenne, over the phone, issued instructions to the relevant officer in Trincomalee to make arrangements as two helicopters carrying the group took off from the helipad on the top of the former Air Force Headquarters. The helicopters departed around 04 in the morning.

They had stayed at Trincomalee Navy House for about a week and, as requested by the Navy, paid for their stay because by then Mahinda Rajapaksa had resigned. Perhaps, they could have taken refuge at the Panagoda Army cantonment or at Saliyapura, home to the Gajaba Regiment, but, at the end, sought the protection at the Trincomalee Navy base.

Ironically, President Gotabaya Rajapaksa, too, had to take refuge at the Trincomalee Navy base, exactly two months later. Ever since the President moved into the President’s House, Fort, the Navy had been on their toes to meet any eventuality. The daunting task of arranging evacuation by sea fell on the shoulders of VA Ulugetenne, who, meticulously, planned the operation with his staff.

Having informed the President of the contingency plans, VA Ulugetenne stationed two Advanced Offshore Patrol Vessels (AOPVs), namely SLNS Sindurala and SLNS Gajabahu and four Fast Attack Craft (FACs), at the Colombo Port. It would be pertinent to mention that SLNS Sindurala, built at the Goa shipyard, in terms of an agreement signed at the tail end of the Mahinda Rajapaksa government, was adjudged the best vessel in the SLN fleet in 2022.

Additional SBS personnel and snipers, too, had been brought in to Colombo though none of them knew exactly what their task would be. The OPV and FAC crews most probably felt that they were awaiting orders for a major anti-drug operation in the high seas.

As the decision was made to evacuate the President and the First Lady, the Chief alerted the vessels and quickly deployed tugboats to pull SLNS Sindurala and, shortly thereafter, SLNS Gajabahu, formerly of the US Coast Guard, carrying the President and the First Lady. By the time the two AOPVs moved in different directions, on the instructions of VA Ulugetenne, the hand phones of SLNS Gajabahu crew were collected to prevent them from revealing what was happening. Along with the AOPVs, two pairs of FACs had moved out to sea. (https://island.lk/ranil-reveals-bid-to-get-rid-of-him-while-gr-was-fleeing-to-trinco-on-board-slns-gajabahu/)

Nearly 12-hour journey to Trinco

The SLNS Gajabahu, formerly of the US Coast Guard, had a crew consisting of over 100 officers and men. Someone, most probably a port employee, posted a short clip of some unidentified persons taking large travelling bags into the ship but the President, First Lady and VA Ulugetenne going in were never captured on a camera.

As the vessel began its journey towards Trincomalee, it remained approximately 12 nautical miles from land and the President received many calls, some of which weren’t answered. VA Ulugetenne, too, received quite a number of calls. Those familiar with the developments at that time said that some felt that SLNS Gajabahu should move out of Sri Lankan waters. There had been suggestions that the destination should be the Maldives, India or Singapore. Regardless of such suggestions, SLNS Gajabahu proceeded towards Trincomalee where the Navy made necessary arrangements to host them.

Captain Marlon Perera, who still serves the Navy, had been the Commanding Officer of the vessel. Perera now holds the Commodore rank.

During the journey precautions were taken to ensure the safety and security of the President and the First Lady. Although the crew hadn’t been aware that they would be entrusted with such a sensitive task at a time the country was in crossroads against the backdrop of an economic collapse and sovereign default, there were fears of the crew being affected by propaganda in support of regime change operation.

The attempt made by sailor Wijemuni Vijitha Rohana de Silva to cause harm to Indian Prime Minister Rajiv Gandhi, way back in July, 1987, underscored the necessity to take precautions during the Colombo-Trincomalee journey as the possibility of anti-Gotabaya campaign having an impact on at least some members of the ship crew couldn’t be ruled out.

On July 30, 1987, during a guard of honor in Colombo, the 21-year-old naval rating struck Gandhi on the shoulder and back with the butt of his rifle. Gandhi narrowly avoided the full impact of the blow by evasive ducking.

On the invitation of VA Ulugetenne, Gotabaya Rajapaksa attended all the formalities in respect of a visit undertaken by the President to the Trincomalee Navy base. The President participated in those formalities knowing that he couldn’t attend the commissioning parade that was scheduled to be held on 15 July, 2022. The Navy was not in a position to put off the commissioning parade hence the decision to invite Defence Secretary Gunaratne as the Chief Guest.

Ulugetenne retired from active naval service on 18 December, 2022, following a distinguished career, spanning over 37 years. He received the appointment as the 24th Commander of the Navy in July, 2020, just a couple of months after Gotabaya Rajapaksa’s election as the President.

Wickremesinghe, in his capacity as Gotabaya Rajapaksa’s successor, appointed Ulugetenne as Sri Lanka’s Ambassador to Cuba. The appointment was made in late 2023 and the retired Navy Chief presented his credentials to Cuban President Miguel Díaz-Canel on 13 February, 2024 (https://island.lk/from-fonseka-convictions-to-arrest-of-ulugetenne/)

However, within weeks after the last presidential election held in late November, 2024, the NPP government recalled over a dozen top envoys appointed by the previous administration. Admiral Ulugetenne was among them. The government deprived a decorated officer, who had served the country for nearly four decades, from completing his term in Havana. Within months after his return, he became the target of a murder investigation.

Then out of the blue the retired Navy Chief became the focus of a murder investigation, that, too, post-war. The Criminal Investigation Department (CID) arrested him on 28 July, 2025, over the disappearance of a person reported in July, 2020.

Kurunegala High Court Judge Tikiri Jayatilleke, on 14 October, 2025, granted him bail. Jayatilleke declared that the CID acted in an illegal manner in respect of the former Navy Commander. His counsel Kalinga Indatissa, PC, alleged in court that his client had been apprehended only on the basis of an ex-LTTE cadre’s allegation in the absence of any evidence

The next hearing is scheduled for 08 July, 2026. Ulugetenne was held at the Kegalle Prison for four days and then transferred to the Dumbara (Pallekale) Prison. Altogether, he was in prison for 80 days, like a common criminal, despite him being a former Navy Commander with an unblemished career record.

Wartime Chief of Naval Intelligence, Rear Admiral (retd) Sarath Mohotti, who had been also arrested in connection with the same investigation, was also granted bail, a few weeks later.

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Midweek Review

India should convene a regional El Niño preparedness dialogue in Delhi

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El Niño events have historically been associated with weaker monsoons in South Asia, erratic rainfall patterns, and increased risks of droughts and floods.

The coming months could bring South Asia and the wider Indian Ocean region a dangerous mix of climate shocks, economic strain, and geopolitical instability. At the centre of this looming challenge is the anticipated El Niño event, which is likely to disrupt monsoon patterns, intensify weather extremes, and place additional pressure on already fragile food, water, and energy systems.

But El Niño will not arrive in isolation. It will intersect with continuing global disruptions—from the war in Ukraine to instability in the Middle East—each of which continues to reverberate through energy markets, food supply chains, and shipping routes. The combined effect is likely to be cumulative, not linear.

This is, therefore, a moment that calls for anticipatory regional coordination rather than fragmented national responses.

A record of regional first response

There is already a clear precedent for such coordination in the region.During the COVID-19 pandemic, India emerged as a key first responder, supplying vaccines, medicines, and logistical support across the neighbourhood under its “Neighbourhood First” policy. This helped establish a practical framework for regional cooperation in times of systemic stress.

More recently, India played a similar role during the economic crisis in Sri Lanka, providing critical financial assistance, fuel, and essential supplies at a moment of acute vulnerability. India has also been among the first responders during major climate-related disasters, including cyclone events such as Cyclone Ditwa, delivering rapid humanitarian assistance.

These are not isolated gestures. They reflect an emerging pattern in which India increasingly functions as a stabilising force in the wider region.

This trajectory is reflected in India’s evolving regional frameworks—from Neighbourhood First, to SAGAR (Security and Growth for All in the Region), and now the broader MAHASAGAR vision, which signals an expanded maritime and regional engagement architecture.

Why El Niño is different this time

El Niño events have historically been associated with weaker monsoons in South Asia, erratic rainfall patterns, and increased risks of droughts and floods. In a region where agriculture remains highly climate-sensitive, even modest deviations can translate into inflation, rural distress, and fiscal pressure.

This year, however, the risks are compounded by global fragilities:

* Persistent food and fertilizer price volatility

* Elevated energy costs linked to geopolitical tensions

* Supply chain disruptions in key commodities

* High debt burdens in several neighbouring economies

Together, these factors reduce the resilience of national systems and increase the risk of cascading shocks across borders.It is also important to recognise that social instability in some fragile countries in the region should be kept in mind, as climate shocks and economic pressures can quickly reinforce each other and create wider humanitarian and political consequences.

The case for a Delhi-based regional initiative

Against this backdrop, there is a strong case for India to convene a regional El Niño preparedness dialogue in Delhi, bringing together neighbouring countries, key development partners, and multilateral institutions.

This should not be limited to South Asia alone. The impacts of El Niño extend across the wider Indo-Pacific and Indian Ocean region. Participation could include:

* Neighbouring states in South and Southeast Asia

* The United Nations system

* The World Bank and Asian Development Bank

* Key bilateral partners such as Japan and others active in regional resilience

Given its geographic position, institutional capacity, and experience as a first responder, it is both natural and appropriate for India to chair such an initiative.

What the initiative should focus on

The objective should be practical coordination rather than declaratory statements. Three areas stand out:

1. Shared forecasting and early warning systems

Strengthening real-time exchange of climate data, monsoon projections, and sectoral risk mapping, particularly for agriculture, water, and fisheries.

2. Contingency planning for essential supplies

Coordinating regional approaches to food reserves, fertilizer availability, and energy supply buffers during climatic disruptions.

3. Disaster response and financing coordination

Improving interoperability among disaster management systems, and exploring rapid-response financing through multilateral development banks for climate-related shocks.

From Neighbourhood First to MAHASAGAR

India’s regional doctrine has steadily evolved—from Neighbourhood First to SAGAR, and now MAHASAGAR—reflecting a broader conception of responsibility in the Indian Ocean region.Each stage has expanded the scope of engagement: from immediate neighbourhood assistance, to maritime cooperation and growth, to a wider vision of regional interconnectedness.

A structured El Niño preparedness initiative would be a natural continuation of this trajectory, embedding climate resilience into the region’s evolving strategic architecture.

Climate as regional security

The distinction between climate events and security outcomes is increasingly blurred. A failed monsoon in one country can trigger food inflation in another; a cyclone can disrupt trade routes; droughts can accelerate migration pressures and fiscal instability.

El Niño should therefore be seen not only as a meteorological phenomenon but as a systemic stress test for regional resilience.

India is already widely seen in the region as a first responder in times of crisis. The experiences of COVID-19, the Sri Lankan economic emergency, and climate-related disasters have reinforced this role in practical terms.

The next step is to move from reactive response to anticipatory coordination.

A Delhi-based regional El Niño preparedness meeting—anchored by India and supported by multilateral institutions and key bilateral partners—would be a timely and pragmatic initiative. In an era of compounding global risks, regional cooperation is no longer optional; it is essential.

(Milinda Moragoda is the Founder of the Pathfinder Foundation. Can be contacted via email@milinda.org, courtesy wionews.com.

by Milinda Moragoda

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Midweek Review

Beyond Harsha’s IMF “Revelations”

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Harsha

“A demagogue is one who preaches doctrines he knows to be untrue to men he knows to be idiots.” — H.L. Mencken

Summary

During a recent television appearance (https://www.youtube.com/watch?v=s0QWfenCFlk) , opposition MP and Committee on Public Finance (COPF) Chair Dr. Harsha de Silva dramatically brandished the latest IMF Letter of Intent (LoI, 13 May 2026), pointing to the signatures of President Anura Kumara Dissanayake and Central Bank Governor Dr. Nandalal Weerasinghe as proof of a “secret” alignment with austerity and cost-reflective utility pricing. However, for serious students of Sri Lankan macroeconomics, this “revelation” contained no new information. The legal, structural, and institutional mandate for cost-reflective pricing was codified long before the current administration took office—embedded in the IMF Extended Fund Facility (EFF) of 2023, the 2023 IMF Governance Diagnostic, and the Economic Transformation Act of 2024. This article argues that veteran economists in parliament must move beyond theatrical “gotcha” moments designed for political popularity and instead fulfill their true duty: educating the public on the non-negotiable continuity of structural adjustment programmess.

Anatomy of a Non-Revelation

The recent spectacle of Dr. Harsha de Silva presenting the IMF Letter of Intent on live television was framed as a grand exposure of the current administration’s hidden fiscal policy. With theatrical emphasis, Dr. de Silva pointed to the signatures of President Anura Kumara Dissanayake (AKD) and the Central Bank Governor, declaring that the government had bound the public to the bitter pill of cost-reflective electricity and fuel pricing.

Yet, to anyone who understands the mechanics of central banking and sovereign debt restructuring, this performance revealed nothing that was not already part of (i) the public, (ii) legal, and (iii) institutional reality. A Letter of Intent is a standard operational requirement of the IMF review process; it is not a newly minted policy conceived in secret. By treating a routine administrative continuity as a shocking disclosure, Dr. de Silva engaged in political showmanship rather than economic education.

Legacy of Cost-Reflective Pricing

The narrative that cost-reflective utility pricing is a novel concession by the AKD administration is factually incorrect. The institutional architecture to eliminate non-commercial losses within the Ceylon Electricity Board (CEB) and Ceylon Petroleum Corporation (CPC) was firmly established under the previous administration of Ranil Wickremesinghe.

The structural benchmarks were explicitly laid out in (i) the March 2023 IMF EFF Agreement and (ii) re-emphasized in the September 2023 IMF Governance Diagnostic Report. This framework was further consolidated by the legislature through (i) the Economic Transformation Act of 2024 and (ii) the new Sri Lanka Electricity Act. When the current administration assumed office, the fiscal tracks had already been laid. President AKD is merely operating the machinery of state within the legal and economic boundaries inherited from his predecessor Ranil Wickremesinghe to prevent a secondary default.

The Myth of the Solitary Saviour

There is a troubling tendency among Sri Lanka’s technocratic elite to engage in a saviour complex—positioning themselves on television screens as the singular authorities capable of managing public finance or navigating international waters. Dr. de Silva’s presentation was less about unveiling unknown data and more about projecting an image of unrivaled smartness in public finance.

When veteran economists resort to these manoeuvers, they diminish their own professional standing. Sri Lanka’s economic recovery does not hinge on the brilliant insights of a single individual or party; it depends on (i) institutional discipline, (ii) data-driven planning, and (iii) structural continuity. Pretending that routine compliance documents are exclusive intelligence updates serves only to feed personal political popularity at the expense of public intellectual growth.

Real Politics behind the Screen

Why, then, did Dr. de Silva choose to make a mountain out of an administrative molehill? The answer lies in pure political strategy. The National People’s Power (NPP) platform ascended to governance on strong anti-austerity rhetoric, promising relief from the heavy tax and tariff burdens imposed by the previous regime.

By holding up the signed LoI, Dr. de Silva sought a political checkmate. His objective was to expose the contradiction between the NPP’s populist election promises and its executive actions. While highlighting this policy convergence is fair game in partisan politics, framing it as a “new discovery” misleads the electorate into believing that the IMF programme is an optional, arbitrarily signed document rather than a legally binding national framework that leaves any sitting President with zero alternative manoeuvers.

True Mandate of Parliament’s Financial Oversight

During the broadcast, the fundamental boundary of the Committee on Public Finance (COPF) was brought into question. Dr. de Silva correctly noted that COPF does not formulate state policy—that remains the strict prerogative of the Executive and its chosen advisors. COPF’s true mandate is oversight: ensuring transparency, accountability, and the efficient monitoring of state revenues and expenditures.

If the head of our public finance oversight body wishes to protect the national interest, that energy should be (ii) directed toward evaluating the actual performance scorecards of state institutions, (ii) tracking structural benchmarks, and (iii) monitoring the real-time efficiency of economic programs. Using the platform of technical oversight to score quick points on a talk show blurs the vital line between a state auditor and a political campaigner.

Conclusion: The Need for Institutional Candour

Sri Lanka has paid a catastrophic price for populist rhetoric and the manipulation of economic facts for electoral gain. What the public requires from veteran economists and seasoned politicians today is not more political theater but radical candor.

The truth is simple: Sri Lanka is locked into a long-term, institutional structural adjustment programme that transcends whoever sits in the presidential secretariat. President AKD is executing pre-existing state commitments because the alternative is immediate economic isolation. Rather than trying to convince the public that they alone possess the secret key to salvation, opposition technocrats owe it to the nation to elevate the discourse. It is time to replace television showmanship with (i) honest, (ii) evidence-based planning, (iii) acknowledging that while politicians change, the arithmetic of national survival remains exactly the same.

(The writer, among many, served as the Special Advisor to the Office of the President of Namibia from 2006 to 2012 and was a Senior Consultant with the UNDP for 20 years. He was a Senior Economist with the Central Bank of Sri Lanka (1972-1993). He can be reached via asoka.seneviratne@gmail.com)

By Prof. Asoka S. Seneviratne

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