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Editorial

The axe falls

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The signs have been ominous for the past several weeks and finally the axe has fallen. Plagued by both mismanagement and bad governance by the ruling Rajapaksas, aggravated by an ineffective opposition, the bad news is now very much here and the people have to face the harsh reality. Last week’s sharp devaluation of the rupee against the dollar, long resisted by the Central Bank and its Governor, has been forced upon the Sri Lanka economy and a population that moved from gas queues to milk powder queues and then to long lines to refuel their vehicles interspersed by blackouts and power outages countrywide will, hopefully, be spared such torment in the near term. But at a price and a very heavy price at that, that most people would not be able to afford. But for how long? We can only hope that a benevolent deity will smile down on this tormented land.

The economic indicators are grim. The foreign exchange liabilities of the Central Bank exceeded its reserve assets by Rs. 662 billion (USD 3.29 bn.) in January this year, up from Rs. 386 billion (USD 1.9 bn.) a month earlier. The situation today must necessarily be worse with the country struggling to repay debt and being compelled to utilize reserves to pay for vital imports. We have been printing money as though there is no tomorrow and this has been going on for a long time. Cash savings of people have been wiped out in value terms in a country that had long been advocating savings as a means of strengthening the economy. Those who held what funds they had in fixed income instruments like fixed deposits have taken a heavy blow while those who invested in real assets like land and property or even a vehicle have been relatively unscathed. However, it is still too early to say whether capital appreciation of real estate in the current scenario will continue as in the past.

Government leaders have been urging patience on a population that is running out of that, or more correctly, already run out of it. No less than the president assured that the power problem will be over by March 5. But that was not to be. Ministers Lokuge and Gammanpila kept making contradictory statement with the ground situation proving Gammanpila right. The Lanka Indian Oil Company (LIOC), the Indian player in Sri Lanka’s oil import and distribution market, raised prices four times since Dec. 21 last year. The Ceylon Petroleum Corporation (CPC) which controls the larger market share did not follow suit though both players have been stridently claiming that they are selling below procurement cost. The obvious result of LIOC fuel, both petrol and diesel, being much more expensive than CPC’s, consumers tanked-up at CPC filling stations unless they were forced to do otherwise. The net result is that already high CPC losses swelled further.

The grim reality is that CPC must raise its prices sooner than later. The government, obviously, is all too aware of the ramifications of a fuel price increase which is all encompassing. Public transport fares must go up; so also the price of produce that must be moved to markets. The implications are far and wide but the evil day will soon be with us. The CPC, initially, would hike prices to be on par with LIOC, and thereafter both companies needing to match their sale prices with the cost of procuring supplies will demand further price increases. These no doubt will be granted. There is a Tamil proverb that the man who is already wet does not feel the rain. People hit with price rises for all essentials, leave apart the few luxuries that makes life tolerant, may (hopefully from the rulers’ viewpoint) like the man who got wet in the rain not feel the effect of this one too badly. We need not labour the fact that the impact of the devaluation will be all pervading.

There have been indication that the hard line resistance towards going to the IMF for assistance is weakening. A structural adjustment facility (SAF) from the Fund in 1978 greatly assisted President J.R. Jayewardene’s big bold stroke of freeing the economy shackled for decades by state controls. There were conditions for that including a sharp depreciation of the rupee from then prevailing exchange rates. Older readers may remember that the National Savings Bank (NSB) at that time paid as much as 22% for one-year fixed deposits. There was a surge in imports and demand pent-up over several years was satisfied. So much so that Mr. Lalith Athulathmudali, then minister of trade and shipping, once declared that people may tolerate high prices up to a point, but never again scarcities. Fifty years later they have been forced to tolerate both.

The IMF has warned that the Central Bank may lose control of money and the economy could implode unless money printing was stopped. There are signs that this advice is now being taken, although late. It said in a statement that Sri Lanka’s public debt, including Central Bank liabilities, has risen to 119 percent of gross domestic product (GDP). The bank is yet carrying debts to the tune of USD 1.2 billion to the IMF from previous currency crises. The president will chair an All Party Conference, something it was hitherto reluctant to do, within the next few days. As SJB front-liner Harsha de Silva, a knowledgeable economist recently said, “We’re all in this together.” Now is not the time for the cheap politics that has long plagued this country. The right thing must be done. But do we have the leaders to do it? That is the question.



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Editorial

Beyond tragedy that shook the nation’s conscience

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Saturday 6th June, 2026

Tuesday’s tragedy at Anguruwatota, where a fire engulfed an elders’ home, claiming 13 lives and seriously injuring several others, has shaken the conscience of the nation. Equally shocking are the allegations that the residents of the care centre had been mistreated; among them were persons with disabilities, and some of them had been restrained with chains, according to eyewitnesses. The police have said they found the charred body of a resident in chains. It has now been revealed that the care home was not registered. The question is why the authorities did not take any legal action against it.

The Director of the gutted elders’ home has been remanded and the police will press charges against him. However, the Anguruwatota tragedy is not a problem that should be addressed in isolation. It should be examined in the context of a wider socio-economic issue.

There are other elders’ homes across the country, and they number about 250, according to media reports. They are run by a mix of government institutions, provincial councils, religious organisations, NGOs, and private operators. Some of them are reportedly under-resourced, and poorly-regulated. These institutions can accommodate only a fraction of the country’s elderly population needing assistance. Most of them, however, are basic residential care facilities rather than fully developed geriatric care centres, often functioning more as shelters than as medically supported long-term care institutions, which the country badly needs.

Sri Lanka has already reached a rapidly ageing phase of its demographic transition, with the proportion of citizens above 60 years increasing. About 18 out of every 100 Sri Lankans are aged 60 or above. This proportion has risen sharply from about 12.4% in 2012. It is doubtful whether successive governments have addressed this issue adequately, much less formulated a strategy to face challenges arising from an ageing population. This shift has placed increasing pressure on many families that are struggling to make ends meet and therefore cannot provide full-time care for their elderly members and relatives. Hence the need for policymakers to intensify their focus on structured elderly care for those without family support or social security.

While action is taken to ensure that the existing elders’ homes are run properly, it is incumbent upon policymakers to devise ways and means of facing the problems associated with an ageing population. Experts have pointed out that a national elderly care strategy to address these issues need to integrate several components. First, it should strengthen community-based care models that allow elders to remain in their homes for as long as possible, supported by home visits, mobile health services, and social workers. Second, it should develop a graded system of care homes, ranging from basic shelters to medically supported nursing facilities, all under proper regulatory supervision. It was a chronic lack of oversight and poor regulation that led to the Anguruwatota tragedy. Third, local government authorities should be formally involved in identifying vulnerable elders, coordinating welfare benefits, and ensuring minimum care standards at community level. Fourth, financial protection mechanisms such as social pensions, subsidised care, and public-private partnerships should be expanded to reduce the burden on low-income families.

It is hoped that Tuesday’s tragedy will jolt politicians and policymakers into addressing the long-felt need for a coherent national strategy to enable the elderly to spend their twilight years in comfort and dignity.

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Editorial

Emperor’s new clothes

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Friday 5th June, 2026

The Opposition’s propaganda mill is in overdrive, manufacturing various stories about a split in the JVP-NPP government. Mighty governments collapse not because their political enemies regain lost ground and turn the tables on them. They fall largely because the arrogance of power blinds their leaders to reality while their members dare not speak truth to power. Government members sing hosannas to their leaders and even defend the latter’s wrongdoing, committing collective political hara-kiri in the process. The incumbent JVP-NPP government has its fair share of acolytes who try to defend the indefensible.

Former Public Security Minister Sarath Weerasekera (SW), in his response to a recent editorial in this newspaper, has sought to lay the blame for the failure of the Gotabaya Rajapaksa (GR) government on others. In his letter published on the opposite page, today, he insists that the Rajapaksas had the national interest at heart. He implies that they never engaged in dynastic politics, and the 2022 economic crisis was due to factors other than the mismanagement of the economy.

The economy went into a tailspin during the GR government not solely due to the economic consequences of the Covid-19 pandemic and the repayment of foreign loans obtained by the Yahapalana government. Economists have pointed out that the pandemic did not cause bankruptcy on its own, but it acted as a major trigger that exposed pre-existing weaknesses such as high debt, weak foreign reserves, and overdependence on exports and tourism. All governments pay back loans obtained by their predecessors.

The GR government should have sought IMF help at the first signs of trouble. One may recall that acting on Central Bank (CB) advice, the Mahinda Rajapaksa (MR) government (2005-2010) secured IMF assistance and managed an emerging forex crisis, which would have derailed the war effort. If the GR government had heeded CB advice and taken action to increase tax revenue and shore up the country’s foreign currency reserves with IMF help, the 2022 economic crisis could have been averted.

Sri Lanka had to opt for a soft default and seek IMF assistance in 2022. The choice it had was between a soft default and a hard default, which would have ruined its chances of borrowing from external sources again. Sri Lanka was bankrupt, and that fact had to be announced.

The UPFA and SLPP administrations during MR’s second presidential term (2010-2015) and GR’s presidency (2019-2022) were in fact governments of the Rajapaksas by the Rajapaksas for the Rajapaksas. In the GR government, the number of key ministries held by the Rajapaksas increased to five. The share of government expenditure linked to the ministries controlled by them was more than 50% between 2010 and 2015 and between 2019 and 2022, according to political commentators. The other members of the MR government (2010-2015) became so disgruntled that a group of prominent UPFA MPs including ministers voted with their feet in 2014, and General Secretary of the SLFP Maithripala Sirisena went on to challenge MR in the 2015 presidential contest and secure the presidency. As many as 41 SLPP MPs broke ranks with the GR government in early 2022.

Aragalaya,

which crippled the Rajapaksa rule, began as a genuine, leaderless protest campaign against economic hardships, especially prolonged fuel shortages and power cuts. Some political forces infiltrated it subsequently, but it was losing steam when a group of SLPP goons set upon peaceful protesters at Galle Face in May 2022, and triggered a spree of retaliatory violence, which led to the ouster of the Rajapaksas, and paved the way for the 2024 regime change.

As for reconciliation, a retired Major General known for his distinguished military career and respected leadership, writing under a pseudonym––‘Old Soldier’––recently had this to say in his letter critical of the way the government handled this year’s War Heroes’ commemoration, which was the topic of the editorial comment under discussion: “Reparations are claimed by the winners in wars between nations. After civil conflicts there should be reconciliation. There should be no humiliation. When will commemoration of the dead be national in Sri Lanka?”

If the SLPP is to make a comeback, its leaders and their apologists must shed their aversion to self-criticism. The same applies to their equally self-righteous counterparts in other Opposition parties.

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Editorial

Another game of chicken

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Thursday 4th June, 2026

The government has locked horns with private bus operators, who are demanding a fare hike amidst soaring fuel prices. The former has rejected the fare hike demand out of hand, claiming that it is unfair. President of the Lanka Private Bus Owners’ Association Gemunu Wijeratne has threatened to launch a bus strike unless a fare increase is granted forthwith. He has claimed that there is legal provision for the annual bus fare revision due in July to be advanced. The government and the irate private bus owners are now playing a game of chicken.

School vehicle operators have warned that they will have to increase fees. Trishaw owners have also demanded a fare hike. Container truck operators have already increased freight charges by 5% to offset surging operating expenses, primarily driven by higher diesel prices, inflated costs of tyres and spare parts.

A brutal one-two combination—fuel price hikes and rupee depreciation—has sent all vehicle owners, save a few, to the canvas, so to speak. The prices of spare parts, lubricants and tyres have also skyrocketed. It is only natural that transport operators are demanding fare revisions. The government should stop making political statements and address the issues facing the transport sector. The public cannot take any more shocks, and another fare hike is something everyone needs like a hole in the head. It may not be feasible to grant the bus operators’ request for a fuel subsidy, but the government may be able to help them lower costs in some other way.

It will not be possible to overcome Sri Lanka’s balance of payments woes, strengthen the rupee and shore up foreign currency reserves without a proper strategy to reduce the national fuel bill, which accounts for more than 20% of the total value of imports. President Anura Kumara Dissanayake has pointed out that the country’s monthly fuel import expenditure has surged nearly six-fold. Driven by escalating tensions in West Asia, the fuel import bill rose from USD 98 million in February to USD 522 million in May, according to him. There is no gainsaying that drastic measures need to be adopted to reduce fuel consumption urgently. However, increasing fuel prices is not the only way to achieve this goal.

A country does not need a government to curtail the demand for fuel through price hikes. The JVP-NPP administration should be able to strategise to reduce fuel consumption through other means if it is to be considered worth its salt. Minister Anura Karunathilake and Ceylon Petroleum Corporation Chairman D. J. A. S Rajakaruna have gone on record as saying that action will be taken to have the QR-based fuel rationing system strictly regulated. Why didn’t the government care to do so earlier? If the fuel quota system is to be effective, the practice of motorists sharing the QR codes must be brought to an end. If the national fuel consumption has reached an unmanageable level, as President Dissanayake has said, will the government explain why fuel quotas were increased.

President Dissanayake and his government should learn from India’s efforts to reduce fuel consumption and adopt a top-down national austerity approach to conserve foreign exchange amidst external economic pressures. India’s strategy emphasises reducing official fuel use, adopting digital alternatives to travel, and promoting public transportation to manage energy consumption. After all, the JVP-led NPP came to power, promising austerity measures, which it must now adopt to curtail state expenditure while reducing the burgeoning import bill.

The JVP-NPP government is slow in responding to emergencies. Its disaster response following the landfall of Cyclone Ditwah was woefully tardy. It ignored warnings and waited until the country’s fuel reserves were almost depleted to introduce the QR-based rationing. It cannot wish away the threat of a private bus strike. It must get the bus owners around the table and have a serious discussion on how to resolve the transport sector woes instead of bellowing rhetoric.

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