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The road to economic recovery ahead is long, hard, and unavoidable

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by Ravi Abeysuriya

 Talk to anyone waiting in a long queue to get fuel for daily living, the same set of emotions are apparent: lamenting about lost livelihoods, confusion about the mess we are in, fear and trepidation about an uncertain present and future, and anger at those responsible for the mismanagement of the economy.

 Along with those feelings come three questions. How did we get into this mess in the first place? What is debt restructuring and when will all this be over? and How do we get out of this crisis and who has to do what? The sense of uncertainty is almost physical. The answers will remain foggy for some time but let me attempt to briefly answer for all to understand.

 Looking back, but not in anger

 Start with Sri Lanka’s debt, especially its external debt. In 2000, exports of goods and services were 39 per cent of GDP; in 2020, they had declined to 20 per cent. Sri Lanka has faced a ‘twin deficit’ problem for decades: imports have consistently been higher than exports, and public expenditure has consistently been higher than revenues.

 The last 20 years is the story of a series of policy blunders reducing taxes and inefficiencies in tax collection, a bloated public sector, and unaffordable subsidies. Together, they drained the exchequer.

 On the external front, investing in ‘vanity’ and unproductive infrastructure projects, funded through foreign commercial borrowings at high interest rates to pay for them was the beginning of the external debt crisis, which only exacerbated thereafter due to infrastructure projects becoming a breeding ground for corruption.

 The 2016 IMF programme for a three-year $1.5 billion Extended Finance Facility (EFF) proposed a series of structural reforms to rebuild tax revenues and make Sri Lanka less reliant on foreign borrowing and an export-oriented economy and reduce the budget deficit. These included, tightening monetary policy, letting the currency float, and slashing food subsidies was suspended in November 2019 for a home-grown solution. As a result, those reforms were not implemented, plunging Sri Lanka into its latest crisis.

 Bad Politics, faulty policy exacerbated the situation

 Four more policy mistakes accelerated Sri Lanka’s descent into bankruptcy. What does bankruptcy mean; No financial institution is willing to extend any credit to Sri Lanka to import even the most essential medicine and fuel, leading to Sri Lanka degrading itself to a hand-to-mouth existence, having exhausted all foreign exchange reserves of the country.

 First, reducing taxes in November 2019, cost the Sri Lankan economy profoundly as concerns were raised about Sri Lanka’s debt sustainability, leading to the Credit Rating downgrades and resultant thwarting of the ability to tap global sovereign debt market for further foreign borrowings.

 Second, attempting to maintain a fixed exchange rate leading to a 52% reduction of worker remittances from a year ago (the only country to face a reduction of remittances). Approximately, USD 5 billion of the reserves was wasted to defend the Rupee, and another USD 500 million to repay foreign debt in January 2022 leading to a further depletion of meagre foreign reserves of the country.

 Third, the decision not to pre-emptively renegotiate debt restructuring with the IMF when the Covid-19 pandemic hit in 2020 while Sri Lanka’s debt was still sustainable. Lenders would have been willing for a more generous restructuring of debt, just as multilateral and bilateral lenders did in the wake of the tsunami in December 2004.

 Fourth, in 2021, a misguided and inappropriate policy to implement an outright ban on import of chemical fertilisers was imposed in the name of ‘import substitution’ to conserve foreign exchange reserves. This hit the tea industry and paddy crops, impacting Sri Lanka’s export crops, and forcing Sri Lanka to import food to fight hunger.

 Debt restructuring process will be tough and long drawn out

 So, what happens now? Sri Lanka had no choice but to approach the IMF again, for the 17th time. Since Sri Lanka has now defaulted on its debt, it does not meet debt sustainability criteria, obtaining a facility from IMF this time will be difficult, more long drawn out and accessing the IMF’s Rapid Financing Instrument is out.

 Negotiating a macroeconomic programme supported with IMF financing will be contingent on Sri Lanka undertaking accelerated structural reforms to achieve economic growth and debt sustainability. The process will require arriving at a debt restructuring agreement with bondholders, and then with Multilateral Financial Institutions (MFIs) and other bilateral borrowers. Given past failures for Sri Lanka to keep its word, they will be tougher this time.

 The first stage is to reach a Staff Level Agreement (SLA) with IMF and thereafter, seek the IMF executive board approval for an Extended Fund Facility (EFF). EFF will be further supported by World Bank and ADB and friendly countries such as Japan, USA and the European Union. The earliest we could expect some funding is in 2023 and country to get back to some normalcy by 2026.

 A System Change is required, all citizens will have to play their part

 The people of Sri Lanka have completely lost confidence and trust in the Government’s ability to resolve the crisis. The People’s struggle “Aragalaya” will only intensify. Their demands are well justified. A “System Change” is required and those responsible must leave and an all-party interim Government needs to be established. Further, it is imperative to have a general election as soon as possible for a more competent and honest set of professionals to be appointed to properly govern the country. The costs associated with having a General Election pale into insignificance compared to the massive costs of running an incompetent government. Perhaps, donor countries should give a grant of USD 20 million to hold a general election.

 What do we have to do? Sri Lanka needs a credible national policy and a plan agreed by all those who have the best interest of the Country at heart to get the country out of the crisis. The plan or reform agenda should comprise eight core focus areas. Win the credibility for the plan with IMF, that Sri Lanka is on the path to economic recovery and get the EFF facility. This is the only hope, there is no other alternative.First, Sri Lanka must stem the widespread bribery and corruption with harsh penalties, similar to penalties in countries such as Singapore. No donor or Sri Lankan expat wants to see their help to the people being scammed by the unscrupulous politicians and Government officials.

 Second, government expenditure must be curtailed, the burden imposed on the people of loss-making State-Owned-Enterprises (SOE) must be removed. One option would be to restructure and list all SOEs in the Colombo Stock Exchange for better governance and accountability of SOEs. It is time, the public change their misguided mindset and realise the futility of SOEs that are sustained for the ultimate benefit of politicians such as Sri Lankan Airlines where the public had to bear Rs. 372 billion of losses since 2008. The Ceylon Petroleum Corporation (CPC) operating loss, despite price increases is Rs. 64.9 billion in the first four months of 2022.

Third, Sri Lanka will have to live within its means; The government cannot simply print money, to provide relentless relief “Sahana” to the people and continue to be a welfare state. People should pay at least the cost for Government services and utilities. All spending must be carefully thought through and planned and public spending on infrastructure should only be on projects that would generate income to pay back debt. Financial discipline of the state is imperative manage the fiscal deficit.Fourth, the government revenue at 8% of GDP remains one of the lowest in the world. The tax system will have to be overhauled to widen the tax net to increase government revenue.

 Fifth, Sri Lanka should refocus on a major tourism drive to attract more tourists. In 2018, Sri Lanka Tourism generated receipts worth USD 4.5 billion, which can be swiftly achieved and surpassed. Further, a massive export drive to make Sri Lanka an export-oriented economy like Vietnam is essential (Sri Lanka’s exports grew by only 1.2 times whereas Vietnam’s exports grew over three times and Bangladesh 2 times during the period 2011 to 2021). We have an untapped opportunity in value-creating exports such as Graphite, crystal and Mineral Sand that can easily reach over USD 500 million per month. Attracting FDIs and adding even greater value should be encouraged with the appropriate policies to prioritize foreign-exchange-earning manufacturing industries, agriculture, and service exports.

 Sixth, a well-designed, and properly targeted social safety net will be crucial to protect the most vulnerable and provide for them adequately, but only for as long as necessary.Seventh, despite the hardship and the pain that comes from austerity, Sri Lanka, its people, and its government – the executive and all parties in parliament must stay committed to the agreed upon reform agenda for the next ten years. Repeating the mistakes of the past is unaffordable and will inflict pain upon the generations to come.

 Eight, the public is expecting restitution and those who brought economic ruin and robbed the country to be held accountable for their actions and prosecuted in a court of law also funds misappropriated to be brought back.

 As the famous words of President John F. Kennedy’s “Ask not what your country can do for you, ask what you can do for your country”. It’s vital that all Sri Lankan’s be smart at the next general election and send the right people irrespective of their party affiliation to the parliament to Govern the Country and not repeat the mistakes of the past 74 years.

(The writer is a Member of the Disciplinary Review Council of the CFA Institute, USA and Advocacy Chair and Board Director of CFA Society Sri Lanka and functioned as a member of the Code of Conduct Review Committee (CoCRC) of the Central Bank of Sri Lanka 2020-2021 and can be reached at abeysuriya@hotmail.com)



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Features

Silence of the majority keeps West Asian conflict raging

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Pope Leo the XIVth / President Donald Trump

With no military quick-fix in sight to the ongoing, convoluted West Asian conflict it ought to be clear to the rationally inclined that there is no other way to a solution to the blood-letting other than through a negotiated one. Unfortunately, there are not many takers the world over for such an approach.

Consequently the war rages on incurring the gravest human costs to all relevant sides. Whereas it should be obvious to the Trump administration that Iran wouldn’t be backing down any time soon from its position of taking on the US frontally and with the required military competence in the Hormuz Strait and adjacent regions, the US demonstrates a stubbornness to persist with war strategies that are showing no quick, positive results on the ground.

Clearly, the virtual ‘lock down within a lock down’ situation in the Strait is not proving beneficial for either party. Instead, the spilling of civilian blood in particular continues with unsettling regularity along with an all-encompassing economic crisis that carries a staggering material toll for ordinary people all over the world.

From this viewpoint it is commendable for Pakistan to offer itself as a peace mediator and go ‘the extra mile’ to keep the principal parties engaged in some sort of negotiatory process. But its efforts need to win greater support from the world community. It is a time for peace-makers the world over to stand up and be counted.

It is also a time for straight-talking. To his glowing credit Pope Leo XIV is doing just that and he is the only religious head worldwide to do so. Very rightly he has called on President Trump to end the war through negotiations and described it as ‘unjust’ and ‘a scandal to humanity’.

May this crucial cause be taken up by more and more world leaders, is this columnist’s wish. Instead of speaking fatalistically about a ‘Third World War’, decision and policy makers and commentators, and these are found in plenty in Sri Lanka as well, would do better to help in drumming-up support for a peaceful solution and the latter is within the realms of the possible.

Incidentally, the commonplace definition of the phrase ‘World War’ is quite contentious and it would be premature to speak forebodingly about one right now. The fissures within the West on the Middle East conflict alone rule out the possibility of a ‘World War’ occurring any time soon.

Instead, it would be preferable for the international community, under the aegis of the UN, to take the ‘straight and narrow’ path to a peaceful solution. As implied, this path is no easy avenue; it is cluttered with obstacles that only doughty peace makers could take on and clear.

However, the path to a negotiated peace is worth taking and no less a power than the US should know this. After all, the US ‘bled white’ in Vietnam and had to bow out of the conflict, realizing the futility of pursuing a military solution. A similar lesson should have been learned by Russia which bled futilely in Afghanistan. It too is in an unwinnable situation in Ukraine.

The Pope’s observations to President Trump on negotiating peace have earned for him some snarls and growls of criticism but with time these critics would realize that peace could come only by peaceful means and not through ‘the barrel of a gun.’

For far too long the ‘silent majority’ of the world has allowed politicians to take the sole initiative on working towards peaceful solutions to conflicts and wars. As could be seen, the results have been disastrous. The majority of politicians speak the language of Realpolitik only and this tendency runs contrary to the ways of the selfless peace maker.

Power, which is the essence of Realpolitik, and peace are generally at loggerheads in the real world. Power and self-aggrandizement have to be shelved in the pursuit of durable peace anywhere and it is a pity that the likes of Donald Trump and his team are yet to realize this.

At this juncture the ‘peace constituency’ or the silent majority would need to take centre stage and play their rightful role as the ‘Conscience of the World’. If the latter begins to take on the cause of peace in earnest everywhere, the politicians would have no choice but to pay heed to their cause and take it up, since a contrary course would earn for them public displeasure and votes.

An immediate challenge would be for the ‘peace constituency’ to come together and act as one. Right now, such a coordinating role could be played effectively by only the UN and its agencies. Practical problems are likely to get in the way but these need to be managed insightfully and resourcefully by all stakeholders to peace.

In fact the time couldn’t be more appropriate for the backers of peace to come together and work as one. Right now, economic pressures are increasing worldwide and no less a public than that in the US is beginning to feel them in a major, crushing way.

Going ahead the US public, along with other polities, would find the economic consequences of war to be intolerable. There would be no choice but for governments and peoples to champion peace. Peace makers would need to ‘strike while the iron is hot.’

The success of the above endeavours hinges on the importance humans attach to their consciences. The danger about prolonged wars is that they deaden consciences; particularly those of politicians. The latter deaden their consciences to the extent that they prove impervious to the pain and suffering wars incur.

Thus, the ‘peace constituency’ has its work cut out; it cannot rest assured that politicians would prove sensitive to their demands. The latter would need to be constantly dinned into the hearts and minds of politicians and decision-makers if peaceful solutions to conflicts are to be arrived at.

Likewise, the publics of war-torn countries would need to demand the activation and sustaining of accountability processes with regard to those sections that are suspected of committing war crimes and like atrocities. Those publics that cease to demand accountability from powerful sections among them which are faced with war-time atrocity charges are as good as condemning themselves to lives of permanent dis-empowerment and enslavement.

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Don’t take the baby: In the quiet night, mother always returns

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Grey Slender Loris

Chaminda Jayasekara

There is a particular stillness in Sri Lanka’s forests, after dusk — a kind of hushed expectancy where shadows lengthen, cicadas soften their chorus, and the night begins to breathe in its own rhythm. It is a world that does not reveal itself easily. You have to wait for it. You have to listen.

And then, suddenly, you see them — a pair of luminous, unblinking eyes suspended in the dark.

The Grey Slender Loris, or unahapuluwa, emerges, not with drama, but with quiet precision. Small, slow-moving, and almost impossibly delicate, it is one of Sri Lanka’s most enigmatic nocturnal primates — a creature that has survived millennia by mastering the art of stillness.

Yet, during these months — from late March through July — the forests hold a more tender story. It is the breeding season of the slender loris, and with it comes a scene that is often misunderstood by those who encounter it for the first time: a tiny infant, alone on a branch, barely three inches long, its fragile body silhouetted against the night.

Grey Slender Loris with twin babies

To many, it appears to be a moment of abandonment.

To nature, it is a moment of trust.

“People often act out of compassion, but without understanding what they are seeing,” explains Chaminda Jayasekara of the University of Hertfordshire. “A baby loris left alone is not necessarily in danger. In fact, it is part of a natural process that is critical for its survival.”

According to Jayasekara, when a baby loris is about a month old, the mother begins a remarkable routine. As darkness settles, she gently places her infant on a secure branch and moves off into the forest to forage. Her journey can take her hundreds of metres away — sometimes close to 800 metres — as she searches for insects and other small prey.

In those hours of solitude, the infant is not abandoned. It is learning.

Clinging to the branch, it begins to explore its immediate surroundings. Tentatively, almost hesitantly, it reaches out — testing balance, grip, and instinct. It may attempt to catch tiny insects, mimicking behaviours it will one day rely on entirely. This is its first classroom, and the forest its only teacher.

“Those early nights are crucial,” Jayasekara says. “The baby is developing motor skills, coordination, and the ability to interact with its environment. These are things that cannot be replicated in captivity.”

And yet, this is precisely where human intervention often disrupts the process.

Across rural and even semi-urban Sri Lanka, stories circulate of well-meaning individuals who come across a lone baby loris and assume the worst. Driven by concern, they pick it up, take it home, or attempt to hand-rear it — believing they are saving a life.

Grey Slender Loris

But the reality is far more complex — and far more tragic.

“When a baby is removed unnecessarily, it loses something fundamental,” Jayasekara emphasises. “It loses the chance to learn how to survive in the wild. Without that, even if it survives in the short term, its long-term prospects are extremely poor.”

The forest, after all, is not just a habitat. It is a living, evolving system of lessons — how to detect predators, how to navigate branches, how to hunt silently, how to recognise territory. These are not instincts alone; they are behaviours refined through experience.

And the mother, contrary to assumption, is rarely far away.

“If people simply waited — even for several hours — they would often see the mother return,” Jayasekara explains. “She knows exactly where she left her baby. Her absence is temporary, purposeful.”

The advice from conservationists is clear and consistent: observe, but do not interfere.

If you encounter a baby loris, watch quietly from a distance. Avoid using bright lights or making noise. Give it time — at least 10 to 12 hours — before drawing conclusions. In most cases, the situation will resolve itself, just as nature intended.

35 days old Grey Slender Loris

Only if the animal is clearly injured, or if there is strong evidence of abandonment after prolonged observation, should intervention be considered — and even then, it must be done through the proper channels, particularly the Department of Wildlife Conservation.

Attempting to care for such a delicate animal at home is not only ineffective but often fatal.

Sri Lanka is home to two species of slender loris — the Grey Slender Loris and the Red Slender Loris — each adapted to specific ecological zones across the island. Both are protected under national legislation and recognised internationally as species requiring urgent conservation attention.

Their threats are many: habitat loss, road mortality, illegal pet trade, and, increasingly, human misunderstanding.

Yet, in the midst of these challenges, there are also signs of hope.

In recent years, the slender loris has become the focus of a unique form of wildlife tourism — one that values patience over spectacle. Night walks, conducted with trained naturalists and strict ethical guidelines, offer visitors a chance to witness the loris in its natural environment without disturbing its behaviour.

At places like Jetwing Vil Uyana, this approach has been refined into a model of responsible eco-tourism. Over more than a decade, the property has developed a dedicated Loris Conservation Project, recording thousands of sightings while educating visitors and supporting local communities.

Here, the loris is not handled, chased, or exploited. It is simply observed — a quiet presence in a carefully protected landscape.

“The success of such initiatives shows that conservation and tourism do not have to be at odds,” Jayasekara reflects. “When done responsibly, tourism can actually support conservation by creating awareness and value for these species.”

There is something profoundly moving about encountering a loris in the wild. It does not roar or charge. It does not demand attention. Instead, it exists — quietly, deliberately — as it has for millions of years.

And perhaps that is why it is so easily misunderstood.

In a world that often equates visibility with importance, the loris reminds us that some of the most extraordinary lives unfold beyond the spotlight.

It also reminds us of something else — something simpler, yet harder to practice.

Restraint.

Because conservation is not always about stepping in. Sometimes, it is about stepping back. About recognising when nature does not need our help, but our patience.

So if, on some future night, you find yourself walking beneath the trees, and your light catches a tiny figure sitting alone on a branch — do not rush forward.

Pause.
Watch.
Let the moment unfold.

Because somewhere, moving silently through the darkness, guided by instinct and memory, a mother is already on her way back.

And by morning, the forest will be whole again.

 

By Ifham Nizam

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Kumar de Silva: 40 years of fame and flair

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Kumar de Silva: The four-decade journey

We first saw him on the small screen in January 1986 – a relatively raw, totally untrained and a very nervous 24-year-old presenting ‘Bonsoir’ on ITN.

And now, 40 years later, and as one looks back, one realises what a multi-dimensional journey Kumar de Silva has navigated across the small screen yes, from your television screens to your laptops, and iPads, tabs, and mobile phones.

Says Kumar: “It is the French language I speak that opened the world of television to me, 40 years ago. It was ‘Bonsoir’ alone, and so to my French teacher at Wesley College, Mrs. BA Fernando, to ‘Bonsoir’, and to the Embassy of France in Sri Lanka, I am eternally grateful”.

Promoting the French language, and culture, in Sri Lanka, in a big way

Kumar went on to say that on the heels of ‘Bonsoir” came ‘Fanclub’, on ITN, describing it as yet another resounding success story which saw him as a music DJ on TV.

His inherent talent saw him handle a range of contrasting programmes across ITN, TNL, Prime TV and SLRC with consummate ease – from News Reading, Business Talk Shows, Celebrity Chats, to Dhamma discussions, on Poya Days, to name a few.

Kumar – the 1986 look

Trained in Paris in television production and presentation, the Government of France, in 2012, conferred on him the title of ‘Chevalier dans l’Ordre des Arts et Lettres’ (Chevalier in the Order of Arts and Letters) in recognition of his contribution to promoting the French language, and culture, in Sri Lanka.

In celebration of his four decades on the small screen, Kumar recently launched ‘Bonsoir Katha’, the Sinhala translation (by Ciara Mendis) of his English book ‘Bonsoir Diaries’ (2013), at a gala soiree. at the Alliance Francaise de Colombo, under the distinguished patronage of the French Ambassador in Sri Lanka, Remi Lambert, and francophone President Chandrika Kumaratunga.

He’s now excited about launching the French version of this book, ‘Les Coulisses de Bonsoir’, in Paris, in autumn this year. It is currently being translated by Guilhem Beugnon, a former Deputy Director of the Alliance Francaise de Colombo. This will, co-incidentally, also be Kumar’s 30th visit to Paris.

Chief Guest French Ambassador in Sri
Lanka Remi Lambert

Says Kumar: “The word GRATITUDE means a lot to me and so I always make it a point to spend time with two very special French people every time I go to France. One is Madame Josiane Thureau, formerly of the French Foreign Ministry, who began ‘Bonsoir’ in Sri Lanka. way back in the mid-1980s. The other is Madame Aline Berengier, the lady who designed the ‘Bonsoir’ logo – the Sri Lankan elephant in the colours of the French national flag”.

Kumar is also a much-sought-after Personal Development and Corporate Etiquette Coach in Colombo’s corporate world. Over the past 15 years, tens of thousands of corporates, have been through the different modules of his interactive training sessions. There have also been thousands of school leavers and undergraduates from national and private universities, many of whom will constitute the corporates of tomorrow.

Guest of Honour francophone President Chandrika Kumaratunga at the gala soiree
at the Alliance Francaise de Colombo

The multi-talented Kumar turns 65 next year, and his journey on the small screen still continues – you see him on the (monthly) ‘Rendez-Vous with Yasmin and Kumar’ on the French Embassy’s YouTube Channel, and (every Friday) on ‘Fame Game with Rozanne and Kumar’ on Daily Mirror Online, Hi Online and The Sun Online.

There’s yet another podcast in the pipeline, he indicated, but diplomatically declined to give us details. All he said, with a glint in his eye, was, “It will hit your screens soon.”

Whatever he has in mind, one can be certain that the new programme will continue to showcase Kumar de Silva’s enduring presence in Sri Lanka’s entertainment scene.

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