Features

A Layman’s long-view of the economy

Published

4 years ago

2022/05/1

by Kumar David

Experts rarely layout the longer view of Lanka’s impasse in simple words. Political manifestos are all boringly much the same except a difference in emphasis between the roles of state and market. I do not touch on a What Next Programme today; that will have to wait. I wish to take a step back and measure processes not persons. We need first to appreciate that both the consumer side and producer side have been transformed between Independence and now.

In previous times mass consumption needs were simpler; now even the less well-off classes and all but the lowest stratum in the village have more complex expectations; books and apparel for school kids, tuition-masters, consumer durables – fridge, microwave, gas-cooker, a motorbike or a scooter, and money to sometimes take a three-wheeler, better clothes, jeans, shoes, the list goes on. There is explosive growth not only in the amount but also range and variety of consumer demands across the social spectrum. And I must mention the quality of housing and furnishing. This is not the snotty elite; I refer to maybe 70 or 80 percent of people in towns and villages.

A simple agricultural economy as in colonial times cannot generate the surplus required to meet these expectations of a much-expanded population. In an agricultural economy the value of output minus costs of production (including farmers labour time) is too small to generate a net economic surplus to carry this burden. (The plantation sector of course produces a large surplus). This is transformation number one, the consumption side.

There have also been advances to a degree in the production side. Local industry in the broad sense that includes the capitalist sector, state enterprises after the mid-1950s and often forgotten but very important small and medium enterprises (SME) have expanded, somewhat. (The contribution of SMEs to the economy, in production, services – repair shops, computer services and trade – is significant). Still, the gross surplus generated in production is inadequate to (a) plough back for sector expansion and (b) satisfy growing consumer needs.

The extended nature of consumption and the somewhat muted progress in production together characterise Sri Lanka’s stifled transition to economic modernism. I speak here of the economic side, not of life-style, cultural, educational and political progress. Furthermore, alterations in the rural sector has created an excess labour pool that the agricultural economy cannot absorb. This together with population growth has led to a demand by the young for jobs in the modern sector which it cannot satisfy because this sector is struggling to expand.

Allow me to summarise what I have said. There has been a large if not explosive expansion in consumption but a by no means matching response in production. It is also vital to bear in mind that the surplus value (that is output-value net of all costs including labour) created in manufacturing, services, plantations and SMEs, must put aside a portion for expanded reproduction. In other words, a part of the profits in manufacturing must be ploughed back for expanded reproduction. But Sri Lanka is a democracy, every one of us jealously guards our democratic system. When you have growing mass consumption, inadequate surplus generated in production and also democracy, the outcome is inevitable; Political Populism!

Political parties, leaders and budgets have no option but to resort to theoretically off-radar methods not only to survive but also to maintain social stability. Otherwise you get strikes, unsustainable wage demands, hartal-1953, electoral avalanches (1956, 1970, 1977, 1994-Chandrika, 2019-20 Rajapaksa landslides) and now in 2022 an explosion on the streets. I do not gloss over corrupt leaders, rampant robbery by political classes and monumental policy blunders but these subjective elements have to be placed side by side with evolved economic imbalances. The failure of material conditions is more important than the robber barons, but let’s not pause here to argue about chickens and eggs.

You would have observed that I have so far assumed a closed or autarchic economy. That is, I have not said anything but cross-border influences – trade, export-import, foreign investment and indebtedness. In the case of a small dependent economy, in an age where globalisation is sweeping like wildfire across the world and bending even mighty China to its will, to ignore the ‘border’ is like talking about an unclothed emperor.

Take-off into modernism failed in Lanka because economic conditions for take-off did not come to fruition. And add another aspect, nationalism. Sinhala nationalist extremism and its child a Tamil nationalist civil-war undermined economic development. The counter example that is quoted frequently is Singapore. The thesis that basic material factors are interwoven with the independent actions of decision-making elites is not new, some people have a name for it, the dialectic, but never mind, no ideology today.

But there is no escaping that the political dimension influenced the consumption-production contradiction and had deep influence on how take-off into modernism took effect in countries whose economies modernised. The Singapore way curtailed racist-populism but satisfied consumption expectations (housing first), in South Korea the tool was harsh repression till the capitalist class expanded the economy, then the dictatorship was overthrown in the late 1980s releasing the nations democratic energies.

Taiwan’s is far too complicated a story of economic take-off and political democratisation to recount here. These are examples of take-off into economic modernity and democracy. Eastern Europe pulled off economic take-off under the Stalinist gun and democratisation after the Berlin Wall tumbled. Among smaller countries, Cuba, Nicaragua and Venezuela have failed the tests of both democratisation and economic take-off for reasons outside the scope of this essay.

The previous paragraph was something of a digression. I wish to return to the significance of turning away from the autarkic road (closed-economy) to economic modernisation and return to the theme of cross-border flows; that is globalisation, external economic relations and foreign investment. The chances of economic take-off in a closed economy (that is generating sufficient surplus in domestic industry and manufacturing alone to bridge the ever-widening consumption-production imbalance) is zero.

Sri Lanka is the classic example of that failure. We have fiscal deficit, money printing, balance of payment deficits and gigantic foreign debt. Even if Gautama Buddha, Jesus Christ and the Prophet were President, Prime Minister and Finance Minister (in any order) this outcome was inevitable in a country that has for 70 years been unable to raise production to match consumption. In truth Lanka is not a closed economy, but it has not been open enough to modernise production, trade, investment, technology and thinking.

Enter trade and investment

Investment from abroad whether the capitalist West or China is the lifeline if after these chaps take away their profits there is, first, expanding reproduction (growth in production), second a surplus injected in some form (goods, services or money) into local consumption and third employment creation. Employment is another way of saying injecting consumption into the domestic economy. Production has to expand and expand uninterruptedly to meet increasing and diversifying local consumption expectations.

This is where champions of shaving imports down to the bone, eliminating all “luxury” imports, introducing cooperative distribution of necessities and such like frugality, are careless. There is a large element of social justice motivating them; that’s ok but it’s not going to do much good for modernising and expanding production. It also calls for a licence regime; licence-raj as they call it in India.

Allow me to tell you a story about licence-raj. My late uncle Vernon Peries was Director of Family Planning in the 1970s. At one stage there was panic in all the clinics; the essential wherewithal had disappeared from pharmacy shelves. Vernon maama investigated, visited the Treasury and dug out files. Now this was the era when the import of sports goods was prohibited as a luxury. He found that an enterprising official had classified condoms as Sports Equipment and the Customs Department had withheld import licences. That’s a true story, and that’s licence-raj for you.

To get back; does encouragement of foreign investment spell the death of state engagement in the economy? No, in my scheme which envisages a different State from now, there will be directive principles about what investments are welcome bearing in mind the three criteria in the para before my sporting story. I envisage three categories; all-foreign, joint ventures where local and overseas capitalists participate, and in the case of the largest enterprises, joint ventures between the state and big investors.

Sure, investors have to take something away, but it has to be a win for the nation too; Deng Xiao Ping played it well. They left behind the capability of production facilities to survive on their own when it was time to say goodbye. This assumes a government with clear objectives and the ability to implement policy. Observe that I have not touched on technology and productivity enhancement – crucial, but too much for one essay.

What are the benefits? One is rent extraction. Taxes and duties will accrue to the state, that’s a sine qua non apart from the previously mentioned three points. This helps finance populist demands without recourse to deficit budgets. And export earnings will help buy motorbikes, cell-phones, refrigerators, books and blue jeans without falling off the debt cliff. It assumes intelligent political leadership and clear policy; well, if you don’t have that forget the whole discourse anyway.

My mind is on a future progressive regime, so in relation to state-foreign joint ventures what should the role of the state in enterprise management be? Managers of the best international companies are professionals whose loyalty is to the excellence of the company itself; they are rarely the big investor or representatives of share-holders. Similarly, our government and ministerial mutts should keep their grubby fingers out and let able managers get on with it. Younger readers will not know BD Rampala, Vere de Mel and ANS Kulasinghe. The role of the state is only laying out directive principles.

You might object that this is not socialism. Well which idiot said that socialism was possible in one country, and how bizarre to expect it in a tiny island or to expect it even in mighty China in this day and age? But I am not talking about bare-faced capitalism and extraction of surplus value by that class by simple exploitation either. What is the state form in Vietnam, or in China or such indeterminate cases? Not capitalism, but I don’t have a name for it either – a rose by any other name is good enough. As for party programmes everybody says the same thing; raising production and productivity, pruning handouts, cutting expenditure, export orientation and attracting foreign investment of the correct type. Aye there’s the rub; the dichotomy between inordinate market orientation and the directive function of the state. But that’s for another time.

END

(FDI Graphic below)

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Features

Proactive peacemaking becomes a paramount need

Published

9 hours ago

2026/06/4

Sahan Weerasooriya

Wasting wars: Some war-displaced people in Lebanon. BBC

It may be some time before the full impact of food inflation is felt in the West. Until such time the world would continue to keep itself in suspense over whether the Trump administration is in earnest when it seeks to convey the impression that it is backing a negotiated solution in West Asia.

As is usually the case, consumer stress would be one of the final determinants of political change. To the degree to which the average US consumer somehow ‘muddles through’ and puts the food on the table, to the same extent would the Republican sections of the US public in particular be tolerant of the Trump administration’s inconsistent handling of the West Asian war and the main issues stemming from it. That is, there would be no grave popular disaffection and a demand for political change in the short term.

However, the indications are that the Trump administration’s support base is suffering some erosion in the wake of the current economic crisis. While reports indicate that Democratic sections are firming-up their opposition to the political centre, Republican support for Trump is also showing signs of waning, we are given to understand.

The above developments are probably why Trump is on record as having given Israeli Prime Minister Benjamin Netanyahu a ‘dressing down’ recently on his seeming intransigence on the question of giving negotiations a chance in West Asia. The show of displeasure could be really aimed by Trump at containing the impatience of the American public.

However, the current ground situation in the Middle East, particularly the uncontained bloodshed, is likely to impress on the thinking sections of the world that more than temporary political change is needed in West Asia and the US.

A well thought out political solution that addresses all the contentious issues at the heart of the Middle East conflict is what enlightened opinion would demand, and very rightly. Right now, the ‘peace efforts’ initiated by the Trump administration give the impression of being piecemeal solutions at best.

There have been, of course, numerous initiatives in the past aimed at bringing permanent peace to the Middle East. These failed mainly because they did not address in full the root causes of the conflict.

At bottom the Middle East conflict is mainly about race and religious hate bred by socio-economic and material inequalities. For instance, if the Palestinian people were not displaced and deprived of land occupied by them at the time of the founding of the Israeli state, ethnic enmities would not have grown to the current unmanageable proportions.

When addressing the above questions, though, it must be remembered that the Israelis too were a displaced people who were entitled to land and a state of their own in the Middle East. Basically, out of these seemingly irreconcilable and conflicting demands have grown the Middle East imbroglio.

Middle East peace is considerably about reconciling these demands and arriving at a solution that would ensure the creation of two states that would opt for peaceful co-existence thereafter.

As long as the US does not see the need for a non-partisan solution that addresses the needs of both ethnicities and religions and goes all-out, as it were, to have it implemented, the Middle East would continue to bleed.

However, staunching the blood flow through the creation of two states would be only half the job done, though a very important part of it. More pernicious, pervasive and difficult to remedy are the inter-ethnic and inter-religious hatreds that have been unleashed over the decades.

However, if substantial, long-lasting peace is to be fostered in the region the latter ‘demons’ would need to be exorcised from the hearts and minds of the communities concerned. No doubt an uphill task but one that must be undertaken by those who wish the region well.

The UN would need to put its ‘best foot forward’ in such undertakings but it is time that it dawned on the international community and other caring quarters that Middle East peace, and all other such uphill challenges, require proactive peacemaking on the part of all civilized sections for their effective management. That is, public involvement in peacemaking too is a must.

Since hatreds are harboured in the human consciousness the enmities embedded in the latter need to be managed and defused judiciously alongside other undertakings in a peace process. In the case of West Asia, such enmities could be even spread globe-wide besides being multi-dimensional. For instance, it ought to be thought-provoking that Iran is insistent on a peace initiative that would also include Lebanon.

Besides security considerations it is also ethnic and religious affiliations that account for Iran making this demand. For instance, the Shias are a numerically important religious community in Lebanon and they provide a significant number of Hizbollah fighters, who are in a vital sense carrying out a ‘proxy war’ for Iran. It also needs to be factored in that Iran is a Shia-majority country.

Thus trans-border religious affiliations could add to the complexities and enormity of ethno-religious conflicts. However, the task of managing centuries-long enmities needs to be launched and prodded on with by peacemakers since a downing of arms alone would not guarantee substantive peace.

It is not realized sufficiently that the process of ending hatreds begins with mutual apologies by antagonists to a conflict for the harm inflicted on each other. This would be anathema in some ears but there is no getting away from the requirement. It is the vital first step to permanent peace anywhere.

In fact there could be no reconciliation worth speaking of without such mutual apologies. It is a point worth re-iterating in these times when even the government of Sri Lanka is voicing the need for national reconciliation. Well, without the words, ‘I am sorry’, there could be no permanent end to enmities – they would do well to remember.

The above requirements may not go down very well with governments, but they resonate in the hearts and minds of most people, since they are inheritors of religious traditions of some kind.

This is a principal reason why peacemaking works well when publics too are involved in them. The effectiveness of such campaigns increases several fold when they have a Mahatma Gandhi or a Jawaharlal Nehru at their helm. A strong proactive involvement by the public in peace could lead to the emergence of such leaders at some point in these campaigns.

Features

Dialog Brings Sri Lanka’s Largest Digital Vesak Experience to Matara

Published

9 hours ago

2026/06/4

Sahan Weerasooriya

From left to right: Hon. Saroja Savithri Paulraj, Hon. Sunil Handunnetti, and Lasantha Theverapperuma experience the Dialog 5G Ultra-powered VR tours.

Official Digital Partner of the 2026 ‘Dakshina Prabha’ National Vesak Zone

Dialog Axiata PLC, Sri Lanka’s #1 connectivity provider, collaborated with the Ministry of Buddha Sasana, Religious and Cultural Affairs to bring one of Sri Lanka’s largest and most technologically advanced Vesak experiences to the ‘Dakshina Prabha’ National Vesak Zone. The three-day celebration, in Matara attracted more than hundred thousand visitors, who engaged with a series of innovative digital activities powered by Dialog 5G Ultra, including Artificial Intelligence (AI) and Virtual Reality (VR) experiences, digital pandols and a Data Dansala. The opening ceremony was attended by Hon. Sunil Handunnetti, Minister of Industry and Entrepreneurship Development and Hon. Saroja Savithri Paulraj, Minister of Women and Child Affairs, along with distinguished guests and Dialog’s senior management.

One of the key attractions at the venue was the Dialog 5G Ultra-powered Virtual Reality (VR) experience, which attracted more than 35,000 participants. The activation enabled devotees to virtually visit and pay homage to sacred Buddhist sites, including the Jaya Sri Maha Bodhi in India and the Atamasthana in Anuradhapura, directly from the Vesak zone in Matara.

Visitors receive complimentary mobile data through Dialog’s QR-powered Data Dansala.

Dialog also conducted an AI Digital Vesak Greeting Card Competition from 21 May to 01 June 2026, attracting numerous entries from across the country. The shortlisted designs were showcased across 20 large LED screens throughout the venue and across Matara City, and were also made available for download via mobile devices. Further, through the use of AI, traditional Jathaka Katha were reimagined in a digital format, demonstrating how technology can be used to preserve and enhance cultural and religious heritage. Together, these initiatives blended traditional Vesak celebrations with emerging technologies, offering visitors a unique and immersive way to engage with Vesak traditions.

Extending the spirit of Vesak through connectivity, Dialog conducted a special Data Dansala powered by its QR Reload platform, enabling visitors to receive complimentary mobile data by scanning QR codes placed across the venue. In addition to the Matara National Vesak Zone, similar Data Dansala activations were also conducted at the Gangaramaya and Bauddhaloka Vesak zones in Colombo.Visitors also had the opportunity to create personalised Vesak-themed digital photos through an AI Photo Booth, generating AI-enhanced portraits using their own photographs and adding a contemporary digital element to the Vesak celebrations.

Visitors watch AI-generated Jathaka Katha

Commenting on the initiative, Hon. Sunil Handunnetti, Minister of Industry and Entrepreneurship Development, said, “The 2026 Dakshina Prabha Vesak Festival marked the first time AI-powered digital innovations were incorporated into a National Vesak Festival in Sri Lanka. Presenting Buddhist stories and teachings through technology created a new and engaging way for visitors to connect with these traditions. We thank Dialog for supporting this initiative and for working closely with us to bring our vision to life. Their contribution played an important role in making this first-of-its-kind event a reality.”

Lasantha Theverapperuma, Group Chief Marketing Officer of Dialog Axiata PLC said, “We thank the Government of Sri Lanka for the opportunity to support the 2026 Dakshina Prabha National Vesak Festival and for embracing technology as part of this year’s celebrations. As the Official Digital Partner, we were privileged to contribute through our Dialog 5G Ultra and AI capabilities, creating new ways for visitors to engage with Vesak traditions while preserving their cultural significance for future generations.”

Beyond supporting the National Vesak Zone in Matara, Dialog also enhanced the Gangaramaya and Bauddhaloka Vesak zones through a range of digital activations during the Vesak season. The company additionally continued its sustainability initiatives, including the Thirasara Aloka Poojawa, which illuminated rural places of worship through solar-powered lighting solutions.

Features

Beauty, elegance and talent…for women

Published

9 hours ago

2026/06/4

Sahan Weerasooriya

Universal Woman is an international pageant focused on “beauty, elegance, and talent” for women, positioning itself as a platform to shape global ambassadors. The 2026 edition will be held in Cambodia, and Sri Lanka will be there, as well.

According to reports coming my way, contestants, at the international event, will work with industry trailblazers, under international standards.

Sri Lankan supermodel, runway and pageant trainer Chulpadmendra Kumarapathirana, is the National Director for Universal Woman Sri Lanka 2026.

With over two decades in the industry, Chula was crowned Miss Sri Lanka 2006, and has since shaped the next generation of titleholders through her Colombo-based Chulpadmendra Catwalk Studio, widely regarded as one of the country’s leading modelling academies.

The team behind Universal Woman Sri Lanka 2026

A former host of Derana Miss Sri Lanka for Miss World 2008 and a judge for Miss Universe Sri Lanka 2025, Chula now serves as National Director for Universal Woman Sri Lanka 2026, leading the franchise’s search for Sri Lanka’s delegate to the international final in Cambodia.

Applications for Universal Woman Sri Lanka 2026 are being taken, via WhatsApp: 077 659 4994, says Chula.

The judging panel for Universal Woman Sri Lanka 2026 includes Senaka De Silva, Pageant Aesthetic Advisor & Chairperson of the Judging Panel, Angela Seneviratne, Caroline Jurie, Rozelle Plunkett, and Suraj Mapa.

Universal Woman Sri Lanka 2026 officially began its journey with a first round of auditions, held in Colombo, marking the start of an exciting new chapter in Sri Lanka’s pageant industry.

Launching the first round of auditions

The platform aims to empower women while selecting an intelligent, confident, and inspiring representative to compete at the Universal Woman International Pageant 2026 in Cambodia, this September.

Universal Woman Sri Lanka now moves forward with the vision of creating one of the country’s most prestigious and empowering pageants while preparing to crown a queen who will proudly represent Sri Lanka on the international stage.