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ARE SRI LANKA’S DEBTS “ODIOUS”?

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by M. Sornarajah

Emeritus Professor of Law

National University of Singapore

The economic crisis in Sri Lanka is due to massive borrowings by recent governments of the country. It is true that external factors, like the covid pandemic and, later, the war on Ukraine, contributed to the crisis but inability to service the loans was the primary and immediate cause of the economic crisis. The policies of the government like the reduction in taxation of high earners, the mismanagement of the covid pandemic and the banning of chemical fertilisers contributed to the situation. These were factors that operated on the primary cause, the unsustainable debts that had been incurred for purposes which lacked a clear public benefit and were tainted by corruption. Repayment of interests on the loans depleted the dollar resources of the state.

Sri Lanka now lacks resources to service the loans. The government has declared that it has no more than 50 million dollars in its coffers. That is less than the personal wealth of our corrupt politicians. Some arguments must be found for rescheduling the debts. Among them are the lack of public utility of the debts, the lack of transparency in the loan transactions, excess of authority of public officials negotiating the loan, the unfavourable interest rates and the complicity of the lender in making the tainted transactions. These reasons are encapsulated in the legal doctrine on “odious debts.” This article examines the possible application of the doctrine of odious debts to the debt obligations of Sri Lanka.

The restructuring of the existing debts so as to make repayments easier is necessary to ease the debt burdens of the country. In negotiating such restructuring, it is relevant to discuss whether the original purposes of the debts and the circumstances of their negotiations impact on the fairness of the debt obligations. A sovereign debt is unlike a commercial debt. A commercial debt is negotiated between private parties. The transaction is between the lender, usually a bank and a private person. The private person seeks the debt for a purpose of his own and the parties agree on terms relating to interest and repayment. The loan transaction is subject to the normal principles of contract law. Even in such private transactions, domestic legal systems are beginning to question the fairness of the terms of the loan.

The debt obligation of a sovereign state is different. For one, the sums involved in a sovereign loan is very large, unlike in private commercial transactions. The debt is negotiated between the government of the state through its officials with a foreign state or a foreign bank in order to serve the interest of a third party, the public of the state. It is the existence of this public interest that gives legitimacy to the debt obligation. Where that public interest is lacking, doctrine has it that the sovereign debt is an odious debt, particularly in the situations where the lender knew that the loan was tainted by an absence of public interest or corruption.

Creditor complicity in the taint exists where the creditor lent the money in order to achieve a purpose of its own, such as securing a political advantage or securing high interest rates using the ignorance of the sovereign borrower. The debt becomes odious also where the creditor is aware of the widespread culture of corruption in the state. The instances where the lender pushes the loans for securing monetary or political advantages for itself are regarded as instances of “predatory lending”, the existence of which supports a finding of an odious debt.

The doctrine of odious debts in international law casts doubt on the validity of debt obligations created by a government when it appears that the debt was not to be used and was not used for a project that benefited the people. In terms of Sri Lankan domestic law, the ministers or public officials who negotiate loans knowing that the public interest in the loan is non-existent or slim, exceed their bounds of authority. The sovereign loan, being an administrative transaction located in public law, would be treated as invalid due to excess of authority. The soundness of the premises on which the doctrine is based is unassailable.

The policy purpose of the doctrine is admirable in that it deters lending to states with corrupt leaders. It raises the question also as to whether lending states should use sovereign debts as instruments of diplomacy to further their influence with the state or the region. The legitimacy of a debt made to an authoritarian government by a lender who sought to cultivate a special relationship with a regime is an irksome idea. Why should such a debt be passed on to a later democratic government? Why should the people of the state have to bear the debt burden which is not to their advantage?

There are human rights issues that arise as well. The example of Sri Lanka indicates that such debts result in an increasing unavailability of the essentials of life, like medicines, electricity, cooking gas, transport, hospital facilities and schooling for children. They result in hunger and increase poverty. They implicate the violation of human rights such as the right to life. Such loans come into conflict with fundamental norms of international law and must be considered invalid on that count.

The debts that have been incurred by the Sri Lankan governments in the last few years do have hallmarks of odious debts. They were debts incurred by a government that the people allege was steeped in corruption. It is alleged that a part of the loans found their way into the pockets of ministers and public officials who negotiated the loan. Many of them lacked a public purpose, were not negotiated transparently and served the political interests of leaders of the borrowing state and the foreign policy interests of the lending state.

Many of the projects for which Sri Lanka sought loans lacked an overt public purpose. Many were projects which were objected to on grounds of feasibility, the harm they could cause the environment or the lack of potential to earn revenue. True it is that some projects involved the building of infrastructure such as roads and bridges but the raising of the loan as well as the tendering processes in these projects involved heavy corruption. The popular belief is that more than 10 percent of the sums involved in every government project found its way into the personal coffers of a particular minister. There are many projects that the public readily associate with corruption because of their obvious lack of utility to the public despite the high costs involved in their construction.

The megaprojects for which loans were granted have some common features. They are named after President Mahinda Rajapaksa, indicating that they were often vanity projects designed to keep the President’s name for posterity. Each one of them has been referred to as a white elephant in both the local and the international press. There was considerable local opposition to their construction. Besides the other common features, they were usually located in the Hambantota District, the native area of the Rajapaksa family. These debts were given by Chinese development banks which were influenced by the Chinese policy of securing a foothold in Sri Lanka. The projects so overtly lacked public interest that the lender should have known that the loans were tainted.

Many of the loans were raised in the context of a new foreign policy initiated by President Mahinda Rajapaksa. There was a tilt in foreign policy towards China. China itself was fast rising as an economic power. China was keen to establish links with Indian Ocean States. Sri Lanka provided strategic advantages in securing a foothold in the Indian Ocean. China also began a Belt Road Initiative, the object of which was to restore Chinese influence along the old land-based silk route as well as the maritime routes that the Chinese Admiral Zheng He had used in the fifteenth century. (It is a matter of our history that the Chinese Admiral visited our island on two occasions. He captured one of our kings, Alekeswara, and took him to China as a hostage. A regime change resulted. (See The Island, 31.05.2021 on the “Trilingual Inscription on the Galle Stela”. The inscribed stone left behind by the Admiral was found in Galle. It is kept in the National Museum.) Recovering the past influence was an object of the BRI in the context of which China is said to pursue a policy based on loans to the countries of the BRI region. If so, there was a political objective behind the giving of these loans.

Several loans were given by the Chinese Exim Bank. The Export-Import Bank of China is chartered to implement the policies of the Chinese state in the areas of international trade, industry and foreign aid. It was a principal source of loans to several projects in Sri Lanka. The Magampura Mahinda Rajapaksa Port (Hambantota Port) was built with large loans given by the bank. The economic feasibility of the Port is suspect. As a result of problems in the repayment of loans, a 99-year old lease was given to a joint venture company in which a Chinese state corporation had 80 percent of the shares. There was a lack of transparency in the transaction.

The Mattala Rajapaksa International Airport was also built with loans from China. It was described by Forbes Magazine as the “world’s emptiest airport”. It provides a home for wildlife in the area and was used for storage of rice. The Mahinda Rajapaksa International Cricket Stadium is another white elephant built near Hambantota. It cannot attract sufficient spectators to make playing international matches there viable. The Stadium was built by the Sri Lankan cricket authorities though a Chinese company which is owed money for its construction. The Lotus Tower sticks out like a thumb in the Colombo skyline. It was built with loans. It is difficult to discover a public interest in its construction.

The Nelum Pokuna Mahinda Rajapakse Theatre was built to resemble the Nelum Pokuna in Polonoruwa, built by Parakramabahu The Great in the twelfth century. It was built with borrowed money. There is also the building of the DA Rajapaksa Museum concerning which a case is pending. These projects could not have promoted public welfare. The loans to construct them must be regarded as odious debts.

Other projects connected with Hambantota, like the Southern Expressway (on which I recently drove comfortably from Colombo to Kataragama), though little used due to high tariffs, do have public utility. The same would apply to the improvement of road networks under the Rajapaksa regime. Though their construction involved much corruption, they were useful to the public. To the extent that the odious debt doctrine may have partial application, the doctrine may affect these projects as well.

Much is made in newspapers about the Chinese debt trap. There does not seem to be a case for that. But, there seems to have been an eagerness to court the Rajapaksas and give loans for unwise projects. There may also have been a need to show the success of the Belt Road Initiative behind the making of these loans.

China has used the odious debt doctrine in the past to deny its debt obligations. Immediately after the success of the Chinese Revolution, China used the odious debt doctrine to justify default on bonds issued in connection with the building of the Huguang Railway during the previous regime in litigation arising before US courts in 1952.

The odious debt doctrine can be used to justify default on payment of some debts. Strategically, it would be best to use the doctrine to renegotiate or reschedule the debt obligation. The doctrine will enable an argument that some debts which carried little public benefit should be rescheduled in a manner favourable to Sri Lanka. The countries that are using this doctrine will increase. The doctrine has been discussed in connection with Greece, Ecuador and Venezuela. The doctrine featured in the rescheduling of Argentine debts during its economic crisis in 2000.

In 2003, the Bush administration favoured the cancellation of Iraqi debts partly on the ground that the debt obligations were created during a dictatorial regime. Many Iraqi debts were cancelled. Debts incurred by colonial governments were renounced by the newly independent states, Algeria and Indonesia providing examples. In the immediate post-colonial period, developing states made the argument that they do not succeed to debt obligations incurred during colonial rule. The affinity with such past situations with the current debts of states exist when an authoritarian leader clothed in the vestiges of democracy commits his country to unwise loans that do not further the public interest but advance his personal interests.

The odious debt doctrine is not supported by extensive case law because it is an argument used largely for the restructuring of debts. It provides a useful tool to base an argument for cancellation or renegotiation of unsavoury debts. In the Sri Lankan case, the debts owed to China do attract the application of the doctrine. The Chinese debts form only 10% of our debts. The extent to which loans by private institutions can be subject to the doctrine is uncertain due to lack of information. Given the context in which Sri Lanka finds herself, exploration of the use of the application of this doctrine to the Sri Lankan debts is necessary.

The potential finding of the Sri Lankan debts as odious debts also requires reform of the rules that regulate the raising of loans by the state. In a country ruled by successive authoritarians, maintaining power through ethno-religious chauvinism, the practice of securing corrupt loans will be rife. There should be constitutional and other regulatory mechanisms controlling future governments raising loans from foreign banks. Besides complete transparency, there should be demonstration of clear public benefit objectives that are secured by the loan and the spending of the money.



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Polarizing rhetoric greets America on its epochal anniversary

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President Donald Trump addresses the public on the occasion of the US celebrating the 250th anniversary of the US Declaration of Independence from Britain.(BBC)

Democratic and progressive opinion in the US and the world over would likely have been further jolted by the divisive rhetoric blared forth by US President Donald Trump on no less an occasion than the 250th anniversary of the US Declaration of Independence from Britain. The world has been placed on notice that what it would be having in the main is aggravated polarization on multiple fronts during what’s left of the Trump tenure.

If the world was expecting positive moves by the Trump administration to bridge divisions, heal rifts and usher in a more harmonious international political order, this is very unlikely to be. Instead, in all probability we would be left with a far more ‘dangerous place to live in’.

Some of the more thought-provoking recent ‘takes’ from President Trump are : ‘A generation after we fought and won the cold war against the menace of communism, there is now a resurgence of the communist menace in our land, including from newcomers to our country who embrace ideas totally opposed to our way of life and our great success.’ ‘We will send them (immigrants) quickly away, and we will continue to build our country bigger and better than ever before.’ ‘We are going to give our country its identity back.’ ‘You can be loyal to Karl Marx or you can be loyal to America. You can be a communist or you can be a patriot. You cannot be both.’

Accordingly, what the world would have in increasing measure going forward are stepped-up attempts to consolidate a white supremacist administration in the US accompanied by a suppression of ethnic, religious and cultural minorities at home along with renewed attempts to spread and consolidate US hegemonism world wide.

The latter project would mainly translate into US military interventions abroad of the Venezuelan type and a persistence if not a resurgence of identity based conflicts globally. Violent reactions internationally to what are seen as attempts by the US to bring recalcitrant sections in particularly the South under white supremacist control will provide the basis for the steadfast presence and spiking of identity politics globally.

Moreover, the path has been paved for stepped-up ethnic, religious and cultural disharmony within the US. A united state is far from possible, given this backdrop. Put simply, it would be a question of steeper political polarization at home and abroad.

The persistent, widespread support for the hard line Islamic regime in Iran locally and globally should serve as an eye-opener for the political decision-makers of the US. Huge crowds at the funerals of Iran’s political leaders could very well be state-orchestrated but they are a pointer to the fact that political Islam is far from on the decline. To the extent to which this is so, the phenomenon could be a hurdle in the path of a stridently expansionist US.

Looking back, it was the consolidation of the Islamic regime in Iran in the late seventies of the last century that, besides proving a major challenge to the unfettered global power expansion of the US and its Western allies, provided the motive force as it were for the proliferation of Islam-based identity politics in particularly the South. This continues to be so.

Going forward, the US would need to figure out how best it could manage the persistent presence of Islamic fundamentalism world wide, and for that matter other forms of identity politics, without drastically losing its global power and influence.

The recent successful challenge by Iran to the US’ efforts to exercise its diktat in West Asia should prove an ‘eye-opener’. In these confrontations both sides were bloodied but Iran proved that it could successfully take on the US militarily. The inference for the US ought to be that projecting its military might in the Middle East in a no-holds-barred fashion would not prove easy.

Arising from the foregoing a foremost policy challenge for the US would be to curb Iranian military power while avoiding another major military confrontation with the Islamic state that would cost the US and the world dearly in particularly economic and material terms. The US would have no choice but to persist with the often flagging West Asian peace effort and to render it fully workable.

Ukraine presents the US with another formidable challenge. As is known, Ukraine is proving no easy ‘push-over’ for Russia, but it is badly in need of more sophisticated Western arms, particularly effective air defense systems, to fully neutralize the Russian invasion. What would the US choose to do; go to Ukraine’s assistance fully or opt not to ruffle and antagonize the Putin regime, with which it is on some cordial terms?

A negotiated solution is best in Ukraine and the Trump administration would do well not to lose sight of this ideal but Russia too should see the need for a diplomatic solution if it is to salvage itself from its military stalemate in Ukraine. The US needs to try being a peace mediator in the latter theatre but if the Russian political leadership fails to opt for peace the US would have no choice but to join the rest of NATO and Europe in continuing to arm Ukraine.

The US would need to take the latter course if the ‘world’s mightiest democracy’ is to remain committed to its founding ideals. If President Trump fails to meet this challenge he would prove that he is nothing more than an ‘empty rhetorician’.

However, it should not come as a surprise to the world if Trump chooses not to strongly back the rest of the West on Ukraine. Domestic and foreign policy are closely intertwined. Since the Trump administration is committed to building a white supremacist state at home, democratic development worldwide has been of the least importance to it.

The Trump administration’s strong affinities to white jingoism would increasingly compel it to opt for a policy of international isolationism. As a result Ukraine could prove unimportant for the US going forward.

Consequently, US-Western Europe friction in particular is only likely to intensify in the days ahead. Coupled with the contentious issues growing out of the persistence of identity politics, the Trump administration’s far-sightedness in managing foreign policy issues would be tested to the fullest. Whether the world would have comparative peace or continued blood-letting would depend crucially on such judiciousness.

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Beyond concrete: Sunela Jayewardene urges Sri Lanka to rediscover an ancient wisdom for a planet in peril

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Sunela / Rishan / Spencer

It was more than a lecture on architecture. It was a challenge to rethink civilisation itself.

Standing before a packed audience at Dilmah by Genesis in Maligawatte, internationally acclaimed environmental architect, author and conservationist Sunela Jayewardene delivered a keynote that transcended blueprints, buildings and urban planning.

Instead, she invited her listeners on an intellectual journey into Sri Lanka’s ancient past, arguing that the answers to some of the world’s gravest environmental crises may already exist within the island’s forgotten ecological wisdom.

Her address, titled “Beyond Concrete: Architecture for the Coexistence of Species,” was at once philosophical, historical and deeply practical. It questioned humanity’s obsession with dominating nature and called for a return to a design ethic rooted in respect, restraint and coexistence.

“The road is actually very simple,” Jayewardene said. “We have simply forgotten it.”

That observation became the defining thread of an afternoon that challenged conventional thinking about architecture and development.

According to Jayewardene, modern society has inherited a worldview shaped largely by colonial values that placed human needs above those of every other living organism.

“Our value system was turned on its head,” she observed. “We accepted a Western way of looking at nature without questioning it. Today we can clearly see the consequences. The world is in crisis. Species are in crisis. Our lifestyles are in crisis.”

She was careful not to romanticise the past, nor was she dismissive of modern science. Instead, she argued that Sri Lanka’s pre-colonial civilisation possessed a sophisticated environmental philosophy that modern planners and architects have largely ignored.

For Jayewardene, environmental architecture is not about fashionable sustainability slogans or cosmetic landscaping.

It begins with humility.

It begins by recognising that humans are only one species among millions sharing the same landscape.

“The built environment should not exist in opposition to nature,” she said. “It should become part of nature.”

One of the most captivating moments of her presentation came when she introduced her own research into the island’s ancient sacred geography.

Using digital mapping and satellite imagery, Jayewardene demonstrated the remarkable alignment of Sri Lanka’s four original Saman Devalayas, whose axes converge on Sri Pada, historically known as Samanthakuta.

The extraordinary precision of these alignments, she argued, raises profound questions about the scientific and surveying capabilities of ancient Sri Lankan civilisation.

“What kind of technology enabled them to achieve this?” she asked the audience.

Her purpose was not to offer speculative answers but to challenge deeply ingrained assumptions that ancient societies lacked scientific sophistication.

“We often underestimate what our ancestors knew,” she said. “Yet the evidence around us tells a very different story.”

That forgotten knowledge, she argued, extended well beyond engineering.

It shaped an entire philosophy of living with the landscape rather than imposing human will upon it.

Displaying photographs from archaeological sites including Ritigala, ancient monasteries and rock pavilions hidden within Sri Lanka’s forests, Jayewardene illustrated how builders carved steps around natural boulders, integrated structures into existing rock formations and preserved the contours of the land.

Modern construction, she suggested, would almost certainly have bulldozed those landscapes into submission.

“Our ancestors honoured the land,” she said. “They accepted the landscape instead of trying to conquer it.”

For Jayewardene, that principle remains the foundation of every project she undertakes.

She described environmental architecture as an exercise in listening rather than commanding.

Every site, she explained, possesses its own identity, ecological history and natural rhythm.

The responsibility of the architect is to understand that identity before attempting to intervene.

“The land tells you what it wants to become,” she said.

Throughout the presentation, one word repeatedly surfaced—context.

Without understanding context, she argued, architecture becomes little more than sculpture.

Good design cannot be copied indiscriminately from one country to another or even from one district to another.

Climate differs.

Rainfall differs.

Vegetation differs.

Wildlife differs.

Culture differs.

Even the stories associated with landscapes differ.

All of these, Jayewardene insisted, must shape architecture.

“When I speak about inhabitants, I don’t mean only human beings,” she explained.

“The birds, insects, reptiles, mammals, trees and every living organism already occupying that land must become part of the design equation.”

This broader understanding forms the basis of what she describes as non-human-centred design—an approach that rejects the notion that cities exist exclusively for people.

Instead, landscapes should provide refuge for biodiversity while simultaneously serving human communities.

It is an idea that resonates strongly at a time when rapid urbanisation continues to erode habitats across Sri Lanka.

Jayewardene also challenged prevailing attitudes towards development itself.

Too often, she argued, “development” has become synonymous with replacing natural systems by concrete infrastructure.

She questioned whether flattening hillsides, redirecting streams and clearing vegetation can genuinely be described as progress.

In her view, genuine development should first ask what ecological value already exists before deciding what should be built.

One of the simplest yet most profound examples she offered concerned water.

“I always say it is acceptable to interrupt water,” she remarked. “But never disrupt it.”

That distinction reflects an ecological understanding often absent from conventional engineering.

Natural drainage systems, she warned, perform countless functions that remain invisible until they are damaged.

Floods, soil erosion, biodiversity decline and even changes in local climate frequently follow.

“We disrupt far more than water,” she said. “We disrupt entire ecological relationships.”

Equally significant was her distinction between degraded brownfield sites and relatively untouched greenfield landscapes.

Brownfield sites require ecological restoration, rehabilitation and renewal.

Greenfield sites demand restraint.

Minimal intervention, she argued, is often the highest form of environmental design.

The keynote found an appropriate setting within Dilmah Conservation’s own efforts to restore degraded urban landscapes.

Earlier in the programme, Rishan Sampath of Dilmah Conservation outlined the organisation’s transformation of an abandoned industrial property in Moratuwa into a flourishing urban forest containing over 300 tree species and more than 1,000 individual plants.

Scientific studies conducted within the restored forest have already demonstrated improvements in air quality compared with adjoining urban roads, providing measurable evidence that biodiversity restoration can improve city life.

For Jayewardene, such initiatives represent far more than beautification projects.

They demonstrate that ecological restoration can become a guiding philosophy for future urban planning.

Her address ultimately became a call to rethink humanity’s place within nature.

Architecture, she argued, should no longer celebrate domination over landscapes.

It should celebrate coexistence.

Every building should strengthen biodiversity.

Every development should restore ecological balance.

Every designer should ask not merely how a project serves people, but how it serves life itself.

As the audience left the hall, they carried with them more than architectural ideas.

They carried a challenge

To question inherited assumptions.

To rediscover indigenous ecological wisdom.

And to recognise that Sri Lanka’s greatest contribution to global sustainability may not lie in importing new environmental models, but in rediscovering the timeless principles embedded within its own civilisation.

For Sunela Jayewardene, the future will not be secured by building more impressive skylines.

It will be secured when humanity learns once again to build gently, intelligently and respectfully—allowing architecture to become not an act of conquest, but an expression of coexistence.

By Ifham Nizam

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Colombia’s “back-to-back queen”

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Beyond modelling, Colombia’s Katherine Castaño, who captured the crown at the Top Model of the World 2026, in Egypt, is also a TV host, entrepreneur and social media influencer.

She’s based in Miami, Florida right now — a hub for fashion and influencer work — a city she calls home base, while representing Colombia on the world stage.

Her Miami base gives her access to fashion, entertainment, and business networks, while her title keeps Colombia front and centre in the global modelling conversation.

Off the runway, she says she enjoys singing, playing the piano, and tennis.

Katherine didn’t make the trip to Egypt as a newcomer. She’s built a strong international portfolio before winning the crown.

In fact, her résumé reads like a fashion passport: Colombia Moda, New York Fashion Week, Miami Swim Week, Miami Fashion Week, Nicaragua Diseña, IXEL Moda, and Mercedes-Benz San José.

On June 8, 2026, Katherine Castaño was crowned by outgoing winner Natalia Garizabal Vera, also of Colombia. That gave Colombia a historic back-to-back victory — the first time any country has done it in the competition’s history, and Colombia’s 4th win overall.

As Top Model of the World 2026, Katherine’s reign is centred on elevating her profile as a model, influencer, and entrepreneur.

She’s built a personal brand around beauty, ambition, style, and professionalism, with strong reach across fashion, social media, and business.

As titleholder, she’s now the face of the pageant’s international fashion platform, representing Colombia globally, while based out of Miami.

Ahead of the competition she was clear about the stakes: “This is bigger than me. This is for my country. This is for the story I’m here to write… And I’m not going quietly… we’re going for that back to back.”

As the reigning titleholder, Katherine Castaño’s role extends far beyond the sash. She’s using the platform to grow her brand as a model, influencer, and entrepreneur rooted in “beauty, ambition, style, and professionalism”.

She will also be doing runway shows, photoshoots, brand appearances, and fashion events.

Sri Lanka’s representative at this pageant was NetalieWithanage.

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