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Editorial

Cushioning tariff shock

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Thursday 10th April, 2025

President Anura Kumara Dissanayake’s letter to US President Donald Trump over the US tariff hikes has received much publicity. The NPP government is reportedly sanguine about a positive response from Washington to its request for lower tariff on Sri Lanka’s exports, especially apparels. Hope is said to spring eternal, and there is nothing wrong with being optimistic, but it behoves Sri Lanka to prepare for the worst-case scenario. President Trump’s mind is so elusive that it is not possible to predict his moves, much less guess what he expects the smaller economies to do if they are to qualify for US tariff reductions, if any. He is eyeing mineral resources in Ukraine in return for US military aid to that war-torn nation. Sri Lanka has no such resources to offer. Is the Trump administration trying to pressure it into going out of its way to help further Washington’s geostrategic interests in this part of the world?

China has retaliated by increasing tariffs on imports from the US thereby aggravating global economic uncertainty. Washington says its tariff increases are reciprocal, and therefore the countries affected by them may think they can gain relief by reducing duties on US exports. But the question is whether such action will help the US rectify its massive trade imbalance significantly. The demand for American exports will not increase substantially even if countries like Sri Lanka lower duties thereon, for factors such as cost and quality basically drive demand. Imports from the West, especially input materials, are not in high demand in the developing world because of the availability of cost-effective alternatives.

So, the Trump administration is likely to insist that apparel producing nations like Sri Lanka import commodities such as cotton fabric from the US so as to give a fillip to the American industries. This is what US Ambassador Julie Chung told former Minister Mano Ganeshan at a recent meeting, according to a report we published on 27 March. Such a move is bound to increase the cost of Sri Lankan apparels because US products are very expensive and will adversely affect the competitiveness of Sri Lanka’s apparels in the global market.

President Trump is hopeful that ‘jobs and factories will come roaring back’ because of the tariff hikes at issue, but he does not seem to have factored in the high cost of production in the US and increases in the prices of imports due to high tariff hikes. Tech analysts have pointed out that Apple iPhone prices would soar if they were to be made in the US, and even if the existing supply chains are maintained, their prices will increase substantially. The same may hold true for other commodities, whose prices remain low in the US at present owing to cheap labour and lax environmental laws in the other countries where they are produced.

The countries hit by the US tariff increases have adopted different strategies to cushion the blow from the drastic US action, which has led to a global stock market rout, and sparked protests in the US itself. India is seeking to strike more trade deals with other nations, according to Indian Finance Minister Nirmala Sitharaman, who says such measures have become necessary in view of prevailing global uncertainty. Sri Lanka can learn from how India is trying to mitigate the impact of the US tariff hikes.

Prof. C. A. Saliya, a senior banker turned academic, has pointed out in his latest column, Out of the Box, in this newspaper that if the emerging economies get their act together, they may be able to turn disruptions caused by the isolationist, protectionist, and coercive US trade practices into an opportunity to diversify their exports and trade relations, invest in technology and undertake structural reforms to ensure their economic resilience.

Meanwhile, the formulation of Sri Lanka’s strategy to navigate the new US tariff regime should arise from a tripartite effort if it is to be effective. The government, industrialists and workers should be represented in discussions on the issue. It is high time trade unions shifted their focus from their demand-oriented activism to the pressing need to play a crucial role in protecting the domestic industrial sector. The government should do everything in its power to help industrialists keep costs manageable, ensuring the competitiveness of their products in the global market, and the captains of industry must carry out their export operations in a transparent manner without resorting to sordid practices such as parking most of their export proceeds overseas.



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Editorial

Trace all missing firearms

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Thursday 1st Junuary, 2026

The CID arrested EPDP leader and former minister Douglas Devananda last Thursday in connection with an ongoing investigation into a pistol issued to him by the Army way back in 2001 allegedly ending up in the underworld. It has claimed that information elicited from Makandure Madush, a notorious criminal, led the police to the weapon hidden in a shrub in Weliweriya.

Devananda is one of the battle-scarred ex-Tiger combatants who courageously stood up to the LTTE and helped defeat it. He survived several assassination attempts, including one inside the Kalutara Prison. Devananda’s predicament has gladdened the hearts of pro-LTTE groups beyond measure, as evident from their social media posts.

The pistol in question was reportedly issued to Devananda at the height of LTTE terror; Madush was arrested in 2019 and killed in October 2020, while in police custody. Curiously, the serial number of the weapon remained intact while it was in the underworld.

Madush is long dead, and there is no way the CID’s claims about the firearm at issue can be checked. The CID, which is under two members of the Retired Police Collective of the JVP/NPP, has become the JVP’s rottweiler. The police are all out to protect the interests of the JVP/NPP government; they suddenly ran out of breathalysers when a government MP caused a road accident the other day. A policeman, assaulted by a government MP and his backers recently for conducting a raid on a cannabis plantation, was arrested and interdicted! The police have not arrested a deputy minister and an NPP mayor, charged with fraud.

Now that the CID is busy probing Devananda’s pistol, let it be urged to launch an investigation into thousands of weapons issued by the Defence Ministry to politicians in the second JPV uprising in the late 1980s, and the arms seized by the JVP during that period.

In January 2019, the then Defence Secretary Hemasiri Fernando disclosed that about 4,700 9mm pistols and revolvers had been licensed, but there was no information about those who had obtained them and, worse, some individuals possessed as many as 15 small firearms each! In 2023, the then State Minister of Defence Premitha Bandara Tennakoon revealed in Parliament that the defence authorities had issued about 700 firearms to 154 politicians in the late 1980s, when the JVP went on a killing spree, but none of them had been returned. This figure, we believe, is a gross underestimate.

The National Commission against the Proliferation of Illicit Small Arms, appointed by President Chandrika Bandaranaike Kumaratunga in 2004, dealt extensively with the issue of illegal weapons in circulation in Sri Lanka, as we pointed out in a previous editorial comment. Its survey report contains valuable information, which, however, needs to be updated. Defence authorities should study this document thoroughly and commission a fresh survey on illicit firearms.

The police must go all out to find the illegal firearms used by the JVP during its second uprising. Most of the JVP’s arms caches have not been traced. SJB MP Dayasiri Jayasekara told Parliament on 27 February 2025 that more than 2,000 firearms seized by the JVP between 1987 and 1989 had not been recovered. One may recall that the JVP attacked several police stations and military camps and grabbed many weapons. In April 1987, it seized the arsenal of the Pallekele army camp. Now that the JVP-led NPP has formed a government and launched a campaign to eliminate gun violence, the Defence Ministry and the CID may be able to ascertain information about the firearms used by the JVP in the late 1980s.

Hardly a day passes without incidents of gun violence. Two shooting incidents were reported from the Western Province yesterday. The proliferation of illicit firearms in Sri Lanka can be attributed to several key factors, according to researchers; they include gunrunning, illegal operations carried out by rogue elements in the police and the armed forces, local arms manufacturing, and criminals gaining access to arms caches of the LTTE and the weapons that went missing in the late 1980s.

The police produced 12 suspects before the Colombo Chief Magistrate on March 22, 2019, for having supplied weapons retrieved from some buried LTTE arms caches in Kilinochchi to criminal gangs elsewhere. The LTTE seized firearms from the police, the armed forces and the rival militant groups like the EPDP. It is incumbent upon the police to make a serious effort to trace all illegal firearms. Let that be their New Year resolution.

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Editorial

Health ills: The curse of corruption

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Wednesday 31st December, 2025

The health sector has long been free from the clutches of the likes of Keheliya Rambukwella and his bureaucratic lackeys, but it continues to be plagued by various rackets and frauds, as evident from the shocking Ondansetron scandal. The corrupt survive regime changes and continue their sordid operations, enabling politicians and officials to enrich themselves at the expense of patients.

The National Medicines Regulatory Authority (NMRA) has become a metaphor for serious lapses and malpractices. No wonder this country is a dumping ground for substandard and falsified medicines. The absence of proper drug testing facilities has benefited corrupt officials and their political masters alike. Hence successive governments have chosen to allow the status quo to remain while bellowing rhetoric and promising to safeguard patients’ rights and eliminate corruption.

The issue of poor-quality and unsafe drugs has become overpoliticised in this country. The Opposition uses it as a bludgeon to beat the government in power and gain some political mileage. During its Opposition days, the JVP/NPP would bash the then rulers for endangering the lives of patients by allowing substandard or fake drugs to be imported. Today, the boot is on the other foot; those who were accused of striking corrupt pharmaceutical deals are taking up the cudgels for the rights of the sick and inveighing against the JVP/NPP politicians and their loyalists. Partisan politics has thus eclipsed the real issues that need to be addressed to eliminate bribery and corruption in the health sector and ensure drug safety.

The need is not for rhetoric and moral grandstanding. A respected medical professional analyses the issue of poor-quality drugs in Sri Lanka, in an article published on the opposite page today. He has pointed out what needs to be done urgently to find a solution. Dr. B. J. C. Perera has stressed the need for a state-of-the-art laboratory to test medicines. He says drugs must be tested properly before they are released for use, besides being subjected to proper random post-marketing surveillance. At present, the health authorities have to go by manufacturers’ own certification in granting approval for imported pharmaceuticals. There are many other medical professionals, academics and other experts who have studied the issue at hand and provided valuable insights. One can only hope that the government will care to ascertain their views and take steps to ensure drug safety.

Meanwhile, another scandal in the health sector has come to light. Dr. Rukshan Bellana has claimed that he was removed as Deputy Director of the National Hospital of Sri Lanka (NHSL), Colombo, recently, because he sought to have a reagent racket probed by the Commission to Investigate Allegations of Bribery or Corruption and the CID. Stocks of substandard or contaminated reagents have been procured at the expense of the state coffers for the NHSL laboratory, Dr. Bellana has alleged. This serious allegation must be probed thoroughly.

There is more to the reagent issue than the fraudulent procurement practices. Calls for a pricing formula for reagents to prevent the suppliers from keeping the prices of those products unconscionably high have been ignored. It must be made mandatory for the import prices of all reagents to be revealed so that massive profit margins cannot be kept at the expense of the public. Successive governments have allowed importers to increase the prices of reagents according to their whims and fancies and drive the cost of testing up. Health sector trade unions have alleged that corrupt practices among politicians and officials who control the procurement process are also responsible for the extremely high prices of reagents.

The health sector is a swamp that must be drained as a national priority without further delay if the interests of patients are to be safeguarded. The JVP/NPP, came to power, claiming that the country had been under a 76-year curse and promising to break it. But going by the sheer number of corrupt deals reported from various public institutions, the politicisation of state institutions, especially the police, and the government’s despicable efforts to appoint one of its cronies as the Auditor General, one wonders whether the ‘curse’ has been extended by one year.

If the government is serious about eliminating corruption in state-run health institutions, first of all, it should develop a proper understanding of the multi-faceted nature of the issue. Only a special probe, presidential or parliamentary, will help grasp its enormity and determine how best to tackle it.

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Editorial

The Customs and revenue bubble

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Tuesday 30th December, 2025

Sri Lanka Customs is on cloud nine, boasting that it has set a revenue record. It says it has raised more than Rs. 2,497 million, which is in excess of the targets set by the government for the current year. An increase in state revenue is certainly a very positive development, but how that goal has been achieved should be revealed to the public.

There have been exponential tax increases and they have enabled the government to boost its revenue significantly. The Customs Department has been able to meet its revenue targets thanks to the lifting of restrictions on vehicle imports after a lapse of several years and tax hikes. The Customs has admitted that taxes on imported vehicles have amounted to about Rs. 870 billion in 2025. Thus, one can argue that vehicle imports have created a revenue bubble, which may not last long. An increase in the Customs’ revenue has come at the expense of the rupee, which is depreciating. So, there is no cause for celebration, and the government has to tread cautiously.

Spokesman for the Customs Chandana Punchihewa, addressing the media yesterday, blamed cargo clearance delays on a container backlog created by Cyclone Ditwah. Extreme weather events no doubt cause delays in ports, but in this country port delays occur even during long spells of fine weather. Protracted delays in the Colombo Port, in January 2025, led to the release of 323 red-flagged containers without Customs inspection. What they carried is anybody’s guess.

Excuses are of no use where port delays are concerned. Delays ruin ports, for they drive away major shipping lines. It has been reported that several international shipping lines have opted to bypass the Colombo Port, which is facing escalating congestion due to various factors related mainly to capacity and efficiency—not adverse weather as such. The Customs cannot absolve itself of responsibility for this sorry state of affairs in the Colombo Port, which has also been facing strategic neglect.

As we argued in a previous comment on port congestion, the Ports Authority, the government and the Customs must formulate a strategy to eliminate delays. If the Customs cannot cope with the situation, the Coast Guard personnel can be called in to help clear cargo; they are qualified to handle such tasks. The government ought to take cognisance of formidable challenges Sri Lanka faces from the other ports in the region, especially India’s newly built Vizhinjam port, which is becoming a major attraction for international shippers who are averse to delays. In global logistics, shipping lines place very high value on on-time delivery, reliability and efficient operations.

The government must make a serious effort to enhance the efficiency and capacity of the Colombo Port to retain the transshipment traffic historically routed via Colombo. There is a strong possibility of shipping lines rerouting feeder services away from Colombo to Vizhinjam, adversely impacting Colombo’s network role, as we have said previously, quoting shipping experts.

Vizhinjam has several key advantages over Colombo. It advertises itself as a deep-water port with a 24 m natural draft, which enables it to accommodate ultra-large container vessels without dredging; its proximity to the main east–west shipping route helps vessels to call without significant deviation, reducing voyage time and costs. Automation, modern cranes, faster turnaround times, enhanced operational efficiency and attractiveness to shipping lines are other advantages India’s new port has over Colombo.

Sri Lanka Customs may brag about its ‘revenue record’, but it must not lose sight of the need to enhance its productivity in view of challenges from other ports in the region to Colombo. It should reveal how it is going to meet the revenue targets set by the government when vehicle imports decrease, causing the current revenue bubble to burst.

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