Features
Diversifying in new directions – hospitality plantations, broking and health care
(Excerpted from the Merrill J Fernando autobiography)
Sometime in 2003, together with Dilhan and his family, I holidayed in Bali. Indonesia, at Bali Villas, an exclusive hospitality complex. We rented two units which came with a highly-personalized service, including maids and a chef for each villa. We also had our own swimming pools and a common spa facility. Outside the complex there were cafes, restaurants, and little eating houses, offering dazzling arrays of food, which made eating out a daily adventure.
On the morning of the second day, a very tall gentleman walked in to my villa and introduced himself: “Good morning, Mr. Dilmah, I am an Aussie and the owner of this hotel.” Over a cup of tea, he told me his story. He had first visited Sri Lanka looking for both a location and a partner to launch this special hospitality concept he had in mind. Whilst he had been happy with the opportunities, he had not been able to find a suitable partner, nor had he been very comfortable with the political climate. Abandoning Sri Lanka for those reasons, eventually be had located this special project in Bali.
After an interesting conversation with me, he called his CEO, Chris Green, an Englishman, and told him to give us anything we wanted and Chris offered us a 60% discount on all the spa treatments. In the course of our friendly discussion with Chris which followed, I told him that I was interested in setting up a similar project in Sri Lanka and asked for his advice.
One week later Chris was in Sri Lanka and Malik was taking him around, visiting potential locations in the plantation regions. The tourist industry has always attracted me, in view of the tremendous potential that Sri Lanka possesses and the fact that it is an industry that Sri Lanka can own totally. The raw material is the composites of our unparalleled natural beauty, the easily accessible game parks, the cultural and historical heritage seen in our many ancient cities like Polonnaruwa, Anuradhapura, and Sigiriya, and the natural friendliness and spontaneous, welcoming hospitality of our people. These charming inborn attributes cannot be supplanted by imports!
Ceylon Tea Trails
Our upcountry plantation areas are amongst the most scenic in the country, with the emerald green cover of tea carpeting an undulating landscape, broken up by spectacular rock escarpments and mountains blanketed by montane forest, heavily-wooded ravines in the valleys, and the whole crisscrossed by tumbling streams and cascading waterfalls.
There are also the historic plantation bungalows, rambling and comfortable, often somewhat neglected but set in large gardens and, invariably, panoramically sited. The British who first built them had, collectively, an unerring instinct for commanding locations, obviously conditioned by the ‘monarch of all I survey’ worldview of the Western coloniser.

The Cape — A peerless location View from the pool — all the way to the South Pole Tranquility at dusk Old fashioned comfort in a modern setting
Following the preliminary tour with Chris, Malik engaged Miguel, a young Spaniard, who toured the plantation regions on a motorcycle and identified four bungalows with the best combination of scenery, attractive bungalow configuration, and accessibility: the Tientsin, Norwood, Summerville, and Castlereagh bungalows, all located in close proximity to each other in the Bogawanthalawa-Norwood area, were finally selected for the project.
The proximity of the picturesque Castlereagh Reservoir, nestled in the basin created by the surrounding tea-covered hills, was one of the key selling points. Later, Dunkeld bungalow, sited on the Western banks of the reservoir and located on our own estate, was restored and added to the list, when the demand for accommodation rapidly overtook capacity.
A South African interior designer was selected to reconfigure and refurbish all the bungalows. This was a delicately-managed operation, as the prime consideration was to maintain the original, old world charm of the bungalows, whilst unobtrusively introducing all the modern amenities and conveniences expected by a discerning clientele, accustomed to and prepared to pay for luxurious but unique hostelry in exclusive locations. The new had to merge seamlessly with the old, as if the offering in its entirety had been there always, handed down intact across generations by the original British owners.
The features of comfort and attraction needed to be tangible, quantifiable, and visible, while the designer’s hand remained invisible. There were no invoices submitted to the guest on departure. The customer was made to feel that he/she was holidaying in the home of a wealthy, generous, and caring friend. It was a personalized service where guests discussed dining choices for each meal with an own chef, whilst the in-house butlers’ service was at hand, at any time of the day or night, to attend to every guest need or fancy. What was on offer was a fully-inclusive concept, which anticipated and provided everything that the guest needed and desired.
Thus, with the opening of the first bungalow, Castlereagh, in June 2005, ‘Ceylon Tea Trails’ was born and, simultaneously, Malik came in to his own as an entrepreneur. Tea Trails projected the now somewhat-hackneyed boutique hotel concept into a new dimension, previously unknown to Sri Lanka. The bungalows were between two to 15 kilometres apart and guests could walk or cycle between them, and be served meals in any one of them, as if they had visited the house of a close friend. Each bungalow had four to five bedrooms and suites and a total of 27 rooms, in locations in the tea-covered hills encircling the Castlereagh Reservoir.
Many of the vegetables, herbs, and spices featured in the wide-ranging and exquisite cuisine on offer at the bungalows are grown organically in the bungalow gardens themselves. The preparation is personally handled by experienced chefs with international training.
Tea Trails soon became a high-demand holiday destination, fully booked most of the time and I frequently had great difficulty in securing a room when I wanted one. Most bookings were repeats and made a year ahead! Finally, Malik developed a nice little cottage on Dunkeld, designated as the ‘Owner’s Cottage,’ for my personal use, supposedly at my will and pleasure.
Once it was done I asked him to hand the keys over to me, but I was not very surprised when Malik apologetically responded that I would have to be little patient as it had been booked till the end of August that year! Though it has been over two years since it was completed, I have been able to occupy it with friends only once.
On account of its exclusivity, exceptional quality of service and cuisine, and guests’ recommendations, Tea Trails was invited to join the prestigious Paris-based Relais & Chateaux Association, known for its uncompromisingly rigid admission standards. Since the 65 years of its founding in France, it has permitted only 580 landmark hotels and restaurants worldwide to enter its elite membership.
Since then the two other resorts in our group which followed, Tea Trails, Cape Weligama in Weligama and Wild Coast Tented Lodge, deeper south in Yala, have been admitted to Relais & Chateaux to date the only three members in Sri Lanka.
Cape Weligama
A few years ago, Malik persuaded me to buy a beautiful hilltop property near the beach in Weligama, overlooking the Indian Ocean east of Galle. My original intention was to resell it to a hotel developer, but Malik had other ideas and convinced me that the location was ideal for an exclusive, boutique-type hotel. He hired a well-known architect, Lek Bunnag from Thailand, who produced an exceptional design.
Along with Malik I visited Bangkok to review the plans and was very impressed by them. The construction then commenced and on completion, much to my serious displeasure, the final cost had far exceeded the initial budget.
Malik’s explanation was that this was the first hotel we built from ground-up and that it was also a learning experience for us! Further, in the process of construction, many new features had to be introduced to complement the degree of exclusivity and uniqueness that we were striving for. It opened in 2014 with 39 suites and villas, the latter starting at around 130 square metres in extent.
Wild Coast Lodge
With two exclusive and successful tourist destinations in our portfolio, and a little more experience in the hospitality trade under our belts, we decided to expand further in that direction and commenced work on a seven-acre, heavily-wooded site, near the Yala National Park. The land, between the beach and the jungle and comprising a contiguous segment of the real jungle, lent itself ideally to the concept we had in mind for a tented, but luxurious resort.
It is an arresting fusion of two extremes, the wildness and the potential danger of the proximal animal inhabited scrub forest, as a counterpoint to the understated indulgence of every modern comfort and convenience within. The bamboo and tented resort blended seamlessly with the surrounding forest and opened for business in 2017. It has since has won several global awards, including a UNESCO award for uniqueness of design.
Resplendent Ceylon
With these three destinations, Malik has very successfully captured the contrasting aspects of the beauty of different parts of our country, and the scenic diversity it has to offer the traveler. “Resplendent Ceylon,” as he calls this varied collection the gentle, quaint charm of our verdant plantation country, with its cool climate and orderly tea cultivation, the warm, balmy beach land of the south, and the harsh, arid beauty of the south east epitomizes the multi-faceted, natural splendour of our country. The only commonality between these destinations, with such contrasting features of attractiveness, is the matchless service they offer. Given these attributes, it is fair to say that Resplendent Ceylon is the pioneering small luxury hotel brand in Sri Lanka.
Acquisition of Forbes and Walker and Kahawatte Plantations
Elsewhere in this writing I have several times referred to my resolve to eventually become independent of external assistance for critical aspects of my business operation. In this age of enterprise complexity, admittedly, it is difficult for any operation, however efficient it may be, to be totally self-sufficient. Independent providers of ancillary services and products do play an important part in any large business operation. Generally, obtaining the services of independent contractors to complement the less-crucial aspects of your operation makes sound commercial sense.
However, in regard to my tea export business, the mainstay of my group enterprise, I was determined that I would become totally self-reliant, with direct ownership and control of the value chain, ‘from-bush-to-cup’ as it were. It was that intent which earlier led to my investing in Printcare. I did not put a label on my purpose, but business management experts identify it as the principle of ‘vertical integration’.
I decided that the first step in the above direction would be to acquire control of a tea broking company. Broking has been an important corollary activity of the plantation industry, growing from a purely marketing service in its infancy in the last quarter of the 19th century, to its present multi-faceted role as provider of warehousing, finance, technical advisory, and other related services.
Sometime in early 2000 I became aware that the owners of Forbes Ceylon Limited (FCL), VANIK Incorporated a now largely-inactive private investment bank were seriously considering the sale of Forbes & Walker (F&W), including its produce broking arm, Forbes Tea Brokers, a very reliable and well-established broking firm with a long history. As a tea buyer and exporter for over five decades up to that time, I was very familiar with the company and, over the years, had got to know all its key personnel from the early 1950s onwards.
However, one condition attached by VANIK to the sale of Forbes was that Forbes Plantations, through which it owned Kahawatte Plantations Plc, a Regional Plantation Company, should also be disposed of at the same time. The intention of VANIK was to exit from the tea industry altogether. The purchase of Kahawatte Plantations, then owned by FCL, had to be part of the transaction. One could not happen without the other.
Whilst I was discussing the possible sale of Forbes Brokers with VANIK, the latter were in negotiation with another party, Central Highfields Ceylon (Pvt) Ltd. (CHFC) incorporated in the UK, with its Sri Lankan interests represented by Nimal Silva, a former planter, for the sale of Kahawatte Plantations. An agreement had been signed between VANIK, CHFC, and FCL, with CHFC paying an advance of Rs. 100 million against an agreed price of Rs. 200 million, for the purchase of a majority shareholding of Kahawatte, through Forbes Plantations.
Since CHFC was unable to deliver the balance Rs. 100 million on the due date, it agreed to VANIK borrowing the sum from my company. I agreed to the proposal, because I wanted to assist CHFC in its purchase of Kahawatte, thus ensuring that I would be able to purchase Forbes Brokers, thereby meeting VANIK’s condition of an exit from the tea industry altogether. As security against the loan, VANIK furnished my company with a primary mortgage over the Kahawatte shares held by Forbes Plantations.

Luxury inside a tent The forest outside and the indulgence within — a matchless union. Unique design
It had not been my original intention to buy the plantation company as, at that time, my company already had sizeable holdings in both Elpitiya and Talawakelle Plantations. Therefore, a produce broking company was the only missing link in the vertical integration value chain.
I gave CHFC more than one extension on the deadline for the settlement of the advance. In fact, even after I had served VANIK with notice to transfer the Kahawatte shareholding in lieu of settlement of the loan. I gave additional time to CHFC to settle the issue. However, it was unable to secure funding and by end of 2000, both Forbes & Walker and Kahawatte Plantations had become part of the MJF Group of Companies.
The main reason for my decision to exercise my right to the Kahawatte shareholding, was that the uncertainty surrounding the ownership transfer was soon reflected in management inadequacies,which were visibly affecting the company’s performance. Further delays in the finalization of the transaction would only have accelerated its decline.
When I acquired Kahawatte, it was in dire financial straits, with large accumulated losses and substantial liabilities, a significant proportion of the latter represented by unpaid statutory dues. Those
were settled soon after the acquisition. Subsequently, a comprehensive factory rehabilitation, in parallel with a product quality policy drive, resulted in the company achieving the highest annual net sale average for in the Regional Plantation Company sector.
It has maintained this position for several years. Apart from the capital intensive consolidation of core crops, involving extensive replanting of both tea and rubber, we also launched a major crop diversification initiative, cultivating Ceylon Cinnamon in the low-country sector. Presently, Kahawatte has over 200 Ha in mature cinnamon, making it the largest single owner of cinnamon in the country.
Since its acquisition, the investment in shares and the value of corporate guarantees extended to Kahawatte by MJF Holdings and its subsidiaries together exceed Rs. 3 billion. As for Forbes & Walker, it was my firm belief that as a broker, F&W should remain independent, despite being part of the main group. That could be achieved only if the management also had a stake in the company, with the company itself being operated as a Joint Venture. Consequently, I caused a management trust to be created, which held 30% of the F&W shareholding on behalf of the management of the broking company. It proved to be a sound principle and has continued to operate efficiently to the present day.
The health sector
My friend, the late Lawrence Tudawe, who built my Maligawatte office and packing complex, had, at some point in time, purchased Durdans Hospital. It had been founded in 1939 and in the colonial period, was the primary military hospital in then Ceylon, mostly serving the British Armed Forces then stationed in the country. In 1945 it was acquired by a group of doctors and managed as Ceylon Hospitals Limited, before being bought by the Tudawe family.
The younger Tudawes , Ajit, Rohan, and Upul have since developed it to its present position as one of the finest private healthcare centres in the country. A few years ago, I was persuaded by the Tudawe family to invest in the company and I acquired a reasonable shareholding in Ceylon Hospitals, which owns and operates Durdans Hospital. Subsequently I made a further investment in the more modern entity, Durdans Medical and Surgical Hospitals (Pvt) Ltd. I consider it a very useful investment, not only on account of the financial returns but also because of the excellent healthcare service it provides the public, which also includes the employees of my group of companies.
Features
Sri Lanka’s vanishing wetlands put elusive otter under growing threat
The world marked World Otter Day 2026 recently. Conservationists are warning that Sri Lanka’s rapidly disappearing wetlands, polluted waterways and unplanned development are placing increasing pressure on one of the island’s most elusive freshwater predators, the Eurasian otter (Lutra lutra).
The species, locally known as “Diya Balla”, is the only otter found in Sri Lanka and is regarded as a key indicator of healthy freshwater ecosystems. Yet despite its ecological importance, experts say the animal remains poorly studied and largely overlooked in national conservation planning.
Naturalist and conservationist Chaminda Jayasekara, who has spent years documenting otters in Sri Lanka, said the species is facing mounting environmental pressures across the island.
Speaking to The Island, Jayasekara said habitat destruction, chemical pollution, road kills, sand mining, and increasing human disturbance are fragmenting the waterways on which otters depend.
“Otters are extremely sensitive animals. When wetlands are degraded or rivers become polluted, they disappear very quickly. Their survival is directly linked to the health of freshwater ecosystems,” he said.
Jayasekara, who specialised in MSc Environmental Management at the University of Hertfordshire, noted that while the species has been recorded across Sri Lanka’s wet zone, dry zone and coastal wetlands, scientific data on population numbers and distribution remain limited.
According to him, the decline of wetlands has become one of the most serious environmental issues facing Sri Lanka. Marshes, mangroves, irrigation tanks and riverine habitats are increasingly being altered by urban expansion, tourism infrastructure, encroachment and agricultural runoff.
He warns that the loss of these habitats not only threatens otters, but also weakens flood control systems, freshwater security and biodiversity resilience at a time when climate-related disasters are becoming more frequent.
Jayasekara said otters play a vital ecological role by helping maintain balanced fish populations and healthy aquatic ecosystems.
“When otters thrive, it tells us the river system is functioning properly. Their presence is a sign that water quality, fish diversity and habitat conditions remain healthy,” he explained.
One of the best-known locations for otter sightings in Sri Lanka is Aranga Pond, within the Horton Plains National Park, where the species has adapted to the island’s cold montane ecosystem.
However, conservationists stress that even protected areas are not immune to broader environmental degradation occurring outside park boundaries.
Jayasekara’s own work on otters gained prominence through long-term conservation efforts at Jetwing Vil Uyana, where a former degraded chena landscape was restored into a functioning wetland ecosystem.
The restored habitat eventually attracted Eurasian otters, fishing cats, grey slender lorises and numerous wetland bird species.
Over 14 years, Jayasekara carried out field observations, camera trapping and awareness programmes involving hotel staff, surrounding schools and local communities.
“What happened at Vil Uyana clearly showed that habitat restoration works. If degraded ecosystems are given time to recover, wildlife can return naturally,” he said.
He added that wetland restoration should become a central component of Sri Lanka’s environmental policy, particularly as climate change intensifies droughts, floods and biodiversity loss.

Chaminda collecting scat for research purposes in Sigiriya
He says wetlands are among the planet’s most productive ecosystems, functioning as natural water filters and carbon sinks while providing breeding grounds for fish, amphibians and aquatic mammals.
Yet globally, wetlands are disappearing at an alarming rate, and Sri Lanka is no exception.
Conservation groups have repeatedly warned that illegal waste disposal, pesticide contamination and poorly planned infrastructure projects are severely affecting freshwater ecosystems throughout the country.
Jayasekara also highlighted the importance of stronger environmental education and community participation in conservation.
“Awareness is still very limited. Many people living close to wetlands do not realise the ecological importance of otters or the threats they face,” he said.
According to him, involving local communities in conservation monitoring is essential if Sri Lanka hopes to safeguard the species in the long term.
He also pointed to the growing international interest in otter conservation.
In November 2025, Jayasekara represented Sri Lanka at the International Eurasian Otter Conservation Workshop held at Colchester Zoo and organised by the International Otter Survival Fund.
The workshop brought together nearly 100 researchers, conservationists and wildlife experts from 33 countries to discuss emerging threats facing Eurasian otter populations.
Jayasekara presented Sri Lanka’s experience under the theme Rewilding Through Hospitality, focusing on how habitat restoration and sustainable tourism practices at Vil Uyana contributed to otter conservation.
“The international response was extremely encouraging. Many delegates were surprised that a tourism property in Sri Lanka had quietly carried out wetland conservation work for more than a decade,” he said.
Discussions at the workshop also examined wider environmental concerns including river pollution, declining fish stocks, illegal killings and habitat fragmentation affecting otter populations across Europe and Asia.
New conservation technologies such as AI-assisted wildlife tracking and environmental DNA surveys were also highlighted as emerging tools for monitoring elusive species.
Jayasekara said Sri Lanka urgently requires more scientific surveys, stronger environmental law enforcement and greater investment in freshwater conservation research.
He warned that unless wetlands and waterways are protected, several lesser-known freshwater species could face severe decline in the coming decades.
Environmentalists say otter conservation should not be viewed in isolation but as part of a broader effort to protect entire freshwater ecosystems that millions of Sri Lankans depend on for drinking water, irrigation and livelihoods.
He further noted that healthy wetlands also strengthen climate resilience by absorbing floodwaters, reducing soil erosion and supporting groundwater recharge.
As Sri Lanka experiences increasingly erratic weather patterns linked to climate change, conservationists argue that protecting wetlands is becoming both an ecological and economic necessity.
Jayasekara believes Sri Lanka still has an opportunity to become a regional example in balancing tourism, biodiversity conservation and habitat restoration.
“The otter teaches us an important lesson,” he said. “If rivers are protected and wetlands are respected, nature has an incredible ability to recover.”
This year’s observance of World Otter Day 2026 is, therefore, serving not only as a celebration of one of the world’s most charismatic mammals, but also as a reminder of the urgent need to conserve the fragile freshwater ecosystems upon which both wildlife and human communities ultimately depend.

Eurasian otter
By Ifham Nizam
Features
Malaiyaha Tamil people: Healing the Oldest Wound of Independence
In their Vesak messages this year, President Anura Kumara Dissanayake and Prime Minister Harini Amarasuriya highlighted the values of reconciliation, coexistence and justice as essential to Sri Lanka’s future. President Dissanayake emphasised that Buddhism’s teachings remain deeply relevant to contemporary society and described Vesak as a symbol of “mutual understanding, unity and coexistence among all communities” and of reconciliation itself. Prime Minister Amarasuriya similarly called for the building of a society in which justice is assured to all irrespective of caste, race or religion. These messages were not merely religious aspirations, they were a direct challenge to the most serious failures in Sri Lanka’s post-independence history. These include the three-decade-long war, its human rights violations and the inability to implement a political solution.
These have been and continue to be the challenges that have prevented Sri Lanka from reaching its full potential. Added to this have been the persistence of social and economic inequalities that continue to marginalise communities at the bottom of the social hierarchy. One of the most enduring examples of such injustice is the experience of the Malaiyaha Tamil community. The scale of the original exclusion is worth understanding clearly. According to the 1946 Census, the Malaiyaha Tamil community numbered approximately 780,600 persons and constituted 11.73 percent of the country’s population making them the second largest ethnic community, larger than the Sri Lankan Tamil community who numbered 733,700 or 11.02 percent of the population at the time
The denial of citizenship and voting rights to the Malaiyaha Tamil community was the first major injustice inflicted on an ethnic minority in post-independence Sri Lanka. The consequences were devastating and long-lasting. A community that had contributed enormously to the country’s economy through its labour on the plantations was excluded from political participation and denied basic rights. This was a political and moral failure that cast a long shadow over the country’s post-independence history. Responsibility for that injustice needs to be shared widely. Political leaders across ethnic lines failed to resist it. The result was the marginalisation of a community whose contribution to national prosperity far exceeded the recognition it received. Today, nearly eight decades later, Sri Lanka has an opportunity to correct that historic wrong but only if economic reform is matched by genuine social inclusion.
Longstanding Grievances
The NPP government has repeatedly acknowledged the need to address the longstanding grievances of the Malaiyaha Tamil people. In its election manifesto, the NPP pledged to improve living conditions in plantation areas, strengthen land and housing rights, ensure equal access to education and public services, and integrate plantation communities more fully into national development. The NPP’s Nuwara Eliya Declaration of 2023 similarly recognised that the plantation community had suffered generations of exclusion and promised measures to address disparities in housing, land ownership, infrastructure, education and economic opportunity. The need for such action is plain to see. While citizenship issues have largely been resolved over time, the socio-economic consequences of decades of exclusion remain deeply entrenched and continue to shape daily life in plantation communities. A conference organised by the Institute of Social Development to mark International Tea Day on May 21 at the BMICH brought out this and many other salient issues. Headed by P Muthulingam the organisation has advocated for the rights of the Malaiyaha Tamil people for the past 35 years to be equal citizens who enjoy social and economic justice.
The central problem facing many plantation workers is the low level of income they receive. Daily wages remain among the lowest in the country relative to the difficulty and intensity of the work. Plantation labour continues to depend heavily on methods that have changed little over generations. Productivity remains low compared to competing tea-producing countries — not because workers lack capability, but because sustained investment in their welfare, skills and economic mobility has been withheld. Workers consequently remain trapped in a cycle of low wages and limited economic mobility. Their housing situation compounds these difficulties. Many plantation families continue to live in housing owned either by plantation companies or the state. Lack of secure ownership limits their ability to accumulate assets, access credit or make independent decisions regarding their future. When Cyclone Ditwah damaged plantation housing, it exposed the inability of those living in that housing to access state compensation as they did not own the housing in which they lived.
The problems extend beyond the central highlands. Plantation workers living in private estates and smallholdings in other parts of the country face similar challenges. A recent Amnesty International report documented serious abuses affecting Malaiyaha Tamil workers in private tea estates in the Southern Province. These include wage withholding, debt dependency, restrictions on movement and intimidation and practices the report argued correspond to internationally recognised indicators of forced labour. These findings are not peripheral. They reveal that the structural exclusion of the Malaiyaha Tamil community is not a relic of the past but an active, ongoing condition. Economic vulnerability and social marginalisation continue to leave many plantation workers without effective protection or access to justice. It is against this backdrop that the government’s recent plantation reform initiative assumes special significance.
Second Phase
The government has announced the second phase of a programme to make underutilised plantation lands and assets available for investment. The objective is to transform underperforming assets into productive enterprises capable of generating employment, attracting investment and revitalising regional economies. The programme seeks to modernise the plantation sector, improve productivity and create new opportunities in tourism, renewable energy and export-oriented industries. These objectives are necessary and welcome. However, economic reform alone will not be sufficient and Sri Lanka’s own history provides the warning. Previous rounds of plantation modernisation pursued productivity gains without addressing the structural disempowerment of the people at the centre of the industry. The result was investment that generated wealth without distributing it. The workers who produced the wealth were once again treated as labour inputs rather than as beneficiaries. If the current reform follows the same logic, it risks reproducing the same failure.
For reform to succeed, plantation workers must be recognised not merely as a labour force but as stakeholders with rights, aspirations and a legitimate claim to share in the benefits of development. Housing ownership, secure land tenure, quality education, vocational training and entrepreneurship need to be built into the reform process from the outset. The government’s commitments to the Malaiyaha Tamil community therefore need to be incorporated into every stage of the reform process. On the contentious question of land, the government should consider establishing an independent national land commission. Such a body should include respected government officials, professionals and representatives from all ethnic and religious communities. It should review land policy comprehensively, develop transparent principles for allocation and use, ensure fairness in decision making and provide a trusted mechanism for resolving disputes. A credible land commission would help build public confidence that land reforms are being undertaken in the national interest rather than for the benefit of particular groups.
The correction of historic injustices should not be viewed as a concession to one community. It should be understood as an investment in national unity, because societies do not become stronger by maintaining the exclusion of those they have wronged. On the contrary, they become stronger by ending it. The first great injustice committed against an ethnic minority after independence cannot be undone. But its consequences can be addressed, and doing so would strengthen reconciliation, enhance social cohesion and bring Sri Lanka closer to the vision of a country in which all communities live with equal dignity and equal hope. This is what the Vesak messages of the President and Prime Minister promised. The plantation reform now underway is the moment to make good on that promise not in words alone, but in sustained policy that endures beyond any single government and reaches the people who have waited longest for it.
by Jehan Perera
Features
IMF relief is not economic recovery: Sri Lanka’s real test begins now
The IMF’s latest decision to release approximately US$695 million to Sri Lanka provides an important measure of financial relief, but it should not be mistaken for full economic recovery. While the approval reflects progress in stabilisation, fiscal discipline, and reform implementation, the country still faces deep structural weaknesses, social pressures, and external risks. The real test begins now: whether Sri Lanka can convert this temporary breathing space into lasting reform, productive growth, stronger institutions, and national resilience. This moment should not be used for political celebration, but for serious national reflection and responsible action. Sri Lanka must now resolve to support a clear policy direction, a practical reform programme, and a long-term national development path — not merely an individual, a party, or a political camp.
1. IMF Relief: A Necessary Step, but Not a Final Solution
The IMF Executive Board recently completed the combined Fifth and Sixth Reviews under Sri Lanka’s Extended Fund Facility, allowing the country immediate access to SDR 508 million, approximately US$695 million. This decision represents an important step in Sri Lanka’s ongoing economic recovery process following the severe crisis that led to sovereign debt default, shortages of essential goods, high inflation, and the collapse of foreign reserves in 2022.
However, this decision must be understood with great sensitivity. IMF relief is not the same as full economic recovery. It gives Sri Lanka temporary breathing space, helps rebuild a certain level of international confidence, and supports the continuation of the reform programme. However, this relief is not a magic solution that can automatically resolve the country’s deep-rooted economic problems. Fundamental challenges such as the debt burden, weak productive capacity, low export earnings, poor public revenue performance, weak fiscal management, excessive dependence on imports, corruption, and inefficient state-owned enterprises still remain unresolved. Addressing these challenges requires domestic reforms, disciplined policies, stronger production and export capacity, and a long-term national development programme. Therefore, the IMF decision should not be treated as a political victory or as proof of complete economic success. Rather, it should be seen as a reminder that Sri Lanka still has a long and difficult journey ahead.
2. Sri Lanka’s Progress Recognised by the IMF and Its Limits
The IMF’s approval indicates that Sri Lanka has made progress in several important areas. Inflation has been brought under control compared to the extreme levels experienced during the crisis. Foreign reserves have improved, the exchange rate has shown greater stability, and fiscal management has become more disciplined. The government has also continued to implement reforms in taxation, public finance, energy pricing, and debt restructuring.
According to the IMF assessment, performance under the programme has generally been strong. Several quantitative performance targets have been met, while many structural benchmarks have either been achieved or implemented with some delay. This shows that Sri Lanka has remained broadly committed to the reform path agreed under the IMF-supported programme.
Yet this progress remains fragile. Stability achieved through external support must now be converted into genuine economic strength.
3. Conditions and Responsibilities Attached to the IMF Programme
IMF support does not come merely as financial relief; it comes with a set of important reform conditions and responsibilities that Sri Lanka must fulfil. Key among them are maintaining fiscal discipline, improving government revenue, continuing cost-reflective pricing for fuel and electricity, strengthening public financial management, restructuring state-owned enterprises, protecting institutional independence, and preventing the accumulation of new external payment arrears.
The main objective of these conditions is to restore macroeconomic stability, strengthen fiscal credibility, and rebuild international confidence in Sri Lanka. However, these reforms also carry social and political consequences. Higher taxes, market-based utility pricing, and strict expenditure controls can place a heavy burden on ordinary citizens, especially low-income families, small businesses, pensioners, and salaried workers. Therefore, in implementing reforms, economic discipline alone is not enough. Fairness, transparency, and social sensitivity towards vulnerable groups must also be treated as essential priorities.
4.The Impact of IMF Conditions on People and the Economy
One major social consequence of the IMF programme is the increased pressure it can place on household incomes and living standards. When electricity, fuel, and other essential services are priced on a cost-recovery basis, people may have to face a higher cost of living. Although such reforms are necessary to reduce the losses of state-owned enterprises and maintain fiscal discipline, they can weaken the purchasing power of ordinary citizens if strong social protection programmes are not in place.
Another important consequence is the pressure placed on the operating costs and stability of small and medium-sized enterprises. Higher taxes, increased utility costs, fuel and electricity expenses, and the rising cost of borrowing can affect business survival, job creation, and new investment decisions. If reforms are implemented without sufficient attention to production, exports, and small businesses, the country may achieve short-term fiscal stability, but long-term economic growth could remain weak.
There is also a political risk that cannot be ignored. If people feel that the burden of reform is not being shared fairly, reform fatigue and public frustration may emerge. If ordinary citizens are expected to make sacrifices while corruption, waste, and political privileges continue, public confidence in the reform process will decline. Therefore, for IMF-supported reforms to succeed, fairness, transparency, and social sensitivity must be firmly ensured alongside economic discipline.
5. The Real Test Before Sri Lanka
Sri Lanka’s real test begins now. Beyond temporary financial relief, the country must now prove that it can build a strong economy that generates income and can withstand external shocks. Therefore, our objective should not be limited to securing the next IMF tranche. While an IMF tranche may provide short-term breathing space, it does not guarantee long-term economic independence or stability. The real objective should be to create an economy that does not have to return to the IMF repeatedly during every crisis, but can stand on its own productive strength, export earnings, and fiscal discipline.
This requires fiscal discipline. However, discipline alone is not enough; economic growth is also necessary. Taxation is necessary. But increasing taxes alone is not a solution; production, investment, and exports must also be expanded. Debt restructuring is necessary. But beyond reducing the debt burden, Sri Lanka must also build an economic foundation that does not depend excessively on borrowing in the future. Sacrifices may be asked of the people. But for those sacrifices to be fair, accountability, transparency, and exemplary conduct from leaders are also essential.
Economic recovery cannot be sustained in the long term through financial assistance alone. Such support can provide breathing space during a crisis, but a country is rebuilt on the strength of its own institutions, productive capacity, export competitiveness, and public trust. Therefore, what Sri Lanka needs today is strong institutions, income-generating industries, a broader export base, food security, energy security, and a system of governance that people can trust.
6. Policy Priorities for Sustainable Recovery
Sri Lanka must now move from crisis management to national transformation. First, fiscal discipline should continue, but it must be fair. Revenue mobilisation should not rely only on increasing taxes on the same groups of people. The tax base must be broadened, tax administration must be improved, and tax evasion must be reduced.
Second, social protection must be strengthened. The most vulnerable groups should be protected through well-targeted assistance. Reforms will be more acceptable if people feel that the poor, elderly, disabled, and low-income families are not abandoned.
Third, state-owned enterprise reform should be carried out with transparency and public accountability. The objective should not merely be privatisation, but efficiency, professionalism, financial discipline, and better service delivery.
Fourth, Sri Lanka must prioritise export-led growth. The country cannot build a stable future by depending mainly on borrowing, remittances, and consumption. Agriculture, tourism, manufacturing, IT services, logistics, education, and value-added exports must become central pillars of national development.
Fifth, governance reform is essential. Without reducing corruption, political interference, wasteful expenditure, and weak implementation, no IMF programme can create lasting recovery. Economic reform and governance reform must move together.
7. From Temporary Relief to Lasting Recovery
The IMF decision gives Sri Lanka an important opportunity. It provides the country with space to strengthen economic stability, rebuild international confidence, and move forward with essential reforms. However, it is not a guarantee of success. It is only a step that gives the country some breathing space. It is now Sri Lanka’s responsibility to use that space wisely, with discipline and accountability to the people.
The country must now decide whether it will continue the old cycle of crises, debt, temporary relief, and political blame, or whether it will build a new national programme based on discipline, productive capacity, fairness, and accountability.
At this moment, true success cannot be measured by the amount of money received. It must be measured by whether Sri Lanka can build an economy that produces more, exports more, saves more, is governed better, and protects its people more effectively. The real victory is not receiving IMF relief, but building a strong national economy that will not depend excessively on such relief in the future.
Public Appeal: Let Us Choose a Programme, Not a Personality
This US$695 million will not solve every problem in our country. It may provide temporary financial relief and support the continuation of reforms, but it cannot replace the hard work required to build a productive, disciplined, inclusive, and self-reliant economy.
Therefore, this is the right time for all Sri Lankans to rise above narrow political loyalties and support a clear policy direction, a practical reform programme, and a long-term national development agenda — not merely an individual, a party, or a political camp. What Sri Lanka needs today is not the victory of a personality, but the victory of a responsible national programme that can restore confidence, protect the vulnerable, promote production, strengthen exports, ensure accountability, and secure a better future for the next generation. The question before us is simple but decisive: are we ready to make that choice?
by Prof. Ranjith Bandara,
PhD (Qld.,)
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