Opinion
Dollar Crisis: What aggravated it

by Eng. D. Godage
Total foreign currency reserves of the country were around seven billion dollars at the beginning of 2021 but it decreased to around 1.2 billion dollars towards the year end, even though the Central Bank announced that there was a reserve of three billion dollars. The net foreign assets of the total banking system are said to be a US$ 4.1 billion deficit by 2021 end. Everybody knows the suffering and difficulties the countrymen undergo as a result of the depletion of foreign currency or dollar reserves. Without elaborating on those effects, it is the intention of the writer to examine how foreign reserves depleted so fast.
Politicians, officials, public speakers very often tend to blame every government since independence over the past 70 years for ruining this country, but with regard to foreign debt, it is not applicable. Moreover, the effects of the COVID-19 pandemic were felt globally but other countries in this region did not suffer as much and face such crises like the ones faced by Sri Lanka, so it is no excuse. It is not essential to elaborate on this fact as it is common knowledge. Consequently, the writer makes an attempt to understand how and when it happened. The focus of this discussion is on infrastructure development, and not other debt instruments.
Debt burden since independence
The Oya project implemented around 1948 using local funds comes to mind. Moreover, from 1950 the major port development scheme of Colombo Harbour created the Colombo Port, one of the most modern ports at the time, by 1956 under the leadership of the Minister of Transport and Works, Sir John Kotelawala in the Dudley Senanayake Cabinet, utilising local funds amounting to 110 million rupees. While work was in progress, the ship ‘Gothic’, carrying Queen Elizabeth II, berthed alongside the newly constructed Customs Quay to christen it the Queen Elizabeth Quay (QEQ). Incidentally, the QEQ was buried in the privately developed SAGT or South Asia Gateway Terminals around year 2000.
The Mahaweli Development Project, a massive irrigation cum hydroelectric scheme originally planned for 30 years but telescoped into about six years, was undertaken by the J.R. Jayewardene government using concessionary loans as well as grants. Funds were provided based on a thorough feasibility study, with eminent engineer late Dr. A.N.S Kulasinghe and his team of engineers working as consultants. Resultant benefits are well known and they did not lead to any debt crisis in the country.
Road and railway infrastructure development has been carried out with locally raised funds. After the 2004 tsunami disaster, the Railway Department staff rehabilitated the destroyed line to recommence operations with the least possible delay. It is said that northern rail line improvements carried out later on loans under Uthuru Wasanthaya had spent two to three times the cost.
Since 1980 the country has seen another major development programme in the port sector. Studies had been conducted at a time of increasing demand for container traffic, confirming the urgent need to expand port facilities. The first phase of expansion, requiring US$ 32 million, was funded in the form of a Yen currency loan. The project progressed systematically aided by further loans, through a transparent bidding process. As a result, the Colombo Port was elevated from the global rank of 127 in 1981 to 21st in 1997. These loans were granted only after proper feasibility studies were carried out and confirmation of loan repayment capability, as affirmed by the lending Japanese Agency. Extensive borrowing for project infrastructure became the norm only after about 2000 and not since independence.
Newer debt accumulation
A Sunday English newspaper on March 9, 2014 and May 1, 2016 reported, with details from the External Resources Department, on 28 projects funded predominantly by China Exim Bank loans amounting to US$ 7,671 million, with five-year grace and 10-year repayment periods; their interest rates are not indicated but is supposed to be over six percent. All these projects are said to have been initiated through unsolicited tenders. The same newspaper published a report under the caption, “Normal tender procedure not possible for mega projects: PBJ”. This is a questionable statement. Further examination of the above list shows seven projects, all in Hambantota, totalling US$ 5,054 million, for airport, port, highway extension, railway extension and local road network. None of them seem capable of generating revenue to repay the massive loans even though they have been in operation for around 10 years by now. These loans alone require about US$1 billion per year as repayment, burdening the country, and using up its dollar reserves. During the previous regime the Hambantota Port was given out on a 99-year lease.
Did the Treasury officials who handled these borrowings not see the danger of the debt burden or debt trap and the country’s inability to repay them without adequate future revenue? One can cite the shifting global financial structure and unforeseen circumstances as the reason. But they should have been taken into consideration in any plan. High costs due to unsolicited proposals without a competitive bidding process are also an issue. As for costs, the Treasury Secretary has said that it is the engineers who determine costs. This is not an acceptable excuse.
The Colombo Port South Harbour was found to be an urgent project, and proved viable after an extensive feasibility study by 2001. After producing detailed designs, cost estimates and all implementation requisites, it was not possible to proceed due to lack of funds. The Hambantota Port project was also given high priority by the same government though two feasibility studies failed to show the viability of the project. For the Colombo Port project, the Treasury Secretary advocated commercial borrowing claiming that the lending agency conditions were unacceptable.
In fact, only one lending agency came forward to offer approximately one third of the fund requirement. The Ports Authority managed to obtain very concessionary loan of US$ 300 million in 2006, to proceed with the project, albeit after a two-year delay. The new harbour was completed successfully within the stipulated time and cost while adhering to a transparent tender process. It is worthwhile to note that the lowest cost, approximately US$ 320 million, was quoted by the Korean contractor who successfully completed it, while the next bid was around US$ 570 million by a Chinese contractor. This project seems to be generating more revenue than budgeted.
In fact, the biggest container ship in the world ‘Ever Ace’, with a carrying capacity of 24,000 TEU, berthed in the Colombo South Harbour in October 2021 as it is the only port in the region that could accommodate a ship of that scale, bringing great honour and promoting the Colombo Port.
Most Chinese funded projects that commenced during the past two decades seem now complete and in operation, spread among power and energy, transportation, airport and aviation, ports, irrigation and water sectors. Debt distribution is US$ 1,553 million in power and energy, US$ 3.99 billion in transportation, US$ 232 million in airport and aviation, US$ 1,336 million in ports and US$ 101 million in irrigation. This includes projects indicated by the aforementioned 2016 news item, and subsequent major projects like the Central Highway are not included.
Expensive ventures like the Norochcholai coal power plant costing US$ 1,346 million have helped to meet the country’s energy demands and there has to be a post project evaluation to ascertain its financial gains and loan repayment capacity. Highway projects undertaken on expensive loans do not seem to generate enough revenue to meet dollar loan repayments. Although some benefits accrue, the post project economic and financial evaluations are not satisfactory. The highest revenue on a peak day on the Southern Highway has been 38 million rupees a day. Considering the average annual turnover minus the operation and maintenance costs it could take 100 years to repay loans. Authorities should perform a post project evaluation for the benefit of future planners.
Lessons to learn
This is history but should not be discarded, for the valuable information and data therein demonstrate the actual scenario and resultant repercussions. Decision makers and economic advisors to the government, especially of the Treasury and any other relevant officials could review them.
The debt burden has aggravated the dollar crisis during the past two decades. The COVID-19 pandemic during the past two years is not an excuse as other countries in the region too have faced the same but are performing better. The negative economic growth in 2020 and the considerable dollar debt burden, with the country’s reserves collapsing have not occurred suddenly. Severe import restrictions have made day to day life of the people inconvenient and led to the collapse of some domestic industries.
The worst is yet to come, as warned by the Secretary to the President, delivering a speech in Colombo, as reported by a Sunday English newspaper on 28 Nov. 2021. He was the Treasury Secretary during the past two decades, when China Exim Bank loans were signed to the tune of billions of dollars mostly for white elephant projects, The massive dollar debt seems the root cause of most problems faced today.
Opinion
Pope decries ‘major crisis’ of Trump’s mass deportation plans, rejects Vance’s theology

by Christopher White Vatican Correspondent
Pope Francis has written a sweeping letter to the U.S. bishops decrying the “major crisis” triggered by President Donald Trump’s mass deportation plans and explicitly rejecting Vice President JD Vance’s attempts to use Catholic theology to justify the administration’s immigration crackdown.
“The act of deporting people who in many cases have left their own land for reasons of extreme poverty, insecurity, exploitation, persecution or serious deterioration of the environment, damages the dignity of many men and women, and of entire families, and places them in a state of particular vulnerability and defencelessness,” reads the pope’s Feb. 11 letter.
Since taking office on Jan. 20, the Republican president has taken more than 20 executive actions aimed at overhauling the U.S. immigration system, including plans to ratchet up the deportations of undocumented migrants and halt the processing of asylum seekers.
The pope’s letter, published by the Vatican in both English and Spanish, offered his solidarity with U.S. bishops who are engaged in migration advocacy and draws a parallel between Jesus’ own experience as a migrant and the current geopolitical situation.
“Jesus Christ … did not live apart from the difficult experience of being expelled from his own land because of an imminent risk to his life, and from the experience of having to take refuge in a society and a culture foreign to his own,” writes Francis.
While the letter acknowledges the right of every country to enact necessary policies to defend itself and promote public safety, the pope said that all laws must be enacted “in the light of the dignity of the person and his or her fundamental rights, not vice versa.”
The pontiff also goes on to clearly reject efforts to characterise the migrants as criminals, a frequent rhetorical device used by Trump administration officials.
“The rightly formed conscience cannot fail to make a critical judgment and express its disagreement with any measure that tacitly or explicitly identifies the illegal status of some migrants with criminality,” the pope writes.
Soon after Trump took office, Vice President JD Vance — a recent convert to Roman Catholicism — attempted to defend the administration’s migration crackdown by appealing to St. Thomas Aquinas’ concept of ordo amoris.
“Just google ‘ordo amoris,’ ” Vance posted on social media on Jan. 30 in response to criticism he received following a Fox News interview.
During that interview, Vance said: “You love your family, and then you love your neighbour, and then you love your community, and then you love your fellow citizens in your own country. And then after that, you can focus and prioritise the rest of the world.”
While not mentioning Vance directly by name, Francis used his Feb. 11 letter to directly reject that interpretation of Catholic theology.
“The true ordo amoris that must be promoted is that which we discover by meditating constantly on the parable of the ‘Good Samaritan,’ that is, by meditating on the love that builds a fraternity open to all, without exception,” wrote the pope.
Since his election in 2013, Francis has become one of the world’s most vocal champions. His latest letter, however, marks a rare moment when the pontiff has directly waded into a country’s policy debates.
In the letter, however, he states that this is a “decisive moment in history” that requires reaffirming “not only our faith in a God who is always close, incarnate, migrant and refugee, but also the infinite and transcendent dignity of every human person.”
“What is built on the basis of force, and not on the truth about the equal dignity of every human being, begins badly and will end badly,” the pope warned.
In a brief post on social media, the U.S. bishops’ conference shared the pope’s letter with its online followers.
“We are grateful for the support, moral encouragement, and prayers of the Holy Father, to the Bishops in affirmation of their work upholding the God-given dignity of the human person,” read the statement.
(The National Catholic Reporter)
Opinion
Is Sri Lanka’s war on three-wheelers an attack on the poor?

For decades, three-wheelers—commonly known as tuk-tuks—have been a vital part of Sri Lanka’s transportation system. They provide an affordable and convenient way for people to get around, especially in areas where public transport is unreliable. However, successive governments have repeatedly discouraged their use without offering a viable alternative. While concerns about traffic congestion, safety, and regulations are valid, cracking down on three-wheelers without a proper replacement is unfair to both commuters and drivers.
For millions of Sri Lankans, three-wheelers are not just a convenience but a necessity. They serve as the primary mode of transport for those who cannot afford a private vehicle and as the only reliable last-mile option when buses and trains are not accessible. Senior citizens, people with disabilities, and those carrying groceries or luggage rely on tuk-tuks for their ease and accessibility. Unlike buses, which often require long walks to and from stops, three-wheelers offer door-to-door service, making them indispensable for those with mobility challenges.
In rural areas, where public transport is scarce, three-wheelers are even more critical. Many villages lack frequent bus services, and trains do not serve short-distance travel needs. Tuk-tuks fill this gap, ensuring people can reach markets, hospitals, and workplaces without difficulty. In urban areas, they provide a quick and affordable alternative to taxis and private vehicles, especially for short trips.
Despite their importance, three-wheelers have increasingly come under government scrutiny. Restrictions on new registrations, negative rhetoric about their role in traffic congestion, and limits on their operation in cities suggest that policymakers view them as a problem rather than a necessity. Authorities often cite traffic congestion, safety concerns, and lack of regulation as reasons for discouraging tuk-tuks. While these issues are valid, banning or restricting them without addressing the underlying transport challenges is not the solution.
The biggest flaw in the government’s approach is the absence of a proper alternative. Sri Lanka’s public transport system remains unreliable, overcrowded, and often inaccessible for many. Buses and trains do not provide efficient coverage across all areas, and ride-hailing services like Uber and PickMe, while convenient, are often too expensive for daily use. Without a suitable replacement, discouraging three-wheelers only makes commuting more difficult for those who rely on them the most.
Beyond the inconvenience to passengers, the economic impact of limiting three-wheelers is significant. Thousands of drivers depend on tuk-tuks for their livelihoods, and with rising fuel prices and economic instability, they are already struggling to make ends meet. Further restrictions will push many into financial hardship, increasing unemployment and poverty. For passengers, particularly those from lower-income backgrounds, losing three-wheelers as an option means higher transport costs and fewer choices.
Instead of discouraging tuk-tuks, the government should focus on improving and regulating them. Many countries have successfully integrated three-wheelers into their transport systems through proper policies. Sri Lanka could do the same by enforcing proper licensing and training for drivers, introducing digital fare meters to prevent disputes, ensuring better vehicle maintenance for safety, and designating tuk-tuk lanes in high-traffic areas to reduce congestion. These measures would make three-wheelers safer and more efficient rather than eliminating them without a backup plan.
The government’s push to restrict three-wheelers without providing a suitable alternative is both unfair and impractical. Tuk-tuks remain the only viable transport option for many Sri Lankans, particularly senior citizens, low-income commuters, and those in rural areas. Instead of treating them as a nuisance, authorities should recognise their importance and focus on making them safer and more efficient. Until a proper substitute is in place, discouraging three-wheelers will only create more problems for the very people who need them the most.
P. Uyangoda
Director-Education (retired)
Nedimala
Opinion
Government by the people for the people: Plea from citizenry

By an Old Connoisseur
The incumbent rulers keep on reminding the people, ad nauseam, that the current administration is a government for the people by the people. They have claimed the current government was born out of the uprising of the people.
All governments in democratic societies are born out of the will of the people. In such a context, all such governments have to work towards the well-being of the people with undiluted commitment. There is no doubt in the minds of even the most discerning citizens of Sri Lanka that all these promulgations are indeed the most noble of objectives and one would justifiably expect such contentions to even warm the cockles of the hearts of all and sundry.
Yet for all this, we do need to remember and firmly reiterate to our politicians that this principle should be the bedrock on which the political governance of any democracy is based. The people of a country should come first and foremost in all considerations of any legally elected democratic government. True enough, we do know for sure that even despite the very loud vocal grandiloquence of all previous governments, and I repeat all previous governments, they did not go even a little distance to hold the welfare of the people to be sacred, and their deeds and interests were completely at loggerheads with such an honourable foundation as well as essential and admirable attitudes. Without any significant exceptions, all previous political systems over the last 77 years of independence of our much-loved Motherland, have gone on record as institutions that put themselves first in all their considerations.
In point of fact, we also have to agree even unequivocally that this noble task cannot be achieved by the politicians alone. Politicians will have to take steps to stimulate, facilitate and unite all sections of society so that our people will put their collective shoulder to the wheel in a concerted initiative to lift up this country from the mire into which it has been pushed by politicians of various hues. Delving deeper into the depths of this contention, the question arises as to what or who are understood as people. In any society when one talks of people, we should focus on all people; the rich and the poor, the able and the disabled, the educated and the not so well educated, the employed and the unemployed, public-sector workers and the private-sector workers, the farmers as well as the white-collar workers, government enterprises as well as community organisations, and the business enterprises; in fact, the whole lot of Homo sapiens in our country. To improve the well-being of people we need the participation and unstinted cooperation of all these groups in our populace. An abiding sense of patriotism in the psyche of all of our people is definitely the need of the hour.
Politicians lay down the policies and the public sector ensures the implementation of these rules and regulations to improve the wellbeing of people. The public sector, including all politicians of different sorts, are servants of the people and are not deities with unlimited power just to take care of themselves and their political institutions as well as their kith and kin and acolytes. To realise these exalted goals we have to ensure that we have certain universal rules including respect for our people at all times, fair distribution of resources in an equitable manner, kindness, empathy and respect for the freedom of others, preservation and conservation of nature and the environment, adherence to the rule of law, unmitigated compliance with basic human rights and dignity, as well as the development of those very fine humane attributes such as beneficence, non-maleficence and altruism.
If we are to develop by transforming society by the people for the people, we will have to internalise and translate these attributes in our behaviour all the time and in all sectors of the community. Political leadership alone cannot do this honourable task. Society has to unite under these values and other attributes to be articulated and facilitated by the leadership. This is what many other progressive countries have attempted, some of them forging ahead with great success. For this to happen the entire society will have to work together over a long time with respect and minimal adversity. The stakeholders for this endeavour would be all individuals of society, Public Service including the political leadership, Private Sector and their leading figures and Community Organisations including their management. Every member of the population of our wonderful country should be invited to put his or her shoulder to the common wheel in a trek towards prosperity to enable everybody to enjoy an era of opulence.
The most admirable theme for the celebrations of our independence on the 4th of February this year was “Let us join the National Renaissance”. It was a clarion call to enable us to rise up like the proverbial phoenix from the ashes towards a magnificent revival. In addition to all that has been written above, the government and its leadership, for their part, have an abiding duty to take all necessary steps to facilitate the revitalisation of patriotism to urge the populace to contribute to the prospect of national resurgence. Towards that end, the general public has to be happy in this thrice blessed land and they need to live in a country that is safe and affluent. The powers that be need to realise most urgently that unless corruption is completely eliminated, the drug lords effectively neutralised, murderers and other law-breakers swiftly brought to book, various Mafia-type impertinent audacious organised collectives such as Rice Millers, Egg Manipulators, Coconut Wheeler-dealers, and Private Transport Syndicates; all of which hold the public to ransom, are ruthlessly tamed, there is no way in which we can rise and march towards any kind of Nationwide Resurgence. Of course, equally importantly, the farmers who provide sustenance to the entire nation should be looked after like royalty. It is also ever so important that vital and purposeful steps are taken to develop the rural impoverished areas and take steps to alleviate the poverty of the downtrodden. If these things are not attended to, at least for a start, the grandiose but implausible and tenuous rhetoric of that call to rally would just be a ‘pus vedilla’, and could even be a virtual non-starter.
-
Business4 days ago
Sri Lanka’s 1st Culinary Studio opened by The Hungryislander
-
Sports5 days ago
How Sri Lanka fumbled their Champions Trophy spot
-
News7 days ago
Killer made three overseas calls while fleeing
-
News6 days ago
SC notices Power Minister and several others over FR petition alleging govt. set to incur loss exceeding Rs 3bn due to irregular tender
-
Features5 days ago
The Murder of a Journalist
-
Sports5 days ago
Mahinda earn long awaited Tier ‘A’ promotion
-
Features5 days ago
Excellent Budget by AKD, NPP Inexperience is the Government’s Enemy
-
News6 days ago
Mobile number portability to be introduced in June