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Opinion

Drought, El Nino, agriculture and food security: What Sri Lanka can do

Published

3 years ago

on

Udawalaw reservoir almost empty

By Prof. W.A.J.M. De Costa
Senior Professor and Chair of Crop Science,
Faculty of Agriculture, University of Peradeniya

At present, Sri Lanka is going through a prolonged rain-free period. Several parts of the country are experiencing an unprecedent drought with the Udawalawe reservoir running almost dry for the first time in fifty years. It is reported that water levels of most tanks and reservoirs are below 50% of their capacity. Agriculture, being an activity of extreme sensitivity to the variations in climate, has taken a severe hit. We see images of dried and scorched crops and the inevitable pleadings and protests from the farmers demanding water from reservoirs be released to their fields along with demands for compensation for crop losses. While the climatic variations are beyond our control, the question arises as to whether we could have anticipated the drought and put measures in place to better manage its potential impacts on Agriculture. An analysis of these issues, while coming too late to alleviate the present crisis, will be useful for the future as scientific evidence indicates that this scenario is likely to be repeated with greater frequency in the foreseeable future.

What has caused drought, and could it have been predicted?

The general rainfall pattern in Sri Lanka dictates that a drought could be expected during the period from July to September in the dry- and intermediate climate zones, which broadly include all parts of the country except its southwest and the western slope of the Central Highlands. The South-West Monsoon which brings rainfall during the period from May to September to the wet zone in the southwest of Sri Lanka does not go beyond the western slope of the Central Highlands, which act as a physical barrier for extending the rains to the rest of Sri Lanka.

Therefore, crop fields in the dry- and intermediate zones receive very limited rainfall at the beginning of the yala season in the second half of April and the first half of May. Thereafter, there is no assured and consistent rainfall generating process for these climatic zones until the Second Inter-Monsoon which sets in from October onwards, largely as a result of tropical atmospheric depressions in the region around the Bay of Bengal. Therefore, the present drought cannot be considered as entirely unexpected.

What has happened in Sri Lanka is that the rainfree period that generally occurs during the July-September period in the dry- and intermediate zones has intensified into a severe drought. Even though the full rainfall data are not yet available, it is highly likely that rainfall from the South-West Monsoon has been below-average in 2023. This has meant that even the limited amount of rainfall that normally occurs at the beginning of the yala season was decreased, thus increasing the possibility of water shortage for crops at an earlier point in the current season than in a season of normal rainfall.

Lower rainfall from the South-West Monsoon in the wet zone means less water in the major reservoirs and tanks in the dry zone that are fed by the rivers originating from the Central Highlands (e.g. Mahaweli, Walawe) and the reservoirs located in the wet zone (e.g. Kotmale, Victoria).

Intensification of the ‘normally expected’ drought during this time of the year has been caused predominantly by the atmospheric phenomenon known as the ‘El Niño’, which had been predicted to occur in the middle of 2023, based on the climatic patterns observed in 2021-22 and the early months of 2023. El Niño is a process triggered by a weakening of the atmospheric air circulation (i.e. wind) patterns above the Pacific Ocean around the equator. Such a weakening of atmospheric circulation patterns disrupts the normal pattern of ocean evaporation, cloud formation and rainfall.

This disruption of wind patterns brings droughts to Australia, tropical East Asia (e.g. Indonesia, India, Sri Lanka etc.) and some parts of South America (e.g. Brazil) while bringing heavy rainfall and floods in some parts of South America (e.g. Peru). El Niño events usually happen at a frequency of 1-3 times every decade.

The opposite cycle of El Niño, called La Niña, also happens at an approximately similar frequency where the wind patterns are unusually strengthened bringing excess rainfall to tropical Australasia and causing droughts in tropical South America. During an El Niño event, global air temperature increases above average whereas the opposite happens during a La Niña event. During an El Niño year, sea surface temperatures in the equatorial Pacific near South America (e.g. Peru) increase above average, and thereby provides an early warning signal. Such an increase had been observed during the first few months of 2023 and by April, climate scientists had predicted an El Niño during the middle of 2023.

Furthermore, they had warned that the El Niño in 2023 could be unusually strong (called a ‘Super El Niño’) because the last three years (2019-22) had seen a rare continuous run of La Niña, thus raising the possibility of it being followed by an El Niño. This information and early warnings should have been available to Sri Lanka’s Department of Meteorology who should have alerted the relevant authorities and stakeholders such as the officials of the Ministries of Agriculture, Power and Energy and the farmers.

What measures could be taken to protect Agriculture from the impacts of drought?

Early warning, preparation and making adjustments in advance are key to minimising the impacts of a drought on Agriculture as options are very limited once a drought sets in.

Early warning: Why was it not there?

Early warnings on impeding droughts can be issued based on analyses of the current and past meteorological data from land, atmosphere, and ocean. Large volumes of data from several sources are fed to models that describe the behaviour of climate and weather based on the laws of physics. These models, which are run on high-performance supercomputers, make predictions of the future weather patterns. Different global agencies such as the US National Oceanic and Atmosphere Administration (NOAA) and the UK Met Office run these models on a global scale, and their predictions are made available to the relevant agencies of countries which do not have the capacity to develop and operate their own models (e.g. Sri Lankan Department of Meteorology).

Prediction of weather is a complex and tricky exercise, where there is a possibility of getting the predictions wrong. The highly chaotic nature of the atmosphere and incomplete understanding of the processes means that none of the predictions are definitive. Only the probability of a certain weather event occurring within a given period can be given and often different models provide different probabilities for the same event. An unforeseen or previously unaccounted atmospheric disturbance can cause a sudden and large-scale impact on the entire weather system so that predictions given only a few days ago may not come true.

A small country such as Sri Lanka has the added complexity that it is represented by only a small portion of the global grid. The climate models are run separately and concurrently for small segments of the earth (called ‘grid cells’) and overall predictions are made by combining the model predictions for each individual cell. Sri Lanka falls within a small number of grid cells so that the predictions from these global scale climatic models are not specific enough to be of use in making decisions about important weather-dependent activities such as Agriculture. This is especially true when we take in to account the fact that Sri Lanka is divided in to 46 different agroecological regions based on the diverse combinations of climate and soil conditions that are found within such a small country.

Overcoming the above methodological difficulties in the prediction of weather (short-term variations) and climate (longer-term variations), especially given the limited resources available to the Sri Lankan Department of Meteorology, is challenging, but not impossible. Greater vigilance and monitoring of the forecasts, especially the medium- to long-range forecasts, from global weather and climate models put out by the global agencies could help the Sri Lankan meteorologists to look for similar patterns in the local weather data as they come in. Weather and climate forecasting involves the expertise, local knowledge and judgement of the meteorologists to translate model outputs into practically usable forecasts.

Conversion of larger scale model outputs to smaller scale local areas (called ‘down-scaling’) requires research which develops relationships between atmospheric processes and climatic factors at different scales. For Sri Lanka, a network of weather stations with sufficient geographical coverage to take into account the 46 different agroecological regions is essential to generate the data that will enable the local meteorologists to develop meaningful down-scaling procedures and make sufficiently accurate predictions.

The current number of weather stations which measure all required climatic factors in Sri Lanka is woefully inadequate and little initiative has been taken in recent times to develop and expand capacity in this vital area despite the obvious threat of climate change. Agencies such as the UK Met Office and NOAA are research hubs staffed with a large number of climate scientists and have close links to the university system of those countries and beyond.

In contrast, very little research takes place in the Sri Lankan Department of Meteorology and there are no formal links to the university system. Urgent initiatives are required to address these shortcomings in Sri Lanka’s capacity to forecast weather and climate especially given the clear and present danger posed by climate extremes such as droughts which are predicted to increase in their frequency as a result of climate change.

Preparation and making adjustments: Were they done?

Agriculture, especially the cultivation of crops, is an activity which is extremely sensitive to climatic conditions that the crops would experience in a given season. In Sri Lanka, the climate sensitivity of its crop production is further increased by the fact that rice, which provides its staple food and on which its national food security depends, is a crop which has an unusually high-water requirement in comparison to other major staple food crops such as wheat and maize. As such, adjustment of the cropping practices in accordance with the expected rainfall and water supply is essential for the cultivated crops to survive an expected drought until they are harvested.

A general principle that is adopted in drought-prone regions all over the world is to grow short-duration crops which are able to complete their cropping cycle before the drought intensifies (known as ‘drought escape’). This is especially relevant in the yala season in the dry- and intermediate zones of Sri Lanka because the drought that develops from mid-July onwards persists until October (and therefore called ‘terminal drought’). For such seasons, the Rice Research and Development Institute (RRDI) of the Sri Lankan Department of Agriculture has developed rice varieties which provide a harvest in 2 ½ – 3 months (e.g. Bg251, Bg314). However, it is clear that the majority of farmers have not opted for these varieties, but have instead cultivated their preferred varieties, which are of longer duration and therefore got caught in the drought before they mature.

Irrespective of the duration of the variety, timely commencement of cultivation with the onset of the limited rainfall in late-April and May is crucial for the crops to escape the drought that develops later in the season. Unfortunately, Sri Lankan farmers do not have a good track record in this regard. If rice crops had been established by the end of April with land preparation either before or after the Sinhala and Hindu New Year, even a three-month rice variety would have been harvested by the end of July.

In such crops, the need for water would have decreased from mid-July onwards because the water requirement of rice decreases during its final grain filling period. Therefore, while there are no records to verify this, there is a high likelihood that rice crops that have got caught in the drought are late-planted crops and most likely of longer duration (i.e. 3 ½ to 4 months) varieties.

There are reports that during the time when water was initially released from the Uda Walawa reservoir, a majority of the farmers had not begun their cultivation. Uncertainty about the supply of fertilizer may have played a part in farmers delaying commencement of cultivation, but it has proven to be a costly delay.

Selection of which crops to cultivate is a crucial decision prior to a season where a drought could be expected. In this regard, the recommendation from the Department of Agriculture is to cultivate short-duration rice only in fields where there is a reasonably-assured supply of water and to grow other field crops such as short-duration legumes (e.g. mung bean, cow pea, soya bean etc.) in fields where there is a likelihood of a water shortage. However, there is an inherent reluctance on the part of the farmers to follow this recommendation.

The preference is to cultivate rice irrespective of whether sufficient water would be available or not while ignoring any warnings from the Departments of Meteorology and Agriculture. There is a fair percentage of Sri Lanka farmers who practice rotation of crops, which has many agronomic advantages such as restoring soil fertility and breaking the pest- and disease cycles. However, changes in the choice of crops, especially at short notice, in response to an early warning of possible extreme climatic events such as drought, is not a practice that is ingrained in the psyche of the average Sri Lankan farmer.

Using the limited amount of available water efficiently, with minimum wastage, is essential to avoid crop failure during a drought-affected season. The predominant method of irrigation employed by Sri Lankan farmers involves saturating the soil by applying water along the surface. In rice cultivation, this is taken even further by maintaining a layer of standing water. These methods of water management require large quantities of water along with substantial wastage due to evaporation, lateral seepage and deep drainage (i.e. water draining down below the crop’s root zone).

Research has shown that in many crops, including rice, the soil need not be saturated throughout the crop’s duration for it to have sufficient water for its growth. In rice, there are alternative water management methods such as ‘alternative wetting and drying’ and ‘saturated soil culture’, which do not require standing water to be maintained at all times, and therefore require less water. These alternative methods require more precise management of their crops by the farmers. Unfortunately, they have not gained much acceptance by the farmers despite the efforts of researchers at the RRDI.

Role of governmental agencies: Did they do their job?

The governmental agencies, run by the taxpayer’s money and the indirect tax paid by the general public, have an important contribution to make to enable Sri Lankan Agriculture to withstand climate-related shocks such as the current drought, the frequency of which is predicted to amplify with climate change. While the Department of Meteorology needs to step up in providing forecasts with greater precision and credibility, the Department of Agriculture (DoA) of the central government and the Provincial Departments of Agriculture need a major shake-up of their programs and activities to build resilience in the food production system and among the farmer community to better manage similar drought episodes in the future.

While the research arm of the DoA should continue its efforts to develop crop varieties with greater genetic tolerance to drought, the extension arms of the DoA and the Provincial DoAs have a huge role to play in changing famer perceptions and convincing them to adopt cultivation strategies and practices that will increase the resilience of their farming systems against drought.

All these governmental agencies are hugely under-staffed and under-resourced with very low levels of motivation for innovation while being steeped in routine practices. As a result, these agencies and their officials have lost credibility in the eyes of the farmers so that their recommendations are not taken seriously and adopted. Therefore, there is a need to restore credibility and confidence among the farming community by more focused proactive activities with a clear vision and better planning.

The current crisis clearly demonstrated that there is no proper coordination between the relevant governmental agencies when addressing the multiple challenges faced during a drought. It is important that mechanisms are put in place for a coordinated response during a drought where all parties work with better understanding and flexibility while keeping the greater goals of protecting national food security, farmer livelihoods and energy security in focus.

Role of farmers: Are they willing to adapt and change?

Farmers are key stakeholders in Sri Lanka’s efforts to ensure national food security and as such are highly influential in shaping the interventions and policy initiatives to meet the challenges posed by drought and other climate-related events that affect Agriculture. While the government has the responsibility of ensuring the availability of key resources for farming such as fertilizer, water, seeds, fuel etc., the farmers, in turn, should have the willingness to adapt and change their age-old cultivation practices and perceptions to follow recommendations that are issued after careful research and field validation. A paradigm shift is needed on the part of the farmers as well.


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Opinion

Sri Lanka has policy, but where is the data?

Published

6 hours ago

on

2026/03/31

By

In recent months, President Anura Kumara Dissanayake has repeatedly expressed a concern that the government does not have the accurate data it needs to make good decisions.

At meetings with senior officials from ministries ranging from health and agriculture to education and infrastructure, the President has reportedly lamented that the government often lacks reliable information on what its projects are achieving, how funds are being spent, and whether public investments are producing results. The meeting on December 6th at the Matale District Secretariat was a case in point. The President emphasised the need for most accurate data to award compensation for damaged agricultural lands before the month’s end. He recalled that the Department of Agriculture’s data showed an excess of rice in the country, but the nation has faced a rice shortage.

For a country attempting economic recovery after the most severe crisis in its post-independence history, absence of accurate data is a dangerous position to be in.

Without data, decisions become guesswork. Without evidence, policy becomes speculation.

Ironically, Sri Lanka already possesses the policy architecture required to solve this problem. The National Evaluation Policy (2018) and the National Evaluation Policy Implementation Framework (2023) were created precisely to ensure that public spending is guided by evidence, results, and accountability. Yet today, despite these policies and the presence of a dedicated government agency tasked with monitoring development projects, the country still lacks the integrated digital monitoring and evaluation system needed to turn policy into practice. Until that gap is closed, Sri Lanka will continue to struggle with inefficient public investment, delayed projects, and policy decisions made without reliable evidence.

The scale of the problem

The Department of Project Management and Monitoring (DPMM), operating under the Ministry of Finance, is the central institution responsible for overseeing development projects implemented by government ministries. According to its 2024 Annual Performance Report, the department monitored 226 large-scale development projects across various ministries during the year. These projects collectively had an allocated budget of LKR 705 billion, but the actual expenditure amounted to only LKR 401.96 billion, representing about 56.9% utilization of the allocated funds.

In other words, nearly half of the planned development spending did not materialize.

While fiscal constraints and external factors contributed to this outcome, the data nevertheless highlights a deeper systemic issue: weak monitoring and decision-making structures that fail to identify and resolve implementation problems early.

The report also indicates that many projects face delays due to procurement issues, coordination failures, cost escalations, and operational bottlenecks. What makes the situation more troubling is that information about these problems is often fragmented and slow to reach decision-makers.

The government does monitor projects through reports and field visits, but the information flow remains largely manual and scattered across ministries. In the digital age, such a system is simply inadequate.

A policy that already foresaw the solution

Sri Lanka’s National Evaluation Policy (NEP), approved by the Cabinet in 2018, recognised this problem years ago. The policy aims to ensure that public investment decisions are guided by reliable evidence, efficiency, and measurable development results.

The NEP outlines several key goals:

· strengthening evidence-based decision making,

· improving efficiency in resource utilisation,

· ensuring transparency and accountability in public expenditure,

· promoting learning from successes and failures of past projects, and

· creating a national culture of evaluation.

To operationalise the policy, the government introduced the National Evaluation Policy Implementation Framework (NEPIF) in 2023. This framework explicitly calls for the creation of integrated information systems capable of gathering and analyzing data across the project cycle—from planning and budgeting to implementation and evaluation. In fact, NEPIF specifically proposes the establishment of a web-based integrated public investment management and evaluation information system to store project data and evaluation reports.

Such a system would allow decision-makers to access reliable information quickly, improving accountability and policy planning. Unfortunately, despite the clarity of this vision, the digital infrastructure necessary to implement it at a national scale is still largely absent.

A revealing moment at a Colombo seminar

The urgency of this gap became strikingly clear at a recent seminar in Colombo organized by a national NGO. The organization demonstrated its cloud-based monitoring and evaluation system which was comprehensive and updated by multiple layers of personnel, to a group of university students. On a large screen, a dashboard displayed real-time information on the organization’s twenty development projects across the country. Each project appeared as a branch of a digital tree, connected to activities, budgets, locations, and beneficiaries. With a few clicks, staff could generate reports showing the status of any project at national, district, or local levels, both of data and graphics. Updated data was available up to the previous day.

What would normally take weeks of manual compilation could be done in less than a minute.

Among the audience was a university academic who observed something obvious but powerful. ‘If a small NGO can run a system like this,’ he asked, ‘why can’t the Government?’ Another participant responded and told that the non-introduction of a digitalized Monitoring and Evaluation mechanism was due to some bureaucrats’ resistance. ‘I heard the Evaluation Reports of several projects of the government was not published because the respective Project Managers had opposed, fearing their failure would be exposed’, another academic commented. Those comments deserve serious reflection on the situation, I believe.

The digital revolution in monitoring and evaluation

Around the world, governments are increasingly adopting digital monitoring and evaluation platforms to track public investments in real time. These systems combine several elements:

· project databases

· geospatial mapping

· financial monitoring tools

· citizen feedback mechanisms

· performance dashboards for decision-makers.

Countries such as Estonia, South Korea, Rwanda, and Chile have integrated such systems into national governance structures. In these systems, ministers and senior officials can see instantly:

· which projects are progressing

· which projects are delayed

· how funds are being spent

· whether outputs and outcomes are being achieved.

More importantly, such platforms enable early intervention. Problems can be identified before they become crises. For Sri Lanka, which must now manage scarce fiscal resources with extreme care, such tools are no longer optional luxuries.

They are necessities.

The cost of not knowing

The absence of integrated data systems carries real economic consequences. Public investment decisions affect everything from roads and irrigation schemes to hospitals and schools. When these investments fail or underperform, the cost is not merely financial. It affects the daily lives of citizens.

A hospital without doctors. An irrigation scheme without water. A school building without teachers.

These are not simply implementation failures; they are information failures.

Without reliable monitoring systems, governments often learn about problems too late. By the time corrective action is taken, budgets have been spent and opportunities lost.

The NEPIF recognises precisely this challenge. It emphasises that evaluation should be an integral part of the entire development cycle—from project design to implementation and feedback for future planning.

But such evaluation cannot occur without reliable data systems.

Building an evaluation culture

Another important goal of the National Evaluation Policy is to create a culture of evaluation within the public sector. This requires a shift in mindset. Evaluation should not be seen as a fault-finding exercise. Instead, it should function as a learning mechanism that helps improve policy design and implementation.

The NEPIF stresses that evaluation findings should inform planning, budgeting, and future project selection. However, without systematic information systems, evaluation results often remain scattered across reports that few decision-makers read. Digital platforms can transform this situation by making information visible, accessible, and actionable. They turn data into knowledge. And knowledge into better decisions.

What a national digital system could look like

Sri Lanka does not need to start from scratch. The institutional building blocks already exist:

· the Department of Project Management and Monitoring (DPPM)

· the National Evaluation Policy

· the National Evaluation Policy Implementation Framework

· various sector-specific monitoring systems across ministries.

What is missing is integration.

A national digital monitoring and evaluation platform could include:

1. A centralised project database:

All government development projects recorded with budgets, timelines, outputs, and implementing agencies.

2. Real-time progress dashboards:

Accessible to the President, Cabinet, ministry secretaries, and provincial administrators.

3. Geographic mapping:

Showing where projects are located and how they benefit communities.

4. Automated reporting:

Reducing paperwork and enabling faster decision-making.

5. Citizen transparency portals:

Allowing the public to see how public funds are used.

Such a system would dramatically strengthen transparency, accountability, and efficiency.

The opportunity before Sri Lanka

Sri Lanka today has a rare opportunity. Economic crises often force governments to rethink outdated systems. The country cannot afford inefficient public investments any longer. Every rupee spent must produce measurable results. The National Evaluation Policy and its implementation framework already provide the intellectual foundation for this transformation. What remains is political commitment. A bold decision to build the digital infrastructure of evidence-based governance.

A call to action

The President’s concern about the lack of reliable data in government is both accurate and urgent. But the solution does not require new policies. The policies already exist. What Sri Lanka needs now is implementation. A national digital monitoring and evaluation system would give policymakers something they currently lack: a clear, real-time picture of the country’s development efforts. Such a system would empower leaders to identify problems early, allocate resources wisely, save billions of rupees from wasting and ensure that development projects truly benefit citizens.

In short, it would give Sri Lanka what every modern state needs: a digital nervous system connecting policy, data, and decision-making. The question is no longer whether the country needs such a system.

The question is simply this: how soon Sri Lanka is willing to build it.

by Tilak W. Karunaratne

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Opinion

Tribute to a distinguished BOI leader

Published

2 days ago

on

2026/03/29

By

Mr. Tuli Cooray, former Deputy Director General of the Board of Investment of Sri Lanka (BOI) and former Secretary General of the Joint Apparel Association Forum (JAAF), passed away three months ago, leaving a distinguished legacy of public service and dedication to national economic development.

An alumnus of the University of Colombo, Mr. Cooray graduated with a Special Degree in Economics. He began his career as a Planning Officer at the Ministry of Plan Implementation and later served as an Assistant Director in the Ministry of Finance (Planning Division).

He subsequently joined the Greater Colombo Economic Commission (GCEC), where he rose from Manager to Senior Manager and later Director. During this period, he also served at the Treasury as an Assistant Director. With the transformation of the GCEC into the BOI, he was appointed Executive Director of the Investment Department and later elevated to the position of Deputy Director General.

In recognition of his vast experience and expertise, he was appointed Director General of the Budget Implementation and Policy Coordination Division at the Ministry of Finance and Planning. Following his retirement from government service, he continued to contribute to the national economy through his work with JAAF.

Mr. Cooray was widely respected as a seasoned professional with exceptional expertise in attracting foreign direct investment (FDI) and facilitating investor relations. His commitment, leadership, and humane qualities earned him the admiration and affection of colleagues across institutions.

He was also one of the pioneers of the BOI Past Officers’ Association, and his passing is deeply felt by its members. His demise has created a void that is difficult to fill, particularly within the BOI, where his contributions remain invaluable.

Mr. Cooray will be remembered not only for his professional excellence but also for his integrity, humility, and the lasting impact he made on those who had the privilege of working with him.

The BOI Past Officers’ Association

jagathcds@gmail.com

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Opinion

When elephants fight, it is the grass that suffers

Published

4 days ago

on

2026/03/27

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“As a small and open country, Singapore will always be vulnerable to what happens around us. As Lee Kuan Yew used to say: “when elephants fight, the grass suffers, but when elephants make love, the grass also suffers“. Therefore, we must be aware of what is happening around us, and prepare ourselves for changes and surprises.” – Prime Minister Lee Hsien Loong, during the debate on the President’s Address in Singapore Parliament on 16 May, 2018, commenting on the uncertain external environment during the first Trump Administration.

“When elephants fight, it is the grass that suffers”

is a well-known African proverb commonly used in geopolitics to describe smaller nations caught in the crossfire of conflicts between major powers. At the 1981 Commonwealth conference, when Tanzanian President Julius Nyerere quoted this Swahili proverb, the Prime Minister Lee Kuan Yew famously retorted, “When elephants make love, the grass suffers, too”. In other words, not only when big powers (such as the US, Russia, EU, China or India) clash, the surrounding “grass” (smaller nations) get “trampled” or suffer collateral damage but even when big powers collaborate or enter into friendly agreements, small nations can still be disadvantaged through unintended consequences of those deals. Since then, Singaporean leaders have often quoted this proverb to highlight the broader reality for smaller states, during great power rivalry and from their alliances. They did this to underline the need to prepare Singapore for challenges stemming from the uncertain external environment and to maintain high resilience against global crises.

Like Singapore, as a small and open country, Sri Lanka too is always vulnerable to what happens around us. Hence, we must be alert to what is happening around us, and be ready not only to face challenges but to explore opportunities.

When Elephants Fight

To begin with, President Trump’s “Operation Epic Fury”.

Did we prepare adequately for changes and surprises that could arise from the deteriorating situation in the Gulf region? For example, the impact the conflict has on the safety and welfare of Sri Lankans living in West Asia or on our petroleum and LNG imports. The situation in the Gulf remains fluid with potential for further escalation, with the possibility of a long-term conflict.

The region, which is the GCC, Iraq, Iran, Israel, Jordan, Syria and Azerbaijan (I believe exports to Azerbaijan are through Iran), accounts for slightly over $1 billion of our exports. The region is one of the most important markets for tea (US$546 million out of US$1,408 million in 2024. According to some estimates, this could even be higher). As we export mostly low-grown teas to these countries, the impact of the conflict on low-grown tea producers, who are mainly smallholders, would be extremely strong. Then there are other sectors like fruits and vegetables where the impact would be immediate, unless of course exporters manage to divert these perishable products to other markets. If the conflict continues for a few more weeks or months, managing these challenges will be a difficult task for the nation, not simply for the government. It is also necessary to remember the Russia – Ukraine war, now on to its fifth year, and its impact on Sri Lanka’s economy.

Mother of all bad timing

What is more unfortunate is that the Gulf conflict is occurring on top of an already intensifying global trade war. One observer called it the “mother of all bad timing”. The combination is deadly.

Early last year, when President Trump announced his intention to weaponise tariffs and use them as bargaining tools for his geopolitical goals, most observers anticipated that he would mainly use tariffs to limit imports from the countries with which the United States had large trade deficits: China, Mexico, Vietnam, the European Union, Japan and Canada. The main elephants, who export to the United States. But when reciprocal tariffs were declared on 2nd April, some of the highest reciprocal tariffs were on Saint Pierre and Miquelon (50%), a French territory off Canada with a population of 6000 people, and Lesotho (50%), one of the poorest countries in Southern Africa. Sri Lanka was hit with a 44% reciprocal tariff. In dollar terms, Sri Lanka’s goods trade deficit with the United States was very small (US$ 2.9 billion in 2025) when compared to those of China (US$ 295 billion in 2024) or Vietnam (US$ 123 billion in 2024).

Though the adverse impact of US additional ad valorem duty has substantially reduced due to the recent US Supreme Court decision on reciprocal tariffs, the turbulence in the US market would continue for the foreseeable future. The United States of America is the largest market for Sri Lanka and accounts for nearly 25% of our exports. Yet, Sri Lanka’s exports to the United States had remained almost stagnant (around the US $ 3 billion range) during the last ten years, due to the dilution of the competitive advantage of some of our main export products in that market. The continued instability in our largest market, where Sri Lanka is not very competitive, doesn’t bode well for Sri Lanka’s economy.

When Elephants Make Love

In rapidly shifting geopolitical environments, countries use proactive anticipatory diplomacy to minimise the adverse implications from possible disruptions and conflicts. Recently concluded Free Trade Agreement (FTA) negotiations between India and the EU (January 2026) and India and the UK (May 2025) are very good examples for such proactive diplomacy. These negotiations were formally launched in June 2007 and were on the back burner for many years. These were expedited as strategic responses to growing U.S. protectionism. Implementation of these agreements would commence during this year.

When negotiations for a free trade agreement between India and the European Union (which included the United Kingdom) were formally launched, anticipating far-reaching consequences of such an agreement on other developing countries, the Commonwealth Secretariat requested the University of Sussex to undertake a study on a possible implication of such an agreement on other low-income developing countries. The authors of that study had considered the impact of an EU–India Free Trade Agreement on the trade of excluded countries and had underlined, “The SAARC countries are, by a long way, the most vulnerable to negative impacts from the FTA. Their exports are more similar to India’s…. Bangladesh is most exposed in the EU market, followed by Pakistan and Sri Lanka.”

So, now these agreements are finalised; what will be the implications of these FTAs between India and the UK and the EU on Sri Lanka? According to available information, the FTA will be a game-changer for the Indian apparel exporters, as it would provide a nearly ten per cent tariff advantage to them. That would level the playing field for India, vis-à-vis their regional competitors. As a result, apparel exports from India to the UK and the EU are projected to increase significantly by 2030. As the sizes of the EU’s and the UK’s apparel markets are not going to expand proportionately, these growths need to come from the market shares of other main exporters like Sri Lanka.

So, “also, when elephants make love, the grass suffers.”

Impact on Sri Lanka

As a small, export dependent country with limited product and market diversification, Sri Lanka will always be vulnerable to what happens in our main markets. Therefore, we must be aware of what is happening in those markets, and prepare ourselves to face the challenges proactively. Today, amid intense geopolitical conflicts, tensions and tariff shifts, countries adopt high agility and strategic planning. If we look at what our neighbours have been doing in London, Brussels and Tokyo, we can learn some lessons on how to navigate through these turbulences.

(The writer is a retired public servant and can be reached at senadhiragomi@gmail.com)

by Gomi Senadhira

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