Connect with us

Features

Economic crisis and possible way out

Published

on

By Dr. Wijeyadasa Rajapakshe,

President’s Counsel, Member of Parliament

Sri Lanka has been positioned in the third place of the weekly global inflation dashboard by John Hopkins University (US), above Turkey, Sudan and Venezuela as at 21st April 2022. As measured by the US university, inflation is as high as 119% a year. It surged to 30% in April. As for food items and medicine, the inflation is over 50%. Our total public debt has increased up to 100 % of the GDP whereas it remained as 25% in the year 1960. Our per capita income was USD 200 in 1960, but now it has reached closer to middle income country. Devaluation has caused an abysmal gap between the rupee and dollar.

Sri Lankan debt was 86.8% of the GDP in 2019, but now it has reached approximately 109% (2021). External debt has increased to US $ 51 billion. External debt as of export earning has risen to 350% in 2019. During the last two years, the value of imports has been 100% more than that of exports. Now, we are facing a massive debt and fiscal crisis and experiencing diminished liquidity and insolvency. In March, the rupee depreciated by over 40%. Foreign exchange reserves virtually remain at zero. Projected debt service stands at USD 8 billion per annum from 2022 -2026. The economy cannot take this kind of pressure.

The Sri Lankan economic crisis is not limited to the economic front; it began as a result of a political crisis, which had been simmering for the last one and a half decade. The outlook shows that the monetary authorities are struggling to stabilise the economy without much support from the citizenry due the mounting anger against corrupt rulers and officials of the Central Bank and the Treasury. A family oligarchy has made the public resentful. It is important to identify the reasons which led to the current economic crisis:

1.    Sri Lanka’s foreign debt has risen up to USD 51 billion including USD 3.38 billion from China and it amounts to 10% of total debt liabilities. The amount spent by Chinese lenders on BRI (Belt and Road Initiative) projects is USD 11 billion. Borrowing at commercial lending rate from China for projects is not sustainable as most of the projects are white elephants, e. g. the Hambantota Port, the Mattala Airport, and the Lotus Tower.

2. Shady deals of the government in obtaining foreign loans for projects such as expressways and awarding contracts.

3.Imprudent and immature monetary policy adopted by the Governors of the Central Bank during the last 15 years and most of the transactions are ostensibly corrupt and disadvantageous to the country, e. g. sovereign bond issues, hedging deal, the purchase of Greek bonds, etc. Maladministration and dishonest conduct of the Central Bank have led to devaluation of the rupee. The appointment of unqualified henchmen as Governors was the reason.

4. Tax concessions to high-income earners in 2020 amounting to Rs. 600-650 billion per annum at a loss of revenue equivalent to USD 7 billion during the last two years at the then exchange rates.

5. The ill-conceived, irresponsible decision to ban agrochemicals has caused an approximately 40-50% drop in the national agricultural output, especially paddy harvest.

6. Appointment of mediocre MPs as minister to handle vital sectors such as Finance, Power and Energy, Education, Health, Highway, etc.

Similarly, appointments of unqualified and dishonest henchmen to the institutions vital to the economic development had aggravated the present crisis.

7. Failure of monetary authorities to seek IMF assistance immediately after realising that the economy was heading for crisis in early 2021.

8.Excessive money printing

9.Disorganised and unproductive public service, which has become a burden on the economy

The economy has to be revived to meet the basic needs of the populace. The government has sought assistance from friendly countries, mainly India and China, but geo-political conflicts have become obstacles to a certain extent although substantial assistance has been given. Now, the government has finally sought the assistance of the IMF, which has already supported Sri Lanka 16 times earlier.

Although we have secured IMF assistance and many other monetary agencies, our agricultural and industrial sectors have been gradually dwarfed by the ever-expanding service sector. The contribution of different sectors to the GDP is as follows:

Agriculture 8.3%

Industries 26.2%

Services 59.6%

Due to its heavy dependence on the service sector, the economy is susceptible to adverse global situations.

Corruption prevalent among politicians and bureaucrats has plunged the country into chaos. Reforms and strategies that we are in need of urgently are short-term and long-term.

Short-term measures

1.Political stability is the key factor to resolve both the prevailing social uprising and the economic crisis. Fiscal discipline. Unless the government can convince the general public that it is free of corruption and engages in transactions in a transparent manner, it may not be able to achieve political stability.

2. Increase of interest rates. (Already done)

3.  The immediate steps to have a moratorium on debt, and a debt restructuring programme with the assistance of the IMF shall be the prioritised task of the authorities. International Sovereign Bonds is the major share of debt which amounts to 36% of the total and ADB multilateral debt is the second highest, amounting to 14%.

Management of debt liabilities both foreign and domestic shall include the following:

a) Moratorium on debt service (Already done).

b) Renegotiate and restructure loan and interest components.

c) Renewal and extension of SWAP arrangements,

d) Setting off part of the loans obtained at commercial interest rates for projects that do not make a significant contribution to the economy.

4. Complete ban on import of non-essential items for a limited period. Although authorities have announced such a policy, it is apparent that the importers having close links with the powerful politicians do display such items for sale.

5. Reducing the deficit of the balance of trade is extremely urgent. Laws alone will not help tackle this problem; generous support from businesses and expatriates is called for.

6. The eradication of money transfer schemes such as hawala and undial which have been adopted by the importers as well as the exporters to bypass the established banking system, the result being that the Banks do not receive dollars and the rupee depreciates.

7.                Sri Lankan migrants also resorted to such informal methods of money transactions instead of sending their remittances through banks. Some of such intermediaries are directly linked to drug dealers engaged in money laundering.

8.                Monetary authorities also should draw their attention to the fact that some migrants do not send their remittances to the country in protest against the current rulers, who are corrupt. Although the country was receiving around USD 600 million monthly from expatriates earlier, it now receives only about USD 250 million a month. This needs to be addressed as an extremely urgent matter to resolve the deficit of the balance of trade.

9.                Immediate tax reform measures to be taken to impose direct taxes on high income earners as was the case before 2019.

10.            Delay the capital expenditure on projects, more prudently by presenting a new budget to tackle the economic crisis.

Long-term measures

1.                Encourage export-oriented products by extending tax concessions and providing infrastructure facilities.

2.                Value addition to exports

3.                                        Adoption of a national policy to take measures to increase the agriculture sector contribution to GDP from 8.3% up to 14% and industrial sector contribution from 26.2% to 34% (approximately) in five years.

4.                Restructuring of major loss-making State institutions.

a)               Ceylon Electricity Board has recorded a loss of Rs. 308 billion up to 2020.

b)               Sri Lankan Airline has recorded a loss of Rs. 374 billion up to Feb. 2021.

c)                Sri Lanka Railway Dept has recorded a loss of Rs. 331 billion up to 2020.

5.                Restructuring of the public sector to ensure its sustainability and contribution to the national economy.

6.                The establishment of development banks for sustainable development of agriculture and industrial sectors. At the commencement of the state-owned Bank of Ceylon and People’s Bank, the state was aiming to achieve the goals of industrial and agricultural sectors and it attained its goals, but after the introduction of liberal economy, those two banks also started making profits, forgetting the purpose for which they were established.

7.                The curtailment of the budget deficit. Budget deficit increased up to 11.1% in 2020, whereas it was 5.5% in 2017, which is indicative of weak financing management.

8.                The adoption of stringent procedure as regards appointments to all state-run institutions and to ensure that appointees have met the minimum qualifications stipulated.

9.                Either amending the Assets and Liabilities Declaration Act or enacting a new law to ensure that transactions of politicians, official and government contractors are monitored to ensure their transparency.

10.            Making anti-bribery laws applicable to the private sector as well.

1. 11.            Restructuring of the Sri Lanka Customs.  It is apparent that a substantial amount due to the treasury from the Custom is not credited due to variety of reasons.



Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Features

Combining local resources,traditional knowledge and science to build a food-secure Sri Lanka

Published

on

World Food Day 2026: Innovating today for a better food future

by Dr. Kaushalya Wijayasekara

What will be on the Sri Lankan dinner table ten years from now? Will our children be able to get nutritious food at a price their families can afford? Will farmers be able to grow enough despite changing weather and rising costs? And how much of the food we produce will actually reach the consumer, instead of being lost or wasted along the way?

These questions can’t wait. A farmer faces unpredictable weather. A family faces rising food costs. Fruit goes unsold after a good harvest. Some children do not get enough nutrition. The future of food is tied to the future of Sri Lanka itself.

World Food Day 2026 is a chance to look beyond the immediate problems and ask whether we can build a food system that feeds our people well, gives farmers better opportunities, protects the environment and makes better use of what we already have. The answer can be yes, but we will have to think differently.

We are not starting from zero. Sri Lanka has diverse crops, fisheries, traditional food knowledge, indigenous varieties, research institutions, universities and a young generation able to create new solutions. What we need is to bring these together and act. Producing more will not secure our food future on its own. It will depend on how intelligently we produce, process, preserve, distribute and consume food.

Making more of what we already have

Innovation does not always mean inventing something new. Often it means finding better uses for the resources we have.

Sri Lanka grows traditional rice varieties, kurakkan, green gram, cowpea, jackfruit, breadfruit, cassava, sweet potato, coconut and palmyrah. All of them have great potential for modern, nutritious, value-added foods. Jackfruit and breadfruit can be made into flour and other convenient products. Traditional rice varieties can go into new foods that suit changing consumer needs. Palmyrah, with its strong cultural heritage, can create new income through better processing, packaging, quality assurance and market development.

The aim is to connect our traditional food knowledge with modern consumer needs and technology, while keeping our food heritage.

Stop wasting the food we produce

Reducing food loss and waste should be a major priority. Seasonal fruits such as mango, banana, papaya and pineapple can be lost in large quantities when production exceeds demand or when storage, transport and processing facilities are inadequate. With suitable technology, these fruits can become dried products, pulps, powders, beverages and other shelf-stable foods.

Agricultural and fisheries by-products are resources too. They could be turned into food ingredients, animal feed, bio-based products and other useful materials, which would move us toward a more circular food economy.

Technology alone is not enough. We need stronger local processing facilities, cold storage, efficient transport, collection centres and market information systems, especially close to where food is produced. Cutting food loss raises the value of what our farmers and fishers already produce.

Nutrition and food safety come first

Food security means more than having enough food. People also need food that is safe and nutritious.

Sri Lanka can develop affordable, nutritious foods from local pulses, grains, vegetables, fruits and fish. Children and other vulnerable groups should get particular attention. Schoolchildren in particular deserve a focus: safe, nutritious, locally sourced products for school feeding programs would support child nutrition, local farmers and domestic food industries at the same time.

Food safety must stay at the centre of food innovation. Good hygiene, quality control, laboratory testing, traceability and appropriate food safety systems are what make new products safe as well as attractive and nutritious.

A food system that can cope with climate change

Climate change is already affecting agricultural production, water availability, crop yields and food prices. We need food systems that can handle changing conditions. That means climate-resilient crops, efficient water use, soil and water conservation, better storage and resource-efficient food processing.

Traditional knowledge matters here. Generations of Sri Lankan farmers have developed practices suited to local climates and ecosystems. Combining that experience with modern science can give us solutions that fit local conditions and are sustainable. Technology alone will not build the future of food. Science, experience and local knowledge together can.

Give young people a bigger role

Sri Lanka’s universities have an important part to play in shaping our food future. Young people should be encouraged to identify real problems in the food system and work on practical solutions in areas such as food waste, sustainable packaging, nutrition, food safety, modernising traditional foods and digital technologies.

A good research project should not always end as a research paper. Where appropriate, research should be supported to move on to products, technologies, enterprises and community solutions. That needs stronger partnerships between universities and industry, along with mentoring, research funding, business support and market connections. If young researchers and entrepreneurs can turn their ideas into viable food innovations, both consumers and producers will benefit.

A pathway designed for Sri Lanka

We do not need to copy food-system models from other countries. We can build a pathway that suits our own resources, culture and needs. It would bring together local resources, traditional knowledge, scientific research, appropriate technology and entrepreneurship, with farmers, fishers, universities, research institutions, food industries, entrepreneurs and policymakers working side by side.

The goal goes beyond selling raw materials. We need to create more value, reduce waste, improve nutrition, generate jobs and strengthen rural livelihoods. This matters especially for small and medium-scale food enterprises, which can drive local economic development when they get the right technical, financial and market support.

The choices we make today

The food future will not create itself. It will be shaped by what we grow, what we research, what we process, what we consume and what we choose not to waste.

So, the question for World Food Day 2026 is this: what can we do today so that every Sri Lankan has safe, nutritious, affordable and sustainable food tomorrow?

The answers are already around us, in our farms, fisheries, food businesses, universities, laboratories and communities. We have the resources, the traditional knowledge, the scientific expertise and talented young people. What we need now is to connect them and act.

A better food future begins with the choices we make today.

Dr. Kaushalya Wijayasekara

Senior Lecturer, Department of Biosystems Technology, Faculty of Technology, University of Ruhuna

Continue Reading

Features

20th Anniversary of Digampathana blast – the day Sri Lanka Navy cried

Published

on

Aftermath of the terror attack

By Admiral Ravindra C Wijegunaratne
WV, RWP and Bar, RSP, VSV, USP, NI (M) (Pakistan), ndc, psn, Bsc
(Hons) (War Studies) (Karachi) MPhil (Madras)
Former Navy Commander and Former Chief of Defence Staff
Former Chairman, Trincomalee Petroleum Terminals Ltd
Former Managing Director Ceylon Petroleum Corporation
Former High Commissioner to Pakistan

The Digampathana suicide truck attack on 16th October 2006 remains the deadliest single strike in Sri Lanka Navy history, leaving scars that time cannot erase.

It was a seemingly ordinary Monday morning on 16 October 2006, but the calm of that day would soon be shattered in a way none of us could have imagined. As the Commandant of the Naval and Maritime Academy and Flag Officer Commanding Naval Fleet at Trincomalee, I was aware that a number of my cadets were travelling that morning, part of a convoy of fifteen buses carrying naval personnel from Trincomalee, Colombo, and other bases, heading toward Dambulla to rendezvous with another group. The convoy also included trucks and escort vehicles, a routine movement planned and coordinated with the army to ensure the roads were clear. The morning started quietly. Some personnel greeted friends, handed over their weapons, or strolled to a nearby tea shop. It all seemed so ordinary—too ordinary for what would come next.

Sri Lanka Navy sunk LTTE Ships carrying arms, ammunition and warlike materials thousand miles away from Sri Lanka in Indian Ocean in September and October 2007.

By late morning, both convoys had reached the small ground at Digampathana, near the Sigiriya junction, and personnel mingled briefly, unaware that a carefully orchestrated act of terror was waiting. Then, suddenly, an empty half-truck veered directly into the convoy. It exploded with a ferocity I can still recall as if it were yesterday. Nuts, bolts, and high explosives tore through the air. Pandemonium erupted instantly. I later learned that 107 of our naval personnel were killed on the spot and another 153 critically injured. The scene was indescribable—bodies scattered, vehicles mangled, personal effects strewn across the ground. I remember later hearing that the head of the suicide bomber was recovered more than 100 meters away from the blast, a grim testament to the sheer force of the explosion.

I was in my office at the Naval and Maritime Academy when my mobile phone rang. A young midshipman from the 21st intake called, his voice trembling: “Sir, there was a huge explosion at the convoy point! Many are dead … my batch mate Wijesundara is among them.” I immediately jumped into my jeep with my escort Chief Petty Officer and driver and rushed to Digampathana, relying on every ounce of my driving skill to reach the scene. The journey, which usually took little more than an hour, felt endless that day, each passing mile weighed down by dread.

When I arrived, I was confronted with a sight that no training can prepare you for. The injured were being rushed to Dambulla Hospital, where doctors and nurses worked tirelessly, improvising in ways that saved lives despite the overwhelming chaos. I went back to the site after visiting the hospital. The remains of our naval personnel were scattered across the ground, and someone had begun collecting weapons and protective gear. I immediately contacted Surgeon Rear Admiral Nico Jayasekara and received his instructions: collect all body parts in separate bags and transport them to the Trincomalee Naval Hospital mortuary. This gruesome work had to be done with care and dignity, and it filled the icebox in my vehicle. Through DNA testing initiated by Rear Admiral Nico, we were able to identify every naval personnel lost that day, bringing some closure to grieving families.

The Navy Commander at the time, Vice Admiral Wasantha Karannagoda, was devastated. I had worked closely with him and knew how deeply he cared for his men. He ensured that the fallen were honoured with full ceremonial naval funerals at Welisara Naval Base, attended by families and comrades. Sixty-seven funerals were conducted in a single day—a number that still haunts me.

The Digampathana attack remains the largest single loss of naval life in our history. It was a day of sorrow, but also a day that reinforced our resolve. The tragedy galvanized the Navy to target the LTTE Sea Tiger wing with renewed determination and reshaped our maritime operations forever. Every time I think of that day, I remember not just the lives lost, but the courage, professionalism, and dedication of those who survived, those who treated the injured, and those who ensured the fallen were honored properly. May the souls of our naval hero’s rest in peace, their sacrifice guiding us and inspiring generations of naval personnel to come.

Continue Reading

Features

‘Murder at Whitby Abbey’

Published

on

Tales of Mystery and Suspense – 24

I was intrigued by the title of a book I found in a book drop at the condominium of a friend, Murder at Whitby Abbey, and I brought it home with me though I will not be able to return it in the near future. It was described on the cover page as ‘a standout in the crowded medieval mystery field’, though I fear I do not know of other books in this field, apart from the Cadfael series, which I have dealt with earlier.

The book, by Cassandra Clark, is set during the reign of Richard II and has as a backdrop his precarious position, which led to his being replaced, and murdered, by his cousin Henry, who reigned as Henry IV. It is a gloomy book, the action taking place in the twelve days of Christmas leading up to the Epiphany. And the gloom is pervasive, even though this is supposed to be a time of festivity, with mummers performing, and many of those in the guest house where the heroine stays going to town to enjoy themselves, with much drinking and much music, which also fills the guesthouse.

The heroine Hildegarde is a nun, sent to try to acquire a relic being sold by Whitby Abbey, though this was also a penance set by the Abbot of the monastery that governed her abbess because she had had sex with a man. Soon after she and her companions reach the Abbey set high on a cliff, she finds that there are other bidders, and soon suspects that the hierarchy, not perhaps the Abbot who seems a weakling, but his rapacious bursar, is determined to make money, and not above creating false relics to sell to several aspirants.

After Hildegarde and her Cistercian companions – Whitby is a Benedictine Foundation – two monks, Gregory and Egbert, and a young priest Mark, reach the abbey, they find that Aelwyn, a monk they had met on their way to the guesthouse had died. This was in the apple store, and they realize, when they find the surplices of novices stuffed into the air vents, that he had been left to suffocate in the overwhelming scent of apples.

Clark

The Cistercians are asked to look into the death, perhaps because they are likely to get no cooperation from the Abbey folk, but perhaps because those in charge are keen to know what happened. And the infirmarer, an old monk, suggests Hildegarde talk to a man called Edred who worked for the bursar, and had been a friend of Aelwyn’s. But Edred too is killed, before he can keep an appointment he had made with Hildegarde, drowned in a pool near the farmhouse of the Abbey.

Meanwhile tensions arise between the fisherfolk and the abbey for the bursar wants to charge them for using the beach that technically belongs to the abbey to dry their fish and their nets. This leads to physical battles, when the guards used by the abbey, under the command it seems of the bursar whose determination to make money is not resisted by the abbot and the prior, try to storm the area where the fishermen live.

Hildegard finds out more about what had happened through two youngsters, one of whom Torold is the son of Aelwyn by a woman who worked as a prostitute for a cartel, and with whom Mark fell in love. The other works on the farm and had seen Edred meet someone near the pool, after which that someone left the place by himself. And the boy had also found in the pool a sort of dagger with the seal of the abbey.

He and his dog, and Torold who follows her, rescue Hildegarde from a man at arms who has waylaid her and tries to rape her earlier. Escaping into the abbey she was nearly been raped then by the bursar, but she managed to escape, in the process setting fire to him and the muniments room, which led, when he was rescued, to the discovery of a box with the money he said had been stolen, blame being cast on both Aelwyn and Edred.

Matters come to a head when the fisherfolk try to storm the abbey, being resisted by the men at arms stationed on the towers. But then Hildegarde realizes that behind the murders was the bursar’s clerk, whom she pursued to the cathedral. There is great drama then as she escapes from him when he tries to kill her, and then from the man at arms who had tried to both rape and kill her, but they both fall from the scaffolding she had climbed, the latter coming from a tower where he had been stationed.

Both of them think they run the rapacity of the abbey, the latter claiming to work for the nobles opposed to Richard, who is presented throughout the book as devoted to his subjects, not to power or money. But though the villains die, the bursar continues, having got over the hysteria the fire had caused and his acknowledgment then of guilt – and though the abbot and the prior seem less vicious, whether they will be able to assert themselves is questionable.

Before the climax, when the others in the guesthouse were leaving, Hildegarde found that two of them were in possession of the relic, for which they seem to have paid well. Hildegarde herself had made a derisory offer, but before she leaves the abbot gives her the relic, perhaps in gratitude for what she and her fellow Cistercians had discovered, the abbey having made as much money as it needed and more from the gullible other buyers.

Mark’s inamorata is saved from the stews because she moves in with Edred’s widow whom the bursar had thrown out of the rooms he occupied when her husband was found dead. Hildegarde had paid for lodgings, in a house run by the man who ran the brothels, but he had a kindly side and was going to finance them to make nets for the fishermen.

So, the Cistercians set off for their home as swiftly as they can to get there on the day of the Epiphany, having stopped en route to pray for King Richard whose birthday it was.

Continue Reading

Trending