Opinion
Ganja: Failed industry targets Sri Lanka
Despite Billion Dollar losses in the West they are promising us Billions!
by Dr. Dineth Bandara
The Jackals are closing in. The bait is set. The ganja farce is hotting up. The drama we are watching makes one wonder if there already is a surreptitious agreement between a section of politicians and officials, and the ganja business. The business in suits and ties, not the sarong-clad ganja cultivators hauled regularly before courts.
Public pronouncements on ganja have been made by a few deluded “Honourable” Members of Parliament. These utterances seem to confirm that the government is seriously considering allowing multinational ganja corporations to cultivate ganja in thousands of acres in Sri Lanka. The deluded few have swallowed the bait. The bait that Sri Lanka can settle a substantial amount of her foreign debt easily by selling ganja (hemp) oil to the world.
This time around, ganja comes with a veneer of sophistication, ostensibly to supply posh markets in the West. This is supposed to bring billions to the national economy. Whichever way one washes it, ganja is ganja, be it grown by those in business suits or proletariats. The only difference is that the harmful chemicals being higher in the business variety. There is nothing “desheeya” about it.
The posh ganja pushers with impressive sounding qualifications and mesmerizing presentations will not tell that world prices of ganja oil has fallen down a precipice within a short period. The prices of ganja oil have collapsed by over seventy five percent since 2019. Their fancy looking and awe-inspiring forecasts totally hides this.
Many companies that got into the into the ganja business have taken a huge hit. The largest ganja traders in the world has reported a billion dollar losses this year. This is in addition to their share values collapsing by over 10 billion US dollars last year. They are not in a position to repay their own debts. The ganja peddlers in suits are hurt and desperate. So are the tobacco and alcohol industries that have heavily invested in these companies.
Therefore, there is no surprise that they are looking to expand the markets elsewhere, even working through trade sections of Embassies. Their immediate objective will be the relaxation of the laws and getting a foothold in as many countries as possible.
If ganja oil is liquid gold, why have the prices collapsed? It is because many countries (and businesses) fell in the same trap. It is like someone opening “bath (rice) kadey” and doing good business. Seeing this, two others will also open shop in the same area, collapsing all three businesses.
Ganja oil prices dropped drastically because there is a severe oversupply. Countries with larger areas of land and cheaper labour have got into the business, perhaps fooled by the same economic hit-men that are coming to Sri Lanka. Any mildly competent business analyst, economist or policy maker should spot this blind-folded.
So, in the end, we will end up with a pittance in dollars, after giving thousands of acres to foreign businesses that will exploit our labour. Along the line, they will keep lobbying in more than one way to open up the domestic market, in micro steps.
There is a range of ganja products in the line already to prime any population. Drinks, chocolates, toffees, cosmetics, hair conditioners, tea, butter and even pet products are among these. However, the real target and the most lucrative product that all such companies wish to market is ganja cigarettes, or smoking products. This is marketed in some countries already.
It seems that some very small sections of the Ayurvedic professionals, are being unknowingly used by the ganja trade. They too are asking for the same – relaxation of laws on ganja cultivation. If they look at this more carefully they too may lose after all. It is possible that the market for some Ayurvedic medications will disappear, if the laws on ganja cultivation is relaxed. Why should one pay for such medicine when one can grow it free of charge, at home?
Hopefully, the more perceptive politicians and government officials are aware that thousands of acres of “protected” ganja plantations is nothing but a mirage in Sri Lanka. We were all treated to the spectacle of heroin and other drugs being sold by none other than those linked to Sri Lanka Police, Department of Excise and even the Government Analysts Department.
It is also hoped that those governing us realize that the widespread social and economic misery caused to Sri Lanka even now by ganja will increase, even if a miniscule amount of the high-yielding varieties which will be grown in these thousands of acres will leak out.
In Sinhala, there is a colourful and insightful saying about petting stray snakes, which all of us are familiar with. In countries where ganja was made legal, ganja related road traffic accidents and deaths have increased significantly. Ganja also significantly increases severe mental illnesses in young people and also increases suicides.
We lose billions of rupees and thousands of lives each year due to road traffic accidents. More than 80,000 and Sri Lankans are admitted to hospitals each year due to self-harm. It is doubtful that any sane government will want adding such misery to thousands of more families.
The ganja pushers will not look for relaxation of laws on use of ganja right now. This industry, primed by shrewd and ruthless strategies and the killer instinct of the tobacco industry, will first look for a foothold in Sri Lanka through a slight relaxation of laws and the control of large tracts of land.
They will then work relentlessly over the years until their objective of opening the domestic market for ganja products is achieved. This may even be 10 years down the line. It would be a walk in the park for these traders in countries like ours, considering the huge amount of resources that is available to them.
This is why Sri Lanka should be wary of Greeks bearing gifts. They will promise billions of dollars to the country, which they cannot and will not deliver. Those pretending to be the guardians of Sri Lanka, sitting in the middle of Diyawanna should use their brain cells on this one.
We should not let lighting strike the beggar’s bowl. Unless all of us are alert, we will be in the same position that China ended up after the Opium Wars. All Sri Lankans should hope and pray that “The Vistas of Prosperity and Splendour” will not be seen through a haze of ganja smoke.
Opinion
Sri Lanka’s national security: Justice, reconciliation, and forward-looking vigilance
Sri Lanka stands at a defining juncture where the pursuit of accountability for the 2019 Easter Sunday bombings intersects with fragile economic recovery, communal sensitivities, and renewed demands for political devolution. The arrest of former State Intelligence Service chief Retired Major General Suresh Sallay in February 2026, and subsequent high-level statements linking him to directing aspects of the attacks that killed 279 people, mark a significant escalation in the investigation. Actions such as the impounding of passports of key figures, including former President Gotabaya Rajapaksa and Defence Ministry Intelligence officers, signal seriousness. Yet the process risks being derailed by partisan politics, social media manipulation, and selective narratives. True national security demands that this remains a forensic, evidence-based exercise rather than a political spectacle.
The visible participation of Muslim communities in demanding justice for the victims while articulating long-suppressed grievances represents one of the most important developments. Many within the community are increasingly recognising that they were subjected to a calculated, gradual anti-Muslim agenda in the aftermath of the attacks, one that collectively stigmatised an entire faith group, portrayed them as inherent extremists, and created fertile ground for the radicalisation of vulnerable youth. This manufactured climate of suspicion and marginalisation did not enhance security; it damaged social cohesion and inadvertently aided the very extremist narratives it claimed to counter.
The current government’s handling of the Easter investigations appears to be fostering cautious but noticeable confidence among sections of the Muslim community. When investigations target individuals based on evidence rather than community affiliation, and when senior figures from previous regimes face scrutiny without fear or favour, it sends a powerful message that the state is capable of impartial justice.
This emerging trust is a vital asset in the broader battle against radicalisation. It must be nurtured through consistent, transparent action rather than undermined by political grandstanding or social media campaigns that seek to reignite old fault lines. The Catholic Church’s measured support for the process while insisting on its integrity offers a constructive template that political actors and online platforms would do well to follow.
Parallel to these developments, another significant demand has resurfaced with renewed vigour: calls from the Tamil community, the diaspora, and sections of the international community for the holding of long-overdue provincial council elections. This is not a peripheral governance issue; it is intrinsically linked to national security, reconciliation, and the prevention of future instability in the North and East. Prolonged delays in devolution fuel perceptions of centralised neglect, provide ammunition for external actors seeking to internationalise domestic matters, and risk allowing legitimate grievances to be exploited by fringe elements.
Conducting credible provincial elections would demonstrate the government’s commitment to democratic decentralisation, strengthen local legitimacy, and reduce the space for both domestic radicalisation and foreign interference. Conversely, further postponement risks turning a constitutional requirement into another source of communal tension and international pressure.
The government must therefore treat these calls with strategic seriousness rather than tactical delay. Provincial council elections, conducted fairly and on schedule, can serve as a confidence-building measure that complements the pursuit of justice in the Easter case. Both processes, accountability for past security failures and meaningful devolution, are essential components of a holistic approach to preventing the recurrence of violence, whether from Islamist extremism, ethno-nationalist mobilisation, or hybrid threats amplified through social media.
Economic constraints continue to form the underlying substrate of national vulnerability. While the current administration has maintained a degree of macroeconomic stabilisation under the IMF programme, poverty levels remain elevated, youth unemployment is a persistent concern, and investor sentiment is sensitive to political noise. High-profile investigations that are perceived as selective or politically motivated will deter the very Foreign Direct Investment the country needs to generate sustainable growth and employment. Security and economic resilience are mutually reinforcing; prolonged political turbulence or loss of institutional credibility directly undermines the ability to attract capital and create opportunities that reduce the appeal of extremist ideologies.
On the geopolitical front, the recent visit of General Kevin Schneider, Commander of the United States Pacific Air Forces, for the Indo-Pacific Safety Air Forces Exchange, and US Assistant Secretary of State for South and Central Asian Affairs S. Paul Kapur, who arrived in the island on an official visit, met with the President. Newsfirst.lk highlights both opportunity and the need for careful navigation. Discussions on maritime domain awareness, cybersecurity, and disaster response offer tangible avenues for capacity enhancement. At the same time, Sri Lanka must maintain a balanced engagement with India and China while monitoring broader regional dynamics, including Pakistan’s active mediation role in the US-Iran talks underway in Switzerland. These developments underscore the interconnected nature of Indian Ocean security and the importance of professional intelligence assessments that transcend partisan domestic agendas.
Drug trafficking remains a persistent and serious national security threat. Despite consistent detections at arrival points, particularly at Bandaranaike International Airport (BIA), and within the country, attempts to smuggle narcotics continue unabated. These detections clearly demonstrate that the menace is far from over: demand persists and supply networks remain active. The State Intelligence Service has played a pivotal role in several major detections through its strategic networks and effective fusion of intelligence, enabling more qualitative and targeted operations. However, the operational environment at BIA arrival terminals becomes highly complicated when multiple aircraft land simultaneously.
Many passengers proceed through the “nothing to declare” channel, while customs officers conduct random checks that often create complications for both travellers and enforcement personnel. It would be prudent for authorities to undertake a comparative study of the number of random checks conducted against the number of successful detections achieved, in order to objectively evaluate the effectiveness of this approach. The optimal strategy lies in combining modern technology with intelligence-led operations. In parallel, a sustained public awareness campaign should be launched among travellers, strongly discouraging them from carrying baggage belonging to others, whether known or unknown persons.

Perhaps, the most under-appreciated dimension of contemporary national security is the rise of non-traditional threats. The recurring effects of El Niño and broader climate variability, erratic monsoons, agricultural stress, water scarcity, and potential displacement, carry direct implications for social stability and resource competition. The persistent challenge of Dengue outbreaks further strains state capacity and public health resilience. These are not peripheral issues for intelligence agencies; they are core components of a modern threat landscape that includes hybrid warfare, disinformation campaigns, and climate-induced instability.
National intelligence agencies must expand their analytical frameworks beyond traditional kinetic threats to integrate climate intelligence, health security indicators, and the monitoring of disinformation campaigns that exploit economic hardship or communal grievances. The Easter Sunday tragedy was itself a catastrophic failure of intelligence coordination and threat assessment. Repeating such blind spots in an era of hybrid and non-traditional risks would be inexcusable.
The professional intelligence community has a clear duty at this moment. Its role is to provide objective, evidence-based assessments to the state, insulated from political pressure and focused on protecting the nation rather than serving transient interests. This requires rigorous focus on the actual threat picture: monitoring attempts to exploit the Easter investigations for divisive ends, tracking foreign influence operations, assessing the intersection of economic distress with radicalisation pathways, and integrating climate and health stressors into strategic warning. Inter-agency coordination, professional training, and institutional autonomy are not optional luxuries; they are prerequisites for credible national security.
Sri Lanka cannot afford another cycle in which legitimate demands for justice and devolution are hijacked by partisan actors or amplified into communal polarisation by social media. The emerging recognition within the Muslim community that past anti-Muslim campaigns contributed to radicalisation, coupled with tentative confidence in the current government’s approach, represents a narrow but valuable window. Similarly, addressing the long-standing call for provincial council elections offers a pathway to strengthen democratic legitimacy and reduce external leverage points. Both require the government to demonstrate consistency, transparency, and strategic vision.
Conclusion
Sri Lanka’s national security will not be secured by half-measures or political expediency. The time has come for decisive, professional, and coordinated action across all fronts. The pursuit of justice in the Easter Sunday investigations must remain evidence-driven and impartial, not a tool for partisan score-settling. Meaningful devolution through timely provincial council elections and the full implementation of the 13th Amendment within the unitary framework must be delivered without further delay, as unresolved grievances remain fertile ground for division and external interference.
Drug trafficking and other hybrid threats demand the immediate fusion of modern technology with superior intelligence-led operations, supported by robust public awareness campaigns. Non-traditional threats such as climate-induced instability and public health risks must be elevated to the core of national security planning.
True national security is built on institutional integrity, social cohesion, economic resilience, and strategic foresight. Sri Lanka has paid an unbearably high price in the past for allowing political calculations and institutional failures to override professional security management. The current moment offers a rare opportunity to break that destructive cycle. The government, intelligence community, political parties, religious and community leaders, and all stakeholders must rise above narrow interests. They must choose evidence over expediency, unity over division, and long-term national interest over short-term political gain. Anything less would be a betrayal of the sacrifices made and the future that belongs to the next generation. The choice is clear, and the time to act with courage and clarity is now.
Mahil Dole, SSP (Retired), is fthe former Head of the Counter-Terrorism Division of the State Intelligence Service of Sri Lanka, and has served as Head of the Sri Lankan Delegation at three BIMSTEC Security Conferences. With over 40 years of experience in policing and intelligence, he writes on regional security, interfaith relations, and geopolitical strategy.
This opinion draws on public records and professional experience. The views expressed are personal
By Mahil Dole
Senior Superintendent of Police (Retd.)
Former Head of Counter Terrorism,
State Intelligence Service.
Opinion
Ranasinghe Premadasa: The man who would not take ‘No’ for an answer
Had former Sri Lankan President Ranasinghe Premadasa lived to celebrate his 102nd birthday, it would have fallen on June 23, 2026. Premadasa, a politically self-made leader from humble beginnings, served as the second Executive President of Sri Lanka from 1989 until his assassination in 1993. He was the first non-aristocratic “commoner” to rise to the nation’s highest office, breaking the long-standing dominance of the landed elite, high-caste aristocracy, and wealthy political families. Emerging from modest social origins, Premadasa represented a rare example of social mobility in Sri Lankan politics. He often marked his birthdays in remote villages through the “Gam Udawa” (Village Reawakening) programme.
It is fitting to begin this column with an anecdote connected to Gam Udawa. Following the Gam Udawa ceremony in Buttala, Premadasa took a helicopter ride with several officials and identified a site in Mahiyangana for the next programme. He instructed the Director of Town and Country Planning to prepare a sketch plan for the location.
When the Director later returned to Colombo and met the President, Premadasa asked, “Where is the sketch plan?” Instead of producing a plan, the Director handed over a small piece of paper and said, “Sir, when I stepped out of the vehicle, a youth handed me this note.”
Premadasa brought the note to a meeting at Sethsiripaya attended by nearly one hundred officials and read it aloud. The message stated: “If you visit again, you will not leave alive.”
Holding up the note before the gathering, Premadasa asked sharply: “If a mere threat is enough to stop an officer from carrying out his duty, what use are such officers to the country?”
Ascendency to the Presidency
Premadasa assumed office during one of the most turbulent periods in the country’s post-independence history. Sri Lanka was engulfed in twin civil conflicts while still grappling with the consequences of the sweeping economic and constitutional changes introduced through the open economy reforms and the 1978 Constitution. Poverty had deepened, export growth had slowed, balance-of-payments pressures persisted, and external debt continued to mount. The nation stood politically divided, economically strained, and socially unsettled.
At a public meeting, Premadasa once remarked that the Presidency was not “a crown placed upon my head, but a melting pot.” He believed governance should not remain the preserve of a privileged few. Ordinary people, in his view, had to participate in every aspect of governance — from policymaking to implementation. Citizens should share both the responsibility and the benefits of development.
Premadasa often argued that the root cause of unrest was the reduction of people into “mere voting machines operating once in five years.” It was within this philosophy that he introduced the concept of poverty alleviation into Sri Lanka’s national development agenda. He frequently observed that while institutions existed for every crop, few truly existed for the people themselves.
Janasaviya (People’s Strength) Programme
Out of this thinking emerged the people-centred programme Janasaviya, which combined welfare with production-oriented development. Its objective was not merely to help the poor survive, but to enable them to rebuild their lives with dignity and self-reliance. Purpose was alleviating poverty and empowering low-income households. Initially, Janasaviya beneficiaries received baskets of essential goods, many of which consisted of inexpensive imported utensils and crockery purchased through cooperative channels. Premadasa quickly recognised the contradiction and directed that the baskets instead contain locally produced items such as brooms, pottery, serviettes, and other village products. In this way, he envisioned the village not only as a marketplace, but also as a centre of production and economic self-sufficiency. Approach was to combine welfare assistance with credit, livelihood support, and production-oriented activities aimed at self-reliance.
Landmark 200 Garment Factory Programme
Thereafter, he launched the 200 Garment Factory Programme with the purpose of decentralising industrialisation and create rural employment. Approach was to Utilize U.S. garment quotas while offering incentives and infrastructure support for investors willing to establish factories outside major urban centres. Transformed apparel into a major foreign exchange earner while creating employment opportunities, particularly for rural women. At the time, many mocked the idea, questioning whether the country could survive by “selling underwear to Western markets.” Premadasa, however, remained undeterred. Within a few years, garment factories emerged across rural Sri Lanka, bringing investment, employment, and economic activity to regions long neglected. For the first time, investors moved decisively beyond Colombo into the country’s remote periphery.
Those who attended his weekly review meetings at the BMICH would remember the relentless follow-up that characterized his leadership. Secretaries and heads of institutions responsible for urban development, housing, electricity, telecommunications, water supply, and roads rushed from office to office to ensure they could report back to the President with a simple answer: “Yes, Sir, it is done.”
One incident became emblematic of his problem-solving style. A Ceylon Electricity Board official informed an investor that electricity could not be supplied because there were no poles available in the area. Premadasa summoned the official and asked a single question: “Are there coconut trees in the area?” When the answer was yes, he immediately ordered that the lines be drawn using the coconut trees until proper poles could be installed. The issue was resolved within minutes.
Premadasa personally inspected garment factory construction sites and monitored even the smallest details. During one visit, he noticed that several roofs in the adjoining village remained uncovered. Turning to the factory manager, he instructed that by the time he returned to declare the factory open, every roof must be properly covered.
Other Key Programmes
Gam Udawa (Village Reawakening) Movement
Purpose: To provide housing for the poor and improve rural living conditions.
Focus: Development of model villages with housing, roads, schools, water supply, and health facilities. The programme was Sri Lanka’s most ambitious rural housing initiative that drew international recognition leading to the United Nations’ declaration of International Year of Shelter for the Homeless.
Presidential Mobile Service
Purpose: To reduce bureaucratic delays and bring government services directly to the people.
Method: Ministers, secretaries, and senior officials travelled to the provinces to resolve public grievances on the spot creating direct engagement between the state and rural communities.
Industrial, Educational, and Cultural Initiatives
Established the Koggala Free Trade Zone and transformed the Greater Colombo Economic Commission into the Board of Investment of Sri Lanka (BOI), helping attract export-oriented investment.
Introduced free school uniforms to ease the burden on low-income families.
Established the Tower Hall Foundation to support theatre and music and introduced pension schemes for elderly artists.
Job Bank
On a concept introduced by President Premadasa, the Government established a “Job Bank” with the objective of eliminating arbitrary recruitment practices and political patronage in public sector appointments. Unemployed youth were invited to register with the Job Bank, and President Premadasa directed that vacancies in the public sector be filled from among those registered candidates through competitive written examinations and interviews rather than through ministerial recommendations or political influence.
Resource Profile
On the instructions of President Premadasa, a Resource Profile for every Divisional Secretary’s Division (DSD) was also prepared. These profiles contained detailed information on the resources, development potential, issues, and opportunities within each DS Division. The system became an important planning and development tool and continues to be updated and maintained in DSDs across the country.
Independent Verification of Information
He was also known for independently verifying information rather than relying on a single source. Soon after assuming office, a tragic accident occurred at an unprotected railway crossing in Ahangama, where a train collided with a school bus, killing and injuring students. Deeply disturbed, Premadasa ordered the General Manager of Railways (GMR) to ensure that within two weeks no unprotected railway crossing remained in the country.
When the GMR later submitted a report confirming completion, Premadasa sought independent verification from police stations around the country. One station confirmed that a crossing still remained unprotected. The GMR then faced his day of reckoning.
On another occasion, Premadasa invited opposition political parties for discussions on proposals relating to District Development and Coordination. Arriving early for the meeting, I quietly peeped into the room and saw a man rearranging furniture and shifting chairs. As he turned, smiling, he said, “Ah, you have come.” It was President Premadasa himself.
Impatience with Negativity
His impatience with bureaucratic negativity was legendary. During a discussion on land alienation and ownership, officials repeatedly explained why his proposals could not be implemented. Finally, in visible frustration, he remarked: “I have asked you to do 101 things. Is there not even one thing that all of you can do?” The officials understood the message immediately.
On another occasion, he promised every local authority a set of maintenance machinery before the Sinhala and Tamil New Year. Procurement was entrusted to a senior minister, who failed to secure the equipment in time. Yet once the President fixed the date for the handing-over ceremony, “No” was not considered an acceptable answer.
At the time, I had imported several maintenance machines for distribution among Divisional Secretariats. The minister contacted me urgently and requested that I lend him the machinery for one week. Trusting his assurance, I agreed. The following day itself, the machines appeared at Galle Face Green, where an elaborate ceremony was held with local authority chairmen from across the country. President Premadasa commended the minister for the “prompt completion” of the task and ceremonially handed over the equipment. The following day, the relieved minister telephoned me and said gratefully: “Mr. Maliyadde, you saved my neck.”
Visionary Driven by Action
Premadasa was a visionary driven by action. Under his leadership, garments emerged as Sri Lanka’s first major industrial export, transforming an export economy that for more than a century had depended overwhelmingly on tea, rubber, and coconut. Even decades later, apparel remains the country’s principal industrial export sector.
Though not formally trained as an economist, Premadasa instinctively understood concepts that economists often confined to seminars — growth nodes, export diversification, value addition and forward and backward linkages. He transformed these concepts into practice.
He believed the economy could not depend solely on garment assembly. Garment factories, in his view, had to become centres of wider economic activity that stimulated industrial and social development. He encouraged textile production for local supply to garment factories, while also seeking to integrate Janasaviya beneficiaries into these expanding economic networks. For Premadasa, the garment factory programme was not merely an export initiative; it was a bridge linking the village poor, local entrepreneurs, and international markets within a single chain of opportunity.
Right Man for the Right Job
He also possessed a remarkable ability to identify the right man (not the right-hand man) for the right job. Political loyalty, caste, or creed mattered less to him than competence and commitment. That was why he appointed Susil Siriwardane, a prominent JVP activist who was involved in 1971 insurrection, for which he was detained and convicted by the courts, as the first Commissioner of Janasaviya. Many individuals chosen to lead his programmes came not from his own party, but from outside it.
President Premadasa held office for only four years. Yet within that brief period, he launched programmes with the scale and impact of decades of development.
Leadership Style
Premadasa’s leadership style was defined by relentless follow-up, strict monitoring, and an uncompromising belief that obstacles existed to be overcome. Officials knew they had to be prepared for action at any hour of the day. He cultivated a reputation as a leader who refused to accept the words “cannot” or “impossible.”
His vision sought to combine social welfare with a regulated market economy, pursuing what many viewed as a distinctly Sri Lankan “third path” of development. He remains remembered as a determined and action-oriented leader whose policies left a lasting imprint on Sri Lanka’s social and economic landscape.
(Chandrasena Maliyadde is a former Secretary, Ministry of Plan Implementation. He can be reached at chandra.maliyadde@gmail.com)
by Chandrasena Maliyadde
Opinion
The Plunder of Sri Lanka Through Trade Misinvoicing
A Case Study on Sri Lanka-Thailand Trade
In March 2026, a Washington-based think tank, Global Financial Integrity (GFI), released its report on “Trade-Related Illicit Financial Flows in Developing Asia” for the 2013–2022 period. The report calculates the possible misappropriation of 20.51% of Sri Lanka’s total trade value through trade misinvoicing.
A calculation of Sri Lanka’s exports to Thailand in 2024, using the same GFI methodology, shows a possible misappropriation of 207% of the export value by Sri Lankan exporters and Thai importers
The phrase “plunder of Sri Lanka” normally refers to resource extraction through violent foreign invasions with swords and guns. This article is not about them. This article focuses on a more discreet and genteel version of plunder through illicit financial flows and the stashing of foreign exchange earnings offshore through trade misinvoicing.
What is Trade Misinvoicing?
Trade misinvoicing is the fraudulent recording of key invoice information for the purpose of facilitating illicit cross-border financial flows. One of the easiest ways to identify possible misinvoicing is the study of “mirror trade” data, that is, the comparative analysis of partner-country trade data with Sri Lankan trade data. If this flags discrepancies (value gaps), those are indicators of misinvoicing. These gaps could be due to overinvoicing imports, underinvoicing exports, or phantom imports.
Overinvoicing imports occurs when Sri Lankan importers and their foreign counterparts artificially inflate invoice prices for goods. The importer remits foreign currency abroad to settle the bogus invoice amount in full, and the surplus cash is subsequently split or retained in offshore accounts.
Similarly, underinvoicing exports happens when exporters ship high-value goods (for example, gems) out of Sri Lanka but state a considerably lower price on the customs invoice and the importer pays the low price through official channels. Then the actual market balance is paid directly into foreign bank accounts.
Phantom imports occur when bogus companies are set up to execute telegraphic transfers to foreign suppliers under the pretext of importing goods, which never physically enter Sri Lanka. The recently uncovered large-scale foreign exchange fraud totalling around US$85 million linked to fictitious imports revealed by the Public Security Minister Ananda Wijepala is an example of phantom imports. However, what he revealed was just the tip of the iceberg. The annual loss from overinvoicing imports and underinvoicing exports is much larger and may be as high as US$ billion or higher.
So, whenever value gaps occur in mirror data, they should be treated as risk indicators. If the gaps are significantly large, then the authorities should immediately investigate the relevant invoices with the partner countries to find out the reasons for the disparities.
Misinvoicing in Sri Lanka
In 2017, the Washington, D.C.-based think tank Global Financial Integrity (GFI) released a landmark investigative report exposing massive gaps in Sri Lanka’s trade data due to trade misinvoicing during the period 2005–2014. The estimated amount that may have been misappropriated during the period is US$36.83 billion. This report received wide publicity in Sri Lanka. It is not clear if the authorities had initiated any investigations into this foreign exchange hemorrhage. In March 2026 the GFI released its report on “Trade-Related Illicit Financial Flows in Developing Asia” for the 2013–2022 period. The report calculates Sri Lanka’s trade value gap at 20.51% of total trade.
Underinvoicing in Sri Lanka – Thailand Trade
Why a case study on Sri Lanka – Thailand Trade?
Thailand is a relatively small export market for Sri Lanka and ranks 47th as an export destination. As per Sri Lankan customs data, in 2024 Sri Lanka’s total exports to Thailand were valued at US$ 41 million. However, according to Thai customs data, in 2024 Thailand’s imports from Sri Lanka were valued at US$ 126 million. This is a value gap of US$ 85 million. That is a massive 207% value gap… ten times larger than the global average for Sri Lanka. As the table below illustrates, these large value gaps have been growing over the years. (See Table)
A closer look at the data would reveal that the largest value gaps are under gemstones (HS 710391). It is common knowledge that the Sri Lanka–Thailand gem trade suffers from prevalent underinvoicing, resulting in millions of dollars in lost export revenue. Yet, it appears that Sri Lanka Customs and the National Gem and Jewellery Authority (NGJA) have not intervened to curtail this practice. One may argue that the trade ministry, the NGJA, or the customs do not routinely analyse mirror data. However, as Thailand is the third-largest market for Sri Lankan gems, the NGJA should have a very good knowledge of that market, including Thai customs statistics. In-depth analysis of Thai customs data is also a main responsibility of the Sri Lanka embassy in Bangkok.
Sri Lanka-Thailand Free Trade Agreement (SLTFTA)
In addition to that, Sri Lanka commenced negotiations for the Sri Lanka-Thailand Free Trade Agreement (SLTFTA) in 2018. After multiple rounds of negotiations covering trade in goods, services, investments, and customs cooperation, both nations officially signed the SLTFTA in February 2024. While preparing for these multiple rounds of negotiations, Sri Lankan trade negotiators and the embassy in Bangkok should have extensively analysed the Thai customs data. They should have also known Sri Lanka’s export data like the back of their hands. Then, didn’t they discover these massive discrepancies in data sets? If they did, did they address them during the negotiations?
Whatever happens, the gaps keep growing.
So, now it is time for the appropriate agencies to start investigating these enormous value gaps … after all, a massive US$ 85 million, 207% value gap is simply not loose cash.
(The writer can be reached at enadhiragomi@gmail.com) )
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