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Godahewa warns of economic challenges

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Former State Minister Dr. Nalaka Godahewa, MP yesterday pointed out that a careful look at the Central Bank’s 2023 data revealed that the much-touted promise to build a thriving export-oriented economy under the current government was only a pipedream.

Addressing the media at the Nidahasa office at Nawala where he dealt with economic issues, the dissident SLPP MP said that according to the Central Bank’s data, by the end of the first half of 2023, the trade account exhibited a much expanded deficit of $364 million, a significant departure from the $22 million surplus recorded in June 2022. Furthermore, export earnings and import expenditures for the first half of 2023 had both declined by 10 percent and 18.6 percent, respectively, compared to the previous year. Earnings from industrial products, primarily driven by the apparel industry, had contracted by 12%, plummeting from $5,260 million in the first half of 2022 to $4,616 million—a drop of $650 million. Notably, the garment industry, a critical export sector, experienced an 18% decrease, declining from $5,260 million to $2,461 million in compared to the first half of 2022, resulting in a substantial $516 million reduction.

Dr. Godahewa argued that this compelling evidence pointed to a failure in achieving an export-oriented economy, as advocated by the President. However, he also emphasised that tourism revenue and remittances from foreign workers, which were not included in the trade balance, could potentially offset the balance of payments deficit if the government continued to postpone settling foreign debts. Consequently, he pointed out that there should be no issue with importing oil and gas until debt repayment commenced, stressing that economic growth was the only way to manage the country while servicing debts simultaneously.

Nonetheless, Dr. Godahewa noted that the overall state of the economy was concerning, with four consecutive quarters of economic contraction. In the first quarter of 2023 alone, the economy had contracted by 11.5%. He speculated that the contraction in the second quarter would be even more pronounced, although the central bank reports were delayed.

The MP expressed optimism that the government would secure the second installment of the promised $2.9 billion loan over five years from the IMF. However, he cautioned against viewing this positively, as many of the measures taken could have long-term detrimental effects on the country. For example, he highlighted the reduction of employees’ pensions due to domestic debt restructuring and the loss of numerous jobs due to the government’s economic mismanagement, particularly in key employment sectors such as construction and the garment industry.

To meet IMF demands, the government had raised taxes, leaving the working population financially strained. The government aimed to increase tax revenue by 70% by 2023, with tax revenue expected to rise from 1852 billion rupees in 2022 to 3130 billion rupees in 2023. This meant a 70% reduction in disposable income for most people, who already spent the majority of their earnings on basic necessities like food, electricity, and water.

Dr. Godahewa emphasized that there was little money left for essential expenses like education, healthcare, and clothing. This tax burden had driven professionals to leave the country in large numbers, with over 800 doctors, more than 300 specialist doctors, over 1000 engineers, over 500 university professors, and thousands of other professionals departing in the first half of 2023. This brain drain raised concerns about the nation’s ability to build and develop in the future.

The MP asserted that the government’s unreasonable tax policy was ineffective. They pointed out that when taxes were reasonable, people and businesses were more compliant, whereas excessive taxes led to emigration and business closures. By June 2023, the government had only managed to collect 77% of the expected tax revenue, even amidst a significant economic downturn.

The MP also criticized the government for attempting to stifle democratic processes, referencing recent remarks by the President and the Leader of the United National Party concerning the availability of funds for oil and gas in the event of a 2024 election.

Dr. Godahewa argued that the government’s decision to cancel local government elections due to financial constraints was questionable. For the local government election, the Election Commission had initially requested 10 billion rupees, which was later reduced to 4 billion rupees. Despite this, the government claimed it couldn’t afford to allocate the 4 billion rupees for the election, even though they had earmarked an additional 1390 billion rupees as government expenditure for 2023 compared to 2022. Dr. Godahewa pointed out that a mere 0.3% of the total estimated government expenditure was required to fund the election.



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Sorry plight of 1.6 mn children and young adults with disabilities in the country

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From L: Dinanta Thambavita, Adithi Gosh and Dr. Ranjan Thawaseelan

An estimated 1.6 million children and young people with disabilities in Sri Lanka continue to face significant barriers to economic independence, with nearly 70 per cent remaining unemployed and dependent on others for their daily needs, Country Director of ChildFund Sri Lanka, Adithi Gosh has said.

Addressing a media briefing, Gosh stressed the urgent need to strengthen livelihood opportunities for persons with disabilities and enhance their participation in the workforce.

She said ChildFund Sri Lanka had prioritised market-driven and demand-oriented vocational training programmes to improve the livelihoods of more than 12,000 children and young people with disabilities. The initiative is being implemented through a long-term collaborative programme in coordination with the ChildFund National Centre.

According to Gosh, the programme seeks to create sustainable pathways to employment and entrepreneurship for young people between the ages of 15 and 24 who have physical, sensory and neurodevelopmental disabilities. Special attention is being given to youth from low-income and marginalised communities.

She noted that the programme is designed not only to equip beneficiaries with skills required by the labour market but also to improve their access to employment opportunities and self-employment ventures.

Gosh emphasised that the long-term sustainability of the initiative would depend on strengthening existing government systems and institutional capacities rather than establishing separate parallel service structures.

“The focus is on embedding policies and practices that ensure equal participation and access for all within existing systems,” she said.

The programme also aims to promote greater inclusion of persons with disabilities in economic and social life by creating an enabling environment that supports equal opportunities and participation.

Among those present at the media briefing were Director of Business Development of ChildFund Sri Lanka Dinanta Thambavita, Programme Director Dr. Ranjan Thawaseelan and Communication Expert Nishanthi Nonis.

Officials said the initiative forms part of broader efforts to address the challenges faced by young persons with disabilities and to promote inclusive economic development through skills training, entrepreneurship and institutional support.

Text and Pic By Sujatha Jayaratne ✍️

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Sri Lanka–Thailand Free Trade Agreement at last sees the light of day

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Thai Ambassador Paitoon Mahapannaporn addressing the event

The Sri Lanka–Thailand Free Trade Agreement (SLTFTA), signed in 2024 and awaiting implementation, will serve as a key catalyst for strengthening trade, investment and supply-chain resilience between the two countries amid growing global economic uncertainties, Thailand’s Ambassador to Sri Lanka, Paitoon Mahapannaporn, said.

Addressing the Thailand–Sri Lanka Business Forum: Trade, Investment and Beyond in Colombo on June 18, Ambassador Mahapannaporn noted that bilateral trade had reached USD 649 million in 2025, marking a 48 per cent increase over the previous year.

He said stronger partnerships and diversified supply chains had become increasingly important in the face of geopolitical crises affecting global business and investor confidence. The SLTFTA would help boost bilateral trade, reduce tariffs, open new markets and improve access to global supply chains for both countries, he added.

The forum was organised by the Royal Thai Embassy in collaboration with the Sri Lanka–Thailand Business Council and the Sri Lanka–Greater Mekong Business Council and brought together senior government officials, diplomats, business leaders and industry experts from both nations.

President of the Sri Lanka–Thailand Business Council, Rizan Nazeer, highlighted the importance of building resilient cross-border partnerships by combining Thailand’s advanced infrastructure, capital strength and industrial expertise with Sri Lanka’s skilled and cost-effective workforce.

President of the Sri Lanka–Greater Mekong Business Council, Nimal Ratnayake, said the forum was not merely about trade opportunities but also about fostering trust, knowledge-sharing and long-term partnerships that would contribute to sustainable growth in both countries.

Delivering a presentation on trade and FTA opportunities, Secretary to the Ministry of Trade, Commerce, Food Security and Co-operative Development, K. A. Vimalenthirarajah, stressed the need for predictable and effective implementation of the agreement. He said sectors such as logistics, packaging, research and development, food processing, information technology, minerals and technology-driven investments stood to benefit significantly.

Senior Deputy Director of Customs, Compliance and Facilitation Directorate of Sri Lanka Customs, Chamila Prasantha Bopage, outlined customs procedures and regulatory requirements, emphasising the importance of balancing trade facilitation with regulatory oversight.

Providing a Thai business perspective, Dr. Visit Limlurcha, President of the Thai Future Food Trade Association and Vice Chairman of the Thai Chamber of Commerce and Board of Trade of Thailand, described Sri Lanka as a strategic gateway to South Asia and the Middle East. He identified food and agriculture, healthcare, IT, electronics, machinery, construction, tourism, logistics and textiles among sectors with strong potential for bilateral collaboration.

Meanwhile, Deputy Dean of the Graduate School of the University of the Thai Chamber of Commerce, Dr. Phusit Wonglorsaichon said competitiveness in the modern economy depended on digital platforms, effective use of FTAs, research and development, technology adoption and innovation.

Director General of the Board of Investment, Renuka Weerakone, presented Sri Lanka as an increasingly attractive destination for foreign direct investment, noting that 15 pioneering Thai investors were already operating in the country. She highlighted Sri Lanka’s strategic location, expanding logistics infrastructure and investor-friendly policies, including provisions allowing 100 per cent foreign ownership in most sectors.

The forum concluded with a business-matching session involving 27 delegates from 17 Thai companies and more than 100 Sri Lankan counterparts, who explored opportunities for collaboration across food and agriculture, health and personal care, IT and construction, hospitality and logistics, and textiles and household products. Officials said the engagements reflected the growing momentum towards deeper economic integration between Sri Lanka and Thailand under the proposed FTA framework.

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Pathfinder Foundation hosts luncheon meeting for visiting US Assistant Secretary of State

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Milinda Moragoda, Founder of the Pathfinder Foundation, meeting Dr. S. Paul Kapur, U.S. Assistant Secretary of State for South and Central Asian Affairs

Milinda Moragoda, Founder of the Pathfinder Foundation, hosted a luncheon meeting for Dr. S. Paul Kapur, U.S. Assistant Secretary of State for South and Central Asian Affairs,  on 23 June 2026.

The meeting was attended by prominent business leaders, heads of diplomatic missions, policy experts, and representatives from key sectors of the Sri Lankan economy, offering an opportunity for constructive engagement on issues of local and regional significance.

During his remarks, Assistant Secretary Kapur shared his perspectives on the role of small maritime states in promoting a secure and prosperous Indian Ocean region. Discussions also covered current geopolitical and economic developments, regional connectivity, maritime security, trade, and opportunities for enhanced cooperation.

The gathering provided a valuable platform for participants to exchange views on emerging challenges, opportunities, and strategies to foster sustainable economic growth and regional stability. The interactive dialogue underscored the importance of partnerships, knowledge sharing, and collaboration in addressing the evolving dynamics of the Indo-Pacific region.

The Pathfinder Foundation continues to serve as a leading independent think tank in Sri Lanka, fostering informed dialogue and promoting the exchange of ideas on issues of national, regional, and global importance. Through its programmes and engagements, the Foundation seeks to contribute to policy discourse and strengthen understanding of contemporary challenges and opportunities.

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