Business

‘Good politics’ could derail SL’s critical economic reforms – Emeritus Prof. Sirimevan Colombage

Published

2 years ago

2024/09/18

Sahan Weerasooriya

Governor, Central Bank of Sri Lanka Dr. Nandalal Weerasinghe (L) and Emeritus Prof. Sirimevan Colombage.

By Ifham Nizam

Sri Lanka’s economic recovery hangs in the balance as politics threatens to derail critical reforms, well known economist Emeritus Prof. Sirimevan Colombage warns.

Speaking at the launch of the book ‘Reforming Macroeconomic Policies for Stability and Growth: Sri Lanka’s Road to Economic Recovery’ at the Lakshman Kadirgamar Institute, Colombo 07 recently, Emeritus Professor Colombage of the Open University of Sri Lanka stressed the importance of prioritizing sound economic management over political agendas.

According to him, Sri Lanka must focus on reducing the fiscal deficit and encourage foreign investment to achieve long-term economic growth and stability.

Colombage added: ‘Sri Lanka’s economy must be prepared to service its debt repayments by 2028. With a projected growth rate of three per cent in the medium term, this figure is insufficient to significantly reduce unemployment or poverty.

‘It is essential to cut the fiscal deficit to reduce pressure on the domestic capital market and provide financial resources to the private sector, especially in boosting exports. A robust recovery package, is critical to improving the country’s global credit rankings and attracting Foreign Direct Investment (FDI).

‘The IMF’s Extended Fund Facility (EFF) is a key component in reviving the economy. It offers Sri Lanka much-needed “breathing space” to pursue debt restructuring and improve the country’s international image.

‘However, I doubt the existence of the political will to maintain the program, especially in light of the upcoming presidential elections.

‘Sri Lanka’s economic crisis stemmed from years of imprudent macroeconomic policies, particularly between 2019 and 2022, when ill-conceived policy decisions deepened existing imbalances.

‘The 2019 tax cuts, money printing and fixed exchange rates were major triggers for the crisis, resulting in high inflation, capital outflows and a foreign exchange shortage. As a result, Sri Lanka’s debt now stands at 116% of its GDP, with external debt reaching USD 43.3 billion.

‘With the presidential election looming, politically- motivated fiscal policies could jeopardize the country’s recovery. Various candidates have proposed salary hikes and other populist measures, which could undermine fiscal consolidation efforts.

‘Such promises may help win votes but will ultimately fuel inflation and deepen the country’s economic woes.

‘Sri Lanka has a history of “stop-go” economic reforms, where initiatives are often abandoned midway for political reasons.

‘The same fate could befall the current recovery plan. “Good politics is often bad economics.” ‘

‘The Expert Committee on Public Service Salary Disparities recommended an increase in the basic salary of public servants by 24% to over 50% from next January. It is reported that the President has endorsed the proposed salary increase. Other presidential candidates too have followed suit, offering similar or higher salary hikes. This is good politics and bad economics.

‘While such a salary hike may be justifiable to compensate for the rise in cost of living, it is questionable whether the so-called Expert Committee considered its adverse effects on government expenditure, fiscal deficit and more importantly on the macroeconomic policy reforms under the IMF-EFF program. The proposed salary hike, if implemented, would be a discretionary decision that is likely to create pro-cyclical effects, aggravating the economic crisis.

‘Reduction of the fiscal deficit to GDP ratio from around eight percent at present to five percent in 2025 and to 4.2 by 2028 is a major policy target of the recovery package.

‘The proposed salary increase will jeopardise the fiscal consolidation, causing a significant rise in the fiscal deficit to GDP ratio from 2025 onwards.

‘In 2023, the public sector salary bill amounted to Rs. 940 billion. A minimum 24% salary increase, as suggested by the Expert Committee, will incur an additional cost of around Rs. 225 billion to the government.’

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Business

SLEIS 2026 to examine Sri Lanka’s energy transition and its implications

Published

4 hours ago

2026/09/26

Thilina Walpola

Reliable and affordable energy is essential to Sri Lanka’s economic growth, industrial development and competitiveness. As the country seeks to strengthen energy security while reducing its dependence on fossil fuels, the energy sector will be a key area of discussion at the Sri Lanka Economic & Investment Summit 2026, organised by The Ceylon Chamber of Commerce on 12-13 October 2026.

The session, “Beyond Fossil Dependence: Balancing Security, Sustainability, and Growth,” will examine how Sri Lanka can diversify its energy sources, accelerate renewable energy adoption and attract investment while ensuring a reliable energy supply for businesses and households. Discussions will also consider the infrastructure and policy frameworks needed to support the country’s transition towards a modern and competitive energy system.

Ms. Edore Onomakpome – Regional Infrastructure Industry Manager – Bangladesh, Sri Lanka and Nepal, at the International Finance Corporation will keynote the session, and join the panel discussion featuring G.M.R.D. Aponsu – Secretary to the Ministry of Energy, Damitha Kumarasinghe – Director General (Chief Executive Officer), Public Utilities Commission of Sri Lanka, and Manjula Perera – Managing Director, WindForce PLC. The discussion will be moderated by Sheran Fernando – Senior Advisor, Plus94.

The session will also explore the role of public-private collaboration in developing new energy solutions, encouraging investment and creating opportunities within Sri Lanka’s evolving energy sector. It will consider how energy policy and investment decisions can support both economic expansion and the country’s longer-term sustainability objectives.

The Sri Lanka Economic & Investment Summit 2026 is supported by its valued sponsors and partners. Platinum Sponsor – Standard Chartered Bank Sri Lanka, Gold Sponsor – VISA Worldwide (Pvt) Ltd., Bronze Sponsor – South Asia Gateway Terminals (Pvt) Ltd., Strategic Development Partner – Asian Development Bank, Telecommunication Partner – Dialog Telecommunication, Television Partner – Dialog Television, Session Sponsors – David Pieris Motor Company (Pvt) Ltd., Hemas Holdings PLC, Sunshine Holdings PLC, International Construction Consortium (Pvt) Ltd., Official Logistics Partner – Hayleys Advantis Limited, Official Airline – SriLankan Airlines Ltd., Official Hospitality Partner – Shangri-La Colombo, Airline Partner – China Eastern Air Holding Co. Ltd.

Registrations are now open at https://sleis.chamber.lk/. For more information, contact Alikie on 011 558 8805 (alikie@chamber.lk) or Shanuka on 0701082541 (events.division@chamber.lk).

Business

A fresh chapter for the George Keyt Foundation: A renewed commitment to the Sri Lankan art ecosystem

Published

4 hours ago

2026/09/26

Thilina Walpola

The George Keyt Foundation (GKF), dedicated to preserving the legacy of modernist painter George Keyt and fostering local art, has announced strategic appointments to its leadership team, bringing together a mix of global academic expertise, corporate leadership, and artistic passion. These enhancements aim to inject fresh expertise and academic depth into the Foundation’s long-term vision.

Establishment of the New Advisory Committee

To broaden its operational reach and deepen its engagement with the global art market, the George Keyt Foundation has established an Advisory Committee. The newly appointed committee members include:

• Dr Sujatha Meegama is a Senior Lecturer in Buddhist Art History at the Courtauld. She is an acclaimed art historian, author and academic, bringing specialised knowledge in South Asian art history to guide the foundation’s curatorial and educational directives.

• Dr Shamil Wanigaratne: A clinical psychologist, author, and avid art historian, Shamil will lend his unique perspective to help the foundation design meaningful public outreach and cultural preservation strategies.

• Abbas Esufally: A veteran corporate leader and patron of the arts, Abbas is transitioning from his role as a GKF Trustee to this advisory position, where he will continue to offer his sharp business acumen and extensive network.

New Trustee Appointment

Leesha Captain has been appointed to the Board of Trustees. Inspired by Sri Lankan artists, Leesha is a recognised supporter of the local art scene. Leesha’s hands-on perspective will strengthen the foundation’s core team as they develop and design new art programs.

A Vision for the Future

“These new appointments mark an exciting chapter for us as we build on our decades-long history of promoting Sri Lankan artists,” says Malaka Talwatte, Chairman of the Foundation. “The combination of Leesha on the board, alongside the diverse expertise of our new Advisory Committee, will significantly amplify our efforts in curating high-profile exhibitions and expanding local and international partnerships”.

Business

Sun Siyam Pasikudah celebrates World Tourism Day with culture, cuisine and community

Published

4 hours ago

2026/09/26

Thilina Walpola

Sun Siyam Pasikudah, part of the Privé Collection under Maldivian-owned Sun Siyam Resorts, will mark World Tourism Day on 27 September 2026 with a full day programme celebrating the culture, cuisine and natural beauty of Sri Lanka’s east coast, paired with community focused sustainability activities.

The celebrations open with a special buffet of authentic Sri Lankan cuisine, followed by a street food festival showcasing regional snacks and traditional sweets rarely found on resort menus. A signature World Tourism Day mocktail and cocktail, created for the occasion, will be served through the day, while traditional Sri Lankan cultural dance performances bring the island’s heritage to life for guests.

Beyond the festivities, the resort has planned a tree planting activity with guests and a beach or park clean up campaign, both reflecting Sun Siyam Pasikudah’s ongoing commitment to responsible tourism along Sri Lanka’s northeast coast.