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Harsh realities of Non-Alignment and Foreign aid

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Our leaders say we are non-aligned and certainly do their best to stay that way, though the reality may be somewhat different. We are being forced to part with whatever little we have to one or the other of the world powers, in the name of development. It seems as if we have to give something to everybody to appear to be non-aligned. To make matters worse, our economy is in dire straits and our strength to resist these almost hostile takeovers, at this moment, is not very good. Our foreign debt component is huge and we are dependent on foreign assistance, either in the form of loans or debt/equity swaps, to settle these debts and stay afloat. And this assistance comes from countries which are interested in getting hold of pieces of our “valuable real estate”.

Third world countries, whether they call themselves non-aligned or not, are heavily dependent on rich countries for development. Unless they maintain a growth rate above 5%, creation of employment opportunities and essential infrastructure development is not possible. This, for most of the poor countries, is not possible without foreign aid. In the case of Sri Lanka, which had a GDP less than 5% during the period 2015 to 2020, and has to pay about Rs.3 billion per year to service its loans, it is a gigantic task to recover; and unless a rich country comes to its aid, it may slide down further and be more vulnerable to external interference and encroachment into its independence, sovereignty and territorial integrity. However, there is nothing called a free lunch and Sri Lanka will have to carefully manage its policy on foreign aid. The often quoted epithet “beggars can’t be choosers” may not be applicable, as we may be capable of making correct choices.

One option is the IMF and the World Bank, but their aid is not without unfavourable conditions, which are designed to help the neo-liberal policies of the Western powers who seem to have those institutions under their thumb. Joseph Stiglitz, one time Chief Economist of the World Bank, had written about the ugly face of these Bretton Woods Twins (2000). Sri Lanka may not want to get too much into the IMF debt and expose its weak economy to the international market forces. Neoliberal policies include free-market policy, less government involvement, privatisation, austerity, low public expenditure, less welfarism, and commodification . These policies help the rich to accumulate wealth, while the incomes of the poor stagnate, or decline.

Then there are the big aid donors, but some of them would want their pound of flesh. These donors are in two rival camps, and are vying for “favours,” from little Sri Lanka, in return for whatever aid they may give. Surely Sri Lanka cannot afford to please everybody, like the good hearted lady who is always pregnant. If little Sri Lanka tries to please everybody, nothing will be left of the land and its natural resources for its inhabitants. Moreover, the interested parties are ganged up into two camps and are engaged in cold war rhetoric and there is no love lost among them. This would mean if one party receives favours the other party would be hurt and angry, unless they are also given something. However, one group resorts to arm twisting while the other refrains from interfering too much in our internal affairs. Shamelessly, the Western powers resort to fabricated allegations like human rights violations, to force Sri Lanka to yield on matters like MCC, ACSA, etc. They sponsor resolutions at the UNHRC in order to get a grip on Sri Lanka and force it to obey their dictate. China on the other hand, who is our major aid giver, does not resort to such unfriendly tactics; it has not forced Sri Lanka to join their Road and Belt Initiative.

We need foreign aid to get over this economic crisis which is complicated by Covid. We have to see who could give us aid with the least strings. We know that the US and Europe did not give much during the “Yahapalana” days, though the government was pro-West. In this regard it will be interesting to look at some of the research done on aid given by the US and China in the past, and the implications for the recipients.

It is often claimed that Chinese aid is “rogue aid” guided by selfish interests with the aim of entrapping the recipient country to “cough out” its assets. One cited example is the Hambantota harbour, and several such projects in Africa and Asia are also mentioned. However, Dreher and Fuchs (2015) empirically tested to what extent self interests shape Chinese aid allocation, based on the data in Chinese project aid, food aid, and medical staff and total aid money to developing countries from 1956 to 2006. The evidence suggested China’s aid allocation does not depend on the recipient’s endowment with natural resources. Therefore, it is unjustified to condemn Chinese aid as “rogue aid” . These findings are also supported by other researchers (Brautigam, 2009).

Further evidence could be found in a two-volume publication titled “China’s Foreign Aid and Investment Diplomacy” by John F Copper (2016). These research findings show that though China has geopolitical ambitions it does not interfere in the internal affairs of recipient countries. Instead it wins over countries to its side by giving aid for mutually beneficial projects, in terms of bilateral trade and soft diplomacy. In contrast, the US aid is linked to a more aggressive foreign policy and expectations of loyalty in regard to US hegemonic agendas. For instance US would expect recipients of its aid to fall in line and lend support at the UN on controversial issues favourable to the US. Sri Lanka has been at the receiving end in the recent past at the UNHRC, on account of this attitude of the US and other Western powers. A true friend like China would not have done such treachery.

The other important consideration is who would have the ability to give aid, the US and Europe has a ruined economy due to mismanagement of the Covid pandemic, which has devastated their societies in an unprecedented manner. They may not be able to give aid for a long time to come. Remember they did not give any aid to their friend the “Yahapalana” government either. Instead they did their utmost to erode our independence and sovereignty. It would be futile to expect anything from them. Japan, Australia, Scandinavia, South Korea and India, which are in the US camp may be able to help a bit, but their domestic needs would be greater on account of Covid. China, on the other hand, has recovered from the pandemic, and according to the IMF their economy has already overtaken that of the US. China has the potential to dominate the economy of the post-Covid world. China is a true friend of Sri Lanka, and may be relied upon to come to the assistance of Sri Lanka if the latter plays its cards correctly.

It may be alright for our leaders to say in public that Sri Lanka is non-aligned, but in reality, in the present context of a global power game, we are not allowed to be non-aligned. We have to be pragmatic and choose the lesser evil if we need aid in these difficult times.

 

N.A.de S. AMARATUNGA



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Opinion

Sri Lanka’s geopolitical positioning for future prosperity

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Kariyawasam

By Chula Goonasekera
For the LEADS Forum (admin@srilankaleads.com)

Sri Lanka’s future prosperity will depend on how effectively it positions itself within an increasingly complex global environment. At a recent LEADS Forum discussion (https://youtu.be/Bbr3e_qU1Fw), veteran diplomat Prasad Kariyawasam, former Secretary to the Ministry of Foreign Affairs, High Commissioner to India, Ambassador to the United States, Ambassador /Permanent Representative to the UN in New York and Geneva —outlined the strategic choices Sri Lanka must make to secure long term stability and economic advancement. Kariyawasam offered a rare blend of historical perspective, diplomatic experience and practical guidance.

His central message was clear: Sri Lanka must exercise strategic agency—engaging all major partners while safeguarding its national interests.

Foreign Policy as an Extension of National Aspirations

Foreign policy, Kariyawasam emphasised, is inseparable from domestic priorities. As your text notes, “foreign relations often reflect the medium- and long-term aspirations of a country’s people and its leadership.” Governments must therefore craft external relations that reflect the public’s economic and social expectations, avoiding short-term political impulses that undermine long-term national interests.

For a small nation, foreign policy cannot be symbolic or personality driven. It must be purposeful, pragmatic and directed towards the security and prosperity of the people.

A History of Global Connectivity

Sri Lanka’s history demonstrates that the island has never been isolated. From ancient ties with India and Southeast Asia to Arab, Persian and Chinese maritime networks, the island prospered when connected to the wider world. We must realise that “geography creates opportunity, but geography alone does not create prosperity.” Institutions, infrastructure and policy determine whether geographic advantage becomes economic success.

Colombo’s emergence as a cosmopolitan trading hub and Galle’s role as a resupply station for Indian Ocean shipping in colonial times , illustrate how deeply Sri Lanka has been embedded in global commerce for centuries.

Lessons from Asia’s High Performers

Kariyawasam highlighted the experiences of Japan, South Korea, Taiwan, Singapore and Vietnam. Their paths differ, but their success rests on common foundations:

• investment in human capital and infrastructure

• merit based institutions

• integration into global markets

• attraction of investment and technology

• export oriented industries

• strategic engagements with both China and Western economies

The lesson for Sri Lanka is not imitation but continuous adaptation and constructive integration with the global economy.

India: Sri Lanka’s Closest Major Partner

India’s transformation into a global economic power presents Sri Lanka with both opportunity and responsibility. India is already Sri Lanka’s largest source of tourists and a major investor. Kariyawasam states, “The larger question is how effectively Sri Lanka can participate in and benefit from India’s growth.”

A partnership should encompass modern, more open pathways for trade, investment, logistics, energy, technology, digital services, education and professional mobility—And asymmetry between the two economies must be handled with maturity and foresight, seeking special and differential treatment .

China and Other Global Partners

China remains a significant economic partner. Sri Lanka must avoid viewing this relationship through a zero sum lens. The goal should be productive and transparent engagement, ensuring better terms of trade and meaningful technology transfer.

Equally Important relations must be nurtured with the United States, European Union, United Kingdom, Japan, Australia, ASEAN and the Gulf.

All these relationships can be vibrant partnerships that does not lead towards , dependency but mutually beneficial pragmatic arrangements .

A Fragmenting International System

Global geopolitics is becoming more volatile. Trade tensions, wars, sanctions, supply chain disruptions, climate change and technological competition increasingly shape national security. We must realise, “foreign policy cannot be separated from economic policy.”

Sri Lanka’s recent economic crisis demonstrated the importance of international confidence, access to finance and resilient supply chains. Energy security, food security, cybersecurity and digital infrastructure are now core elements of national strategy.

Strategic Agency: The Guiding Principle

Sri Lanka must avoid becoming an arena for great power competition. Strategic agency means making decisions based on national interest, expanding Sri Lanka’s choices, not restricting them.

India is essential. China is important. The United States, Europe, Japan, Australia, ASEAN and the Gulf are important. The objective is a web of partnerships that strengthens resilience and autonomy.

Sri Lanka’s Strategic Assets

1. Location: Sri Lanka’s geography is a long standing advantage. Ports such as Colombo, Hambantota, Trincomalee and Galle can become specialised hubs—if connected to logistics, manufacturing, services and exports.

2. Digital Connectivity: Submarine cables, data centres, cloud services and cybersecurity are now as important as physical geography. Sri Lanka can turn its location into both a maritime and digital advantage.

3. Tourism and Natural Heritage: The focus should shift from tourist numbers to value creation—wellness, heritage, ecotourism, cruise tourism, education and MICE tourism.

4. Human Resources and Demographics: High literacy is no longer enough. Skills in technology, engineering, AI, logistics and advanced manufacturing are essential, especially with an ageing population.

5. Migrant Workforce: Migrant workers are a strategic asset, not merely a source of remittances. Bilateral labour agreements, skills recognition and diaspora engagement should be central to foreign policy.

Requirements for Sustained Prosperity

Sri Lanka’s future depends on:

• peace and security

• access to international markets

• productive investment

• a skilled, productive workforce

• modernised agriculture

• higher value tourism

• demographic preparedness

• climate resilience

• strong, predictable institutions

Please note that “foreign policy can open doors. Domestic institutions determine whether we can walk through them.”

The Role of the State

Sri Lanka does not need a larger state—only a more capable one. Policy continuity, professional institutions, predictable regulation and reduced corruption are essential. Geography does not change; long-term national interests do not change. Intentional relationships built over decades should not be reinvented with each election cycle.

Building Trust Internationally

Trust is a strategic asset. Sri Lanka must be known as a country that honours commitments and maintains predictable policies. This is vital not only for diplomacy but also for investment and long term partnerships.

Avoiding Zero Sum Geopolitics

Sri Lanka does not need to choose between India and China, or between Asia and the West. The task is to identify what each relationship can contribute to national development while protecting sovereignty and freedom of decision making.

Sri Lanka’s geography is an inheritance, but prosperity is not guaranteed. The world is changing rapidly—great-power competition, technological disruption, and climate vulnerability demand a foreign policy that is pragmatic, adaptive, and anchored in national interest.

Sri Lanka must build partnerships without dependencies, maintain strategic agency without isolation, and integrate with the global economy while strengthening domestic capacity.

“We cannot change where Sri Lanka is. We can, however, determine what Sri Lanka becomes because of where it is”

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Opinion

A tariff deal with the US? Make haste slowly

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by Gomi Senadhira

Sri Lanka’s former ambassador to the United States Mahinda Samarasinghe is back in Sri Lanka lobbying for speedier finalisation of a new tariff deal with the United States. According to news reports, delivering the keynote address at the Sri Lanka Institute of Directors’ Annual Meeting last week, he stated, “I have recommended very strongly to the government that we need to conclude the agreement so that we can lock in the very favourable tariff rate that Sri Lanka has got up to now“.

I do not understand why the former ambassador is urging the government to expedite the finalisation of a new tariff deal or what is “the very favourable tariff rate” he refers to in his speech. However, given the ongoing terrible tariff turbulence in the United States and the fragile economic situation in Sri Lanka, I believe, this is not the right time to rush into finalising any trade agreement with the United States. I am also of the opinion that at this juncture Sri Lanka should maintain strategic patience and explore all available options.

Lessons from the countries that rushed for trade deals

To better comprehend this, let’s look at experiences of the countries that rushed to conclude tariff deals with the United States after President Donald Trump declared his “reciprocal tariffs” under the International Emergency Economic Powers Act (IEEPA) in April 2025. As Samarasinghe stated in his keynote, “The bottom line on all these negotiations was that every country that finally agreed to sign the agreement had to give either complete duty-free access for American exports into those markets, or near complete duty-free access.” In exchange for these tariff concessions and other market access commitments these countries managed to get the newly introduced country specific “reciprocal tariffs” reduced.

However, in February 2026, the Supreme Court of the United States (SCOTUS) struck down these “reciprocal tariffs” under the IEEPA. With that, the market access gains these countries received in exchange for complete duty-free access for American exports into their markets evaporated under U.S. domestic law. By moving too fast to conclude bilateral tariff agreements with the United States these countries are now bound to strict obligations whereas the benefits they bargained from the U.S. administration are not worth the paper those were written on.

Sri Lanka’s experience

In April 2025, President Trump declared his “reciprocal tariffs” and labelled Sri Lanka as the worst offender, imposing one of the highest additional duties at 44%. Since then, Ambassador Samarasinghe and other negotiators have managed to negotiate this down to 20%. I do not know what the deal was through which Sri Lanka managed to reduce the 44% tariff to 20% or what we gave in return for this “concession.” However, what we received in return has absolutely no value after the decision by the SCOTUS.

Current state of US tariffs

After the decision by SCOTUS, the U.S. administration introduced a temporary 10% additional tariff on all countries for 150 days. At the end of that period, this 10% tariff was replaced by a new “forced labor tariff ” of 10% to 12.5% on all trading partners under Section 301 of U.S. trade law. Twenty-five U.S. states and several small businesses have already filed lawsuits against these tariffs in U.S. courts. This new “forced labour tariff ” on Sri Lanka was first fixed at 12.5%. Later, after President Anura Kumara Dissanayake issued a gazette notice prohibiting the importation of goods produced using forced labour, it was reduced to 10%. That means Sri Lanka has already made a substantial commitment to receive this “tariff concession,” and I presume our negotiators understand the implications of this commitment.

Make haste slowly

After President Trump imposed 44% “reciprocal tariffs” on Sri Lanka, through an article published in The Island on 25th April 2026 (), I urged the government to engage immediately with the US administration on these tariffs. However, I also emphasised that the best way to move forward was to make haste slowly.

Two millennia ago, Augustus Caesar, the first emperor of Rome, frequently used the phrase, “make haste slowly”, because he detested rashness and haste in his military commanders. It was the recurring guiding maxim that he emphasised throughout his 40-year imperial rule. After 2000 years, this classical oxymoron remains a definitive golden rule for professional trade negotiators. More importantly it is the exact blueprint required when navigating turbulence in trade negotiations with the Trump administration.

The endgame – The most dangerous moment in trade negotiation

Samarasinghe has also stated the agreement is 90% complete. Any experienced trade negotiator should know that the final 10% contains high-stakes provisions and is the most dangerous moment in a trade negotiation. A single misplaced comma or ambiguous product description in a tariff schedule can cost millions through unintended loopholes. Rushing this last stretch to secure a deal can permanently expose Sri Lanka to sudden shifts in American trade policy, heavy compliance costs, or strict enforcement under Section 301 regarding supply-chain labour standards. Hence, this is the time for strategic patience.

(The writer can be reached at senadhiragomi@gmail.com)

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Opinion

Buddhist law and constitutional amendments

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Upon reading the article titled “Prof. Pieris says Buddha Dhamma recognized as source of law under Constitution” (Island, September 12, 2026), the classical Sinhala idiom “Yanne Koheda? Malle Pol” immediately comes to mind. The expression, translating literally to answering “I have coconuts in my bag” when asked “Where are you going?”, underscores a complete disconnect in logic. Because it is uncertain whether the article accurately represents the professor’s precise words, the following critique addresses the contents of the report rather than the speaker himself.

The central premise of the report concerns a statement delivered by the Chief Justice regarding a petition filed against the 22nd Amendment to the Constitution. According to the report, the Chief Justice’s observation that the determination would be made strictly on the basis of established law rather than Buddhist teachings was characterised as a “cavalier dismissal” of the Buddha Dhamma. This assertion carries a host of unexamined assumptions. Had the writer specified precisely which tenets of the Buddha Dhamma were violated, a direct legal or philosophical evaluation could take place. However, no specific Buddhist tenet or law was identified as having been transgressed, and for good reason: no such statutory legal framework exists within the Buddha’s teachings.

To understand the flaw in this argument, one must examine the constitutional context alongside the canonical meaning of the terms involved. Article 9 of the 1978 Constitution of Sri Lanka mandates that the Republic shall give Buddhism the foremost place and that it shall be the duty of the State to protect and foster the Buddha Sasana, while guaranteeing the fundamental rights of all religions under Articles 10 and 14(1)(e).

While “Buddhism” and “Buddha Dhamma” are frequently used as interchangeable terms in casual dialogue, they represent distinct concepts. “Buddhism” is an umbrella term coined by 19th-century Western scholars to classify the global institutionalised religion, incorporating its diverse sects, cultural traditions, rituals, and socio-political histories. Conversely, Sasana is the ancient term designating the structural framework established by the Buddha to preserve and transmit his teachings, comprising the monastic order (Sangha) and its supporting institutions.

In classical Theravada commentarial literature, the Sasana operates as a functional three-tiered structure. It encompasses Pariyatti Sasana, the preservation and study of sacred texts; Paṭipatti Sasana, the practical execution of the doctrine through ethical conduct and meditation; and Paṭivedha Sasana, the direct experiential realization of ultimate truth, or enlightenment. This structural breakdown raises fundamental questions about state capacity. While a state can readily support Pariyatti Sasana through academic institutions, textual preservation, and educational funding, it cannot legislate or enforce Paṭipatti or Paṭivedha. Practical engagement and spiritual realisation are inherently internal, first-person experiences. Expecting the state to codify or guarantee enlightenment is a conceptual impossibility.

Furthermore, the Buddha Dhamma refers specifically to the unconditioned truths of existence and the teachings imparted to realize them, including the Four Noble Truths, the Eightfold Path, and Dependent Origination. As the late Venerable Professor Kotagama Wachissara Thera observed, there is no rigid ideologue or “ism” in the core Dhamma. The teachings do not constitute a system of divine commandments or a legal statute enforced through reward and punishment. Rather, Buddhist ethics function as self-directed guidelines for psychological clarity and moral inquiry. Even the Vinaya Pitaka, which contains explicit rules of conduct, functions as an internal monastic code rather than a civil or criminal law intended for the laity.

Throughout the Pali Canon, guidance regarding governance focuses on the moral character of leadership and the social duties of statecraft rather than rigid legal codification. In discourses such as the Cakkavatti Sihanada Sutta (DN 26), the Buddha observes that social instability and crime cannot be eliminated solely through punitive measures, emphasising instead that states must provide economic opportunities, fair wages, and resource distribution to maintain societal balance. Crucially, in the Maha Parinibbana Sutta (DN 16), the Buddha explicitly highlights the importance of respecting established laws and traditions rather than enacting arbitrary regulations.

The natural laws articulated in the Dhamma, such as the law of cause and effect or the three characteristics of existence, govern all phenomena universally, regardless of legal statutes or personal belief. They are not human laws to be applied or suspended by a court of law. Therefore, characterizing the Chief Justice’s adherence to constitutional jurisprudence over religious doctrine as a “cavalier dismissal” lacks logical and textual foundation. Framing the judiciary’s adherence to legal precedent as an attack on the Dhamma distracts from fundamental constitutional principles and risks misguiding the public for political ends.

Geewananda
Gunawardana,
Ph.D.

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