Features
In bid to counter China, US ramps up effort to boost military ties in Asia
On May 30, the United States accused China of intercepting one of its spy planes in an “unnecessarily aggressive manoeuvre” over the South China Sea. The American RC-135 plane, according to the US military, was conducting routine operations over the sensitive waterway when the Chinese fighter jet flew directly in front of its nose.
A video shared by the US Indo-Pacific Command showed the cockpit of the RC-135 shaking in the wake of turbulence of the Chinese jet.
Days later, on June 5, the US again accused China of carrying out what it said was an ‘unsafe’ manouver near one of its vessels. This time it was around a warship in the Taiwan Strait. The US Indo-Pacific Command again released a video of the incident, showing a Chinese navy vessel cutting sharply across the path of a US destroyer at a distance of some 137 metres (150 yards), forcing the latter to slow down to avoid a collision.
Washington said the near misses showed China’s “growing aggressiveness”, but Beijing said the US was to blame, accusing its rival of deliberately “provoking risk” by sending aircraft and vessels for “close in reconnaissance” near its shores – moves it said posed a serious danger to its national security.
The close calls evoked memories of a deadly incident on April 1, 2001, when a Chinese fighter jet and a US surveillance plane collided in the sky over the South China Sea. The impact caused the Chinese jet to crash and killed the pilot, while the US plane was forced to make an emergency landing in China’s Hainan. Beijing held the 24 American aircrew members for 11 days and only released them when Washington apologised for the incident.
While the two countries were able to de-escalate tensions then, there are worries that a similar mishap today could widen into a bigger conflict due to the deterioration in relations between the rivals.
The US views China as the biggest challenge to the Western-dominated international order, pointing to Beijing’s rapid military buildup – the biggest in peacetime history – as well as its claims over the self-governed island of Taiwan and in the East and South China Seas. The US military’s so-called “freedom of navigation exercises” in the contested waterways near China are part of a push by the administration of President Joe Biden to deepen and expand its diplomatic and military presence in the Asia Pacific.
The campaign – which has accelerated over the past year – stretches from Japan to the Philippines and Australia, and from India to Papua New Guinea and the Solomon Islands. The “once in a generation effort,” as Gregory Poling, director of the Southeast Asia Program at the Center for Strategic and International Studies, puts it, involves the opening of new embassies in the region, deployment of troops and more advanced military assets, as well as obtaining access to sites in key areas facing the South China Sea and the Taiwan Strait.
For its part, China accuses the US of pursuing a policy of “containment, encirclement and suppression”, all aimed at holding back its economic development. And its leaders have pledged to resist.
Chinese President Xi Jinping said the US campaign has “brought unprecedented sever challenges to our country’s development”, and in a speech in March called on his countrymen to “dare to fight”. His former Defence Minister Li Shangfu, during an address at the Shangri-La Dialogue in Singapore, condemned what he called Washington’s “Cold War mentality”, and said Beijing would not be intimidated and would “resolutely safeguard national sovereignty and territorial integrity, regardless of any cost”.
Analysts say tensions will only heighten further as competition between China and the US – a contest about who gets to set the rules on the global stage – intensifies. While the superpower rivalry could bring benefits to countries in the Asia Pacific in the short term – particularly in the form of infrastructure loans and foreign direct investments – these nations could, in the future, find having to navigate between China and the US more challenging.
“This is a competition over what the rules-based order looks like, at least in Asia,” Poling told Al Jazeera. “It’s about whether or not the existing global rules continue to apply to Asia or whether China gets to carve out a huge area of exemption in which its preferred rules predominate.
“Clearly, the next couple of decades at least are going to be characterised by this growing competition. Unless China changes its strategy on this … then we’re going to see competition continue to heighten and tensions continue to heighten not just between the US and China, but also between China and most of its neighbours.”
China’s rise
Japan’s defeat in World War II ushered in an age of US dominance in Asia. But in recent decades, China’s growing military and economic might has brought an end to that uncontested primacy.
Under Xi, who took office in 2012 championing what he calls the “Chinese dream of national rejuvenation”, a vision to restore China’s great-power status, Beijing has invested heavily in modernising its military. According to the International Institute for Strategic Studies, a London-based think tank, China has more than doubled its military spending over the past decade, with expenditure reaching $219bn in 2022 although this is still less than a third of US spending during the same year.
China has also embarked on a naval shipbuilding programme that has put more vessels to sea between 2014 and 2018 than the total number of ships in the German, Indian, Spanish and British navies combined. The People’s Liberation Army (PLA) has since also commissioned guided missile cruisers as well as nuclear-powered ballistic missile submarines. In June 2022, it launched its third aircraft carrier, the Fujian. The PLA’s rocket force has also modernised its capabilities, including with the development of hypersonic missiles and anti-ship ballistic missiles. According to the US military, the PLA also plans to accelerate the expansion of its nuclear arsenal to as many as 700 nuclear warheads by 2027 and at least 1,000 by 2030.
Along with the military build-up, China has also become increasingly assertive in enforcing its territorial claims in crucial waterways off its coast.
In the East China Sea, Beijing lays claim to a group of Japanese-administered islands known as Diaoyu in China and Senkaku in Japan and has increased naval and aerial patrols in the area, drawing protest from Tokyo.
China also lays claim to the entire South China Sea, via its nine-dash line, much to the ire of neighbouring Philippines, Vietnam, Taiwan, Brunei and Malaysia. To shore up those claims, China has built artificial islands in disputed waters, including in the Spratly Islands which it seized from the Philippines in 1996, and expanded its presence in the Paracel Islands which it seized from Vietnam in 1976. China now operates four large outposts with 10,000-foot runways on Woody Island, Fiery Cross Reef, Mischief Reef and Subi Reef. It has also deployed substantial military assets to the islands, including anti-ship missiles, and hangars capable of housing military transport, patrol and combat aircraft.
At the same time, China has faced off with India over their disputed border in the Himalayas. Tensions in the region boiled over in June 2020, when Chinese and Indian troops fought each other with sticks and clubs. At least 20 Indian and four Chinese soldiers died.
Xi has also stepped up rhetoric around Taiwan.
During the Chinese Communist Party’s Congress in September, Xi called unification with the democratically-governed island a “historic mission” and an “unshakable commitment”. The PLA has meanwhile normalised incursions into Taiwan’s Air Defence Identification Zone, the airspace in which Taiwan attempts to identify and control all aircraft.
On the economic front, too, China has grown increasingly powerful.
It is the most important trading partner for more than 120 countries in the world and has sought to expand its economic influence through the ambitious Belt and Road Initiative (BRI). Under the project, sometimes known as the New Silk Road, China has financed physical infrastructure, such as ports, bridges and railways across Asia, Africa and Europe and funded hundreds of special economic zones, or industrial areas designed to create jobs. To date, some 147 countries have signed on to BRI projects or indicated an interest in doing so. In total, China has already disbursed an estimated $1 trillion on such efforts and may spend as much as $8 trillion over the life of the project.
Arc of alliances
The US has sounded the alarm over China’s growing clout.
Biden has called Xi a ‘dictator’, while his administration has accused Beijing of leveraging its commercial, military and technological might to “pursue a sphere of influence in the Indo-Pacific” and “become the world’s most influential power”.
Biden’s Secretary of State Antony Blinken, unveiling the US’s China strategy last year, described the Asian power as “the only country with both the intent to reshape the international order and, increasingly, the economic, diplomatic, military and technological power to do it”.
A key pillar in the US’s campaign to counter China has been its efforts to deepen and expand its military and diplomatic ties with countries in the Indo-Pacific. The campaign – which includes boosting relations with allies such as Australia, Japan and South Korea, and non-allies such as India and Vietnam – has arguably resulted in the most robust US diplomatic and military posture in the Asia Pacific in recent decades.
In Australia, the US, along with the United Kingdom, has announced a historic security partnership to equip Canberra with up to five nuclear-powered attack submarines by the early 2030s. These vessels, which are equipped with long-range missiles, are much harder to detect and can stay underwater far longer than conventional submarines, “making them one of the most effective ways to complicate Chinese military planning and give Beijing a reason to take pause before using force”, according to the Carnegie Endowment for International Peace. Australia and the US have also announced plans to increase the rotational presence of US air, land and sea forces on the island continent, and build airfields to operate nuclear-capable B52 bombers from northern Australia.
In Japan, the US has announced plans to overhaul its troop presence on the Okinawa Islands, including equipping its maritime units there with long-range fire abilities that can hit ships – something that would be key in the event of a Chinese invasion of Taiwan.
In South Korea, which has grown increasingly anxious about neighbouring North Korea’s accelerating nuclear and missile programme, the US has announced new security assurances including the deployment of a nuclear-armed submarine to the Korean peninsula for the first time in four decades. More significantly, the US has announced a new trilateral security partnership with Seoul and Tokyo, a historic achievement given the long history of mutual acrimony between the two countries. At a summit in Camp David in the US in August, the three nations condemned China’s “dangerous and aggressive behaviours” in the South China Sea and pledged to deepen military and economic cooperation to tackle regional challenges.
In the Philippines, another US ally, the government of President Ferdinand Marcos Jr – incensed by Chinese harassment of its vessels in the South China Sea – has granted the Pentagon access to four more sites in the country. This brings to nine the number of locations that US forces have access to in the country – albeit on a rotational basis. Three of the four new sites are in the provinces of Cagayan and Isabela in northern Philippines, facing Taiwan, and the other in eastern Palawan, near the disputed Spratly Islands in the South China Sea. The Philippines and the US have also stepped up the scope and scale of their military exercises, and Washington has reinforced its commitment to defend Manila from an attack at sea. The navies of the two countries are eyeing joint naval patrols in the South China Sea, while the US has also increased freedom of navigation exercises in the waterway.
Vietnam, too, has upgraded its ties with the US. Alarmed by China’s actions in the South China Sea, Hanoi in September elevated the US’s diplomatic status to that of a comprehensive strategic partner – on par with that of China and Russia. The move came during a historic visit to the Vietnamese capital by Biden, and experts say it is indicative of the depth of its concern over its territorial dispute with China in the South China Sea.
On Taiwan, Biden has said on several occasions that the US would come to the island’s aid if there was a Chinese attack. While the White House has since walked back those statements, the Biden administration has continued arms sales to Taiwan, approving more than $3bn in weapons transfers and also allowing US officials to meet more freely with Taiwanese counterparts.
In the Pacific Islands, too, the US has expanded its military and diplomatic footprint.
In May, it signed a security deal with Papua New Guinea that gives it “unimpeded access” to several key airports and seaports in the Pacific nation and re-opened an embassy in the Solomon Islands after a 30-year absence. It has also opened an embassy in Tonga and is in talks with Kiribati and Vanuatu to establish a diplomatic presence there. Biden has also hosted historic summits for Pacific Island leaders in Washington, DC, pledging $810m in new aid for the Pacific Islands over the next decade, including to tackle the existential threat of climate change.
Non-aligned India, too, has stepped up cooperation with the US.
The two countries, along with Australia and Japan have revived an informal alliance known as the Quadrilateral Security Dialogue, or Quad, in a bid to counter China and deliver public goods to countries in the Global South. Quad pledges include a key initiative to help countries protect maritime resources from predatory illegal fishing and promises to invest more than $50bn in developing infrastructure in the Indo-Pacific.
‘Desperation’
Analysts say the US campaign has stirred anger and concern in Beijing.
“This latest phase really just shows an increase in desperation on the part of the US because taking military measures usually is a last resort. Because it’s risky and it’s expensive. It’s also very dangerous. A country that has to resort to these measures, I think, clearly feels it is running out of options and is increasingly desperate to protect its rapidly eroding position in the world,” said Andy Mok, senior research fellow at the Center for China and Globalization in Beijing.
“We only need to look at a map of US military assets to see who’s the aggressor. It’s not that China has numerous military bases surrounding the United States. It’s exactly the opposite. So I think any reasonable observer would question this assertion whether China is really engaging in any sort of military provocations here.”
Mok said China is responding to the US’s efforts by continuing its military modernisation as well as strengthening its own ties.
The military modernisation efforts “include everything from the development of hypersonic missiles to a much stronger navy that is effective not just close to China’s shores, which would include Taiwan, of course, but much broader,” he said. “It includes cyber, includes space from the military perspective. So, becoming a much more comprehensive military force able to respond to threats a number of different ways.”
On the diplomatic front, Mok said China will look to strengthen multilateral initiatives such as the Regional Comprehensive Economic Partnership, the world’s largest free trade agreement that brings together 15 countries, the BRICs group that includes Brazil, Russia and India, and the Shanghai Cooperation Organization (SCO), a nine-member Eurasian group that counts Pakistan and Iran among its members.
“These are all attempts to create a more humane and just global order, where these types of issues are, again, not decided by one country and not decided through coercion, whether that’s primarily military coercion or other forms of coercion, including economic sanctions,” he added.
Heightened tensions
For countries in the Asia Pacific, especially in Southeast Asia, the increased US-China competition has brought some economic benefits. To compete with China’s BRI, the US has pledged to step up investment in infrastructure, though much of this investment has yet to bear fruit, while the trade war between the superpowers has resulted in some Southeast Asian countries marketing themselves as alternative production destinations.
“In Southeast Asia, I think the emphasis is on autonomy. And to the extent that they can invite more actors in to have a stake – whether this is the United States, whether this is Korea, Japan, the EU or Australia – that is somewhat more preferred because it dilutes the presence of any single actor,” said Ja-Ian Chong, associate professor at the National University of Singapore.
“With the diversification of investment from the United States, South Korea, Japan, Taiwan, Australia, some Southeast Asian states will be big beneficiaries. So Vietnam, Thailand, Indonesia, and to some degree, the Philippines and Malaysia have seen investment that might otherwise go to China go to them.”
China, Chong said, sees the robustness of US presence in the region as a bit of a challenge.
“The question is, how they will respond? It is possible that they may respond with more caution, which could be stabilising, but there’s also a possibility that they could react even more strongly. But that’s not easy to predict at this point in time.”
So far, it appears that Beijing is seeking to contest the US’s presence.
That is evident not just in the confrontations between US and Chinese vessels and aircraft over the South China Sea and the Taiwan Strait, but also in Beijing’s standoffs with Philippine military boats in the South China Sea. These include incidents in August and earlier this month when the Chinese Coast Guard used water cannon to prevent the Philippine military from resupplying its troops living on a grounded warship on the disputed Second Thomas Shoal.
On Taiwan, too, China’s navy this year launched its largest-ever exercises in the Pacific Ocean, deploying an aircraft carrier and dozens of naval ships and warplanes, in a move analysts said was probably practice for enforcing a blockade around the island. Beijing said the purpose of the drills was to “resolutely combat the arrogance of Taiwan independence separatist forces and their actions to seek independence”.
Chong said the tensions were likely to pose new challenges to countries in the region.
“I expect the contestation to become more intense. Meaning to say that trying to navigate between the two major powers will become more challenging, not impossible, but certainly more challenging. To expect that you can act in ways that get benefits from both sides may become more difficult. It may be the case that working with one more will invite pressure from the other,” said Chong. “That is likely to be a challenge facing Southeast Asia unless they are more able to set up their own direction.”
(Aljazeera)
(Part III in a series on Sri Lanka’s tourism stagnation.)
Every SLTDA (Sri Lanka Tourism Development Authority) press release now leads with the same headline: India is Sri Lanka’s “star market.” The numbers seem to prove it, 531,511 Indian arrivals in 2025, representing 22.5% of all tourists. Officials celebrate the “half-million milestone” and set targets for 600,000, 700,000, more.
But follow the money instead of the headcount, and a different picture emerges. We are building our tourism recovery on a low-spending, short-stay, operationally challenging segment, without any serious strategy to transform it into a high-value market. We have confused market size with market quality, and the confusion is costing us billions.
Per-day spending: While SLTDA does not publish market-specific daily expenditure data, industry operators and informal analyses consistently report Indian tourists in the $100-140 per day range, compared to $180-250 for Western European and North American markets.
The math is brutal and unavoidable: one Western European tourist generates the revenue of 3-4 Indian tourists. Building tourism recovery primarily on the low-yield segment is strategically incoherent, unless the goal is arrivals theater rather than economic contribution.
Comparative Analysis: How Competitors Handle Indian Outbound Tourism
India is not unique to Sri Lanka. Indian outbound tourism reached 30.23 million departures in 2024, an 8.4% year-on-year increase, driven by a growing middle class with disposable income. Every competitor destination is courting this market.
This is not diversification. It is concentration risk dressed up as growth.
How did we end up here? Through a combination of policy laziness, proximity bias, and refusal to confront yield trade-offs.
1. Proximity as Strategy Substitute
India is next door. Flights are short (1.5-3 hours), frequent, and cheap. This makes India the easiest market to attract, low promotional cost, high visibility, strong cultural and linguistic overlap. But easiest is not the same as best.
Tourism strategy should optimize for yield-adjusted effort. Yes, attracting Europeans requires longer promotional cycles, higher marketing spend, and sustained brand-building. But if each European generates 3x the revenue of an Indian tourist, the return on investment is self-evident.
We have chosen ease over effectiveness, proximity over profitability.
2. Visa Policy as Blunt Instrument
3. Failure to Develop High-Value Products for Indian Market
There are segments of Indian outbound tourism that spend heavily:
* Wedding tourism: Indian destination weddings can generate $50,000-200,000+ per event
* Wellness/Ayurveda tourism: High-net-worth Indians seek authentic wellness experiences and will pay premium rates
* MICE tourism: Corporate events, conferences, incentive travel
Sri Lanka has these assets—coastal venues for weddings, Ayurvedic heritage, colonial hotels suitable for corporate events. But we have not systematically developed and marketed these products to high-yield Indian segments.
For the first time in 2025, Sri Lanka conducted multi-city roadshows across India to promote wedding tourism. This is welcome—but it is 25 years late. The Maldives and Mauritius have been curating Indian wedding and MICE tourism for decades, building specialised infrastructure, training staff, and integrating these products into marketing.
We are entering a mature market with no track record, no specialised infrastructure, and no price positioning that signals premium quality.
4. Operational Challenges and Quality Perceptions
Indian tourists, particularly budget segments, present operational challenges:
* Shorter stays mean higher turnover, more check-ins, more logistical overhead per dollar of revenue
* Price sensitivity leads to aggressive bargaining, complaints over perceived overcharging
* Large groups (families, wedding parties) require specialised handling
None of these are insurmountable, but they require investment in training, systems, and service design. Sri Lanka has not made these investments systematically. The result: operators report higher operational costs per Indian guest while generating lower revenue, a toxic margin squeeze.
Additionally, Sri Lanka’s positioning as a “budget-friendly” destination reinforces price expectations. Indians comparing Sri Lanka to Thailand or Malaysia see Sri Lanka as cheaper, not better. We compete on price, not value, a race to the bottom.
The Strategic Error: Mistaking Market Size for Market Fit
India’s outbound tourism market is massive, 30 million+ and growing. But scale is not the same as fit.
Market size ≠ market value: The UAE attracts 7.5 million Indians, but as a high-yield segment (business, luxury shopping, upscale hospitality). Saudi Arabia attracts 3.3 million—but for religious pilgrimage with high per-capita spending and long stays.
Thailand attracts 1.8 million Indians as part of a diversified 35-million-tourist base. Indians represent 5% of Thailand’s mix. Sri Lanka has made Indians 22.5% of our mix, 4.5 times Thailand’s concentration, while generating a fraction of Thailand’s revenue.
This reveals the error. We have prioritised volume from a market segment without ensuring the segment aligns with our value proposition.
These needs are misaligned. Indians seek budget value; Sri Lanka needs yield. Indians want short trips; Sri Lanka needs extended stays. Indians are price-sensitive; Sri Lanka needs premium segments to fund infrastructure.
We have attracted a market that does not match our strategic needs—and then celebrated the mismatch as success.
The Way Forward: From Dependency to Diversification
Fixing the Indian market trap requires three shifts: curation, diversification, and premium positioning.
First
, segment the Indian market and target high-value niches explicitly:
* Wedding tourism: Develop specialised wedding venues, train planners, create integrated packages ($50k+ per event)
* Wellness tourism: Position Sri Lanka as authentic Ayurveda destination for high-net-worth health seekers
* MICE tourism: Target Indian corporate incentive travel and conferences
* Spiritual/religious tourism: Leverage Buddhist and Hindu heritage sites with premium positioning
Market these high-value niches aggressively. Let budget segments self-select out through pricing signals.
Second
, rebalance market mix toward high-yield segments:
* Increase marketing spend on Western Europe, North America, and East Asian premium segments
* Develop products (luxury eco-lodges, boutique heritage hotels, adventure tourism) that appeal to high-yield travelers
* Use visa policy strategically, maintain visa-free for premium markets, consider tiered visa fees or curated visa schemes for volume markets
Third
, stop benchmarking success by Indian arrival volumes. Track:
* Revenue per Indian visitor
* Indian market share of total revenue (not arrivals)
* Yield gap: Indian revenue vs. other major markets
If Indians are 22.5% of arrivals but only 15% of revenue, we have a problem. If the gap widens, we are deepening dependency on a low-yield segment.
Fourth
, invest in Indian market quality rather than quantity:
* Train staff on Indian high-end expectations (luxury service standards, dietary needs)
* Develop bilingual guides and materials (Hindi, Tamil)
* Build partnerships with premium Indian travel agents, not budget consolidators
We should aim to attract 300,000 Indians generating $1,500 per trip (through wedding, wellness, MICE targeting), not 700,000 generating $600 per trip. The former produces $450 million; the latter produces $420 million, while requiring more than twice the operational overhead and infrastructure load.
Fifth
, accept the hard truth: India cannot and should not be 30-40% of our market mix. The structural yield constraints make that model non-viable. Cap Indian arrivals at 15-20% of total mix and aggressively diversify into higher-yield markets.
This will require political courage, saying “no” to easy volume in favour of harder-won value. But that is what strategy means: choosing what not to do.
The Dependency Trap
Every market concentration creates path dependency. The more we optimize for Indian tourists, visa schemes, marketing, infrastructure, pricing, the harder it becomes to attract high-yield markets that expect different value propositions.
Hotels that compete on price for Indian segments cannot simultaneously position as luxury for European segments. Destinations known for “affordability” struggle to pivot to premium. Guides trained for high-turnover, short-stay groups do not develop the deep knowledge required for extended cultural tours.
We are locking in a low-yield equilibrium. Each incremental Indian arrival strengthens the positioning as a “budget-friendly” destination, which repels high-yield segments, which forces further volume-chasing in price-sensitive markets. The cycle reinforces itself.
Breaking the cycle requires accepting short-term pain—lower arrival numbers—for long-term gain—higher revenue, stronger positioning, sustainable margins.
The Hard Question
Is Sri Lanka willing to attract two million tourists generating $5 billion, or three million tourists generating $4 billion?
The current trajectory is toward the latter, more arrivals, less revenue, thinner margins, greater fragility. We are optimizing for metrics that impress press releases but erode economic contribution.
The Indian market is not the problem. The problem is building tourism recovery primarily on a low-yield segment without strategies to either transform that segment to high-yield or balance it with high-yield markets.
We are building on sand. The foundation will not hold.
(The writer, a senior Chartered Accountant and professional banker, is Professor at SLIIT, Malabe. The views and opinions expressed in this article are personal.)
Understanding Sri Lanka through the India AI Impact Summit 2026
Artificial Intelligence (AI) has rapidly moved from being a specialised technological field into a major social force that shapes economies, cultures, governance, and everyday human life. The India AI Impact Summit 2026, held in New Delhi, symbolised a significant moment for the Global South, especially South Asia, because it demonstrated that artificial intelligence is no longer limited to advanced Western economies but can also become a development tool for emerging societies. The summit gathered governments, researchers, technology companies, and international organisations to discuss how AI can support social welfare, public services, and economic growth. Its central message was that artificial intelligence should be human centred and socially useful. Instead of focusing only on powerful computing systems, the summit emphasised affordable technologies, open collaboration, and ethical responsibility so that ordinary citizens can benefit from digital transformation. For South Asia, where large populations live in rural areas and resources are unevenly distributed, this idea is particularly important.
People friendly AI
One of the most important concepts promoted at the summit was the idea of “people friendly AI.” This means that artificial intelligence should be accessible, understandable, and helpful in daily activities. In South Asia, language diversity and economic inequality often prevent people from using advanced technology. Therefore, systems designed for local languages, and smartphones, play a crucial role. When a farmer can speak to a digital assistant in Sinhala, Tamil, or Hindi and receive advice about weather patterns or crop diseases, technology becomes practical rather than distant. Similarly, voice based interfaces allow elderly people and individuals with limited literacy to use digital services. Affordable mobile based AI tools reduce the digital divide between urban and rural populations. As a result, artificial intelligence stops being an elite instrument and becomes a social assistant that supports ordinary life.
Transformation in education sector
The influence of this transformation is visible in education. AI based learning platforms can analyse student performance and provide personalised lessons. Instead of all students following the same pace, weaker learners receive additional practice while advanced learners explore deeper material. Teachers are able to focus on mentoring and explanation rather than repetitive instruction. In many South Asian societies, including Sri Lanka, education has long depended on memorisation and private tuition classes. AI tutoring systems could reduce educational inequality by giving rural students access to learning resources, similar to those available in cities. A student who struggles with mathematics, for example, can practice step by step exercises automatically generated according to individual mistakes. This reduces pressure, improves confidence, and gradually changes the educational culture from rote learning toward understanding and problem solving.
Healthcare is another area where AI is becoming people friendly. Many rural communities face shortages of doctors and medical facilities. AI-assisted diagnostic tools can analyse symptoms, or medical images, and provide early warnings about diseases. Patients can receive preliminary advice through mobile applications, which helps them decide whether hospital visits are necessary. This reduces overcrowding in hospitals and saves travel costs. Public health authorities can also analyse large datasets to monitor disease outbreaks and allocate resources efficiently. In this way, artificial intelligence supports not only individual patients but also the entire health system.
Agriculture, which remains a primary livelihood for millions in South Asia, is also undergoing transformation. Farmers traditionally rely on seasonal experience, but climate change has made weather patterns unpredictable. AI systems that analyse rainfall data, soil conditions, and satellite images can predict crop performance and recommend irrigation schedules. Early detection of plant diseases prevents large-scale crop losses. For a small farmer, accurate information can mean the difference between profit and debt. Thus, AI directly influences economic stability at the household level.
Employment and communication reshaped
Artificial intelligence is also reshaping employment and communication. Routine clerical and repetitive tasks are increasingly automated, while demand grows for digital skills, such as data management, programming, and online services. Many young people in South Asia are beginning to participate in remote work, freelancing, and digital entrepreneurship. AI translation tools allow communication across languages, enabling businesses to reach international customers. Knowledge becomes more accessible because information can be summarised, translated, and explained instantly. This leads to a broader sociological shift: authority moves from tradition and hierarchy toward information and analytical reasoning. Individuals rely more on data when making decisions about education, finance, and career planning.
Impact on Sri Lanka
The impact on Sri Lanka is especially significant because the country shares many social and economic conditions with India and often adopts regional technological innovations. Sri Lanka has already begun integrating artificial intelligence into education, agriculture, and public administration. In schools and universities, AI learning tools may reduce the heavy dependence on private tuition and help students in rural districts receive equal academic support. In agriculture, predictive analytics can help farmers manage climate variability, improving productivity and food security. In public administration, digital systems can speed up document processing, licensing, and public service delivery. Smart transportation systems may reduce congestion in urban areas, saving time and fuel.
Economic opportunities are also expanding. Sri Lanka’s service based economy and IT outsourcing sector can benefit from increased global demand for digital skills. AI-assisted software development, data annotation, and online service platforms can create new employment pathways, especially for educated youth. Small and medium entrepreneurs can use AI tools to design products, manage finances, and market services internationally at low cost. In tourism, personalised digital assistants and recommendation systems can improve visitor experiences and help small businesses connect with travellers directly.
Digital inequality
However, the integration of artificial intelligence also raises serious concerns. Digital inequality may widen if only educated urban populations gain access to technological skills. Some routine jobs may disappear, requiring workers to retrain. There are also risks of misinformation, surveillance, and misuse of personal data. Ethical regulation and transparency are, therefore, essential. Governments must develop policies that protect privacy, ensure accountability, and encourage responsible innovation. Public awareness and digital literacy programmes are necessary so that citizens understand both the benefits and limitations of AI systems.
Beyond economics and services, AI is gradually influencing social relationships and cultural patterns. South Asian societies have traditionally relied on hierarchy and personal authority, but data-driven decision making changes this structure. Agricultural planning may depend on predictive models rather than ancestral practice, and educational evaluation may rely on learning analytics instead of examination rankings alone. This does not eliminate human judgment, but it alters its basis. Societies increasingly value analytical thinking, creativity, and adaptability. Educational systems must, therefore, move beyond memorisation toward critical thinking and interdisciplinary learning.
AI contribution to national development
In Sri Lanka, these changes may contribute to national development if implemented carefully. AI-supported financial monitoring can improve transparency and reduce corruption. Smart infrastructure systems can help manage transportation and urban planning. Communication technologies can support interaction among Sinhala, Tamil, and English speakers, promoting social inclusion in a multilingual society. Assistive technologies can improve accessibility for persons with disabilities, enabling broader participation in education and employment. These developments show that artificial intelligence is not merely a technological innovation but a social instrument capable of strengthening equality when guided by ethical policy.
Symbolic shift
Ultimately, the India AI Impact Summit 2026 represents a symbolic shift in the global technological landscape. It indicates that developing nations are beginning to shape the future of artificial intelligence according to their own social needs rather than passively importing technology. For South Asia and Sri Lanka, the challenge is not whether AI will arrive but how it will be used. If education systems prepare citizens, if governments establish responsible regulations, and if access remains inclusive, AI can become a partner in development rather than a source of inequality. The future will likely involve close collaboration between humans and intelligent systems, where machines assist decision making while human values guide outcomes. In this sense, artificial intelligence does not replace human society, but transforms it, offering Sri Lanka an opportunity to build a more knowledge based, efficient, and equitable social order in the decades ahead.
by Milinda Mayadunna
The visit by IMF Managing Director Kristalina Georgieva to Sri Lanka was widely described as a success for the government. She was fulsome in her praise of the country and its developmental potential. The grounds for this success and collaborative spirit go back to the inception of the agreement signed in March 2023 in the aftermath of Sri Lanka’s declaration of international bankruptcy. The IMF came in to fulfil its role as lender of last resort. The government of the day bit the bullet. It imposed unpopular policies on the people, most notably significant tax increases. At a moment when the country had run out of foreign exchange, defaulted on its debt, and faced shortages of fuel, medicine and food, the IMF programme restored a measure of confidence both within the country and internationally.
Since 1965 Sri Lanka has entered into agreements with the IMF on 16 occasions none of which were taken to their full term. The present agreement is the 17th agreement . IMF agreements have traditionally been focused on economic restructuring. Invariably the terms of agreement have been harsh on the people, with priority being given to ensure the debtor country pays its loans back to the IMF. Fiscal consolidation, tax increases, subsidy reductions and structural reforms have been the recurring features. The social and political costs have often been high. Governments have lost popularity and sometimes fallen before programmes were completed. The IMF has learned from experience across the world that macroeconomic reform without social protection can generate backlash, instability and policy reversals.
The experience of countries such as Greece, Ireland and Portugal in dealing with the IMF during the eurozone crisis demonstrated the political and social costs of austerity, even though those economies later stabilised and returned to growth. The evolution of IMF policies has ensured that there are two special features in the present agreement. The first is that the IMF has included a safety net of social welfare spending to mitigate the impact of the austerity measures on the poorest sections of the population. No country can hope to grow at 7 or 8 percent per annum when a third of its people are struggling to survive. Poverty alleviation measures in the Aswesuma programme, developed with the agreement of the IMF, are key to mitigating the worst impacts of the rising cost of living and limited opportunities for employment.
Governance Included
The second important feature of the IMF agreement is the inclusion of governance criteria to be implemented alongside the economic reforms. It goes to the heart of why Sri Lanka has had to return to the IMF repeatedly. Economic mismanagement did not take place in a vacuum. It was enabled by weak institutions, politicised decision making, non-transparent procurement, and the erosion of checks and balances. In its economic reform process, the IMF has included an assessment of governance related issues to accompany the economic restructuring process. At the top of this list is tackling the problem of corruption by means of publicising contracts, ensuring open solicitation of tenders, and strengthening financial accountability mechanisms.
The IMF also encouraged a civil society diagnostic study and engaged with civil society organisations regularly. The civil society analysis of governance issues which was promoted by Verite Research and facilitated by Transparency International was wider in scope than those identified in the IMF’s own diagnostic. It pointed to systemic weaknesses that go beyond narrow fiscal concerns. The civil society diagnostic study included issues of social justice such as the inequitable impact of targeting EPF and ETF funds of workers for restructuring and the need to repeal abuse prone laws such as the Prevention of Terrorism Act and the Online Safety Act. When workers see their retirement savings restructured without adequate consultation, confidence in policy making erodes. When laws are perceived to be instruments of arbitrary power, social cohesion weakens.
During a meeting between the IMF Managing Director Georgeiva and civil society members last week, there was discussion on the implementation of those governance measures in which she spoke in a manner that was not alien to the civil society representatives. Significantly, the civil society diagnostic report also referred to the ethnic conflict and the breakdown of interethnic relations that led to three decades of deadly war, causing severe economic losses to the country. This was also discussed at the meeting. Governance is not only about accounting standards and procurement rules. It is about social justice, equality before the law, and political representation. On this issue the government has more to do. Ethnic and religious minorities find themselves inadequately represented in high level government committees. The provincial council system that ensured ethnic and minority representation at the provincial level continues to be in abeyance.
Beyond IMF
The significance of addressing governance issues is not only relevant to the IMF agreement. It is also important in accessing tariff concessions from the European Union. The GSP Plus tariff concession given by the EU enables Sri Lankan exports to be sold at lower prices and win markets in Europe. For an export dependent economy, this is critical. Loss of such concessions would directly affect employment in key sectors such as apparel. The government needs to address longstanding EU concerns about the protection of human rights and labour rights in the country. The EU has, for several years, linked the continuation of GSP Plus to compliance with international conventions. This includes the condition that the Prevention of Terrorism Act (PTA) be brought into line with international standards. The government’s alternative in the form of the draft Protection of the State from Terrorism Act (PTSA) is less abusive on paper but is wider in scope and retains the core features of the PTA.
Governance and social justice factors cannot be ignored or downplayed in the pursuit of economic development. If Sri Lanka is to break out of its cycle of crisis and bailout, it must internalise the fact that good governance which promotes social justice and more fairly distributes the costs and fruits of development is the foundation on which durable economic growth is built. Without it, stabilisation will remain fragile, poverty will remain high, and the promise of 7 to 8 percent growth will remain elusive. The implementation of governance reforms will also have a positive effect through the creative mechanism of governance linked bonds, an innovation of the present IMF agreement.
The Sri Lankan think tank Verité Research played an important role in the development of governance linked bonds. They reduce the rate of interest payable by the government on outstanding debt on the basis that better governance leads to a reduction in risk for those who have lent their money to Sri Lanka. This is a direct financial reward for governance reform. The present IMF programme offers an opportunity not only to stabilise the economy but to strengthen the institutions that underpin it. That opportunity needs to be taken. Without it, the country cannot attract investment, expand exports and move towards shared prosperity and to a 7-8 percent growth rate that can lift the country out of its debt trap.
by Jehan Perera
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