Features
More on Premadasa years: pro-poor policies, garment factories, Janasaviya and housing
Good friend, bad enemy, feud with Ariyaratne
(Excerpted from vol. 3 of the Sarath Amunugama autobiography)
Premadasa then unleashed his prodigious energy to make dramatic changes in the country’s economy. He looked on economic development as a part of his bigger vision to ensure “growth with equity”. While the JRJ administration followed a classical pattern of investment fueled by urbanization which made the GDP of Western province much higher than that of the outlier provinces, Premadasa was a proponent of the concept of all round growth as a way of catering to the poorer segments of society.
I remember studying some World Bank reports with Wickreme Weerasooria, who was the Secretary of the Planning Ministry, which drew attention to the abysmal poverty of the estate population and the people of Hambantota, Monaragala and Mannar in relation to the poverty levels prevalent in the other districts. Accordingly rural development projects were launched with Norwegian aid in the Hambantota, Monaragala and Mannar districts, but that was insufficient to make a dent on the problems there. It was Premadasa who had the vision to undertake poverty alleviation urgently and devote his proverbial energy to obtain dramatic results. His approach was three pronged; Janasaviya, the 300 garment factory programme and meaningful administrative reforms at village level. All three have stood the test of time and marks a change in the rural landscape.
Garment factories
JRJ pioneered the setting up of investment zones under the Greater Colombo Economic Commission (GCEC which later became the Board of Investments or BOI) on the basis of “plug and play” manufacturing, beginning with the Katunayake Free Trade Zone [FTZ]. He introduced the concept of value addition to an economy which was based on export of unprocessed agricultural commodities namely tea, coconut, rubber and cinnamon.
The global economy was undergoing change with production being outsourced to select developing countries. That was much cheaper than producing them at home in the west. Hong Kong and Singapore were the trendsetters of this transformation by manufacturing light industrial products with their easy credit, reliable freight business, cheap labour, work ethic and good links to the markets of rich countries.
Among these products was garments which saw increasing demand in the west with its growing prosperity and emergence of a large middle class within a consumer society. Premadasa deserves credit for immediately recognizing the potential of this trend to further his target of “growth with equity”. As regards the genesis of this all important industry in Sri Lanka, I was told that Premadasa on a visit to Hong Kong was entertained by a Muslim gem merchant who lived there coordinating the sales of gems from his family company. This gem merchant had given Premadasa a tour of the business district and the manufacturing zone of sweated trades, especially the garment factories in Kowloon.
Premadasa immediately saw the potential of this industry and persuaded some of his friends in the local tailoring establishment to enter the garment manufacturing business. Another fortuitous circumstance helped in making this move an instant success. The garment industry worked on the basis of “quotas” allocated by the buyers. The Hong Kong quotas were already full and it took little to persuade some big foreign manufacturers to relocate in Sri Lanka and utilize the quotas that were granted to us.
In fact it is said that at first many foreign exporters only changed their labels to say “Made in Sri Lanka” and shipped their products from their Hong Kong factories to Europe and the US. But this could not go on for long and they soon relocated here and set up factories in our FTZs and outside. This project was personally driven by the President and the facilities like allocation of land, electricity, water and banking facilities were provided in record time which led to favourable responses from large scale buyers like Marks and Spencer and Walmart. This in turn led to the ambitious 300 garment factory program which revolutionized garment manufacturing in South Asia.
The President insisted on locating factories in the hinterland and employing rural .women. This was probably the best attempt to develop our rural areas and also empower women in a practical attempt at poverty alleviation. After decades of”handouts”, which were crippling rural initiatives, new garment industries brought prosperity to distant villages. “The quota system” was adjusted to give more orders to factories in the periphery as against lower allocations for the big cities. Even critics were constrained to admit that standards of living among rural women had improved.
The President gleefully spoke of the jewelry shops that were springing up near the factories and the small gold chains on the necks of working girls who had never before possessed anything of value. These developments drew the envy of rival politicians who wished that they, had first thought of this idea. Lalith Athulathmudali said sarcastically that “our girls are forced to stitch “Jangi” [underwear] for white women” forgetting the fact that his own electorate Ratmalana was the centre of the countries “rag trade” and that this trade was, for the first time, providing employment to a large swathe of semi urban women who had earlier been helpless, unemployed and brutalized.
Janasaviya
Like the garment factories another innovation of the President was the poverty amelioration program named Janasaviya. Conceptualized by a group of his officials, Janasaviya was aimed at providing basic food support to families below the poverty line. Recipients were selected at public sittings and time was given for objections since the local bureaucracy was notoriously corrupt and could be influenced to leave out the deserving and include those with power. Even so the criticism was made that selections were biased in favour of the party in power.
It was one of the earliest attempts at poverty reduction and was taken as a model by many developing countries. Janasaviya, unlike its heavily politicized successors under the SLFP, envisaged the recipients donating their labour for community development projects in the relevant villages. The construction and maintenance of public works was entrusted to Janasaviya recipients because many studies had shown that a village labour force was capable of generating productivity as a basic input in rural development.
Recipients were expected to donate their labour on village works for three days a week in exchange for a basket of goods. During this period the utility of “Shramadana” as a practical economic resource in developing countries was promoted by Gandhian development theorists, including the Sarvodaya Movement in Sri Lanka. However Premadasa engaged himself in an epic confrontation with AT Ariyaratne, the leader of the local Sarvodaya movement. Since I was a friend of Ariyaratne, having helped him to overcome the hostility of Felix Bandaranaike during the Sirimavo regime, I became privy to the reasons for the enemity of these two stalwarts of village development.
Partly due to the link up with the Friedrich Neumann Foundation of Germany that I facilitated, Sarvodaya became rich and began to branch out to ventures designed to ensure its sustainability. Among these ventures was the setting up of a well equipped printing press which was located in Ratmalana. It boasted of the latest German printing technology and Ariyaratne’s rather permissive management style was replaced by a profit oriented trained printer who oversaw this venture. One far reaching decision was to undertake the printing of the “Ravaya” newspaper which had transformed itself from a tabloid to a broadsheet in keeping with its growing popularity.
Ravaya was a progressive newspaper usually critical of the government and was edited by Victor Ivan – a former JVP leader who had been imprisoned after the failure of the 1971 insurrection. He had joined the LSSP after his release but was better known as a lucid writer, defender of human rights and generally an anti-establishment figure. When he began to criticize the Premadasa administration and its leader he put himself on the cross-hairs of the new President’s ire. He blamed Ariyaratne for printing Ravaya in his press and broke off the friendship he had enjoyed with the Sarvodaya chief when he was in the opposition.
To make matters worse Ravaya promoted Lalith and Gamini in their conflict with Premadasa and encouraged internal criticism of the Presidents authoritarian ways. But the main reason for the Premadasa-Ariyaratne conflict was the “inside information” that was leaked to the former during the Presidential election. The secret was that the Sarvodaya Press was printing posters for Mrs. B – which her rival Premadasa took to be a great betrayal by his erstwhile friend. Ari told me that indeed the poster was printed as alleged but that it was a commercial transaction which had been undertaken by his printing manager without consulting him.
A characteristic of Premadasa was that while he had deep friendships any betrayal by a friend resulted in an unending vendetta. He did not believe in “forgive and forget”. The full force of the President’s fury was then visited on Ariyaratne. Ari told me that he had been earmarked for assassination by the Premadasa mafia and that he had a narrow shave when he was targeted at a meeting in Kegalle. Whether this was true or whether it was only a symptom of a paranoia which seemed to afflict the Sarvodaya chief, I had no way of knowing.
I had read that President Richard Nixon too had a similar unforgiving nature. Nixon maintained an “enemies list” and spent time in harassing them ultimately leading to a “break in” to their offices which set in train a set of events which finally led to his resignation. Premadasa too was alleged to have established the “Lawrence mafia” (Lawrence was a retired DIG loyal to Premadasa) which “tailed” his enemies with a view to eliminating them.
Later on I will narrate the famous “Buultjens abduction” case which was used by Premadasa, ably assisted by Ravi Jayewardene, JRJs son, to engineer the arrest of Gamini Dissanayake on charges of kidnapping as a part of his vendetta with his erstwhile colleague. In an attempt to implicate Lalith and Gamini he set up a Commission of Inquiry on their relations with Israel. On public platforms he subtly suggested that Lalith was an Israeli agent because he had taught law at a University in Jerusalem. The Commission found no evidence of such a complicity though it highlighted the purchase of large caches of Israeli weapons for the Sri Lankan armed forces.
Housing
Even as a member of Dudley Senanayake’s cabinet, Premadasa had paid special attention to the problem of housing. As a MP for Colombo Central, where housing is a major problem, he had set about tackling this problem with his usual gusto. In a sense he was competing with his political rival Pieter Keuneman who also, under the Sirimavo administration, concentrated on urban housing. Pieter however, in keeping with his communist ideology, brought legislation to change ownership from urban landlords to long time residents. He also restricted the space of new houses to 2,500 square feet each leading to the construction of smaller houses on smaller extents of land [a minimum of six perches per house] by local architects.
However laudable these objectives may have been it led to a virtual halt to housing construction. Premadasa on the other hand was more realistic and attempted to increase the housing stock. His signature achievement was the development of the Maligawatte housing scheme for which I, and a team from the then Information department undertook the publicity programme under the heading of “a city within a city”. It was hailed by Dudley Senanayake and the UNP, which thanks to Premadasa, earned plaudits as the party of low cost housing.
He also encouraged rural housing under Janasaviya and the new local government structures that he created. Bradman Weerakoon has described how the PM had the “chutzpah” to get housing as a priority of the UN by promoting a resolution calling for a “Year of Housing”. As Bradman says no one could stop him once Premadasa made up his mind.
Local government
From the time he became a municipal councilor R. Premadasa was very interested in local government. In his first assignment as a deputy minister he chose the portfolio of local government under minister Tiruchelvam. He once told me that SWRD Bandaranaike could form his own party because he had an island wide network of Mayors, Urban Council Chairmen and local government representatives who could not be bought over by DS Senanayake. This was long before Premadasa himself set up his “Purawesi Peramuna” which could be transformed into a political party if the UNP did not give him his due place.
One reason why he was not enamored of the Indo-Lanka agreement was its emphasis on establishing Provincial Councils. He did not welcome the establishment of a second tier between the centre and the village council or the “Pradeshiya Sabha”. He proposed wide ranging reforms to the existing Gam Sabhawa or Village Council system of local government. He amalgamated the Village Councils in an electorate so that the boundaries of the newly established “Pradeshiya Sabha”would coincide with that of the electorate. This made it possible for greater financial resources to be allocated to that entity.
The management structure was also changed to bring in public officials as administrative secretaries of the Pradeshiya Sabhas. These changes were welcomed as forward looking and capable of promoting rapid growth at village level. Premadasa believed that decentralization of key state powers to the periphery would also defuse the call for more powers to a new entity like Provincial Councils. He feared that some PCs would encourage the “homelands” concept of the TULF.
Today this three tier administrative structure has been criticized as leading to a dysfunctional bureaucratization which is top heavy. It has produced a large number of ignorant local government representatives who are a drain on national resources. The best example of this anarchy is that the Janasaviya programme which was meant to contribute to cheap labour for village works have been superseded by village level councilors who have become small time contractors swallowing up the funds for roads, culverts, bridges etc., with no quality and financial control. Such project funding has led to the corruption which marks local government administration today.
Hubris
The first few years of the Premadasa regime were a security nightmare. The JVP and its military arm shut down the country at will. However the government fought back amidst many complaints of human rights violations. The security forces employed brutal means to attack the JVP, especially after purported threats to the families of army officers. The JVP politbureau went into hiding but the Ops Combine systematically tracked them down and by 1990 Wijeweera himself was arrested and killed.
But civil society led by journalists associations – many of centre leftist persuasion – carried out a campaign asking for the observation of human rights standards and punishment for those who had blatantly violated them. Many innocent people who were caught in the cross fire between the JVP and the security forces paid with their lives. Left wing tabloids like Yukthiya – which was funded by international NGOs and Ravaya, both edited by ex-JVP combatants, were highly critical of Premadasa and the state apparatus.
While senior SLFPers flirted with the President, younger members like Mangala Samaraweera and Mahinda Rajapaksa spearheaded the formation of a “Mothers Front”. The Opposition preferred to take cover under these organizations rather than confront Premadasa because they themselves were victims of the JVP’s extermination machine. It was an exceptionally trying time and the President whose trait was not to brook any challenge was criticized by the international media and civil society for his intransigence.
Some of his own party members who had lost out in his energetic reorganization of the UNP, were not averse to leaking information to embarrass him. There was, as a result, a siege mentality in the country. The opposition to him among the urban elite grew while the majority of the populace was still in a state of shock due to the unceasing violence and disruptions unleashed by the LTTE and the JVP. The best indication of this transformation of the personality of President Premadasa came in the form of a statement by his secretary Wijedasa who said that “his temperament was much better as Prime Minister than President” [Lankadeepa of August 22, 2023]
All this was to come to a head in an unprecedented Impeachment motion in Parliament and its political consequences which we will describe in the next chapter.
Features
Sri Lanka’s vanishing wetlands put elusive otter under growing threat
The world marked World Otter Day 2026 recently. Conservationists are warning that Sri Lanka’s rapidly disappearing wetlands, polluted waterways and unplanned development are placing increasing pressure on one of the island’s most elusive freshwater predators, the Eurasian otter (Lutra lutra).
The species, locally known as “Diya Balla”, is the only otter found in Sri Lanka and is regarded as a key indicator of healthy freshwater ecosystems. Yet despite its ecological importance, experts say the animal remains poorly studied and largely overlooked in national conservation planning.
Naturalist and conservationist Chaminda Jayasekara, who has spent years documenting otters in Sri Lanka, said the species is facing mounting environmental pressures across the island.
Speaking to The Island, Jayasekara said habitat destruction, chemical pollution, road kills, sand mining, and increasing human disturbance are fragmenting the waterways on which otters depend.
“Otters are extremely sensitive animals. When wetlands are degraded or rivers become polluted, they disappear very quickly. Their survival is directly linked to the health of freshwater ecosystems,” he said.
Jayasekara, who specialised in MSc Environmental Management at the University of Hertfordshire, noted that while the species has been recorded across Sri Lanka’s wet zone, dry zone and coastal wetlands, scientific data on population numbers and distribution remain limited.
According to him, the decline of wetlands has become one of the most serious environmental issues facing Sri Lanka. Marshes, mangroves, irrigation tanks and riverine habitats are increasingly being altered by urban expansion, tourism infrastructure, encroachment and agricultural runoff.
He warns that the loss of these habitats not only threatens otters, but also weakens flood control systems, freshwater security and biodiversity resilience at a time when climate-related disasters are becoming more frequent.
Jayasekara said otters play a vital ecological role by helping maintain balanced fish populations and healthy aquatic ecosystems.
“When otters thrive, it tells us the river system is functioning properly. Their presence is a sign that water quality, fish diversity and habitat conditions remain healthy,” he explained.
One of the best-known locations for otter sightings in Sri Lanka is Aranga Pond, within the Horton Plains National Park, where the species has adapted to the island’s cold montane ecosystem.
However, conservationists stress that even protected areas are not immune to broader environmental degradation occurring outside park boundaries.
Jayasekara’s own work on otters gained prominence through long-term conservation efforts at Jetwing Vil Uyana, where a former degraded chena landscape was restored into a functioning wetland ecosystem.
The restored habitat eventually attracted Eurasian otters, fishing cats, grey slender lorises and numerous wetland bird species.
Over 14 years, Jayasekara carried out field observations, camera trapping and awareness programmes involving hotel staff, surrounding schools and local communities.
“What happened at Vil Uyana clearly showed that habitat restoration works. If degraded ecosystems are given time to recover, wildlife can return naturally,” he said.
He added that wetland restoration should become a central component of Sri Lanka’s environmental policy, particularly as climate change intensifies droughts, floods and biodiversity loss.

Chaminda collecting scat for research purposes in Sigiriya
He says wetlands are among the planet’s most productive ecosystems, functioning as natural water filters and carbon sinks while providing breeding grounds for fish, amphibians and aquatic mammals.
Yet globally, wetlands are disappearing at an alarming rate, and Sri Lanka is no exception.
Conservation groups have repeatedly warned that illegal waste disposal, pesticide contamination and poorly planned infrastructure projects are severely affecting freshwater ecosystems throughout the country.
Jayasekara also highlighted the importance of stronger environmental education and community participation in conservation.
“Awareness is still very limited. Many people living close to wetlands do not realise the ecological importance of otters or the threats they face,” he said.
According to him, involving local communities in conservation monitoring is essential if Sri Lanka hopes to safeguard the species in the long term.
He also pointed to the growing international interest in otter conservation.
In November 2025, Jayasekara represented Sri Lanka at the International Eurasian Otter Conservation Workshop held at Colchester Zoo and organised by the International Otter Survival Fund.
The workshop brought together nearly 100 researchers, conservationists and wildlife experts from 33 countries to discuss emerging threats facing Eurasian otter populations.
Jayasekara presented Sri Lanka’s experience under the theme Rewilding Through Hospitality, focusing on how habitat restoration and sustainable tourism practices at Vil Uyana contributed to otter conservation.
“The international response was extremely encouraging. Many delegates were surprised that a tourism property in Sri Lanka had quietly carried out wetland conservation work for more than a decade,” he said.
Discussions at the workshop also examined wider environmental concerns including river pollution, declining fish stocks, illegal killings and habitat fragmentation affecting otter populations across Europe and Asia.
New conservation technologies such as AI-assisted wildlife tracking and environmental DNA surveys were also highlighted as emerging tools for monitoring elusive species.
Jayasekara said Sri Lanka urgently requires more scientific surveys, stronger environmental law enforcement and greater investment in freshwater conservation research.
He warned that unless wetlands and waterways are protected, several lesser-known freshwater species could face severe decline in the coming decades.
Environmentalists say otter conservation should not be viewed in isolation but as part of a broader effort to protect entire freshwater ecosystems that millions of Sri Lankans depend on for drinking water, irrigation and livelihoods.
He further noted that healthy wetlands also strengthen climate resilience by absorbing floodwaters, reducing soil erosion and supporting groundwater recharge.
As Sri Lanka experiences increasingly erratic weather patterns linked to climate change, conservationists argue that protecting wetlands is becoming both an ecological and economic necessity.
Jayasekara believes Sri Lanka still has an opportunity to become a regional example in balancing tourism, biodiversity conservation and habitat restoration.
“The otter teaches us an important lesson,” he said. “If rivers are protected and wetlands are respected, nature has an incredible ability to recover.”
This year’s observance of World Otter Day 2026 is, therefore, serving not only as a celebration of one of the world’s most charismatic mammals, but also as a reminder of the urgent need to conserve the fragile freshwater ecosystems upon which both wildlife and human communities ultimately depend.

Eurasian otter
By Ifham Nizam
Features
Malaiyaha Tamil people: Healing the Oldest Wound of Independence
In their Vesak messages this year, President Anura Kumara Dissanayake and Prime Minister Harini Amarasuriya highlighted the values of reconciliation, coexistence and justice as essential to Sri Lanka’s future. President Dissanayake emphasised that Buddhism’s teachings remain deeply relevant to contemporary society and described Vesak as a symbol of “mutual understanding, unity and coexistence among all communities” and of reconciliation itself. Prime Minister Amarasuriya similarly called for the building of a society in which justice is assured to all irrespective of caste, race or religion. These messages were not merely religious aspirations, they were a direct challenge to the most serious failures in Sri Lanka’s post-independence history. These include the three-decade-long war, its human rights violations and the inability to implement a political solution.
These have been and continue to be the challenges that have prevented Sri Lanka from reaching its full potential. Added to this have been the persistence of social and economic inequalities that continue to marginalise communities at the bottom of the social hierarchy. One of the most enduring examples of such injustice is the experience of the Malaiyaha Tamil community. The scale of the original exclusion is worth understanding clearly. According to the 1946 Census, the Malaiyaha Tamil community numbered approximately 780,600 persons and constituted 11.73 percent of the country’s population making them the second largest ethnic community, larger than the Sri Lankan Tamil community who numbered 733,700 or 11.02 percent of the population at the time
The denial of citizenship and voting rights to the Malaiyaha Tamil community was the first major injustice inflicted on an ethnic minority in post-independence Sri Lanka. The consequences were devastating and long-lasting. A community that had contributed enormously to the country’s economy through its labour on the plantations was excluded from political participation and denied basic rights. This was a political and moral failure that cast a long shadow over the country’s post-independence history. Responsibility for that injustice needs to be shared widely. Political leaders across ethnic lines failed to resist it. The result was the marginalisation of a community whose contribution to national prosperity far exceeded the recognition it received. Today, nearly eight decades later, Sri Lanka has an opportunity to correct that historic wrong but only if economic reform is matched by genuine social inclusion.
Longstanding Grievances
The NPP government has repeatedly acknowledged the need to address the longstanding grievances of the Malaiyaha Tamil people. In its election manifesto, the NPP pledged to improve living conditions in plantation areas, strengthen land and housing rights, ensure equal access to education and public services, and integrate plantation communities more fully into national development. The NPP’s Nuwara Eliya Declaration of 2023 similarly recognised that the plantation community had suffered generations of exclusion and promised measures to address disparities in housing, land ownership, infrastructure, education and economic opportunity. The need for such action is plain to see. While citizenship issues have largely been resolved over time, the socio-economic consequences of decades of exclusion remain deeply entrenched and continue to shape daily life in plantation communities. A conference organised by the Institute of Social Development to mark International Tea Day on May 21 at the BMICH brought out this and many other salient issues. Headed by P Muthulingam the organisation has advocated for the rights of the Malaiyaha Tamil people for the past 35 years to be equal citizens who enjoy social and economic justice.
The central problem facing many plantation workers is the low level of income they receive. Daily wages remain among the lowest in the country relative to the difficulty and intensity of the work. Plantation labour continues to depend heavily on methods that have changed little over generations. Productivity remains low compared to competing tea-producing countries — not because workers lack capability, but because sustained investment in their welfare, skills and economic mobility has been withheld. Workers consequently remain trapped in a cycle of low wages and limited economic mobility. Their housing situation compounds these difficulties. Many plantation families continue to live in housing owned either by plantation companies or the state. Lack of secure ownership limits their ability to accumulate assets, access credit or make independent decisions regarding their future. When Cyclone Ditwah damaged plantation housing, it exposed the inability of those living in that housing to access state compensation as they did not own the housing in which they lived.
The problems extend beyond the central highlands. Plantation workers living in private estates and smallholdings in other parts of the country face similar challenges. A recent Amnesty International report documented serious abuses affecting Malaiyaha Tamil workers in private tea estates in the Southern Province. These include wage withholding, debt dependency, restrictions on movement and intimidation and practices the report argued correspond to internationally recognised indicators of forced labour. These findings are not peripheral. They reveal that the structural exclusion of the Malaiyaha Tamil community is not a relic of the past but an active, ongoing condition. Economic vulnerability and social marginalisation continue to leave many plantation workers without effective protection or access to justice. It is against this backdrop that the government’s recent plantation reform initiative assumes special significance.
Second Phase
The government has announced the second phase of a programme to make underutilised plantation lands and assets available for investment. The objective is to transform underperforming assets into productive enterprises capable of generating employment, attracting investment and revitalising regional economies. The programme seeks to modernise the plantation sector, improve productivity and create new opportunities in tourism, renewable energy and export-oriented industries. These objectives are necessary and welcome. However, economic reform alone will not be sufficient and Sri Lanka’s own history provides the warning. Previous rounds of plantation modernisation pursued productivity gains without addressing the structural disempowerment of the people at the centre of the industry. The result was investment that generated wealth without distributing it. The workers who produced the wealth were once again treated as labour inputs rather than as beneficiaries. If the current reform follows the same logic, it risks reproducing the same failure.
For reform to succeed, plantation workers must be recognised not merely as a labour force but as stakeholders with rights, aspirations and a legitimate claim to share in the benefits of development. Housing ownership, secure land tenure, quality education, vocational training and entrepreneurship need to be built into the reform process from the outset. The government’s commitments to the Malaiyaha Tamil community therefore need to be incorporated into every stage of the reform process. On the contentious question of land, the government should consider establishing an independent national land commission. Such a body should include respected government officials, professionals and representatives from all ethnic and religious communities. It should review land policy comprehensively, develop transparent principles for allocation and use, ensure fairness in decision making and provide a trusted mechanism for resolving disputes. A credible land commission would help build public confidence that land reforms are being undertaken in the national interest rather than for the benefit of particular groups.
The correction of historic injustices should not be viewed as a concession to one community. It should be understood as an investment in national unity, because societies do not become stronger by maintaining the exclusion of those they have wronged. On the contrary, they become stronger by ending it. The first great injustice committed against an ethnic minority after independence cannot be undone. But its consequences can be addressed, and doing so would strengthen reconciliation, enhance social cohesion and bring Sri Lanka closer to the vision of a country in which all communities live with equal dignity and equal hope. This is what the Vesak messages of the President and Prime Minister promised. The plantation reform now underway is the moment to make good on that promise not in words alone, but in sustained policy that endures beyond any single government and reaches the people who have waited longest for it.
by Jehan Perera
Features
IMF relief is not economic recovery: Sri Lanka’s real test begins now
The IMF’s latest decision to release approximately US$695 million to Sri Lanka provides an important measure of financial relief, but it should not be mistaken for full economic recovery. While the approval reflects progress in stabilisation, fiscal discipline, and reform implementation, the country still faces deep structural weaknesses, social pressures, and external risks. The real test begins now: whether Sri Lanka can convert this temporary breathing space into lasting reform, productive growth, stronger institutions, and national resilience. This moment should not be used for political celebration, but for serious national reflection and responsible action. Sri Lanka must now resolve to support a clear policy direction, a practical reform programme, and a long-term national development path — not merely an individual, a party, or a political camp.
1. IMF Relief: A Necessary Step, but Not a Final Solution
The IMF Executive Board recently completed the combined Fifth and Sixth Reviews under Sri Lanka’s Extended Fund Facility, allowing the country immediate access to SDR 508 million, approximately US$695 million. This decision represents an important step in Sri Lanka’s ongoing economic recovery process following the severe crisis that led to sovereign debt default, shortages of essential goods, high inflation, and the collapse of foreign reserves in 2022.
However, this decision must be understood with great sensitivity. IMF relief is not the same as full economic recovery. It gives Sri Lanka temporary breathing space, helps rebuild a certain level of international confidence, and supports the continuation of the reform programme. However, this relief is not a magic solution that can automatically resolve the country’s deep-rooted economic problems. Fundamental challenges such as the debt burden, weak productive capacity, low export earnings, poor public revenue performance, weak fiscal management, excessive dependence on imports, corruption, and inefficient state-owned enterprises still remain unresolved. Addressing these challenges requires domestic reforms, disciplined policies, stronger production and export capacity, and a long-term national development programme. Therefore, the IMF decision should not be treated as a political victory or as proof of complete economic success. Rather, it should be seen as a reminder that Sri Lanka still has a long and difficult journey ahead.
2. Sri Lanka’s Progress Recognised by the IMF and Its Limits
The IMF’s approval indicates that Sri Lanka has made progress in several important areas. Inflation has been brought under control compared to the extreme levels experienced during the crisis. Foreign reserves have improved, the exchange rate has shown greater stability, and fiscal management has become more disciplined. The government has also continued to implement reforms in taxation, public finance, energy pricing, and debt restructuring.
According to the IMF assessment, performance under the programme has generally been strong. Several quantitative performance targets have been met, while many structural benchmarks have either been achieved or implemented with some delay. This shows that Sri Lanka has remained broadly committed to the reform path agreed under the IMF-supported programme.
Yet this progress remains fragile. Stability achieved through external support must now be converted into genuine economic strength.
3. Conditions and Responsibilities Attached to the IMF Programme
IMF support does not come merely as financial relief; it comes with a set of important reform conditions and responsibilities that Sri Lanka must fulfil. Key among them are maintaining fiscal discipline, improving government revenue, continuing cost-reflective pricing for fuel and electricity, strengthening public financial management, restructuring state-owned enterprises, protecting institutional independence, and preventing the accumulation of new external payment arrears.
The main objective of these conditions is to restore macroeconomic stability, strengthen fiscal credibility, and rebuild international confidence in Sri Lanka. However, these reforms also carry social and political consequences. Higher taxes, market-based utility pricing, and strict expenditure controls can place a heavy burden on ordinary citizens, especially low-income families, small businesses, pensioners, and salaried workers. Therefore, in implementing reforms, economic discipline alone is not enough. Fairness, transparency, and social sensitivity towards vulnerable groups must also be treated as essential priorities.
4.The Impact of IMF Conditions on People and the Economy
One major social consequence of the IMF programme is the increased pressure it can place on household incomes and living standards. When electricity, fuel, and other essential services are priced on a cost-recovery basis, people may have to face a higher cost of living. Although such reforms are necessary to reduce the losses of state-owned enterprises and maintain fiscal discipline, they can weaken the purchasing power of ordinary citizens if strong social protection programmes are not in place.
Another important consequence is the pressure placed on the operating costs and stability of small and medium-sized enterprises. Higher taxes, increased utility costs, fuel and electricity expenses, and the rising cost of borrowing can affect business survival, job creation, and new investment decisions. If reforms are implemented without sufficient attention to production, exports, and small businesses, the country may achieve short-term fiscal stability, but long-term economic growth could remain weak.
There is also a political risk that cannot be ignored. If people feel that the burden of reform is not being shared fairly, reform fatigue and public frustration may emerge. If ordinary citizens are expected to make sacrifices while corruption, waste, and political privileges continue, public confidence in the reform process will decline. Therefore, for IMF-supported reforms to succeed, fairness, transparency, and social sensitivity must be firmly ensured alongside economic discipline.
5. The Real Test Before Sri Lanka
Sri Lanka’s real test begins now. Beyond temporary financial relief, the country must now prove that it can build a strong economy that generates income and can withstand external shocks. Therefore, our objective should not be limited to securing the next IMF tranche. While an IMF tranche may provide short-term breathing space, it does not guarantee long-term economic independence or stability. The real objective should be to create an economy that does not have to return to the IMF repeatedly during every crisis, but can stand on its own productive strength, export earnings, and fiscal discipline.
This requires fiscal discipline. However, discipline alone is not enough; economic growth is also necessary. Taxation is necessary. But increasing taxes alone is not a solution; production, investment, and exports must also be expanded. Debt restructuring is necessary. But beyond reducing the debt burden, Sri Lanka must also build an economic foundation that does not depend excessively on borrowing in the future. Sacrifices may be asked of the people. But for those sacrifices to be fair, accountability, transparency, and exemplary conduct from leaders are also essential.
Economic recovery cannot be sustained in the long term through financial assistance alone. Such support can provide breathing space during a crisis, but a country is rebuilt on the strength of its own institutions, productive capacity, export competitiveness, and public trust. Therefore, what Sri Lanka needs today is strong institutions, income-generating industries, a broader export base, food security, energy security, and a system of governance that people can trust.
6. Policy Priorities for Sustainable Recovery
Sri Lanka must now move from crisis management to national transformation. First, fiscal discipline should continue, but it must be fair. Revenue mobilisation should not rely only on increasing taxes on the same groups of people. The tax base must be broadened, tax administration must be improved, and tax evasion must be reduced.
Second, social protection must be strengthened. The most vulnerable groups should be protected through well-targeted assistance. Reforms will be more acceptable if people feel that the poor, elderly, disabled, and low-income families are not abandoned.
Third, state-owned enterprise reform should be carried out with transparency and public accountability. The objective should not merely be privatisation, but efficiency, professionalism, financial discipline, and better service delivery.
Fourth, Sri Lanka must prioritise export-led growth. The country cannot build a stable future by depending mainly on borrowing, remittances, and consumption. Agriculture, tourism, manufacturing, IT services, logistics, education, and value-added exports must become central pillars of national development.
Fifth, governance reform is essential. Without reducing corruption, political interference, wasteful expenditure, and weak implementation, no IMF programme can create lasting recovery. Economic reform and governance reform must move together.
7. From Temporary Relief to Lasting Recovery
The IMF decision gives Sri Lanka an important opportunity. It provides the country with space to strengthen economic stability, rebuild international confidence, and move forward with essential reforms. However, it is not a guarantee of success. It is only a step that gives the country some breathing space. It is now Sri Lanka’s responsibility to use that space wisely, with discipline and accountability to the people.
The country must now decide whether it will continue the old cycle of crises, debt, temporary relief, and political blame, or whether it will build a new national programme based on discipline, productive capacity, fairness, and accountability.
At this moment, true success cannot be measured by the amount of money received. It must be measured by whether Sri Lanka can build an economy that produces more, exports more, saves more, is governed better, and protects its people more effectively. The real victory is not receiving IMF relief, but building a strong national economy that will not depend excessively on such relief in the future.
Public Appeal: Let Us Choose a Programme, Not a Personality
This US$695 million will not solve every problem in our country. It may provide temporary financial relief and support the continuation of reforms, but it cannot replace the hard work required to build a productive, disciplined, inclusive, and self-reliant economy.
Therefore, this is the right time for all Sri Lankans to rise above narrow political loyalties and support a clear policy direction, a practical reform programme, and a long-term national development agenda — not merely an individual, a party, or a political camp. What Sri Lanka needs today is not the victory of a personality, but the victory of a responsible national programme that can restore confidence, protect the vulnerable, promote production, strengthen exports, ensure accountability, and secure a better future for the next generation. The question before us is simple but decisive: are we ready to make that choice?
by Prof. Ranjith Bandara,
PhD (Qld.,)
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