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MSME sector development vital for achieving sustainable development

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Insights during Covid-19 situation

By Dr. Tissa Ravinda Perera

Faculty of Management & Finance

University of Colombo

Email: ravinda@mos.cmb.ac.lk

Nature and Structure of Sri Lankan MSME Sector

The MSME sector is the backbone of any country. It is not because of the number of people employed therein or the value addition to the national economy; it is because this sector helps solve numerous issues. Therefore, any country tries its best to promote and protect its MSMEs through deferent strategic and policy initiatives. Enterprise Sri Lanka was one of them, recently developed and launched by the previous government, which expected to develop 100,000 SMEs under this programme by mainly providing loans to prospective entrepreneurs. Successive governments have had similar programmes. However, they did not yield the desired results due to numerous reasons.

However, the present government has not yet launched a new programme to develop the country’s MSME sector. It can be expected to have a national programmes to develop MSMEs.

According to the Department of Census and Statistics (2013/2014) there are about 1,019,681 businesses in Sri Lanka. Out of them 99.2% are MSMEs. The micro, small and medium businesses account for 91.8%, 7.0% and 1% respectively of the total establishments in Sri Lanka. The employment generation of the MSME sector, in Sri Lanka is 44.6%, 17.6% and 12.9% respectively. The statistics of the Department of Census and Statistics Sri Lanka clearly shows that the contribution of the SME sector to the national economy is around 31.8% when compared to the large-scale business sector in the country. This sector is as important to Sri Lankan economy as the large-scale businesses.

There are important characteristics of this sector. Out of the 1,019,681 business units, many of them are located in the Western Province, and the Gampaha District has the highest number of industrial establishments in this province. According to the census of industries 2003/2004, conducted by the Department of Census and Statistics, Kurunegala, Gampaha, Colombo, Kandy, Kegalle and Katutara, respectively, have the highest number of industrial establishments in the country. Therefore, it clearly shows that there is a disparity in the distribution of MSMEs in the country.

Policymakers must look into this matter when promoting and developing the SME sector in the country.

 

Current Issues and Challenges Faced by the MSME Sector in Sri Lanka

There is no apex body to coordinate the activities of the MSME Sector in Sri Lanka right now. It is really a major issue when it comes to policy decisions related to this sector. Therefore, it could be noticed that there is a tug-of-war over policymaking and policy implementation. The Industrial Development Board and the Samurdhi Movement play a role in coordinating the activities in entrepreneurship development and MSME development. However, their involvement is not that effective and enough, due to the outdated mode of operation and approach. There is no proper data base in Sri Lanka, related to MSMEs and their activities. Sometimes, the data and the data bases available are not up-to-date or reliable. The Department of Census and Statistics of Sri Lanka has some data and data bases. However, they are also not clear and up-to-date to help understand this sector, which is in a pathetic situation today due to the uncoordinated polices. Such policies change from government to government and Minister to Minister. One can’t see any justifiable reason to change such policies as are related to the MSME sector. The previous government implemented the Enterprise Sri Lanka project. Sometime ago, the Divineguma Programme” and the “Wasanthaya Programme” were introduced. What happened to them? Today, they are no more. What has happened to the enterprise Sri Lanka programme? What has happened to the previous programmes? The uncoordinated polices and lack of national policies are the main issues in the Sri Lankan MSME sector. In any country, protection and promotion of MSMEs are the primary responsibility and task of the government. However, in Sri Lanka, it does not seem to be the case. The government tries to apply taxes to MSMEs in the similar way they are been applied to large scale businesses. It is very difficult for an MSME to get a loan even from public banks, which ask for collaterals, etc. Can Sri Lanka encourage MSMEs in this manner? There are many

procedurals to be followed when starting and running a business. Sometimes, the English language is a barrier for the MSME owners. They have to fill documents in English when applying for a loan or completion. They also have to fill many documents when registering their businesses and opening tax files. This type of procedural barriers affect the MSME performance in the country. Unnecessary laws and environmental protections have a high negative impact on the MSMEs, which do not have enough knowledge and funds to meet some legal requirements. During the previous government Sri Lanka was talking about Singapore-Sri Lanka Trade Agreement and the ETCA Agreement between the Sri Lanka and India. There are many other agreements like this. Do they affect the MSME sector in the country? How is the government going to protect them? There are many low-cost imports to the country, mainly from China. Therefore, how is the government going protect our SMEs from the products and services coming to the country under trade agreements and products and services coming to the country as direct imports.

In 1977, Sri Lanka opened up her economy. Many large scale foreign and local businesses came into being. Therefore, value addition especially from small industries, went down since the contribution from large industries went up exponentially. Hence, the emergence of large-scale businesses is a serious challenge for MSMEs in the country in competing with them. The Sri Lankan manufacturing MSMEs are in trouble since many people like to start service industries than manufacturing industries. Many people do not like to take a high risk of staring a manufacturing MSME in Sri Lanka. What can the government do about this? What can the public sector and private sector organisation do? What can the general public do? There are important questions to be raised here.

Globalisation is a great challenge faced by the Sri Lankan MSMEs. The technological advancement, innovations, telecommunication and transportation development are major components thereof. Thus, the MSME sector in Sri Lanka, has to face this phenomenon. The socio-cultural changes in the world and Sri Lanka drastically, can affect the customer preferences as well. These customer preferences affect businesses, mainly the MSMEs in Sri Lanka. Therefore, social cultural changes are also a major challenge for the MSME sector in Sri Lanka. (To be continued)



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Iain Douglas-Hamilton: Science, courage, and the battle for elephants

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Iain Douglas-Hamilton

Passing of Iain Douglas-Hamilton, a man who dedicated his life to conservation and whose life’s work leaves a lasting impact on our appreciation for, and understanding of, elephants.

– Prince William

In Africa on 08 December, 2025, when the sun slipped below the horizon, it did not only give an end for that day, but it also marked the end of a man whose knowledge and courage saved Africa’s elephants. This gentleman was none other than Iain Douglas-Hamilton! There is a beautiful African proverb that says, “When an old man dies, a library burns to the ground,” and it resonates well with Iain’s demise.

Iain pioneered behaviour research on elephants, and he was the first to highlight the elephant poaching crisis in Africa. Also, the adventures he went through to save the elephants will inspire generations.

From Oxford to Africa

The Life of the Last Proboscideans: Elephants”, authored by Muthukumarana, stands as an awardwinning, comprehensive study that integrates elephant evolution, anthropology, biology, behaviour, and conservation science.

Iain was born on 16 August, 1942, into an aristocratic family, the son of Lord David Douglas-Hamilton and Ann Prunella Stack. His parents were a distinguished couple in Britain: his father, a Scottish nobleman, served as a squadron leader in the Royal Air Force, while his mother was a pioneering figure in physical fitness and a prominent advocate for women’s rights. After finishing his school, Iain was admitted to Oxford University to study zoology. At the age of 23, for his PhD, Iain travelled to Tanzania to study the behaviour of elephants at Lake Manyara National Park. This was a daring and humble beginning that would change how the world understood elephants. He learnt to recognise individual animals based on their tusks and ears. He observed their family bonds, their grief, and their intelligence. These findings made the scientific community identify elephants as sentimental beings. During this period, he married Oria Rocco, and together they had two children, Saba and Mara.

Battle for the elephants

When ivory poaching swept across Africa and devastated elephant populations, Iain did not withdraw in despair. He confronted the crisis head-on, guided by science, rigorous data, and unwavering resolve. Through extensive aerial counts and field studies, he laid bare the scale of the tragedy—revealing that Africa’s elephant numbers had collapsed from an estimated 1.3 million to just about 600,000 in little more than 10 years.

It was largely thanks to his work that the global community saw—perhaps for the first time—the full scope of the crisis. His efforts played a pivotal role in pushing forward the 1989 international ban on ivory trade, a landmark moment for wildlife conservation.

In 1993, Iain founded Save the Elephants (STE), an organisation that would become the heart of elephant conservation efforts in Kenya and across Africa.

At STE, he pioneered the use of GPS-tracking and aerial survey techniques to monitor elephant movements, protect them from poaching, and plan safe corridors for them in increasingly human-dominated landscapes. These methods have since become standard tools in wildlife conservation worldwide.

Beyond technology and science, Iain was a mentor. He inspired — and continues to inspire — generations of conservationists, researchers, and everyday people who care deeply about wildlife. Through his books (such as Among the Elephants and Battle for the Elephants), documentaries, lectures, and personal example, he invited the world to see elephants not as trophies or commodities, but as sentient beings — worthy of awe, study, and protection.

Iain and Sri Lanka

In 2003 Iain came to Sri Lanka for the first time to attend the “Symposium on Human-Elephant Relationships and Conflict” as the keynote speaker. On that day he concluded his address by saying, “When I hear the talk of Problem Animal Control, I always wonder whether our species has the capacity for its own self-regulation or Problem Human Control in a humane and wise manner. HEC stands for Human Elephant Conflict, one of our focuses of this conference. How I wish it could come to stand for Human Elephant Coexistence, based on a recognition that other beings also need their space to live in. We are a long way from that, but I am sure that many of the findings of the talented body of researchers in this room will begin a stepwise progress in answering some of these fundamental problems.”

A few years ago Iain’s organisation STE collaborated with the Sri Lankan Wildlife Conservation Society for research activities aimed at reducing human-elephant conflict. In 2016 when the Sri Lankan government was going to destroy the confiscated illegal African elephant ivory, I made a request for Iain to write a congratulatory message to Sri Lanka’s President and Prime Minister for the wise decision they had taken. Iain sent me a four-page meaningful letter written by him, and he was joined by 18 other conservation organisations. In his letter he mentioned, “I want to offer my congratulations to the government of Sri Lanka for the laudable decision to destroy ivory stocks…” Sri Lanka is sending a message to the world that ivory should be without worth; elephants have value when alive. This is a critical message to send, particularly to the religious world, as they are sensitised about the threat religious ivory poses to elephant populations in Africa.”

Fortunately, Iain’s conservation is taken up by his children, especially his eldest daughter, Saba. In 2016 and 2024 she came to Sri Lanka for a lecture hosted by the Galle Literary Festival. Also in 2019, for the Wildlife and Nature Protection Society’s 125th Anniversary, Saba and her husband visited a gala dinner that was held to fundraise for conservation projects.

A difficult path

Iain’s path was never easy. He endured personal peril many times: from hostile terrain and unpredictable wild animals to being shot at by poachers while conducting aerial patrols over war-torn national parks.

Yet despite the danger, despite setbacks — flooded camps, lost data, shifting political tides — his conviction never wavered. His was a life marked by resilience. He refused complacency. He refused to surrender. And through every hardship, he remembered why he began: to give elephants a future.

Iain was also a pilot, and as the old English saying goes, “Pilots don’t die; they simply fly higher.” In that spirit, I wish the same peaceful ascent for Iain. My heartfelt condolences are with Iain’s family.

by Tharindu Muthukumarana ✍️
tharinduele@gmail.com
(Author of the award-winning book “The Life of Last Proboscideans: Elephants”)




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Awesome power of gratitude

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When you hear the word gratitude the first impression you get is a tail-wagging dog. If you feed a dog one day, it will wag its tail even if you meet it after a few years. That is gratitude. In addition, dogs are great teachers. They are at home in the world. They live in the moment and they force us to stay with them. Dogs love us and remain grateful unconditionally not for our bodies or bank accounts.

Small children are taught to say ‘Thank you’ for any favour they receive from others. They do not know that the two words can have positive effects on your health and the well-being of others.

Some time ago I had to call emergency services as I found one of my family members was unconscious. Within minutes an ambulance arrived and the paramedics whisked the patient away to the nearest hospital. He was in intensive care for a few days and returned home. We were marvelled at the impact of a handful of strangers who took charge of the patient at a critical time. I immediately wrote thank you notes to those who saved the patient’s life. I knew that it was a small gesture on my part. However, it was the only way I could express my gratitude to a dedicated team.

Selfless people

Later I realized that there are a large number of selfless people who do life-saving work, but they never expect anything in return. How volunteers saved a large number of flood victims is a case in point. The flood victims may not have expressed their gratitude in so many words. However, they would have felt a deep sense of gratitude to the volunteers who saved them.

Why do people come forward to help those facing natural disasters and other dangerous situations? A recent research in the United States shows that sharing thoughts of gratitude and performing acts of kindness can boost your mood and have other positive effects on your health. Almost all religions teach that gratitude does have a good impact on your happiness. Professor of Psychology Willibald Ruch says that gratitude is among the top five predictors of happiness.

By showing gratitude you can make positive changes in your own life. If you feel a sense of gratitude whenever you receive something that is good for you, it will be a healthy sign. You cannot get such a feeling in a vacuum because others have to play their roles. They can be your loved ones, friends, strangers or even people in authority. Gratitude is how you relate to them when you see yourself in connection with things larger than yourself.

Gratification lifestyle

Strangely, many people do not pause to appreciate what others are doing for them. For this you have to blame your gratification lifestyle. With the popularity of social media the young people feel that they are the centre of the universe. They seem to think there is no necessity to thank those who help them.

Why should we thank others even for minor favours? Recent studies show that those who express gratitude increase their own happiness levels. They also lower their blood pressure levels to a great extent. On the other hand, they will be able to sleep well and improve their relationships. They are also less affected by pain because of the positive impact on their depression.

They may not know that positive effects of gratitude are long lasting. Research shows that those who write thank you notes improve their mental health. There was also a decrease in their bodily pains. What is more, they feel more energetic in completing their daily activities. Unfortunately, schools and universities do not teach the value of gratitude since it is fairly a new field of study. Researchers are still trying to find out its cause and effect relationship. We know that those who perform acts of gratitude can sleep well. However, we do not know the reason for it. Researchers are wondering whether gratitude leads to better sleep or sleep leads to more gratitude. They also probe whether there is another variable that leads to gratitude and improved sleep.

Children

Despite such controversies, we know for certain that gratitude can benefit people at any stage of life. Most elderly people remain grateful for their children and grandchildren who support them. Elderly people cannot regain their physical strength or mental agility. Therefore they focus on gratitude. They are thankful to their children and grandchildren for their present situation.

How do gratitude recipients react? Research shows that those who receive thank you notes or acts of kindness experience positive emotions. You feel happy when someone holds a door open for you. Similarly, you are happy if you receive some unexpected help. Recently I was pleasantly surprised to see that someone has credited a big sum of money to my bank account in appreciation of a small favour I had done.

When you thank someone they are more likely to return the favour or pay kindness forward. Psychologically, people feel very happy when you thank them. However, some people hesitate to say thank you. The give-and-take of gratitude deepens relationships. In a close relationship husbands and wives do not thank each other. However, there are other ways of showing gratitude. A wife can make her husband feel appreciated. Such a feeling of appreciation will go a long way to strengthen their relationship.

Some people are ungrateful by nature. However, they can learn the art of being grateful. Such people will do well to maintain a gratitude journal. It is something similar to Pinpotha maintained by Buddhists in the past. They can record positive events in the journal. At the beginning this may not be easy. With practice, however, you can do it well. I knew of a man who kept a gratitude journal. Although his family members laughed at him, he did not give up the habit. When he was diagnosed with a terminal disease he used to read his gratitude journal very happily.

By R.S. Karunaratne ✍️

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Another Christmas, Another Disaster, Another Recovery Mountain to Climb

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In line with its overall response to Cyclone Ditwah that devastated many parts of Sri Lanka, India has undertaken to set up temporary Bailey Bridges at selected locations. Work on the first such bridge has begun in Kilinochchi on the Paranthan–Karaichi–Mullaitivu A35 road. Indian Army engineers are working with their counterparts. The Indian HC said that 185 tonnes of Bailey Bridge units were airlifted to restore critical connectivity, along with 44 engineers (Pic courtesy IHC)

The 2004 Asian Tsunami erupted the day after Christmas. Like the Boxing Day Test Match in Brisbane, it was a boxing day bolt for Indonesia, Thailand, Sri Lanka, India and Maldives. Twenty one years later, in 2025, multiple Asian cyclones hit almost all the old victims and added a few more, including Malayasia, Vietnam and Cambodia. Indonesia and Sri Lanka were hit hard both times. Unlike the 2004 Tsunami, the 2025 cyclones made landfalls weeks before Christmas, during the Christian Season of Advent, the four-week period before Christmas preparing for the arrival of the Messiah. An ominously adventus manifestation of the nature’s fury.

Yet it was not the “day of wrath and doom impending … heaven and earth in ashes ending” – heavenly punishment for government lying, as an opposition politician ignorantly asserted. By that token, the gods must have opted to punish half a dozen other Asian countries for the NPP government’s lying in Sri Lanka. Or all those governments have been caught lying. Everyone is caught and punished for lying, except the world’s Commander in Chief for lying – Donald J. Trump. But as of late and none too sooner, President Trump is getting his punishment in spades. Who would have thought?

In fairness, even the Catholic Church has banished its old hymn of wrath (Dies irae, dies illa) that used to be sung at funerals from its current Missals; and it has on offer, many other hymns of peace and joy, especially befitting the Christmas season. Although this year’s Christmas comes after weeks of havoc caused by cyclonic storms and torrential rains, the spirit of the season, both in its religious and secular senses, will hopefully provide some solace for those still suffering and some optimism to everyone who is trying to uplift the country from its overflowing waterways and sliding slopes.

As the scale of devastation goes, no natural disaster likely will surpass the human fatalities that the 2004 Tsunami caused. But the spread and scale of this year’s cyclone destruction, especially the destruction of the island’s land-forms and its infrastructure assets, are, in my view, quite unprecedented. The scale of the disaster would finally seem to have sunk into the nation’s political skulls after a few weeks of cacophonic howlers – asking who knew and did what and when. The quest for instant solutions and the insistence that the government should somehow find them immediately are no longer as vehement and voluble as they were when they first emerged.

NBRO and Landslides

But there is understandable frustration and even fear all around, including among government ministers. To wit, the reported frustration of Agriculture Minister K.D. Lalkantha at the alleged inability of the National Building Research Organization (NBRO) to provide more specific directions in landslide warnings instead of issuing blanket ‘Level 3 Red Alerts’ covering whole administrative divisions in the Central Province, especially in the Kandy District. “We can’t relocate all 20 divisional secretariats” in the Kandy District, the Minister told the media a few weeks ago. His frustration is understandable, but expecting NBRO to provide political leaders with precise locations and certainty of landslides or no landslides is a tall ask and the task is fraught with many challenges.

In fairness to NBRO and its Engineers, their competence and their responses to the current calamity have been very impressive. It is not the fault of the NBRO that local disasters could not be prevented, and people could not be warned sufficiently in advance to evacuate and avoid being at the epicentre of landslides. The intensity of landslides this year is really a function of the intensity and persistence of rainfall this season, for the occurrence of landslides in Sri Lanka is very directly co-related to the amount of rainfall. The rainfall during this disaster season has been simply relentless.

Evacuation, the ready remedy, is easier said than socially and politically done. Minister Lal Kantha was exasperated at the prospect of evacuating whole divisional secretariats. This was after multiple landslides and the tragedies and disasters they caused. Imagine anybody seriously listening to NBRO’s pleas or warnings to evacuate before any drop of rainwater has fallen, not to mention a single landslide. Ignoring weather warnings is not peculiar to Sri Lanka, but a universal trait of social inertia.

I just lauded NBRO’s competence and expertise. That is because of the excellent database the NBRO professionals have compiled, delineating landslide zones and demarcating them based on their vulnerability for slope failure. They have also identified the main factors causing landslides, undertaken slope stabilization measures where feasible, and developed preventative and mitigative measures to deal with landslide occurrences.

The NBRO has been around since the 1980s, when its pioneers supplemented the work of Prof. Thurairajah at Peradeniya E’Fac in studying the Hantana hill slopes where the NHDA was undertaking a large housing scheme. As someone who was involved in the Hantana project, I have often thought that the initiation of the NBRO could be deemed one of the positive legacies of then Housing Ministry Secretary R. Paskaralingam.

Be that as it may, the NBRO it has been tracking and analyzing landslides in Sri Lanka for nearly three decades, and would seem to have come of age in landslides expertise with its work following 2016 Aranayake Landslide Disaster in the Kegalle District. Technically, the Aranayake disaster is a remarkable phenomenon and it is known as a “rain-induced rapid long-travelling landslide” (RRLL). In Kegalle the 2016 RRLL carried “a fluidized landslide mass over a distance of 2 km” and caused the death of 125 people. International technical collaboration following the disaster produced significant research work and the start of a five-year research project (from 2020) in partnership with the International Consortium on Landslides (ICL). The main purpose of the project is to improve on the early warning systems that NBRO has been developing and using since 2007.

Sri Lankan landslides are rain induced and occur in hilly and mountainous areas where there is rapid weathering of rock into surface soil deposits. Landslide locations are invariably in the wet zone of the country, in 13 districts, in six provinces (viz., the Central, Sabaragamuwa, Uva, Northwestern, Western and Southern, provinces). The Figure below (from NBRO’s literature) shows the number of landslides and fatalities every year between 2003 and 2021.

Based on the graphics shown, there would have been about 5,000 landslides and slope failures with nearly 1,000 deaths over 19 years between 2003 and 2021. Every year there was some landslide or slope failure activity. One notable feature is that there have been more deaths with fewer landslides and vice-versa in particular years. In 2018, there were no deaths when the highest number (1,250) of landslides and slope failures occurred that year. Although the largest number in an year, the landslides in 2018 could have been minor and occurred in unpopulated areas. The reasons for more deaths in, say, 2016 (150) or 2017 (250+), could be their location, population density and the severity of specific landslides.

NBRO’s landslide early warning system is based on three components: (1) Predicting rainfall intensity and monitoring water pressure build up in landslide areas; (2) Monitoring and observing signs of soil movement and slope instability in vulnerable areas; and (3) Communicating landslide risk level and appropriate warning to civil authorities and the local public. The general warnings to Watch (Yellow), be Alert (Brown), or Evacuate (Red) are respectively based on the anticipated rainfall intensities, viz., 75 mm/day, 100 mm/day; and 150 mm/day or 100 mm/hr. My understanding is that over the years, NBRO has established its local presence in vulnerable areas to better communicate with the local population the risk levels and timely action.

Besides Landslides

This year, the rain has been relentless with short-term intensities often exceeding the once per 100-year rainfall. This is now a fact of life in the era of climate change. Added to this was cyclone Ditwah and its unique meteorology and trajectory – from south to north rather than northeast to southwest. The cyclone started with a disturbance southwest of Sri Lanka in the Arabian Sea, traversed around the southern coast from west to east to southeast in the Bay of Bengal, and then cut a wide swath from south to north through the entire easterly half of the island. The origin and the trajectory of the cyclone are also attributed to climate change and changes in the Arabian Sea. The upshot again is unpredictability.

Besides landslides, the rainfall this season has inundated and impacted practically every watershed in the country, literally sweeping away roads, bridges, tanks, canals, and small dams in their hundreds or several hundreds. The longitudinal sinking of the Colombo-Kandy Road in the Kadugannawa area seems quite unparalleled and this may not be the only location that such a shearing may have occurred. The damages are so extensive and it is beyond Sri Lanka’s capacity, and the single-term capacity of any government, to undertake systematic rebuilding of the damaged and washed-off infrastructure.

The government has its work cutout at least in three areas of immediate restoration and long term prevention. On landslides warning, it would seem NBRO has the technical capacity to do what it needs to do, and what seems to be missing is a system of multi-pronged and continuous engagement between the technical experts, on the one hand, and the political and administrative powers as well as local population and institutions, on the other. Such an arrangement is warranted because the landslide problem is severe, significant and it not going to go away now or ever.

Such an engagement will also provide for the technical awareness of the problem, its mitigation and the prevention of serious fallouts. A restructuring could start from the assignment of ministerial responsibilities, and giving NBRO experts constant presence at the highest level of decision making. The engagement should extend down the pyramid to involve every level of administration, including schools and civil society organizations at the local level.

As for external resources, several Asian countries, with India being the closest, are already engaged in multiple ways. It is up to the government to co-ordinate and deploy these friendly resources for maximum results. Sri Lanka is already teamed with India for meteorological monitoring and forecasting, and with Japan for landslide research and studies. These collaborations will obviously continue but they should be focused to fill gaps in climate predictions, and to enhance local level monitoring and prevention of landslides.

To deal with the restoration of the damaged infrastructure in multiple watershed areas, the government may want to revisit the Accelerated Mahaweli Scheme for an approach to deal with the current crisis. The genesis and implementation of that scheme involved as many flaws as it produced benefits, but what might be relevant here is to approach the different countries who were involved in funding and building the different Mahaweli headworks and downstream projects. Australia, Britain, Canada, China, Italy, Japan, Sweden and Germany are some of the countries that were involved in the old Mahaweli projects. They could be approached for technical and financial assistance to restore the damaged infrastructure pieces in the respective watershed areas where these countries were involved.

by Rajan Philips ✍️

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