Features
My continuing battle against the Tea Hub proposal that would have debased pure Ceylon Tea
Multinationals have long reduced the content of Ceylon tea in packs branded as such
(Excerpted from the autobiography of Merrill J. Fernando)
The ruthless philosophy of the multinational packer and retail supplier is to buy low and sell high in mass markets in which the consumer, through relentless advertising and promotion, has been compelled to accept a well-packaged mediocrity masquerading as excellence. The intrinsic value of a product such as Pure Ceylon Tea and its inherent value proposition is subordinated to profit. Concepts such as genuine product purity and uniqueness of origin have no place in such a world. Such values do not belong in the base culture of mass-marketing of bland, homogeneous products.
The importation of cheap tea from multiple origins would immediately result in the discounting, at the Colombo Auction, of equivalent grades produced in this country, which would invariably be of a higher value than the import. In fact, the cost of any cheap imported tea would be well below our national cost of production, which, for a number of well known reasons, is the highest in the world.
A glut of such low-priced imported tea would depress auction prices overall and adversely impact the grower and producer, who are already burdened by high production costs and diminishing land and worker productivity. In the meantime, the cheap blend, with its desirability enhanced by the legend ‘packed in Sri Lanka/Ceylon,’ will be perceived as genuine Ceylon Tea by the overseas consumer. That perception will cause irreparable damage to the image of Pure Ceylon Tea and, also, to the exporter of the genuine product.
Despite the many abuses it has been subject to over the years, at the hands of multinationals and other traders, who have no respect for either purity or origins, Ceylon Tea is not a commodity as other teas are. Pure Ceylon Tea, of itself and in itself, is a brand and a specialty in the eyes of the consumer. There is no other tea in the world which is recognized internationally by the country of its origin like Ceylon Tea; nor is any other country globally identified by the tea it produces like Sri Lanka/Ceylon.
Up to about 20 years ago, Ceylon Tea was promoted and marketed on that unique value proposition and that memory still lingers in the minds of the older, middle-aged consumer. It was that memory of quality which ensured the success of Dilmah in Australia, despite it being priced well above its competing brands produced by the big multinationals.
Historically, though, commoditization has been the strategy of the trader, the promotion of the brand on the strength of the quality image of Ceylon Tea and then gradually reducing the latter component, thus deluding the overseas consumer and impoverishing the local farmer. Consumers who purchase blindly on brand loyalty do not perceive the gradual erosion in the quality of the cup of tea they drink every day. They will continue to patronize the debased product as a conditioned reflex to compelling advertising and promotion.
A recent example of the strategy described above is the fate of the Russian market, first serviced by our own traders, who, instead of developing own labels when the opportunity arose, chose the easy path and became servitors of the foreign label. The end result was an ignominious exit from the market when the Russian buyer, having established market share on the strength of Ceylon Tea, took his business elsewhere or established his own packing plants in Russia itself.
Value addition, branding, and marketing have, for long, been the weakest features in our export field. Despite all their arguments to the contrary, increasing the total value of our exports using cheap imported tea is not practically possible. The immediate result would be the decline of the export price of Pure Ceylon Tea.
Value-added tea is already being exported at prices ranging from Rs. 600 per kg to Rs. 1,100 per kg. The availability of Ceylon Tea at those prices, automatically weakens the argument for importation of cheap tea, unless the purpose is simply to devalue the export price.
It is also most unlikely that global players in the tea trade, packing in-market, using cheap, multi-origin tea, would rush to Sri Lanka to establish packing centres with the establishment of a Tea Hub. We are far removed from the main markets of the global packers and the only inducements for them to set up operations in Sri Lanka would be the availability of low-cost labour and cheap tea, at rock-bottom prices, the margin savings overriding other disadvantages, such as additional shipping and distribution costs. Such operators will not buy the high-priced Ceylon Tea, unless the proposed massive influx of imported tea drives the local auction prices down to the floor! Is it necessary to emphasize that such a scenario would be the death knell for the local producer?
Unacceptable comparisons, Garment Sector vs. Tea Export Industry
Blending hubs such as Dubai and Rotterdam, examples frequently used by the Tea Hub proponents as ideal models for replication, cannot be equated with Sri Lanka, which is a major producer. Such hubs are commercial centers which facilitate the recycling of products from multiple origins and owe no allegiance to producing countries.
As for the much-touted increase in employment generated by a Tea Hub, it is a myth, as any new blending or packing plant would be fully automated and designed specifically to minimize manual labour. In an industrialized world relentlessly driving towards robotization of processes, manpower is the first designated casualty in any new venture.
The loss of traditional markets for our tea has not been due to price concerns, but largely due to our inadequacies in value addition, marketing, and promotion. The emergence of ‘Dilmah’ as a premier product in Australia and New Zealand, despite being much higher in price than the corresponding products from large multinationals, is proof of the effectiveness of product promotion on the intrinsic strengths of the product itself. It completely negates the argument that multi-origin, cheap blends will override the uniqueness of Pure Ceylon Tea on cost alone.
Our tea has for long been acclaimed as the ‘cleanest tea in the world,’ meeting the Minimum Residue Levels (MRL) stipulated by some of the most demanding markets in the world, such as Japan. The importation of cheap tea from multiple origins, of unregulated hygiene and cleanliness standards, would immediately defile that image irrevocably.
The garment sector in Sri Lanka and the establishment of special Free Trade Zones (FTZs) have been quoted by the TEA (Tea Export Association) as successful examples of special manufacturing enclaves, equivalent to the proposed Tea Hub. In my view those are most inappropriate comparisons, as unacceptable as a ‘chalk and cheese’ equivalent.
The apparel industry exists almost entirely for the servicing of foreign labels, with 95% of the components being imported, whilst, locally, we simply supply the labor. It is. essentially, a massive labor- intensive operation, dedicated to the concept of maximum production at the lowest cost, but embellished with attractive labels, supported by cutting-edge technology, best manufacturing practices, and compliance with international standards, process hygiene and worker safety.
I am not, even for one moment, belittling the success of the garment industry in Sri Lanka, but those are the realities. Sri Lankans do not own the garment industry and are almost entirely dependent on foreign label patronage for continued existence. In that respect alone, the garment industry in Sri Lanka is very similar to the foreign label service provided by Sri Lankan traders to multi-national tea packers. The establishment of a Tea Hub will relegate our tea industry to that unattractive niche. As long as we are in control of the production of the raw material, we have the power to strategize how and where we sell it and at what price.
The establishment of FTZs was to ensure that the finished product, or the raw material, is not leaked out to local markets. As opposed to that, in the plantation industry, possibly over 95% of the raw material and other components are generated locally. It is a totally home-grown industry where the raw material, in its totality, is produced within.
There are only two sustainable ways of increasing the export value of our tea. One is to improve our land and labour productivity and increase annual production and, thus, send more tea to the auction annually. Another is to increase value addition at source to locally-owned brands, thus enhancing the export price. In fact, simply increasing production without a parallel strategy for adding value is also counterproductive.
Auction prices are determined by supply/ demand dynamics which are outside the producers’ area of control and a combination of both volume and quality will not ensure a sustainable revenue increase. Finally, value addition at source to a good quality finished product, namely ‘Pure Ceylon Tea,’ is the surest method of increasing earnings.
Every kilo of tea produced in Ceylon sells at premium prices and, irrespective of other market dynamics, is still considered as a benchmark for overall quality. In such a scenario, the only objective of devaluing it would be for personal gain, in order to compete with the mass-selling, low-priced, multinational trader.
Example of exploitation
The multinational traders’ exploitative strategy in regard to third world products is best illustrated by coffee, grown in countries such as Brazil, Vietnam, Colombia, Ethiopia, Uganda, and many other countries in Africa. In all the countries where coffee is grown in volume, the per capita income of the farmer is a fraction of that of an average farmer in a developed country and miniscule in comparison to the earnings of the average coffee consumer in the West.
Colvin R. de Silva, as Minister of Plantations, was one of the first politicians to publicly and unequivocally articulate this unacceptable disparity. For every plastic cup of coffee sold for USD 3-4 in affluent societies, the farmer in Africa gets five cents. From a kilogramme of coffee sold at USD 2.75, 110 cups can be brewed, translating to a profit margin of over USD 300 for those in between the poor farmer and the rich consumer.
The story of the tea trade in the hands of the multinational tea trader is no different and the cheapening of Ceylon Tea by importing, blending, and re-exporting will contribute further to that unacceptable social and economic disequilibrium.
It is a cardinal rule of all major packers – multinationals – never to purchase their material from one source or origin. Invariably they operate through two or more suppliers. However, because of the excellent and longstanding quality proposition of Ceylon Tea and the confidence we inspired in all the buyers of the major retailers, for many decades Ceylon Tea used to be, if not the major component, the most important ingredient of multinational packs.
Disappointing indications
During a previous Government’s term, the then Finance Minister, Ravi Karunanayake, deluded by the facile arguments of the Tea Hub proponents, facilitated the importation of tea in one of his budgets.
However, my protests against this provision, supported by the then Minister, Ranil Wickremesinghe, resulted in its removal.
I must also admit to being disappointed by the stance of the Planters’ Association, in regard to the issue of the Tea Hub. I recall a strongly-worded press statement (Daily FT, May 17, 2012), in which the PA declared its opposition to the concept. However, as the umbrella body which primarily represents producer interests, I would have expected it to come out far more strongly, vocally, and actively, against an initiative with the very obvious potential to cause serious damage producer.
Sometime in March 2012, immediately after a meeting of the anvil, chaired by me, certain members of the Tea Council met then Plantations Minister, Mahinda Samarasinghe, and advised him that they would boycott future meetings of the Council chaired by me if I continued to oppose the TEA proposals regarding importation of tea. However, they did not breathe a word about this matter at the meeting itself, though that was the most obvious forum for the issue to have been discussed.
Frankly, I was disgusted by the base conduct of those exporters and, by my letter of March 30, 2012, addressed to Minister Samarasinghe, I resigned from the chairmanship of the Council. In my letter I also clearly stated the reasons for my resignation. The Minister accepted it and appointed Tyeab Akberally, Vice Chairman, to the position I relinquished.
The Tea Council was set up in 1989, under the direction of the then Minister of Plantations, Gamini Dissanayake. Its core purpose was resolving the many problems of the entire industry, in a manner that would benefit the industry in its totality; the plantation worker, the producer, the broker, and the exporter, all included. The very submission of a proposal which only addressed the interests of the exporter, to the obvious detriment of all other stakeholders, was in conflict with the remit of the Council.
Dr. P. B. Jayasundera, then Secretary to the Treasury, has always been a strong opponent of the Tea Hub concept. Addressing the CTTA’s 118th Annual General Meeting in late 2012, ironically flanked at the head table by a couple of ardent proponents of the Tea Hub concept, Dr. Jayasundera stated quite unequivocally that the only manner in which the export earnings from tea could be increased was by “creating a new development framework and promoting Ceylon Tea at a premium, setting aside the idea of making the country a Tea Hub”.
Basically, what Dr. Jayasundera supported was to position Sri Lanka as an exclusive centre for value addition to Pure Ceylon Tea and not to convert it to a trading platform for tea from any and every origin.
Bleak certainties
To any impartial observer, it would be clear that the TEA call for liberalization of imports was driven by the sense of insecurity, generated by the rapidly-diminishing profit margins of the proponents. It is a proposal which reflects, with embarrassing clarity, the mindset of the timid exporter and his submission to foreign label pressure. In my many arguments against the Hub, I have frequently requested its supporters to take a moment to consider why a few exporters from Sri Lanka sell comfortably at USD 10 FOB per kilo, whilst others scramble at the bottom, selling at USD 3 per kilo.
All the multinationals operating in Sri Lanka are now manned entirely by Sri Lankans and the industry’s reliance on the former to market our tea should be minimal. However, I am both baffled and saddened by the still very evident orientation and adherence within the industry to archaic multinational thinking and strategy.
In their hunger for short-term gain, the proponents of the Tea Hub are prepared to sacrifice the long-term potential of Pure Ceylon Tea, as well as consign the hundreds of thousands of low-income earners at the producers’ end to permanent impoverishment. In their pursuit of immediate and short term survival, they are prepared to surrender every natural advantage in ‘Pure Ceylon Tea’. The reality is that it is the locally-owned brands exporting exclusively ‘Pure Ceylon Tea,’ which are the flag bearers of the national product on the global stage.
In total, about 12% of this country’s population is dependent, either directly or indirectly, on the plantation economy. Of that proportion, about 90% toil at the producers’ end; plantation workers and residents, small-holders, their dependents, ancillary service suppliers, bought leaf manufacturers, and so on. A decline in the Colombo tea prices, arising from cheap imports, would result in a permanent adverse impact on the lives of this multitude, whilst temporarily enriching a minuscule proportion at the exporters’ end.
Pure Ceylon Tea was, and still is, this country’s greatest asset. It’s a primary home-grown product and identifies Ceylon/Sri Lanka globally. Its real value and significance have either been misinterpreted by successive governments, and many of our local traders, but fully exploited by the multinational who understood its actual worth. Through Ceylon Tea, the country has a product which can stand alone and compete successfully against any tea grown or manufactured in any other country. The maximization of its inherent value proposition simply requires vision, dedication, and integrity of purpose.
For over a century we have permitted Ceylon Tea, a valuable and attractive ‘finished product’ with enormous potential to this country, to be exported by multinational companies to other countries as a ‘raw material’. The importing countries debase its natural quality by blending with inferior tea from other origins, whilst reducing its cost and, with pretty packaging, claim to add value to a less-than-mediocre mix, but still sell it on its intrinsic value as Ceylon Tea. In the process, the tea that is grown by the farmer in our country enriches a chain which has no real link to his country, at the expense of our producer, our farmer, and our plantation worker.
What the proponents of the Tea Hub are advocating so strongly is the replication of the same odious process, in the country of the orign of Ceylon Tea, though they have clothed the proposal in noble rhetoric, as a panacea for all the ills of the tea industry.
Pure Ceylon Tea is still synonymous with quality in the many countries in which it has been a traditional brew, despite the debasement it has suffered at the hands of multinationals who, whilst devaluing its intrinsic goodness, still leveraged the original quality perception in their marketing. Thus, packers determine the quality that they offer the consumer, as the purchasing choice of the latter is limited to what is available on the supermarket shelf.
This compulsion created by the multi-national marketer appears to have created an illusory perception in the minds of certain exporters, especially the Tea Hub proponents, that the cheap, debased tea is actually a consumer demand or preference. Dilmah, however, convincingly exploded this myth with its success in the marketing of quality ‘Pure Ceylon Tea’ in Australia and New Zealand.
Marshalling the opposition
At the beginning of this chapter I referred to the proposal by the then Trade Minister, Lalith Athulathmudali, in 1979, which, to the best of my knowledge, was the first instance when a leading politician presented tea importation as a strategy with potential for economic benefit to the country. To the best of my recollection, there had been no serious discussion about it before, although I am certain that the idea would have been tossed around in tea trading circles. It is really in the 1980s that wider discussion around the concept commenced, eventually gathering momentum until, within a couple of decades, it became an existential threat to the tea industry in its totality.
When I first opposed Athulathmudali’s proposal, I was, essentially, a bulk tea exporter. Dilmah arrived almost 10 years later. Thus, it must be clear to all readers that my opposition to the concept of a Tea Hub, contrary to the arguments of my opponents, was not to protect my interests or my personal brand, but entirely in the larger interests of the tea industry of Sri Lanka. It is for that reason that in this writing I have explained in considerable detail the likely impact of the implementation of such a proposal.
In the years since 2010, during which the Tea Hub proposal has been canvassed by its advocates at all relevant forums, I have used all the resources that I was able to muster to oppose it. My views have been expressed publicly, via newspapers and the electronic media, whilst concurrently being made known at the highest levels of government. I was also able to enlist the support of the Tea Small Holders’ Association and the assistance of the Private Tea Factory Owners’ Association, whilst the Planters’ Association also endorsed my view. However, as I have said earlier in this writing, from the latter I would have welcomed a far more involved engagement in opposition given that, in the event of unrestricted importation, the producer stood to lose more than any other industry group.
Independent journalists of several newspapers, both Sinhala and English, also published articles in support. My friend Herman Gunaratne, plantation owner and specialty tea producer-exporter from Galle, with his passion for Pure Ceylon Tea and his wide contacts within the smallholder segment and private factory owners of the south, was of immense help to me in marshalling support in resistance of the Tea Hub proposal.
The combined strength of the opposition groups, representing about 12% of the country’s population, eventually succeeded in temporarily suppressing a scheme which would have briefly benefited a few thousand people at most. However, the industry needs to be always aware of and be constantly on guard against a resurgence of the Tea Hub movement. If implemented, it will be, for a short while, very profitable for the proponents who are only interested in short-term gain. Since there is money in it, albeit for a handful of profiteers, I suspect that the idea will never be abandoned altogether, irrespective of opposition.
The Tea Hub proposition is a delusional attempt to bridge the chasm between the supplier of tea and the marketer of tea. It is a futile exercise to conflate these two mutually-exclusive concepts. The supplier furnishes a featureless commodity whilst the marketer markets a branded product with a specific identity. There can never connection between these two extremes. Finally, despite all opposition, if the Hub eventually becomes a dismal reality, and the local tea industry collapses as a result – as it surely will – there will not be one expert at that time to acknowledge responsibility and openly say, “Yes, I supported the importation of Orthodox Tea!”
Features
Social justice in suspense: Sri Lanka’s welfare legacy in an era of austerity
by Prof. M.W. Amarasiri de Silva
The evolution of Sri Lanka’s social policy framework represents one of the most compelling, paradoxical, and debated case studies in the global political economy of development. Often celebrated as an exceptional model among developing nations, Sri Lanka achieved human development indicators, such as high adult literacy, elevated life expectancy, and low infant mortality, that rivaled those of industrialised Western societies, despite maintaining a low-to-middle per capita income. This distinct trajectory was fundamentally sculpted by the establishment of an extensive welfare state, characterised by universal healthcare, free education, and pervasive food subsidies.
However, the long-term impact of this historical welfarism on present-day Sri Lanka presents a complex matrix of social triumph, economic vulnerability, and systemic crisis. To fully comprehend how the historical welfare state has shaped contemporary Sri Lanka, one must trace the institutional genesis of these policies through the critical frameworks provided by eminent social theorists, notably Ralph Peiris in his analysis of Asian development styles and Laksiri Jayasuriya in his landmark work on Sri Lanka’s experience of social development directed toward equity and justice.
Foundation of welfare state
The structural foundation of Sri Lanka’s welfare state was not a post-colonial luxury, but rather a late-colonial construct deeply interwoven with the dynamics of democratization and constitutional reform. As Laksiri Jayasuriya meticulously argues in his historical and theoretical explorations of Sri Lankan social policy, the trajectory of the country’s social development was rooted in the state-building exercises of the late British colonial era. The introduction of universal adult suffrage under the Donoughmore Constitution of 1931 served as a pivotal catalyst. By enfranchising the local population decades before formal independence in 1948, the colonial state altered the political elite’s incentives.
Politicians were suddenly forced to seek electoral legitimacy from a vast, rural, and economically disadvantaged populace. This constitutional shift institutionalised what Jayasuriya terms a culture of ‘welfare politics,’ where competitive electoral democracy became intrinsically linked to the provision of social goods.
During the period spanning from the 1930s to the 1950s, the state laid down the three pillars of its social safety net: free state-provided healthcare, free universal education from primary to university levels (championed by C.W.W. Kannangara), and a heavily subsidised food rationing scheme, most notably the rice ‘polu’ (haal polla) system. In the popular Sri Lankan vernacular and historical memory, these restrictive barriers and checkpoints became closely associated with the rationing culture surrounding the rice distribution and cooperatives where state-allocated rice rations were obtained via coupon books.
Jayasuriya highlights that these measures were conceived not merely as safety nets for the destitute, but as fundamental rights of social citizenship modeled partly on the egalitarian principles of the British post-war welfare state yet adapted to a post-colonial environment seeking equity and social justice. This social democratic commitment was maintained across alternating political regimes, creating a broad cross-party consensus that state-funded welfare was an untouchable social contract between the state and its citizens.
Policy trajectory in perspective
To place this unique policy trajectory in a broader comparative perspective, Ralph Peiris’s conceptualisation of ‘Asian Development Styles’ offers a critical lens. Peiris examined how different Asian nations navigated the tensions between Western models of modernisation, economic growth, and indigenous social structures. Many East Asian economies—such as South Korea, Taiwan, and Singapore—adopted a development style centered on ‘growth-first’ imperatives, state-directed capitalism, and the deferral of widespread social expenditure until after rapid industrialisation was achieved. In contrast, Sri Lanka pioneered a distinct ‘social-led’ development style within South Asia. Peiris observed that Sri Lanka’s development style prioritized human capability, social redistribution, and basic needs over raw capital accumulation. This style reflected a socio-cultural ethos that viewed social harmony, equity, and state paternalism as integral to governance, resisting the purely utilitarian or market-driven metrics of economic progress.
The immediate consequences of Sri Lanka’s socio-centric development style were undeniably positive in terms of human wellbeing. By the late 20th century, Sri Lanka had achieved a physical quality of life index that far surpassed its South Asian neighbors. Maternal and infant mortality rates dropped precipitously due to widespread access to free public health facilities and midwife networks. Universal education fostered a highly literate electorate, dramatically closed the gender gap in basic and secondary education, and enabled significant upward social mobility for marginalized caste and rural communities. Jayasuriya emphasizes that this commitment to equity and justice transformed the social fabric, democratising access to public life and cultivating a politically conscious citizenry that viewed education and healthcare as non-negotiable entitlements.
However, the enduring legacy of this historical welfare state is dual-edged, carrying deep-seated economic contradictions that directly contributed to present-day Sri Lanka’s socio-economic landscape. The central paradox of the Sri Lankan welfare state lay in the disconnect between social expansion and economic productivity. While the state committed huge fractions of its national budget to social consumption, it failed to build a resilient, diversified industrial export base capable of generating the revenue necessary to sustain these expenditures over generations. The primary revenue source funding the early welfare state was the taxation of the colonial-era plantation export economy—primarily tea, rubber, and coconut. As global commodity prices fluctuated and deteriorating terms of trade eroded plantation revenues in the post-independence decades, the state faced severe fiscal deficits.
Macroeconomic imbalances
The fiscal strain of maintaining universal subsidies led to severe macroeconomic imbalances by the 1970s. The state attempted to manage these pressures through import-substitution policies, strict price controls, and state monopolies, culminating in the closed economy of 1970–1977. While this period sought to preserve the egalitarian principles articulated in Jayasuriya’s analysis of social justice, it resulted in severe shortages of essential goods, economic stagnation, and rising unemployment among the newly educated youth. The inability of the economy to absorb the expanding class of literate, ambitious young citizens created a structural mismatch between educational output and employment opportunities.
This socio-economic disjunction erupted into violent political crises. The educated yet economically disenfranchised rural youth became the primary base for insurgencies, such as the Janatha Vimukthi Peramuna (JVP) uprisings in 1971 and 1987–1989. Concurrently, the failure to extend equitable socio-economic and political opportunities to the Tamil minority—compounded by language policies that prioritized the Sinhala majority in public sector employment—fueled ethnic marginalization, eventually escalating into a devastating nearly three-decade-long civil war. Thus, as both Jayasuriya and Peiris observe in their respective analyses, while the welfare state was designed to promote social cohesion and equity, its economic unviability and politicization contributed to social frustration and structural conflicts when the economy failed to fulfill the aspirations created by universal social programs.
Janasaviya, Samurdhi and Aswesuma
A profound structural turning point occurred in 1977, when Sri Lanka became the first country in South Asia to abandon import-substitution and embrace neoliberal market-oriented economic reforms. The advent of the ‘Open Economy’ signaled a major shift in the state’s social policy regime. As Jayasuriya notes in his critique of the post-1977 retreat from the welfare state, universal welfare policies were systematically dismantled or reconfigured into targeted, means-tested poverty alleviation programs. The universal food subsidy was replaced by food stamp programs and later by targeted cash transfer schemes such as Janasaviya and Samurdhi, and eventually Aswesuma.
This transition from universal social citizenship to targeted safety nets marked a fundamental redefinition of the social contract. While the 1977 open market policies stimulated economic growth, foreign investment, and infrastructure development, they also led to rising income inequality, regional disparities, and the commercialization of public goods. The state’s fiscal commitment to public education and health gradually eroded as a percentage of GDP, leading to a dual-track system.
Underfunded state healthcare and education systems remained free but suffered from resource constraints, overcrowding, and quality decline, while a burgeoning private sector in health and tuition-based education emerged to cater to the affluent. Jayasuriya argues that this marketization of social services undermined the egalitarian ideals of social justice that had historically anchored the nation’s social policy.
The contemporary manifestation of this historical trajectory became starkly apparent during the unprecedented economic crisis that engulfed Sri Lanka in 2022 and its continuing aftermath. The crisis—characterized by sovereign debt default, hyperinflation, severe foreign exchange shortages, and acute shortages of fuel, medicines, and food—exposed the fragile structural foundations of the country’s political economy. The roots of this crisis are inextricably linked to the unresolved tension between public expectations built by historical welfarism and modern neoliberal fiscal mismanagement.
Welfare and populism
Over recent decades, successive governments continued to rely on populism to secure electoral victory, promising subsidies, tax cuts, and public sector employment without building a sustainable tax base or correcting structural economic deficits. When the state faced catastrophic revenue declines following ill-advised tax cuts in 2019, combined with the shock of the COVID-19 pandemic and debt-driven infrastructure spending, the fiscal apparatus collapsed. The resulting austerity measures, mandated under International Monetary Fund (IMF) stabilization programs, forced sharp reductions in energy subsidies, increased indirect taxation, and deep spending cuts that severely hit vulnerable populations.
In present-day Sri Lanka, the legacy of the welfare state manifests as both a vital buffer and a site of intense political contestation. On one hand, the historical infrastructure of universal health and basic education has prevented an even more catastrophic loss of human life during the peak of the recent economic collapse. The enduring social capital, public health institutions, and high literacy rates provided a baseline of societal resilience that assisted communities in coping with immense economic shock. The persistent popular memory of social entitlement has also fueled widespread civic mobilization, as demonstrated by the Aragalaya mass protest movement in 2022, which demanded accountability, social justice, and an end to political corruption—echoing the deeply ingrained political culture of democratic accountability that Jayasuriya identified as a byproduct of early welfarism.
Challenge of restructuring social policy
Contemporary Sri Lanka faces the immense challenge of restructuring its social policy framework in an era of stringent fiscal constraint. The rollback of state subsidies and the rising cost of living have pushed millions of citizens below the poverty line, threatening to reverse decades of hard-won human development gains. Malnutrition rates among children have spiked, access to essential imported life-saving medicines has been compromised, and the real value of state pensions and social assistance has been severely eroded by inflation. The targeted social safety nets, such as the Aswesuma welfare scheme introduced to replace Samurdhi, have faced significant administrative challenges, exclusion errors, and public resistance, reflecting the ongoing difficulty of transitioning from universal rights-based social protection to targeted relief mechanisms in a deeply distressed economy.
Furthermore, the contemporary economic crisis has intensified a major ‘brain drain,’ as highly educated medical professionals, engineers, university lecturers, and skilled workers migrate abroad in large numbers. This mass emigration directly exposes the present-day crisis of Sri Lanka’s historical social model: the state continues to invest significant public resources into providing free secondary and tertiary education, but the domestic economy fails to offer economic stability and professional opportunities to retain this human capital. Consequently, the social returns on the state’s educational investment are increasingly captured by developed nations, leaving domestic public institutions further depleted.
In evaluating the contemporary impact of Sri Lanka’s social policy through the theoretical insights of Ralph Peiris and Laksiri Jayasuriya, it becomes evident that Sri Lanka’s history is neither a pure success story nor an absolute policy failure. Ralph Peiris’s emphasis on Asian development styles reminds us that development cannot be reduced merely to economic output metrics; the deliberate choice to prioritize human capabilities and social equity established an enduring standard for human welfare in the global South. However, as Jayasuriya’s critical analysis reveals, a welfare state cannot exist in an economic vacuum. The failure to integrate social policy with a productive, sustainable, and equitable economic strategy created structural vulnerabilities that ultimately undermined the very social justice the state sought to achieve.
Socio-economic contradiction
This socio-economic contradiction has entered a critical new phase under the administration of President Anura Kumara Dissanayake and the National People’s Power (NPP) government, which assumed office with an explicit mandate focused on systemic corruption reform and equitable development. Facing the stringent structural constraints of post-default economic management, the administration has adopted a pragmatic, hybrid economic framework designed to reconcile Sri Lanka’s historic social protection legacy with strict international fiscal discipline. Rather than abandoning structural reforms, the government maintains continuity with the Extended Fund Facility agreement managed alongside the International Monetary Fund (IMF), adhering to primary budget surplus targets and progressive revenue-mobilisation goals. However, it attempts to reorient macroeconomic priorities away from elite-driven financialization toward a state-regulated, productive market economy centered on public sector transparency, digitalization, anti-corruption legislation, and the revitalisation of local agriculture and manufacturing.
Policy of rebalancing
This policy rebalancing directly reflects the enduring relevance of Peiris’s ‘Asian development style’ framework, as the state seeks to build export competitiveness while retaining public oversight of basic social safeguards. Yet, as Jayasuriya cautioned in his critiques of targeted safety nets, managing fiscal austerity within a political culture historically accustomed to universal state entitlement poses severe domestic challenges. High living costs, continuous pressure on public sector wages, structural poverty, and the persistent outflow of skilled human capital leave narrow margins for error. Contemporary Sri Lanka’s economic policy thus represents an ongoing attempt to construct a viable, modern economic model—one that generates sustained productivity and debt sustainability while preserving the foundational democratic imperative of equity and social justice that has defined the nation’s post-colonial identity.
Features
Cholesterol lowering statins: Scope for use widens
by Dr Upul Wijayawardhana
In my medical practice of just under 57 years, divided almost equally between Sri Lanka and the UK, I have been fortunate enough to meet some remarkable patients who demonstrated indomitable fortitude. Not that there were no nasties, but, fortunately, they were extremely rare. Now well into my retirement, I can still vividly remember some remarkable cases as if they happened yesterday. One of them well illustrates what happens when prescription warnings are ignored; that can result in drug interactions producing nasty, sometimes lethal, side effects.
A man in his sixties was admitted under my care to Grantham Hospital with progressively increasing muscle pain and weakness, being almost bedbound by the time of admission. It was pretty obvious that there was extensive damage to muscles which was confirmed by huge elevation of markers of muscle damage. A careful history, one of the vital steps needed for diagnosis, revealed that he was on long-term statin therapy following a heart attack and his GP has recently prescribed an antifungal agent for an infection in the groin. This was before the computerised prescription era and is not likely to have happened now, as a red-alert would be displayed as antifungals are known to produce severe interactions with statins. Both drugs were stopped, and with supportive therapy, he recovered fast and walked out of the ward two weeks later. He was started on a different statin later with no problems.
Would this experience make me join the vast numbers of YouTubers who are harping on the dangers of statins? Definitely not. I say so because the benefits of statins far outweigh the rare side-effects. All drugs have side effects and, in some trials, placebos producing more side effects than the active drug itself! Drugs need to be prescribed by those with education and experience whilst prescribers need to be updated regularly. Statins, perhaps, are the most widely used class of drugs and the scope for use is widening with the reporting of new clinical trials, two significant trials being presented at the European Society of Cardiology Congress held last month in Munich.
It was known for a long time that elevated levels of cholesterol in blood leads to damage of arterial walls (atherosclerosis) which manifests as cardiovascular disease including heart attacks, cerebrovascular disease including strokes and peripheral vascular disease. Various attempts at lowering cholesterol effectively by diets, drugs and surgery were largely unsuccessful till statins were discovered and it was soon realised that cholesterol synthesis by the body is more important than ingestion of cholesterol rich foods and saturated fats. Statins inhibit cholesterol synthesis in the body and the first statin released for therapeutic use was Lovastatin in 1987, but wide use of statins started only after the release of results of the landmark 4S trial in 1994.
The Scandinavian Simvastatin Survival Study (4S) was a multicentre, randomised, double blind, placebo controlled clinical trial which used Simvastatin, the second statin released for use a year later in 1988. 4444 patients, who previously had a heart attack or were having angina with moderately elevated levels of cholesterol, in spite of rigorous dieting, were recruited from 94 centres in Scandinavia. After follow-up of 5.4 years, compared to the placebo group, it was shown that the group treated with Simvastatin showed lowering of LDL cholesterol (Bad Cholesterol whereas HDL cholesterol is protective) by 35% and, more importantly, lowering of death rate by 30%. A follow-up study of 10 years showed continuing benefits. More trials and more statins followed.
Though Simvastatin had widespread use initially, the more powerful Atorvastatin, launched in 1997, overtook producing more dramatic results in subsequent clinical trials. Till the introduction of monoclonal antibodies (mAbs), laboratory produced proteins that mimic the immune system and capable of targeting antigens in cells or pathogens (which can be identified as the drug names end with ‘mab’) Atorvastatin was the highest grossing drug of all time, in spite of prices dropping sharply. There had been a proliferation on mAbs as many are used in a number of cancers and auto-immune diseases, earning more money as they continue to be expensive.
I remember a meeting I attended, just after the results of the 4S trial was released, where fears were expressed whether the NHS would go bankrupt if all eligible patients were prescribed Simvastatin. Widespread use has brough prices tumbling down, a tablet of Atorvastatin now costing in UK only 3p!
Though the initial trials were for secondary prevention, reduce recurrence after the disease has manifested, subsequent trial were aimed at primary prevention, preventing or delaying disease occurrence in those with high risk factors. These too showed significant benefits and the scope for use of statins continue to expand. Two significant trials were presented at the ESC congress.
The first was the STAREE study, which enrolled 5000 persons, over the age of 70 in Australia, with no history of cardiovascular disease, diabetes or dementia and half got Atorvastatin 40mg daily, the other half getting a placebo. Results showed a significant 30% reduction of a composite end point of death from cardiovascular causes, nonfatal myocardial infarction, stroke or coronary revascularization. Interestingly, incidence of serious adverse effects was similar in both groups being 2.6%. There was no significant reduction of death rate by itself. Perhaps, this is explained by most deaths being due to non-cardiac causes in this age group.
The second was a Danish observational study, where researchers assessed whether early initiation of statins after the diagnosis of type 2 diabetes was associated with a lower risk of dementia. Over 10 years, early statin initiation was associated with a 15% lower relative risk of dementia than no statin treatment, while late initiation was associated with a 10% lower risk. Though they studied the records of 132,585 patients, as this is an observational study, not a double blinded clinical trial, results are not as convincing and may have to be reaffirmed by further studies.
How will the results of these two trials affect clinical practice?
To act on the results of these trials is not difficult in the UK. Those over 80 years are already offered a statin and it would not be difficult for GPs to extend use to those over 70. Most diabetics, unless relatively young, are likely to be on a statin already, as they are categorised as high risk. There are no cost implications to patients as diabetics and those over 65 years get all their drugs free from NHS.
Unfortunately, things are likely to be very different in Sri Lanka. Diabetes is rampant and dementia is on the rise. As life expectancy is increasing and those over 70 being an ever-increasing group. Diabetics may be able to get a statin from government hospitals. However, there is no provision for free supply of statins for over 70 group, as this is for primary prevention. With exponentially increasing cost of living, retirees may find it difficult to afford a statin.
Ideally, Atorvastatin 40mg daily, the dose used in the trials, should be taken though one can argue that other statins may be effective as benefits are likely to be a group effect. As many trials used the 40mg dose, Pfizer decided to price 10mg, 20mg and 40mg Atorvastatin tablets the same, but this is unlikely in Sri Lanka, what is available being generics; Atorvastatin went out of patent protection in 2011. If 40mg tablets are significantly more expensive, perhaps, a lower dose could be considered as the average body size of Sri Lankans is smaller than that of Australians.
It can be argued that even a small dose is better than taking no statin at all. Maybe there is a good opportunity for our scientists, perhaps together with their Indian counterparts to do clinical trials to establish appropriate doses of statins and other drugs, rather than follow Western guidelines. Until then, it may be sensible to give anyone over 70 years an affordable dose, with some patient education on adverse effects could be minimized.
Statins are a valuable tool for the prevention of vascular disease. They not only reduce deaths but also improve quality of life by preventing debilitating illnesses. Like any drug they too have adverse effects and should be used under proper medical supervision. Worst thing to do is to listen to fear-mongers!
Features
‘Mortal Causes’ Tales of Mystery and Suspense 20
Tales of Mystery and Suspense 20
by Prof. Rajiva Wijesinha
After the elegance of Agatha Christie and Hercule Poirot, I revert to one of the least elegant detectives I have looked at. The first John Rebus novel by Ian Rankin I discussed here was Set in Darkness, though I think I failed to mention the title. That does not really matter for Rankin’s titles seem a bit interchangeable. Certainly, the title of the book I will explore today, Mortal Causes, could apply to most Rebus adventures.
But this too was a gripping tale, and also dealt with what used to be a disturbing social issue in the last quarter of the last century, namely violent clashes between Catholics and Protestants, which had their roots in the age-old question of Northern Ireland and its place in the United Kingdom. The root problem there was the influx, when Ireland was comprehensively taken over by the English, of Protestants from Scotland, who were so entrenched in the north of Ireland, the area known as Ulster, that they stopped Britain from granting independence to the whole of Ireland.
Ulster remained a part of the United Kingdom, but over the years the Catholics there, supported by the Irish Republican Army, the IRA, agitated for union with the Republic of Ireland. This was bitterly resented by the Protestants, and emotions ran high, as I found when I tried to bring together Catholic and Protestant friends when I was at Oxford.
The sixties saw the overthrow of three Prime Ministers of Northern Ireland, each succeeding one being more committed to the Protestants than his predecessor, for there was a preponderance of Protestant constituencies. But the Catholic numbers were proportionately increasing, and the IRA of course got support from the Irish Republic, with the border being porous and impossible to patrol. This led to vicious reprisals by British troops, and it was their failure to address excesses over the years that made clear their infinite hypocrisy in criticizing Sri Lanka for excesses during the civil war, demanding inquiries while signally failing to address the massacres of Catholics in Northern Ireland.
Mortal Causes
deals with the repercussions of this rivalry in Scotland, where the latent animosity between Catholics and Protestants was exacerbated by events in Ulster. Obviously Scottish groups were keen to help their fellow religionists, and the book is based on how money was collected and guns smuggled in to Ulster. But typically, Rankin also looks at how the proliferation of guns led to the strengthening of gangs, who engaged in extortion, with on occasion Catholic and Protestant guns maintaining a truce so that they could each exploit their own catchment areas.
A microcosm of what went on was seen in a youth club in a seedy housing estate in Edinburgh, to which a Catholic priest Rebus was friendly with sent a youngster who was supposed to bring the communities together. Though this resulted in a truce, it was in essence an arrangement that allowed both Catholics and Protestants to deal in intimidation of their different communities in the area. And the club was dominated by the protestants, led by a youth called David Soutar, who is endemically violent, and takes against Rebus on his very first visit, after he had promised Father Leary to look into the situation.
The youth club turned out of course to be connected with the murder that set off the investigation, though this only became clear because of Rebus’ painstaking investigation of that crime. It was a brutal killing, in an underground section of the city, usually only to be seen by arrangement with the city council. The bodies were discovered by some youngsters, one of whom had purloined a key from his great uncle who was one of the custodians, who provides important information in the course of the investigation to make up for that lapse.
Before that Rebus had realized something bigger was behind the gruesome murder, for while part of the team at his own station he was asked by a Chief Inspector with the Scottish Crime Squad, Kilpatrick, to work also with his team. He had come to the site of the crime with an Inspector from London, Abernethy, who went back almost immediately to London. And though Abernethy mentioned the possibility of the killing being because of drugs, Rebus stuck to his view that it was terrorism related.
The body was soon enough identified, that of a youngster who lived with a couple called Murdock and Millie, and had Protestant insignia on his walls. And painstakingly Rebus established connections with diehard Protestants, one of whom, called Bothwell now which was his parental name, had edited a magazine while stationed in the Orkneys but now ran a dance club in Edinburgh. And he also deduced that SaS tattooed on the arm of the dead body stood for Sword and Shield, an extreme Protestant organization to which it transpired that David Soutar also belonged.
Alarmingly, it turned out that the dead Billy was the illegitimate son of Rebus’ old antagonist Ger Cafferty, who was now serving time in prison. But when he hears that his son had been murdered, he escapes, and makes it clear, through several contacts with Rebus, that he expects the killers to be found, and that he will take revenge on them.
Rebus and Inspector Smylie from the Crime Squad have to fly to Ulster to collect information which the police there refuse to transmit, and find nothing special though they confirm the existence of an extreme group called Sword and Shield, and that it has branches in America. And it seems that one of its leaders in Ulster has just gone to Scotland, while the Americans confirm that another leader will be flying to England and then to Edinburgh. Rebus asked Kilbride to tail the latter, and he says he will set two of his officers, who have no affection for Rebus, on to him.
When Rebus and Smylie get back from Ulster, Rebus is taken aside by one of these officers who says that Smylie’s brother Calumn, who was also part of the Crime Squad, and had been working undercover on arms shipments, has been murdered. This makes it clear that the arms smuggling is the key to the deaths, and also that there has been a leak from the Crime Squad.
And then Millie, who had taken a disk which Billie had hidden in his wall and fled, is also found killed. She had sought shelter with a friend who worked at Bothwell’s club, and the friend had told Bothwell about this, which was doubtless why she had been killed.
When the American organizer of Sword and Shield comes to Edinburgh Rebus manoeuvers a meeting with him, though not without rousing his suspicions. But the reports he receives from Kilpatrick of the surveillance say that he has just been doing touristy things.
The book is set during the Edinburgh Festival, and the police have been getting several calls to say a bomb will go off at its height. And Rebus now realized that this is precisely what Soutar is planning to do, having creamed off some of the weaponry, including explosives, that he had been collecting for transmission to Ulster.
These were stored in a facility provided for him by a friend whose father ran the group, but knew nothing about what Soutar was planning. The son, terrified by what he had been involved in and what the police knew, took Rebus to the warehouse which was where, DNA tests of the floor revealed, Calumn had been killed. And when Rebus and Abernethy, whom he had called up from London, confront Bothwell, it seems he too did not know of Soutar’s little sideshow, though it was also clear that he had known of Millie’s death, as well as Billy’s.
Her murderers had got the compact disk but her flatmate, though he had destroyed the backup, had looked at it before and that was how Rebus found out about the warehouse that Soutar had used. But then he goes with Abernethy to the warehouse in which the Crime Office had kept the weapons they had found, and they both confront Kilbride there and tell him that they know he too had been a member of SaS – the granduncle having shared his research with Rebus – and had passed on parts of what was confiscated to Soutar, since he was in a position to change the invoices.
But he too evidently did not know what Soutar was planning, and when Rebus goes to the youth club it is to find that Soutar had nearly killed him, and had then set off for the festival. There is great drama then as Rebus tries to stop him setting off whatever bomb he has and, though he is nearly killed, as happens in so many Rankin books at the end, Abernethy shoots Soutar dead.
Then however, when Rebus goes to the dance club for what he thinks of as final business, he finds it on fire. Bothwell has been killed. But he finds the American inside and pulls him out. When he goes further and finds the man from Ulster in a chair, tied up so he would burn, he tries to free him and then is again nearly killed, though this time he is rescued by Cafferty – who tells him it was not to save him that he had come in but to make sure he did not save the other man, the American having slunk away after Rebus had taken him outside the burning building.
The American is apprehended when he was trying to leave the country. But Kilbride is smothered in his hospital bed when he was recovering, so Cafferty’s vengeance for his son was almost complete.
-
News7 days agoGnanasara Thero absconding after SC ruling
-
Opinion6 days agoFrom Galkissa (Mount Lavinia) to Tambuttegama
-
Business7 days agoHNB Finance strengthens Board with four independent directors
-
News3 days agoUS embassy won’t comment on IGP’s probe into joint drug raid
-
Sports7 days agoCulture within cricket team worrying authorities
-
Features6 days agoSri Lanka’s university crisis: Brain drain and union action demand urgent reform
-
Features5 days agoThe emptying university: why are academics leaving?
-
News7 days agoHouse to debate 22A, Judicature Bill next week



