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Navigating Sri Lanka’s economic recovery: Opportunities and risks in the aftermath of Cyclone Fengal

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by Prof. Chanaka Jayawardhena,
Professor of Marketing, University of Surrey, UK.
Chanaka.j@gmail.com

Sri Lanka finds itself at a crossroads. The devastation caused by Cyclone Fengal, which displaced over half a million people, destroyed critical infrastructure, and claimed numerous lives, highlights the country’s vulnerability to natural disasters. At the same time, the nation is tentatively emerging from its first-ever sovereign debt default, buoyed by a $12.5 billion bond swap and an IMF bailout. Together, these events pose an urgent question: Can Sri Lanka navigate the treacherous path of recovery without derailing its fragile economic stability?

The answer lies in the delicate balance the government must strike. Cyclone Fengal is more than just a natural disaster—it is a stress test for the economic goodwill painstakingly built up over the past year. How Sri Lanka’s policymakers respond could define the trajectory of its recovery for years to come. This is not just about reconstruction; it is about rethinking priorities, leveraging the current crisis as an opportunity to build resilience, and ensuring the hard-won economic gains are not squandered in the process.

Cyclone Fengal: A Catalyst for Change or a Step Backward?

The immediate economic impact of Cyclone Fengal is staggering. Agriculture, one of the backbones of Sri Lanka’s economy, has suffered significant losses, with thousands of acres of paddy fields and tea plantations—critical export sectors—being submerged. Damaged transport networks have disrupted supply chains, delaying the movement of goods and escalating costs for businesses and consumers alike. The government now faces the twin challenges of financing disaster relief and rebuilding vital infrastructure, all within the constraints of a tight fiscal envelope.

The human cost is equally dire. Families have lost homes, livelihoods, and loved ones. The socio-economic fallout of such displacement is long-lasting, with vulnerable communities pushed further into poverty. Moreover, the environmental damage, including soil erosion and the destruction of ecosystems, adds another layer of complexity to recovery efforts.

Yet, there is an opportunity amidst this tragedy. Disasters often serve as catalysts for long-overdue reforms. Cyclone Fengal could prompt Sri Lanka to implement policies aimed at climate resilience, investing in infrastructure that can withstand future storms and floods. Such investments would not only protect lives and livelihoods but also reduce the economic disruptions caused by such events. However, realising this opportunity requires vision, coordination, and a clear commitment to long-term planning—qualities that have not always been hallmarks of Sri Lankan governance.

The risks, however, are equally pronounced. With limited fiscal space and the need to adhere to IMF conditionalities, there is a real danger that recovery efforts might siphon funds away from critical economic reforms. If mismanaged, this could erode investor confidence, putting at risk the progress made in stabilising the economy. The government must guard against the temptation to prioritise short-term relief over the long-term restructuring that is vital for sustainable growth.

Debt Restructuring: The Elephant in the Room

Sri Lanka’s recent $12.5 billion bond swap was a bold move to address its debt crisis, but the relief it offers is conditional. Investors and international institutions are closely watching how the government navigates its commitments to fiscal discipline and structural reform. Cyclone Fengal has now added an unexpected layer of complexity to this equation.

The IMF bailout, which released $333 million in its latest tranche, demands not only fiscal prudence but also tangible progress in revenue generation and state enterprise restructuring. These measures, while necessary, are politically sensitive and require a stable economic environment to succeed. The cyclone’s aftermath threatens to upset this balance, with rising expenditure on disaster relief potentially crowding out these reforms.

Moreover, the bond swap itself is not without controversy. While it offers breathing room, it also raises questions about the sustainability of Sri Lanka’s debt strategy. With global interest rates on the rise, the cost of future borrowing could escalate, particularly if the government fails to demonstrate fiscal discipline. In this context, the pressure to deliver results has never been greater. Successfully managing this dual challenge of recovery and reform will be the ultimate test of Sri Lanka’s political and economic leadership.

Lessons from other economies

Sri Lanka is not the first country to face the dual challenge of disaster recovery and economic reform. Indonesia’s response to the 2004 tsunami offers valuable lessons. By channelling international aid into long-term development projects and maintaining fiscal discipline, Indonesia turned a crisis into an opportunity for economic transformation. Key to its success was the establishment of a dedicated reconstruction agency that ensured transparency and accountability in the use of funds.

Bangladesh, another country prone to natural disasters, has demonstrated how investing in disaster preparedness—through early warning systems, robust infrastructure, and community education—can mitigate economic losses. These measures have not only saved lives but also reduced the financial impact of natural disasters, enabling the economy to recover more quickly.

Sri Lanka would do well to follow these examples. The establishment of a specialised disaster management authority with a clear mandate and adequate funding could go a long way in ensuring a coordinated and effective response. Such an agency could also play a critical role in securing international aid, which is often contingent on transparent governance and accountability. Ensuring such mechanisms are in place will be crucial to sustaining international goodwill and ensuring long-term economic stability.

Investing in Resilience

The case for strategic investment in resilience is clear. Renewable energy projects, for instance, could reduce the country’s reliance on costly fuel imports while aligning with global sustainability trends. Sri Lanka’s abundant natural resources—sunlight, wind, and hydro potential—position it well to transition to a greener energy mix. Such investments would not only lower energy costs but also make the economy less vulnerable to global fuel price shocks.

Rebuilding transport and communication networks with a focus on durability would also yield significant benefits. Modern, resilient infrastructure is essential for economic growth, facilitating trade, tourism, and investment. Furthermore, the construction phase itself could create jobs, providing a much-needed stimulus to the domestic economy.

Public health must also be a priority. The cyclone has triggered a surge in dengue cases, exposing gaps in the healthcare system’s ability to respond to emergencies. Strengthening healthcare infrastructure and preventive measures could yield significant economic and social dividends. Healthier populations are more productive, and the costs of prevention are far lower than those of treatment and lost productivity.

Building on Goodwill

Sri Lanka enters this challenging phase with a degree of goodwill that is rare for a country emerging from economic collapse. The Central Bank’s policy rate reforms and the government’s efforts to stabilise public finances have been cautiously welcomed by investors. Moody’s recent decision to place Sri Lanka’s credit rating under review for a potential upgrade reflects this optimism.

However, goodwill is a finite resource. The government must tread carefully, avoiding populist measures that could derail its reform agenda. Transparency in disaster relief spending and clear communication about the trade-offs involved in balancing recovery with reform are essential. Failure to do so could erode the trust of both domestic and international stakeholders.

The risk of political complacency is real. The government’s recent electoral mandate, while overwhelming, should not be taken as a licence to abandon fiscal prudence. Populist policies, such as unsustainable subsidies or tax cuts, could undo the progress made and jeopardise long-term stability.

A Path Forward

Cyclone Fengal has exposed the vulnerabilities in Sri Lanka’s economic and social fabric, but it has also provided an opportunity to address them. The government’s response must be both immediate and strategic, balancing the urgency of disaster relief with the long-term necessity of economic reform.

First, the government must prioritise investments that yield both short-term relief and long-term benefits. For example, rebuilding flood-damaged roads and bridges with climate-resilient materials can create jobs today while reducing costs in the future. Second, it must strengthen institutions to ensure that recovery funds are used effectively and transparently. Third, it must actively engage with international partners, not only for financial support but also for technical expertise in disaster management and economic planning.

Sri Lanka’s recovery is not just a matter of economics; it is a test of governance, competence, and foresight. By investing in resilience, maintaining fiscal discipline, and leveraging international goodwill, the country can navigate this crisis and emerge stronger. The stakes are high, but so are the potential rewards. This is a moment for bold but measured action—a chance to turn adversity into a turning point for sustainable growth.

The eyes of the world are on Sri Lanka. Let this be the moment when it rises to the challenge.



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Illegal solar push ravages Hambantota elephant habitat: Environmentalist warns of deepening crisis

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Land earmarked for the project

A large-scale move to establish solar power plants in Hambantota has triggered a major environmental and social crisis, with more than 1,000 acres of forest—identified as critical elephant habitat—cleared in violation of the law, environmental activist Sajeewa Chamikara said.

Chamikara, speaking on behalf of the Movement for Land and Agricultural Reform, said that 17 companies have already begun clearing forest land along the boundaries of the Hambantota Elephant Management Reserve. The affected areas include Sanakku Gala, Orukemgala and Kapapu Wewa, which are known to be key elephant habitats and long-used movement corridors.

He said that what is taking place cannot be described as development, but rather as a large-scale destruction of natural ecosystems carried out under the cover of renewable energy expansion.

According to Chamikara, the clearing of forests has been carried out using heavy machinery, while large sections have also been deliberately set on fire to prepare the land for solar installations. He said that electric fences have been erected across wide stretches of land, effectively blocking elephant movement and fragmenting their natural habitat.

“These forests are not empty lands. They are part of a living system that supports wildlife and nearby communities. Once destroyed, they cannot be easily restored,” he said.

The projects in question include a 50 megawatt solar development undertaken by five companies and a larger 150 megawatt project implemented by 12 companies. The larger project is reported to be valued at around 150 million US dollars.

Chamikara stressed that these projects are being carried out in a coordinated manner and involve extensive land clearing on a scale that raises serious environmental concerns.

He further alleged that certain companies had paid about Rs. 14 million to secure support and move ahead with the projects. He said this points to a troubling failure of oversight by state institutions that are expected to protect forests and wildlife habitats.

“This is not only an environmental issue. It is also a serious governance issue. The institutions responsible for protecting these lands have failed in their duty,” he said.

Chamikara pointed out that under the National Environmental Act, any project of this scale must receive prior approval through a proper Environmental Impact Assessment process.

He said that clearing forest land before obtaining such approval is a direct violation of the law.

He added that legal requirements relating to archaeological assessments had also been ignored. Under existing regulations, large-scale land clearing requires prior evaluation to ensure that sites of historical or cultural value are not damaged.

“The law is very clear. You cannot go ahead with projects of this nature without proper approval. What we are seeing is a complete disregard for legal procedure,” Chamikara said.

The environmental impact of these activities is already becoming visible. With their natural habitats destroyed, elephants are increasingly moving into nearby villages in search of food and shelter. This has led to a sharp rise in human-elephant conflict in several areas.

Areas such as Mayurapura, Gonnooruwa, Meegahajandura and Thanamalvila have reported increasing encounters between humans and elephants. According to Chamikara, more than 5,000 farming families in these areas are now facing growing threats to their safety and livelihoods.

 

He warned that farmers are being forced to abandon their lands due to repeated elephant intrusions, while incidents involving damage to crops and property are rising. There have also been increasing reports of injuries and deaths among both humans and elephants.

“This is turning into a serious social and economic problem. When farmers cannot cultivate their lands, it affects food production, income and rural stability,” he said.

Chamikara also raised concerns about the broader environmental consequences of clearing forests for solar power projects. While renewable energy is promoted as a solution to reduce carbon emissions, he said that destroying forests undermines that goal.

“Forests play a key role in absorbing carbon dioxide. When you clear and burn them, you are increasing emissions, not reducing them. That defeats the purpose of promoting solar energy,” he explained.

He added that large-scale deforestation in dry zone areas such as Hambantota could also affect local weather patterns and reduce rainfall, which would have further negative impacts on agriculture and water resources.

Chamikara called for a shift in policy, urging authorities to focus on more sustainable approaches to solar power development. He said that rooftop solar systems on homes, public buildings and commercial establishments should be given priority, as they do not require clearing large areas of land.

He also recommended that solar projects be located on degraded or abandoned lands, such as areas affected by past mining or other low-value lands, rather than forests or productive agricultural areas.

“Renewable energy development must be done in a way that does not destroy the environment. There are better options available if there is proper planning,” he said.

Chamikara urged the Central Environmental Authority and the Department of Wildlife Conservation to take immediate action to stop ongoing land clearing and investigate the projects. He stressed that all activities carried out without proper approval should be halted until legal requirements are met.

He warned that failure to act now would lead to long-term environmental damage that could not be reversed.

“If this continues, we will lose not only forests and wildlife, but also the balance between people and nature that supports rural life. The consequences will be felt for generations,” he said.

The situation in Hambantota is fast emerging as a critical test of whether development goals can be balanced with environmental protection. As pressure grows, the response of authorities in the coming weeks is likely to determine whether the damage can still be contained or whether it will continue to spread unchecked.

By Ifham Nizam

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Why Mahatma Gandhi’s teachings need to be at the heart of conflict resolution

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Mahatma Gandhi

All credit to the Tamil Nadu government for taking concrete measures to perpetuate the memory of the renowned Mahatma Gandhi of India, who on account of his moral teachings stands on par with the likes of Socrates, Plato, Aristotle, Confucius and Jalaluddin Rumi, to name a few such all-time greats. The time is indeed ripe to draw the world’s attention to the Mahatma’s humanistic legacy which has resonated in the hearts of peace-oriented sections the world over down the decades.

Under its mega developmental blueprint titled ‘ Tamil Nadu 2030’, the Tamil Nadu government, among other things, intends transforming villages into centres of economic growth in conformity with the Mahatma’s vision of making the village the fundamental unit of material and spiritual advancement. Thus will come into being the ‘Uttamar Gandhi Model Villages Project’, which will be initially covering 10 village Panchayats. (Please see page 3 of The Island of March 11, 2026).

The timeliness of remembering and appreciating anew the teachings of Mahatma Gandhi resides in the utter lawlessness that has been allowed to overtake the world over the last few decades by none other than those global powers which took it upon themselves to usher in a world political and economic order based on the UN Charter and the Universal Declaration of Human Rights. Mainly in ‘the dock’ in this regard are the permanent members of the UN Security Council.

As is plain to see, the international law and order situation has veered out of control. Principal priorities for the international community or what’s left of it is to prevent the current mainly regional war in the Middle East from degenerating dangerously into another world war, coupled with the task of eliminating the possibility of another nuclear holocaust.

The most scorching of ironies is that the world’s ‘number one power’, the US, has virtually lost its way in the ‘Global Disorder’ it has been party to letting lose. For instance, instead of making good its boast of militarily neutralizing Iran and paving the way for the constant flow of fuel and gas from the Strait of Hormus by itself and Israel, it is now appealing to the rest of the West to come to its assistance. Not surprisingly, US allies are indicating their unwillingness to help pull the US’ ‘chestnuts out of the fire’.

Oil and gas are the veritable life blood of countries and going ahead it should not come as a surprise if impatience gets the better of the major powers and the nuclear option is resorted to by some of them under the dangerous illusion that it would be a quick-fix to their growing economic ills and frustrations.

All the above and more are within the realms of the possible and the need is pressing for humanistic voices to take centre stage in the present runaway crisis. As pointed out in this column last week, Realpolitik has overtaken the world and unless the latter is convinced of the self-destructive nature of the major powers’ policy of ‘meeting fire with fire’ to resolve their disputes, annihilation could be the lot of a good part of the world.

For far too long the voice of humanity has been muted and silenced in the affairs of the world by the incendiary threats and counter-threats of the big powers and their allies. No quarter has been bold enough in these blood pressure-hiking slanging matches to speak of the need for brotherly love and compassion among nations and countries. But it’s the language of love and understanding that is the most pressing need currently and the Mahatma in his time did just that against mighty odds.

At present the US and Iran are trading threats and accusations over military-related developments in the Gulf and it’s anybody’s guess as to what turn these events will take. However, calming voices of humanity and moderation would help in deescalating tensions and such voices need to go to the assistance of the UN chief and his team.

The Mahatma used the technique of ‘Satyagraha’ or the policy of non-violent resistance to oppose and dis-empower to a degree the British empire in his time and the current major powers would do well to take a leaf from Gandhi. The latter also integrated into the strategy of non-violent resistance the policy of ‘Ahimsa’ or love and understanding which helped greatly in uniting rather than alienating adversaries. The language of love, it has been proved, speaks to the hearts and minds of people and has a profoundly healing impact.

Mahatma Gandhi defined the ideal of ‘Ahimsa’ thus: ‘In its positive form, “Ahimsa” means the largest love, the greatest charity. If I am a follower of “Ahimsa”, I must love my enemy or a stranger to me as I would my wrong-doing father or son. This active “Ahimsa” necessarily includes truth and fearlessness.’ (See; ‘Modern Indian Political Thought; Text and Context’ by Bidyut Chakrabarty and Rajendra Kumar Pandey, Sage Publications India, Pvt. Ltd., www.sagepub.in).

In the latter publication, the authors also defined the essence of ‘satyagraha’ as ‘protest without rancour’ and this is seen as ‘holding the key to his entire campaign’ of non-violent resistance. From these perspectives, the teaching, ‘hatred begets hatred’ acquires more salience and meaning.

Accordingly, the voice of reason and love needs to come centre stage and take charge of current international political discourse. The UN and allied organizations which advocate conflict resolution by peaceful means need to get together and ensure that their voices are clearly heard and understood. The global South could help in this process by seeing to the vibrant rejuvenation of organizations such as the Non-aligned Movement.

An immediate task for the peace-oriented and well meaning is to make the above projects happen fast. In the process they should underscore afresh the profound importance of the teachings of Mahatma Gandhi, who is acclaimed the world over as a uniting and healing political personality and prophet of peace.

If the Mahatma is universally acclaimed, the reason is plain to see. Put simply, he spoke to the hearts and minds of people everywhere, regardless of man-made barriers. The language of peace and brotherhood, that is, is understood by everyone. The world needs more prophets of peace and reconciliation of the likes of the Mahatma to drown out the voices of discord and war-mongering and ensure that the language of humanity prevails.

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Exciting scene awaits them …

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The Future Model Hunt extravaganza, organised by Rukmal Senanayake, and advocacy trainer Tharaka Gurukanda, held in late January 2026, has brought into the limelight four outstanding contestants who will participate, at the international level, this year – Sandeepa Sewmini, Demitha Jayawardhana, Diwyanjana Senevirathna, and Nimesha Premachandra.

Nimesha took the honours as Mrs. Tourism Sri Lanka 2026 and was featured in The Island of 05th March,

Sandeepa Sewmini was crowned Miss Supranational 2026 and will represent Sri Lanka at the big event to be held in Poland later in the year.

A Business Management and Human Resources student, she will be competing under the guidance of Rukmal Senanayake from the Model With Ruki – Model Academy & Agency.

The Mister Supranational Sri Lanka crown went to Demitha Jayawardhana, a 20-year-old professional model and motocross rider.

Apart from modelling he is engaged in his family business.

Demitha Jayawardhana: Mister Supranational Sri Lanka 2026

Demitha is also a badminton player with a strong passion for sports, fitness and personal growth.

In fact, he is recognised for his strength, discipline, and passion for fitness.

A past student of Wycherley International School and St Peter’s College, Colombo, Demitha is currently in his second year of Economics Management at the Royal Institute of Colombo.

He will represent Sri Lanka at the 10th edition of the Mister Supranational pageant, in Poland, in August, 2026.

Mister and Miss Supranational are annual international beauty pageants, held in Poland, and are designed to discover new talent for the modelling and television industries and produce instant celebrities.

The competition focuses on elegance, intelligence, and social advocacy, with contestants, representing their countries.

The newly appointed Miss Teen International Sri Lanka 2026 is Diwyanjana Senevirathna.

She was crowned at the Future Model Hunt and will represent Sri Lanka at the Miss Teen International 2026 pageant in India.

Diwyanjana is noted for her grace and dedication to representing the country at this prestigious event that aims to celebrate talent, intelligence, charm, and individuality, and provide a platform for young girls to showcase their skills.

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