Opinion
SL economy, IMF claims, and reality
Peter Breuer, Chief of IMF Mission to Sri Lanka has claimed that the Sri Lankan economy is showing signs of progress. The monetary and fiscal measures like tax increases and particularly the debt moratorium may have resulted in giving some breathing space for the country to recover from the period of extreme hardship caused by non-availability of foreign exchange to import essential requirements. Now, there are no fuel and gas queues and shortages are not severe. Economic parameters like GNP, inflation, are improving, tourism, are positive, and foreign remittance is flowing in. All these signs are favourable and could make the economist say the economy is doing well.
However, even in the field of economics as it applies to our country there are looming crises. The foreign debt has to be paid in the future and that will be a severe strain on the country’s foreign reserves. Import/export imbalance has been widening mainly due to the lower demand for our products and also the slow growth of production. Our overall export earnings have been declining in the post-Covid period. The Export Development Board has said that cumulative merchandise exports in 2023 decreased by 9.54 percent compared to 2022 (EDB report 31.1.2024). Unless the situation improves quickly foreign reserves which are satisfactory at present may decrease forcing the country to take more loans.
The following facts would substantiate this reality. Sri Lanka’s earnings from exports was only 23% of the GDP in 2014 and it has been around that figure since 1977. We have not been able to improve this situation. There is no way we could change this equation to any significant degree because to increase exports we have to increase imports too. To overcome these problems, we must attract investors (most of whom are Robber Barons) and prepare an investor friendly environment (often by denying the rights of workers and at the risk of environmental degradation) and be able to compete to capture our share of the market (which is often manipulated). This is well-nigh impossible for Sri Lanka as well as other developing countries.
We are not alone in this predicament. This system often leaves us short of dollars for our essentials, and we are forced to borrow from international lenders. Then, we turn to the IMF, which has been created for the purpose of keeping countries like ours afloat. This remedy is often worse than the malady and consequently the poor suffer more than others. The fact that we will never be able to come out of this mess becomes clear when we consider the following.
The new wealth produced by the world since 2020 has been USD 42 trillion. Two thirds of it have gone into the pockets of 1% of the world population. The whole of the rest of the world population, i. e., 99%, will have to do with one third of this wealth, which was largely produced by them. Further, during the last few decades, the debt burden of poor countries has increased by 12 %. Inequality between the rich and the poor has increased by 8%. These facts and figures show that the poor countries could never come out of poverty by following the economic policies they have followed in the past. They must, jointly if possible, work out new policies and mechanisms to come out of their poverty.
Contrary to the IMF claims, we are already witnessing the ill-effects of their policies on the lower middle class and the poor. Child malnutrition, stunting, and school dropouts are rising by the day. Although the IMF says these issues must be addressed by welfare measures, these don’t seem to be sufficient to mitigate the problem. Far-reaching effects of child malnutrition and inadequate education are well known and our country has been experiencing these ills continuously in the past. Health and education are imperative for economic development. As per the Family Health Bureau’s Nutrition Month 2023 Summary Report, the percentage of children under five years, who are underweight, was reported to be 17.1%, compared to 15.3% in 2022 (16.9.2023).
The ultimate future economic loss due to child malnutrition, which has health and mental development implications, is apparently not in the IMF equation. A World Bank report warns that malnutrition is costing poor countries up to 3 percent of their yearly GDP, while malnourished children are at risk of losing more than 10 percent of their lifetime earnings potential (20.3.2006). According to the report—malnutrition has long been known to undermine economic growth and perpetuate poverty, and yet, over previous decades, the international community and most governments in developing countries have failed to tackle malnutrition, even though well-tested approaches for doing so exist. The report says developing countries that invest in better nutrition for their children get high returns on their spending. A group of the world’s leading development economists, including three Nobel Laureates, concluded in a 2004 study known as the Copenhagen Consensus, that nutrition investments were one of the ‘best buys’ that developing countries could make in reducing poverty and improving economic growth.
There may be some chance of getting out of this vicious cycle by a process of import substitution. It may be easier to save foreign exchange by cutting down on the imports, which could be produced locally. We have been importing a significant quantity of commodities that could be produced locally. If Sri Lanka could produce the essential food items, the import expenditure could be reduced by about 50%. If import of non-essential goods is stopped another 25% could be saved. Then, our export earnings will be adequate for the essential needs of fuel, etc. Moreover, if the goal of 70% of renewable energy could be reached, which should not be difficult for a country blessed with ample sunlight, we could save enough of the export earnings for development work. All developing countries must strive for self-sufficiency and move away from export oriented, debt dependent economies. Indonesia has achieved economic development by increasing its agricultural output, which has risen to 15% of the GDP whereas in Sri Lanka it has remained at 8% for the past several decades.
Joseph Stiglitz, Professor of Economics at Columbia University and former senior vice president of The World Bank and Nobel Memorial Prize winner, wrote in April 2000 in an article for the New Republic “They will say the IMF’s economic ‘remedies’ often make things worse – turning slow-downs into recessions and recessions into depressions. And they will have a point. I was chief economist at the World Bank from 1966 until last November, during the gravest global economic crisis in a half century. I saw how the IMF, in tandem with the US Treasury Department, responded. And I was appalled”. He was made to resign from his post in the World Bank. John Maynard Keynes in his book, ‘National Self Sufficiency’ (1933), says: “Ideas, knowledge, science, hospitality, travel, – these are the things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible and above all let finance be primarily national. Experience accumulates to prove that most modern processes of mass production can be performed in most countries and climates with almost equal efficiency.”
N. A. de S. Amaratunga
Opinion
What BNP should keep in mind as it assumes power
BNP rightly deserves our congratulations for winning a decisive victory in the 13th parliamentary election. This outcome reflects an unequivocal mandate that is both politically and historically significant. Coming as it does at a critical point in Bangladesh’s democratic journey, this moment marks more than a change of government; it signals a renewed public resolve to restore democratic norms, accountability, and institutional integrity.
The election came after years of severe distrust in the electoral process, questions over legitimacy, and institutional strain, so the poll’s successful conduct has reinforced trust in the process as well as the principle that governments derive authority from the consent of the governed. For quite some time now, Bangladesh has faced deep polarisation, intolerance, and threats to its democratic foundations. Regressive and anti-democratic tendencies—whether institutional, ideological, or political—risked steering the country away from its foundational goals. BNP’s decisive victory can therefore be interpreted as a call to reverse this trajectory, and a public desire for accountable, forward-looking governance rooted in liberal democratic principles.
However, the road ahead is going to be bumpy, to put it mildly. A broad mandate alone cannot resolve deep-rooted structural problems. The BNP government will likely continue to face economic challenges and institutional constraints for the foreseeable future. This will test its capacity and sincerity not only to govern but also to transform the culture of governance in the country.
Economic reform imperatives
A key challenge will be stabilising the economy, which continues to face mounting pressures: growth has decelerated, inflation has eroded people’s purchasing power, foreign exchange reserves remain low, and public finances are tight. External debt has increased significantly in recent years, while the tax-to-GDP ratio has fallen to historically low levels. State-owned enterprises and the banking sector face persistent structural weaknesses, and confidence among both domestic and international investors remains fragile.
The new government should begin by restoring macroeconomic discipline. Containing inflation will need close coordination across ministries and agencies. Monetary policy must remain cautious and credible, free from political interference, while fiscal policy should prioritise stability rather than expand populist spending.
Tax reform is also unavoidable. The National Board of Revenue requires comprehensive modernisation, digitalisation, and total compliance. Broadening the tax base, especially by bringing all high-income groups and segments of the informal economy into the formal system, is crucial. Over time, reliance on indirect taxes such as value-added tax and import duties should be reduced, paving the way for a more progressive direct tax regime.
Banking sector reform is equally crucial. Proper asset quality reviews and regulatory oversight are necessary to rebuild confidence in the sector. Political patronage within the financial institutions must end. Without a resilient financial system, private investment cannot recover. As regards growth, the government should focus on diversifying exports beyond ready-made garments and deepening integration into regional value chains. Attracting foreign direct investment will depend on regulatory predictability and improvements in logistics and energy reliability. Ambitious growth targets must be matched by realistic implementation capacity.
Political Challenges
Distrust among political actors, partly fuelled by fears of retribution and violence, is a reality that may persist. BNP will face pressure from its supporters to act quickly in addressing perceived injustices, but good governance demands restraint. If the new government resorts to or tolerates exclusion or retaliation, it will risk perpetuating the very cycle it has condemned.
Managing internal party discipline will also be crucial, as a large parliamentary majority can sometimes lead to complacency or factional rivalry. Strong leadership will be required to maintain unity while allowing constructive internal debate. BNP must also rebuild trust with minority communities and vulnerable groups. Elections often heighten anxieties among minorities, so a credible commitment to equal citizenship is crucial. BNP’s political maturity will also be judged by how it treats or engages with its opponents. In this regard, Chairman Tarique Rahman’s visits to the residences of top opposition leaders on Sunday marked a positive gesture, one that many hope will withstand the inevitable pressures or conflicts over governance in the coming days.
Strengthening democratic institutions
A central promise of this election was to restore democracy, which must now translate into concrete institutional reforms. Judicial independence needs constant safeguarding. Which means that appointment, promotion, and case management processes should be insulated from political influence. Parliamentary oversight committees must also function effectively, and the opposition’s voice in parliament must be protected.
Electoral institutions also need reform, particularly along the lines of the July Charter. Continued credibility of the Election Commission will depend on transparency, professional management, and impartiality. Meanwhile, the civil service must be depoliticised. Appointments based on loyalty rather than merit have long undermined governance in the country. So the new administration must work on curtailing the influence of political networks to ensure a professional, impartial civil service. Media reform and digital rights also deserve careful attention. We must remember that democratic consolidation is built through institutional habits, and these habits must be established early.
Beyond winner-takes-all
Bangladesh’s politics has long been characterised by a winner-takes-all mentality. Electoral victories have often resulted in monopolisation of power, marginalising opposition voices and weakening checks and balances. If BNP is serious about democratic renewal, it must consciously break with this tradition. Inclusive policy consultations will be a good starting point. Major economic and constitutional reforms should be based on cross-party dialogue and consensus. Appointments to constitutional bodies should be transparent and consultative, and parliamentary debates should be done with the letter and spirit of the July Charter in mind.
Meeting public expectations
The scale of public expectations now is naturally immense. Citizens want economic relief, employment opportunities, necessary institutional reforms, and improved governance. Managing these expectations will be quite difficult. Many reforms will not yield immediate results, and some may impose short-term costs. So, it is imperative to ensure transparent communication about the associated timelines, trade-offs, and fiscal constraints.
Anti-corruption efforts must be credible and monitored at all times. Measures are needed to strengthen oversight institutions, improve transparency in public procurement, and expand digital service delivery to reduce opportunities for rent-seeking. Governance reform should be systematic, not selective or politically driven. Tangible improvements are urgently needed in public service delivery, particularly in health, education, social protection, and local government.
Finally, a word of caution: BNP’s decisive victory presents both opportunities and risks. It can enable bold reforms but it also carries the danger of overreach. The key deciding factor here is political judgment. The question is, can our leaders deliver based on the mandate voters have given them? (The Daily Star)
Dr Fahmida Khatun is an economist and executive director at the Centre for Policy Dialogue (CPD). Views expressed in the article are the author’s own.
Views expressed in this article are the author’s own.
by Fahmida Khatun
Opinion
Why religion should remain separate from state power in Sri Lanka: Lessons from political history
Religion has been an essential part of Sri Lankan society for more than two millennia, shaping culture, moral values, and social traditions. Buddhism in particular has played a foundational role in guiding ethical behaviour, promoting compassion, and encouraging social harmony. Yet Sri Lanka’s modern political history clearly shows that when religion becomes closely entangled with state power, both democracy and religion suffer. The politicisation of religion especially Buddhism has repeatedly contributed to ethnic division, weakened governance, and the erosion of moral authority. For these reasons, the separation of religion and the state is not only desirable but necessary for Sri Lanka’s long-term stability and democratic progress.
Sri Lanka’s post-independence political history provides early evidence of how religion became a political tool. The 1956 election, which brought S. W. R. D. Bandaranaike to power, is often remembered as a turning point where Sinhala-Buddhist nationalism was actively mobilised for political expedience. Buddhist monks played a visible role in political campaigning, framing political change as a religious and cultural revival. While this movement empowered the Sinhala-Buddhist majority, it also laid the foundation for ethnic exclusion, particularly through policies such as the “Sinhala Only Act.” Though framed as protecting national identity, these policies marginalised Tamil-speaking communities and contributed significantly to ethnic tensions that later escalated into civil conflict. This period demonstrates how religious symbolism, when fused with state power, can undermine social cohesion rather than strengthen it.
The increasing political involvement of Buddhist monks in later decades further illustrates the risks of this entanglement. In the early 2000s, the emergence of monk-led political parties such as the Jathika Hela Urumaya (JHU) marked a new phase in Sri Lankan politics. For the first time, monks entered Parliament as elected lawmakers, directly participating in legislation and governance. While their presence was justified as a moral corrective to corrupt politics, in practice it blurred the boundary between spiritual leadership and political power. Once monks became part of parliamentary debates, policy compromises, and political rivalries, they were no longer perceived as neutral moral guides. Instead, they became political actors subject to criticism, controversy, and public mistrust. This shift significantly weakened the traditional reverence associated with the Sangha.
Sri Lankan political history also shows how religion has been repeatedly used by political leaders to legitimise authority during times of crisis. Successive governments have sought the public endorsement of influential monks to strengthen their political image, particularly during elections or moments of instability. During the war, religious rhetoric was often used to frame the conflict in moral or civilisational terms, leaving little room for nuanced political solutions or reconciliation. This approach may have strengthened short-term political support, but it also deepened ethnic polarisation and made post-war reconciliation more difficult. The long-term consequences of this strategy are still visible in unresolved ethnic grievances and fragile national unity.
Another important historical example is the post-war period after 2009. Despite the conclusion of the war, Sri Lanka failed to achieve meaningful reconciliation or strong democratic reform. Instead, religious nationalism gained renewed political influence, often used to silence dissent and justify authoritarian governance. Smaller population groups such as Muslims and Christians in particular experienced growing insecurity as extremist groups operated with perceived political protection. The state’s failure to maintain religious neutrality during this period weakened public trust and damaged Sri Lanka’s international reputation. These developments show that privileging one religion in state power does not lead to stability or moral governance; rather, it creates fear, exclusion, and institutional decay.
The moral authority of religion itself has also suffered as a result of political entanglement. Traditionally, Buddhist monks were respected for their distance from worldly power, allowing them to speak truth to rulers without fear or favour. However, when monks publicly defend controversial political decisions, support corrupt leaders, or engage in aggressive nationalist rhetoric, they risk losing this moral independence. Sri Lankan political history demonstrates that once religious figures are seen as aligned with political power, public criticism of politicians easily extends to religion itself. This has contributed to growing disillusionment among younger generations, many of whom now view religious institutions as extensions of political authority rather than sources of ethical guidance.
The teachings of the Buddha offer a clear contrast to this historical trend. The Buddha advised rulers on ethical governance but never sought political authority or state power. His independence allowed him to critique injustice and moral failure without compromise. Sri Lanka’s political experience shows that abandoning this principle has harmed both religion and governance. When monks act as political agents, they lose the freedom to challenge power, and religion becomes vulnerable to political failure and public resentment.
Sri Lanka’s multi-religious social structure nurtures divisive, if not separatist, sentiments. While Buddhism holds a special historical place, the modern state governs citizens of many faiths. Political history shows that when the state appears aligned with one religion, minority communities feel excluded, regardless of constitutional guarantees. This sense of exclusion has repeatedly weakened national unity and contributed to long-term conflict. A secular state does not reject religion; rather, it protects all religions by maintaining neutrality and ensuring equal citizenship.
Sri Lankan political history clearly demonstrates that the fusion of religion and state power has not produced good governance, social harmony, or moral leadership. Instead, it has intensified ethnic divisions, weakened democratic institutions, and damaged the spiritual credibility of religion itself. Separating religion from the state is not an attack on Buddhism or Sri Lankan tradition. On the contrary, it is a necessary step to preserve the dignity of religion and strengthen democratic governance. By maintaining a clear boundary between spiritual authority and political power, Sri Lanka can move toward a more inclusive, stable, and just society one where religion remains a source of moral wisdom rather than a tool of political control.
In present-day Sri Lanka, the dangers of mixing religion with state power are more visible than ever. Despite decades of experience showing the negative consequences of politicised religion, religious authority continues to be invoked to justify political decisions, silence criticism, and legitimise those in power. During recent economic and political crises, political leaders have frequently appeared alongside prominent religious figures to project moral legitimacy, even when governance failures, corruption, and mismanagement were evident. This pattern reflects a continued reliance on religious symbolism to mask political weakness rather than a genuine commitment to ethical governance.
The 2022 economic collapse offers a powerful contemporary example. As ordinary citizens faced shortages of fuel, food, and medicine, public anger was directed toward political leadership and state institutions. However, instead of allowing religion to act as an independent moral force that could hold power accountable, sections of the religious establishment appeared closely aligned with political elites. This alignment weakened religion’s ability to speak truthfully on behalf of the suffering population. When religion stands too close to power, it loses its capacity to challenge injustice, corruption, and abuse precisely when society needs moral leadership the most.
At the same time, younger generations in Sri Lanka are increasingly questioning both political authority and religious institutions. Many young people perceive religious leaders as participants in political power structures rather than as independent ethical voices. This growing scepticism is not a rejection of spirituality, but a response to the visible politicisation of religion. If this trend continues, Sri Lanka risks long-term damage not only to democratic trust but also to religious life itself.
The present moment therefore demands a critical reassessment. A clear separation between religion and the state would allow religious institutions to reclaim moral independence and restore public confidence. It would also strengthen democracy by ensuring that policy decisions are guided by evidence, accountability, and inclusive dialogue rather than religious pressure or nationalist rhetoric. Sri Lanka’s recent history shows that political legitimacy cannot be built on religious symbolism alone. Only transparent governance, social justice, and equal citizenship can restore stability and public trust.
Ultimately, the future of Sri Lanka depends on learning from both its past and present. Protecting religion from political misuse is not a threat to national identity; it is a necessary condition for ethical leadership, democratic renewal, and social harmony in a deeply diverse society.
by Milinda Mayadunna
Opinion
NPP’s misguided policy
Judging by some recent events, starting with the injudicious pronouncement in Jaffna by President Anura Kumara Dissanayake and subsequent statements by some senior ministers, the government tends to appease minorities at the expense of the majority. Ill-treatment of some Buddhist monks by the police continues to arouse controversy, and it looks as if the government used the police to handle matters that are best left to the judiciary. Sangadasa Akurugoda concludes his well-reasoned opinion piece “Appeasement of separatists” (The island, 13 February) as follows:
“It is unfortunate that the President of a country considers ‘national pride and patriotism’, a trait that every citizen should have, as ‘racism’. Although the President is repeating it like a mantra that he will not tolerate ‘racism’ or ‘extremism’ we have never heard him saying that he will not tolerate ‘separatism or terrorism’.”
It is hard to disagree with Akurugoda. Perhaps, the President may be excused for his reluctance to refer to terrorism as he leads a movement that unleashed terror twice, but his reluctance to condemn separatism is puzzling. Although most political commentators consider the President’s comment that ‘Buddhist go to Jaffna to spread hate’ to be callous, the head of an NGO heaped praise on the President for saying so!
As I pointed out in a previous article, puppet-masters outside seem to be pulling the strings (A puppet show? The Island, 23 January) and the President’s reluctance to condemn separatism whilst accusing Buddhists of spreading hatred by going to Jaffna makes one wonder who these puppeteers are.
Another incident that raises serious concern was reported from a Buddhist Temple in Trincomalee. The police removed a Buddha statue and allegedly assaulted Buddhist priests. Mysteriously, the police brought back the statue the following day, giving an absurd excuse; they claimed they had removed it to ensure its safety. No inquiry into police action was instituted but several Bhikkhus and dayakayas were remanded for a long period.
Having seen a front-page banner headline “Sivuru gelawenakam pahara dunna” (“We were beaten till the robes fell”) in the January 13th edition of the Sunday Divaina, I watched on YouTube the press briefing at the headquarters of the All-Ceylon Buddhist Association. I can well imagine the agony those who were remanded went through.
Ven. Balangoda Kassapa’s description of the way he and the others, held on remand, were treated raises many issues. Whether they committed a transgression should be decided by the judiciary. Given the well-known judicial dictum, ‘innocent until proven guilty’, the harassment they faced cannot be justified under any circumstances.
Ven. Kassapa exposed the high-handed actions of the police. This has come as no surprise as it is increasingly becoming apparent as they are no longer ‘Sri Lanka Police’; they have become the ‘NPP police’. This is an issue often editorially highlighted by The Island. How can one expect the police to be impartial when two key posts are held by officers brought out of retirement as a reward for canvassing for the NPP. It was surprising to learn that the suspects could not be granted bail due to objections raised by the police.
Ven. Kassapa said the head of the remand prison where he and others were held had threatened him.
However, there was a ray of hope. Those who cry out for reconciliation fail to recognise that reconciliation is a much-misused term, as some separatists masquerading as peacemakers campaign for reconciliation! They overlook the fact that it is already there as demonstrated by the behaviour of Tamil and Muslim inmates in the remand prison, where Ven. Kassapa and others were kept.
Non-Buddhist prisoners looked after the needs of the Bhikkhus though the prison chief refused even to provide meals according to Vinaya rules! In sharp contrast, during a case against a Sri Lankan Bhikkhu accused of child molestation in the UK, the presiding judge made sure the proceedings were paused for lunch at the proper time.
I have written against Bhikkhus taking to politics, but some of the issues raised by Ven. Kassapa must not be ignored. He alleges that the real reason behind the conflict was that the government was planning to allocate the land belonging to the Vihara to an Indian businessman for the construction of a hotel. This can be easily clarified by the government, provided there is no hidden agenda.
It is no secret that this government is controlled by India. Even ‘Tilvin Ayya’, who studied the module on ‘Indian Expansionism’ under Rohana Wijeweera, has mended fences with India. He led a JVP delegation to India recently. Several MoUs or pacts signed with India are kept under wraps.
Unfortunately, the government’s mishandling of this issue is being exploited by other interested parties, and this may turn out to be a far bigger problem.
It is high time the government stopped harassing the majority in the name of reconciliation, a term exploited by separatists to achieve their goals!
By Dr Upul Wijayawardhana
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