Opinion
Some beliefs on current economic and financial crisis, debt sustainability, Central Bank independence, transparency and accountability
By Jayampathy Molligoda
What is Belief?
“Belief is the central problem in the analysis of mind. Believing seems the most “mental” thing we do. The whole intellectual life consists of beliefs, and of the passage from one belief to another by what is called “reasoning”. Beliefs give knowledge and error; they are the vehicles of truth and falsehood. Psychology, theory of knowledge and metaphysics revolve about belief. What makes a belief true or false I call a ‘fact’. The particular fact that makes a given belief true or false I call its “objective.” – Bertrand Russell, The Analysis of Mind (1921), Lecture. XII: Belief, p. 295
Price stability as core function of CB:
One popular belief is that the government of the day could continue to print money to service its domestic debt and meet other expenditure, but it cannot roll over foreign debt so easily and therefore it is associated with sovereign risk, meaning government is unable to repay its debt. Therefore, the debt sustainability needs to be constantly evaluated by comparing future debt obligations with available reserves to ascertain whether it could meet the debt obligations.
It is generally known that a Central Bank mandate is basically to keep the money that the CB has issued at a given period of time at a ‘stable level’. In other words, one of its main objectives are the price stability; means “maintaining inflation at a low rate’- then it would not discourage people to save and businesses to plan for their future activities, taking into consideration a long- term view on price stability. Some eminent economists are of the view that, having undertaking extensive case studies of economic situations and series of financial crises in several countries over a long period of time, the only one task the Central Bank could accomplish well is ‘maintaining price stability’ through regulating the money supply and interest rates. That’s another belief.
Before 2002, the price stability was the supreme objective although there were many sub objectives assigned to the CBSL. In order to attain ‘price stability’ with certain level of economic growth, the CB is required to keep the money supply of the country at an appropriate level so that the total demand for goods and services known as the ‘aggregate demand’ is just equal to the total supply of goods and services called ‘aggregate supply’. Under Monetary Law Act, the objective of price stability and financial system stability becomes the mandatary rule for the CBSL. As for financial system stability, there is a separate department handling banking supervision at the CB. In the event some banks are in trouble and the CB wants to bail out by giving them some loans, it amounts to printing new money leading to increase in money supply, thus facing difficulties in containing core inflation. Therefore, one belief is that the CB should not compromise its prime ‘price stability’ objective, if inflation becomes the most pressing problem at a given period.
In 2002, the then Governor and the monetary board of the CBSL changed the objective clause to state as “economic and price stability” meaning an additional objective of achieving the country’s economic growth. Some economists believe that achieving the economic growth should be the responsibility of the government and not the Central Bank. Retired Senior Central Banker, Dr. W.A Wijewardena stated in his book on Central Banking published in 2017 that he and many in the Central Bank did not fully understand the wisdom enshrined in the mission statement and then Governor’s belief. It should be mentioned here that there are different economic theories put forward by various eminent economists from time to time and for example, Keynes presented his theory in the form of deficient demand that leads to economic recession during 1929 period in the US and he believed that printing money and spending through government budget would eliminate deficient demand and improve economic growth.
When the government expenditure increases, it raises aggregate demand in the country and policy makers would expect some increases in goods and services through capital formation. In addition, the government could reduce taxes as a policy to induce investments through increased capital formation and together with low interest rate regime, it was expected some increases in the economic growth. The Sri Lankan government adopted this policy since beginning 2020 till end of 2021 with a view to providing relief to people and businesses in order to overcome negative effects due to the COVID 19. However, the economy did not really produce goods and services to the extent that is required, resulting in high inflation from beginning of 2022. It is also true that during the year 2020 the recorded negative growth rate of 3.6% due to the COVID 19 impact has thus been converted into a positive growth rate of 3.7% in 2021. From the beginning 2022, the CBSL adopted a policy of tightening the monetary policy by increasing the interest rates in order to avoid over spending by private and public sector economic players.
Excessive government expenditure including subsidies and debt sustainability:
The responsible governments in other developing countries make every attempt to maintain their expenditure within the revenue and any deficit to be financed through non-inflationary borrowings. As for Sri Lankan situation, there has been a current account deficit in the Balance of payment (BOP) every year -except few years. This means, the FOREX receipts from the transactions with rest of the world are always below the FOREX outflows, even before the foreign debt repayment mainly due to excessive import bill. The tourism proceeds and inward remittances from expats are not enough to bridge the trade deficit. There has not been a single year a ‘surplus’ in the government budget for the last half a century.
Exports as a % of the GDP has come down from 28% during 90’s to 12% from 2014 to date. The GDP of the US $ 25 billion in 2004 has increased to the US $ 85 billion during the last 17 years mainly through services sector- infrastructure development expenditure without corresponding increases in revenue from exports. However, it would have helped to improve tourism proceeds and some export sectors by improvement in the ‘incremental capital out- put’ ratio. my belief is that no proper assessment on the economic cost: benefit of these infrastructure development projects has been undertaken by experts and presented to the ordinary people. My belief is the current crisis has aggravated partly due to the ‘twin deficits’ for a long period of time, meaning the current account deficit in the BOP, which was only US $ 215 million in 2001, thereafter ever increasing and it was US$ 3,343 million in 2021. The government budget deficit of 4-6 %, which is now exceeding 12% (not even a primary surplus before debt service, except in 2017). Further, the GDP per capita in the economy did not really increase to the extent that is required, resulting in high inflation. (GDP at current market price was US $ 85 billion in 2021 compared to US $ 75 Billion in 2014)
Even with the current exchange rate of Rs 366 per dollar, compared to say, Rs 230 per $ as determined by CBSL on 06 March 2022 (thereafter has adopted some kind of a managed float with upper bands), the FCY accounts of commercial banks are still not receiving sufficient foreign currency inflows There is a lack of dollars to meet import bills either through LCs, DP/DA terms or TTs. Almost the entire export sector and other foreign exchange earning businesses are in the hands of private sector, but 25-30% of the import bills of the country consists of most essential items/goods have to be imported by the government through trade finance facilities and credit lines, thus creating further issues on foreign debt sustainability. (See table)
Central Bank independence, transparency and accountability:
Prudent and cautious economists believe that there must be a sound, practical and legal mechanism guaranteeing the independence of the Central Bank, whilst making the CBSL accountable and transparent. John Exter, the founding Governor of the Central Bank of Ceylon, in his report stated that Governor of the Central bank should be of unquestioned integrity and responsibility. This is very critical because an independent CB is essential for maintaining price stability. Dr H.N. Thenuwara, former Director, Economic Research, Central Bank during 2004-6, in his book, ‘Money, inflation and output’ published in 2015 argued that the simplest test is whether the CB can resist demands from the government (a) to print money and/or (b) continue to maintain low interest rate regime, when a higher interest rate is necessary to maintain price stability meaning containing inflationary pressure. This is because the government of the day would naturally tend to push economic growth rates to run at a faster rate than its capacity limit permits and their desire to incur budget deficits by securing funds borrowed from the CB. The section 12 of MLA, the President can appoint any one as the Governor of the CBSL based on the recommendations by the Minister of Finance. However, we believe that the appointment of key positions such as the Governor, CBSL and other Monetary board members should not be solely in the hands of the incumbent President or the Prime Minister, but by the Constitutional Council set up with eminent personalities as its members. The independence of the CBSL must be strengthened along with accountability and transparency task as well. According to the CBSL annual report,2021, the total borrowings by State Owned business Enterprises (SOBE’s) from the banking system continued to expand in 2021 (Rs. 186 billion in ’21, in addition to Rs 184 billion in 2020, thus reflecting weak financial position. My own belief is that the CB must focus on price stability as its core mission as well as ‘financial system stability’ till the current precarious situation is arrested in order to contain the core inflation and fluctuations in the external value of foreign currencies including the US $.
Sovereignty of the people and Separation of power:
One of the most important aspects under the Constitution is the ‘separation of powers’ under peoples’ sovereignty – Article 4. The powers of government under peoples’ sovereignty namely, the Executive, the Legislature and the Judiciary – three most important pillars, must be further strengthened and separated. The writer is of the belief that the Cabinet must consist of only from the members drawn from the National list, except the Prime Minister elected by people through parliamentary elections (in addition to the President). This is to reflect aspirations of the people at grass root level through the elected MPs, as PM could take up those views at the cabinet deliberations before taking decisions. The Cabinet of ministers are charged with policy formulation and if necessary, the concept of District ministers could be introduced and such appointments could be made from other elected members in the parliament, the government expenditure for maintaining the PC system and other duplicate political institutions such as PSs, Municipal , Urban Councils need to be reduced (PC/PS acts of parliament during 1986,7 period) Even the Parliamentary seats can be reduced to 160 based on electoral districts, plus maximum 20 national list members whom they select the cabinet. However, it is important to strengthen GA system and Divisional secretary level administrative powers stemming from ‘Grama Niladharis’ empowering them with ICT.
Evidence- based policy shaping through facts finding-reasoning:
This is a time of reckoning when we need to come together and set aside ideology and egos and focus on problem solving. The positive side – there is an opportunity for the government, if genuinely interested to restructure Ceylon Petroleum Corporation, unbundling CEB, arrange Private: Public partnerships (PPPs) of many institutions like ‘Sri Lankan airline’, PPPs for port development etc. Further, some strategic actions such as any amendments to Monetary Law Act of 1949 thus re -defining Central Bank mandate and mission statement, restructuring finance ministry (MOF) and amalgamate duplicate semi government institutions, close down some other SOEs etc.
The government must make every endeavour to maintain their expenditure within the revenue and any deficit to be financed through non-inflationary borrowings and strengthen accountability and transparency to the people through parliament. We can re-build the economy by eliminating the twin deficits as long as the highest authority level, The President and Prime Minister would handle the geo political realities, especially relationship with India, China, US and create a conducive environment to attract Investments and private sector to operate without unnecessary red tapes. Ideally, this must be done in consultation with the leader of opposition after reaching consensus on nationally important subjects. The issue, since 1952 has been this excessive rival party politics and divided loyalty of voters to different political parties, and unwanted trade union protests etc., whoever in power, have made the government of the day inactive and inefficient and thus resorting to malpractices. The enforcement of law and order and discipline in the society must be strictly enforced.
As articulated by Bertrand Russell in his ‘Analysis of Mind’, belief of people gives knowledge and error; they are the vehicles of truth and falsehood. Therefore, opinions expressed (beliefs) by our ‘Key opinion leaders’(KOLs) such as the religious leaders, eminent academics, professionals top level administrators, the educated youth, the politicians including Cabinet ministers, are either truth or falsehood, but what makes a belief true or false, Russell calls a “fact.”. One can shift his own belief to another belief through the passage from failed one to finding ‘truth’ by what he called “reasoning. This applies to every policy matter, may be hybrid middle path solutions can be the most practical, relevant and appropriate. Therefore, the name of the game is evidence- based policy shaping with clear focus on addressing implementation snags through proper monitoring systems.
Opinion
Why do many Sri Lankan students become school dropouts?
Education is widely recognised as the foundation of a country’s development. In Sri Lanka, free education has provided generations of children with the opportunity to attend school regardless of their economic background. Despite these advantages, many students still leave school before completing their education. School dropout is a significant social issue because it affects not only the lives of young people but also the country’s economic and social progress. Understanding the reasons behind school dropout is essential for finding effective solutions.
One of the main reasons students leave school is financial hardship. Although education in Sri Lanka is free, families still have to spend money on uniforms, stationery, transportation, private tuition, and other school-related expenses. For low-income families, these costs can be difficult to manage. Some students are forced to work to support their families instead of continuing their education. In rural areas especially, children may help with farming, fishing, or family businesses, reducing the time and motivation they have for school.
Another important factor is academic pressure. Sri Lanka’s education system is highly competitive, especially because of major examinations such as the Grade Five Scholarship Examination, the G.C.E. Ordinary Level, and the G.C.E. Advanced Level. Many students feel stressed by the heavy workload and the pressure to achieve high marks. Those who struggle academically may lose confidence and believe they have little chance of success. As a result, some choose to leave school rather than continue facing disappointment and failure.
Family problems also contribute significantly to school dropout rates. Children who experience divorce, domestic violence, alcoholism, or the loss of a parent often face emotional and financial difficulties. Some students become responsible for caring for younger siblings or elderly family members. Without proper support, balancing family responsibilities with education becomes extremely challenging. In such situations, education may become a lower priority.
Another reason is the lack of interest in traditional classroom learning. Every student has different talents and learning styles. However, the education system often focuses mainly on academic achievement rather than practical or vocational skills. Students who are gifted in sports, arts, technology, or technical work may not feel motivated in a classroom that emphasises examinations and textbook learning. Without opportunities to develop their unique abilities, some students become bored and eventually stop attending school.
Bullying and mental health issues are also important causes of school dropout. Some students experience bullying because of their appearance, disability, ethnicity, language, or family background. Others suffer from anxiety, depression, or low self-esteem but do not receive the counseling they need. When students feel unsafe or unwelcome at school, they may begin missing classes and eventually leave school altogether. Schools that lack proper counseling services may struggle to identify and support these vulnerable students.
In some parts of Sri Lanka, long travel distances and transportation difficulties discourage students from attending school regularly. Rural students often travel several kilometers every day, sometimes on foot or using unreliable public transport. During the rainy season, flooded roads and poor infrastructure make travel even more difficult. Frequent absenteeism caused by transportation challenges may eventually lead students to drop out.
For some girls, early marriage and teenage pregnancy become barriers to continuing education. Although these cases are less common than in some other countries, they still affect certain communities. Young mothers often find it difficult to balance childcare with school responsibilities. Social stigma and limited support can further reduce their chances of returning to education.
The COVID-19 pandemic also increased the number of students at risk of dropping out. During school closures, many families lacked internet access, smartphones, computers, or stable electricity for online learning. Students from disadvantaged backgrounds fell behind in their studies, and some never returned to school after classes resumed. The pandemic highlighted inequalities in access to education across the country.
The consequences of school dropout are serious. Students who leave school early often have fewer employment opportunities and may earn lower incomes throughout their lives. They are more likely to experience poverty, unemployment, and social exclusion. School dropout can also contribute to higher crime rates, child labor, and poor health outcomes. For the country, losing educated young people means a less skilled workforce and slower national development.
Several solutions can help reduce school dropout rates in Sri Lanka. The government can strengthen financial assistance for low-income families through scholarships, school meal programmes, and transportation support. Schools should provide counseling services to address mental health concerns and prevent bullying. Teachers can receive training to identify students who are at risk of dropping out and provide timely support. Expanding vocational education and technical training would also give students more opportunities to pursue careers that match their interests and abilities. Finally, parents, schools, communities, and government agencies should work together to encourage regular school attendance and create a supportive learning environment.
In conclusion, school dropout is a complex issue caused by economic difficulties, academic pressure, family problems, mental health challenges, transportation issues, and limited educational opportunities. Although Sri Lanka has made remarkable progress in providing free education, ensuring that every child completes their schooling requires continued effort from all sectors of society. By addressing the root causes of school dropout and supporting vulnerable students, Sri Lanka can build a more educated, skilled, and prosperous future for the next generation.
Saumya Aloysius
saumyaaloysius@gmail.com
Opinion
El Nino is here: We must be ready for its impact
by Eng. Parakrama Jayasinghe
El Niño is here! It is now official. With the fear of it being even a super El Niño, the authorities have been summoned by President Anura Kumara Dissanayake for an urgent discussion and instructions have been given on measures to initiate possible mitigation measures. These have spanned a wide spectrum of sectors which are in danger of being gravely affected. While food production and energy have received much attention, even the drinking water supply is expected to be adversely affected.
However, by and large the feeling that an ordinary citizen gets, on listening to the reportage on public media, is that at least on this critical issue there are no cohesive, detailed pragmatic plans and strategies being discussed and promoted.
It may not be impossible to mitigate the possible effects of El Niño fully, but what we can hope for is a degree of mitigation. El Niño is nearly upon us and there is no time for longdrawn discussions or time-consuming plans.
Specific comments on electricity sector
I would like to focus on the electricity sector in particular and its unavoidable links to irrigation and domestic water supply.
We have already discussed in earlier articles, how power cuts are being avoided by using diesel for power generation, with grave impacts on balance of payments as well as the economy. In response to a query, in public media, the Chairman of the National System Operator (NSO) has said he expects a fuel subsidy to continue until September and therefore there will be an increase in cost of diesel and consequently a hike in electricity tariff.
The Proposals for safeguarding the Electricity Supply
An analytical review of our past electricity generation mix records would reveal this eminently feasible and attractive way forward.
At the above public energy committee meeting, it was further noted that while the electricity utility consumed over 900,000 litres of diesel per day for power generation, in April 2026, the amount came down to some 350,000 litres per day in May. It is important to consider and recognise the circumstances which led to this turnaround, even if not adequate to solve the problem.
The Island newspaper reported on 8 June 2026 that to overcome the deficit of some 27 GWh of coal power, caused by substandard coal imports, the gap had to be filled with diesel power once more. Lack of courage to face the problem and declare limited power cuts to overcome it ,is the reason for this state of affairs. The resultant extra cost is said to be Rs 4.5 Billion.
Accordingly, the startling fact is that the unit cost of diesel power generation was Rs 166/kWh, but the utility charges only Rs 100/kWh for consumers with a monthly consumption over 180/kWh since 11 May . Those with lower consumption are charged much less. These figures highlight the unsustainable reliance on diesel.
It is very likely that there would be a call for increasing the consumer tariff once more in September when the next tariff review is due. This is in spite of the lowered world crude oil prices on 17 June 2026, due to a framework for peace signed between the USA and Iran. As per the IMF edicts, the Utility has to recover all its costs from consumers, irrespective of their mode of operation and efficiency or the lack thereof.
Change from April 2026 to May 2026 is illustrated above. (See image 1)

Further the dramatic decline in use of diesel highlights the past scenarios we illustrated earlier with possible increase in the availability of major hydro power in May with the onset of the monsoon. With added increase in ground mounted solar. It is to be noted that the large input from rooftop solar PVs is not recognized here.
Sri Lanka has experienced the most encouraging instances of generating all its electricity without the use of any oil including diesel, furnace oil or Naptha on isolated days, all too infrequent, but it is noteworthy. (See image 2)

The days of zero or near zero use of oil for power generation listed below, unfortunately did not receive the attention of either the Utility or the Ministries of Power or Finance. Such attention could have resulted in a much more progressive electricity sector and a much lower consumer prices and saving of billions of dollars over the past decade. (See Table 1)

The bottom line is that when there is good May–Dec hydro generation, there is a scant need for oil-based generation. Past records show that in such good hydro years, the CEB was making profits and not in need of Treasury handouts. However, the dry season of January to April results in low hydro generation and generation costs rise. No one bothered to consider the means of filling the gap of lower hydro during the dry months with other available economical and indigenous renewable resources. Instead, the easy solution and perhaps the more profitable solution for some, and obviously not for the country, or the consumer, was the use of oil and even the so-called emergency power at enormous cost to the consumers.
The authorities professed that there was no solution. Slow adoption of mini-hydro, wind, and biomass was making only a small impact. There was a singular lack of support for accelerating development of such projects in spite of the setting up of the Sri Lanka Sustainable Energy Authority in 2007, expressly to facilitate and promote the development of the sector.
That was the case until the acceleration of solar power development. (See graph 1)

The ignored impact of Surya Bala Sangraamaya
Matters changed in 2010 with the declaration of the Surya Bala Sangramaya, opening the door for smallscale rooftop solar PV development. Further impetus was given by Net Plus and Net Accounting schemes. From 2016, exponential growth in the solar PV sector was recorded, reaching over 2300 MW through 150,000 mostly with sub MW scale domestic rooftop solar PV installations.
The power generation industry was no longer the sole purview of large wealthy corporations. The consumers themselves became generators thus becoming “Prosumers”
However, in 2025, the Surya Bala Sangraamaya suffered a setback, because of the machinations of the utility and others in authority; they did not recognize its true value.
It is necessary to recognise the growing contribution of rooftop solar PV, recognised world over along with its variable nature and not unique to Sri Lanka. An attempt was made to include such strategies in the successive Long-Term Generation Plans, but without much success.
How do we face the El Nino , already with us ?
It is under these circumstances that we have to face El Niño or even a Super El Niño. At least in the electricity sector, the past records point to a way forward.
It does not require much intelligence to discern the fact that
* When there is good hydro we manage without oil and CEB can make good profits
* But when there is low hydro, we have the advantage of much higher Solar energy
* Only intervention that is needed is to provide storage batteries so that solar energy can be stored and used at night as well and thus avoid the need for thermal generation.
* There is now some 2500 MW of rooftop solar and 400 MW of ground mounted solar and 170 MW of wind already installed, just waiting for the batteries to be added.
* The Utility is dragging its feet on adding the large batteries at grid substations and ignoring the fact that much more urgent need for early benefits is by adding batteries at the distribution substations and even individual distribution transformers.
* The Prosumers with 2500 MW of rooftop solar are ready and waiting to add the behind-the-meter batteries, provided that the Utility is willing to accept that option.
Will this happen? Or, will anyone in the government realise this possibility and get cracking.
Electricity and Irrigation
It is argued that as for water allocation in case of drought conditions, priority should be given for drinking water and agriculture. While this is logical, I have never seen any figures related to the actual water needs and water discharge.
Naturally, drinking water is the first priority. But what percentage is needed for this? Have we got logical strategies to maintain a balance between drinking needs and the power generation or Irrigation? Can’t we have the cake and eat it by making sure that the water released for irrigation also generates electricity?
Short-term approach with long lasting advantages
Therefore, it is my contention that the maximum attention should be paid to adding behind-the -meter batteries to get ready in case El Nino results in draughts, even during the conventional high rainfall periods, say June to December. If not, it would give us an opportunity to get ready with the infrastructure needed to make the best use of the basic facilities already built by the Prosumers and also to attract new Prosumers to install solar with batteries. These could then be ready to face the likely dry months from January to May 2027, however severe they are.
My appeal is to the current Prosumers with rooftop solar and the many others, whose requests for grid connections have been rejected out of hand to install rooftop solar and batteries to operate in the off-grid mode and thus reduce their dependence on the grid significantly. This would automatically reduce the peak load demand and the need for diesel based generation and enable the reduced hydro resource to be used to meet the peak load at much lower cost. This is an interim measure and they should be permitted to participate by exporting any excess during peak hours, once the FIT scheme presently being developed is active.
This is not the time and place to quote detailed numbers, but suffice it to say that if 100,000 Prosumers with 5 kWh batteries go off the grid during peak hours, it will help reduce the peak demand by 500 MW. The current peak load is only about 2900MW. This positive contribution could in fact be much greater if there is even the slightest signal of support from the state.
If further evidence is needed the following table illustrates the contribution made by the Renewable Energy Sector to the Country on an annual basis. (See Table 2)

The potential is unlimited. Therefore, the current El Nino scare should be treated as a warning as well as an opportunity to get control of the electricity sector and ensure future energy security.
(The writer can be contacted at
parajayasinghe@gmail.com)
Opinion
Why it’s time to let SAARC go
Terminally Ill:
Anyone with a minimal rational understanding of international relations and the functioning of multilateral organisations would know that South Asian Association for Regional Cooperation (SAARC) has gone the same way the Non-Aligned Movement had gone before. That is, to total oblivion and inconsequence. Maintaining these organisations today is a waste of taxpayers’ money from countries which can hardly afford extra cash for inconsequential diplomatic performances.
In June 2026, amidst an official visit to Colombo, SAARC’s outgoing Secretary General, Md. Golam Sarwar made several public statements about the future of the organisation during engagements at the Regional Centre for Strategic Studies and the SAARC Cultural Centre. It is instructive to see what he said. He did recognise the organisation was in trouble when he noted the need for member nations to engage more proactively with each other to overcome the present difficulties the organisation faces and “re-ignite” it. He also noted at Colombo’s RCSS that “an inspiring momentum is emerging as visionary leadership across the region works to keep broader cooperation at the heart of the conversation.” He further said, “when member nations champion this collective vision together, they can successfully elevate the dialogue around shared progress, ensuring that deep, meaningful regional integration remains a vibrant and lasting priority for all.”
But where exactly is this wonderful world of cooperation and visionary leadership emerging in the messiness that typifies domestic and international relations in South Asia? Where exactly can one see this inspiring momentum? Not on the ground for sure. In more realistic terms, what he has articulated is not fact or what is possible, but hope, against hope. What he outlined also does not constitute ongoing action on the ground. The reality beyond diplomatic sound bites is something very different. That reality merely mirrors the fractured history and dysfunctionality of SAARC over the last four decades.
In an essay titled ‘As SAARC Faces Unprecedented Setback, Time to Rethink the Rigid Boundaries of Its Nation States’ published in 2016, my former colleague Ravi Kumar and I noted the need to rethink how actually SAARC works. We wrote at a time when India, Bangladesh, Afghanistan and Bhutan refused to attend the 2016 SAARC summit scheduled to be held in Islamabad affectively scuttling the important meeting. Despite its forty-year history, the last summit took place twelve years ago in 2014 in Katmandu indicating the utter dysfunctionality of the organisation. What organisation can function when it cannot even successfully hold regular mandatory summits? This inability comes fundamentally from the India-Pakistan rivalry that flows into decision-making and more crucially, due to the unpractical expectation of 100 percent consent across all nations to proceed with all significant programmes.
In this background, when Mr Sarwar claims SAARC is the “irreplaceable beacon of hope” for the 2 billion people in South Asia, it means nothing more than utter naivety. It is precisely this ostrich attitude of its leaders and officials which have at one level ensured SAARC’s established dysfunctionality and track record in relatively unimaginative programing. That is, they have not moved beyond the practices and hurdles so typified by nation states and mere sound good rhetoric as in this case.
Beyond this, SAARC should never have been merely focused on a geographic grouping led by nation states with their often-irreconcilable idiosyncrasies and rivalries. This is what Ashish Nandy had referred to as “garrison states.” Where are the region’s people, their collective organisations, their cultural productions and their hopes and histories beyond the overused rhetoric of people-to-people relations? This is what Kumar and I raised in 2016. That is, whether it was possible, “from the continued existence and overall usefulness of the regional grouping, to the foundational concern of how to work out issues of regional cooperation.”
In this situation, mere “politics and economics of nation states” have “become the most significant dimension of the hegemonic discourses of regional cooperation.” Unfortunately, “in this process, it loses track of the actual sites inhabited by people, which are the messy cultural and emotional spaces beyond these territorial boundaries.” Moreover, “this has become evident in the way states have to work through their own formal bureaucratic mechanisms, while the initiatives of the people, and the imagination of scholars and creative people of the region, have often been very different and more inclusive than that of the state.”
Beyond the matter of leadership, the other area where SAARC has failed is in its lack of creative imagination in the way it should work. If it could put in place a process beyond the usual bureaucratic performances where there is more grounded involvement of people, there can be some hope. However, as Kumar and I had noted in 2016, “these non-hegemonic approaches have not been recognised at the level of formal statecraft. The obvious disconnect between the people and the nation is reflected in the constitutive character of the SAARC.” This is why even when visual artists, singers, dancers and sometimes scientists take part in purportedly SAARC-led initiatives, they are drawn from lists of supporters maintained by individual national governments and constituent political parties rather than from repositories of people who have actually worked tirelessly and excelled in their respective fields. The result is consistent mediocrity.
Mr Sarwar reportedly noted at RCSS that the “SAARC Cultural Centre in Sri Lanka” is “a vital node of technical expertise driving a practical, bottom-up approach to regional problem-solving.” Since when does this organisation do this kind of thing? While this is certainly possible when it comes to discourses on issues such as heritage management and preservation, the Centre’s mandate is to “promote regional unity through cultural integration and intercultural dialogue” and to “contribute towards preservation, conservation and protection of South Asia’s cultural heritage within the framework of the SAARC Agenda for Culture.” In any case, this organisation as well as SAARC more generally have never been about working through a bottom-up approach to address regional problems. Given their bureaucratic personalities, they are top-down by definition like all such multilateral organisations.
Notwithstanding that the SAARC Cultural Centre has become far more active in very recent times than it ever has been in the recent past due to changes in its leadership affected under the auspices of the Sri Lankan government, it is nevertheless reduced to run programmes mostly online. The inability to undertake more proactive programming despite the Centre’s present enhanced interest comes from both funding restrictions as well as the unnecessary rivalry between member states, particularly between India and Pakistan that percolates into the way the Centre is expected to function. It also does not help when the ability to be creatively independent in its programs is severely curtailed by unpractical norms of consent across member nations.
The Secretary General’s observations on the South Asian University in Delhi were far more disappointing as were they also completely wrong. Referring to the University’s now meaningless slogan, “knowledge without borders,” he described the university as a “visionary investment in our collective intellectual capital” that inculcates a shared regional consciousness by functioning as a “living bridge of mutual trust and academic collaboration” transcending political boundaries. Clearly, despite being the current Secretary General of SAARC, Mr Sarwar is completely unaware of what the university has become in more recent times, and particularly under his own watch.
What he has outlined are the expectations and hope upon which the university was established, which was also put into practice in the first decade or so of its existence. However, this is far from the reality now. Under its present and continuing India-appointed leadership, where no other South Asian nation has been able to appoint a President, the university has not only become completely North Indian (not even simply Indian) for all practical purposes in so far as its discission-making apparatus is concerned, but it has also become an organ of Hindutva and upper caste dominance. This transformation has affectively made it a mere extension of domestic Indian politics.
It no longer admits students from Pakistan and Afghanistan. And students from countries beyond India that include Sri Lanka and the Maldives hardly show any interest in joining the university given its seriously dented reputation and toxic environment as regularly reported in the Indian press. Even the number of students joining from Nepal – compared to early years – has also come down for the same reasons. This is an unfortunate but conscious deviation from its original intentions. What has happened in the process is its mandated South Asian identity and consciousness that the Secretly General himself referred to, has been violently uprooted. All this has happened officially under the auspices of SAARC and unofficially under the guidance of the Indian government while all member states have remained silent. The university’s deterioration into what is at best a mediocre regional ‘coaching centre’ has been well-documented in the Indian press over a long period of time. In this context, the Secretary General seeing the failed South Asian University experiment as a “living bridge of mutual trust and academic collaboration” is truly shocking.
In this overall situation, as opposed to the Secretary General’s over-optimistic and naïve assessment of SAARC’s future not grounded on regional realities, it is creditable that some of the Sri Lankan participants did bring up the South Asian University’s deterioration as well as what actually is meant by rhetoric such as South Asian identity and consciousness.
Ceylon Today of 28 June 2026 quoted the Secretary General as asking rhetorically, “without SAARC, what is the alternative?” This is indeed an important question. The answer to this question has been provided by the Secretary General’s own public pronouncements of naivety. Rather than a dynamic diplomatic institution, SAARC has become a moribund entity that merely reemploys retired diplomats and officials from the region, appoints others on secondment and employs junior officers on an unenviable pay scale, none of which have effectively contributed to serious and long-term institution-building. It is merely a burden on the region’s hapless taxpayers.
All this suggests the necessity for SAARC to radically and completely reinvent itself if it is not to become even more irrelevant than it already is. Its only hope is to rediscover itself within a “sense of embedded subversiveness in the acts of reasonable people” which cannot be done within the shackles of officialdom and dysfunctionality SAARC and the nation states which reluctantly fund it are straddled with. To be functional, the organisation also must be rescued from the India-Pakistan rivalry and its consequences. We know, all this is impossible as things stand today. This is why SAARC should be formally put to rest while its functioning organisations can be reinvented – where necessary and if it makes economic and financial sense – in the national personalities of the countries where they are located as South Asian University has already done.
Let me conclude by answering in plain terms the Secretary General’s question, “without SAARC, what is the alternative?” South Asia’s future is clearly not with SAARC. It lies squarely with individual nation states and their ability to forge bilateral and multilateral relations in areas that matter to them and in ways that benefit their national interests while at the same time self-consciously remaining out of the shadows and devious plans of any single hegemon.
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