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Midweek Review

Some thoughts on green financing options for Sri Lanka

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By Prof. Nimal Gunatilleke

This is a sequel to my earlier article, titled ‘The Sri Lankan Debt Crisis: A Layman’s Review’, which appeared in two parts on the 01st and 02nd June in The Island Midweek Review and also in the Daily Financial Times on the 06th and 07th June 2022. In the second part of that article, I highlighted some of the emerging global investment opportunities, such as Green Bonds that are being made available for restructuring sovereign debts in this green economic era.

In this article, I would like to draw attention to the additional green financing options that are currently available for prospective investors, based on recent successful examples from other countries. These green financing opportunities will only be available once the debts have been brought to a sustainable level, as dictated by the IMF. However, Sri Lanka is currently wrestling desperately with the task of securing bridging finance, either as donations or loans to meet her day-to-day needs spilled over to the streets, day in, day out.

Among the loans received in the form of fuel, food, and medical supplies, the USD 500 million loan through the Indian Credit line (more credit under negotiation) and more recently pledged loan of USD 120 million (and perhaps, additional grants) from the US stand out prominently. It is a relief to learn that several other countries and international agencies too have come forward to help Sri Lanka in her critical stage of the balance of payment crisis. All these loans being given in the name of bridge financing during this interim period will also be added on to the existing debt burden during the restructuring process. In the meantime, Sri Lanka needs to restructure its foreign debt or make substantial progress towards that goal before the IMF agrees to lend money.

Still being categorized as a Middle-Income Country, Sri Lanka is not entitled to interventions focused on providing debt relief to the Low-Income Countries, usually given on greater concessionary terms. The IMF intervention in this instance, as it happened 16 occasions earlier, since our independence, may once again recommend, among other solutions, outright sale, lease, or pawn of our family silver – the valuable real estate assets – as a stopgap fix to the debt problem. Consequently, IMF intervention alone is least likely to be a sustainable solution for our chronic trade deficit problem because Sri Lanka has been consistently spending more forex than it earns over the past decades. In all probability, this trend may continue further since the economically sound options for bridging the trade deficit are socially more painful and therefore politically inauspicious. The current mayhem that the country is going through and led by deceitful political forces would only lead to worsening the situation, further.

As we all are now well aware, we had been borrowing forex from the international capital markets to meet the deficit to balance the national budget each year over the past several decades, which obviously cannot keep going forever. If we continue to have this ‘business as usual’ attitude, the country will simply pile up bigger and bigger debts to pay back in the future despite IMF interventions. This is where the selling of family silver stealthily sneaks in.

Fortunately, however, there are new green financing opportunities emerging as a unified global response to the climate change mitigation and adaptation in transforming International Sovereign Bonds into more climate-friendly investments such as green bonds, climate bonds, sustainability bonds, payment for ecosystem services, debt for climate swaps, etc., under Paris agreement on climate change.

Green bonds

Although Sri Lanka has been quite late to enter the globally booming green bond market, our nearest neighbour, India has been expanding its green bond market vigorously over the recent years. This includes several projects they have supported in Sri Lanka as well, under the green bond label since 2015. Amongst them, the EXIM Bank of India, the closest proxy to the Sovereign in International Debt Markets in India, had supported three projects in Sri Lanka for the purpose of laying railway tracks from i) Omanthai to Pallai, ii) Pallai to Kankasanturai, and iii) Madhu church -Talaimannar sectors under eligibility in the mass transportation sector, since 2015 ().

The recently inked Sampur Solar Energy project by the National Thermal Power Corporation of India, and even the proposed Mannar and Pooneryn wind and solar energy projects to be funded by the Indian investors may be coming under similar green or other such bond schemes. On the other hand, the only Sri Lankan green finance venture that I came across so far in literature is the one in which the Seylan Bank PLC has arranged a Green Bond for financing several renewable energy projects in Sri Lanka. The global and regional appetite for green bond issuance is on the increase and it is high time that Sri Lankan investors too, evoke greater attention towards it.

Sri Lanka Road Map for Green Financing

The Sri Lankan Road Map for sustainable/green financing has been prepared by the Central Bank of Sri Lanka with technical assistance from the International Finance Corporation through a consultative process for the purpose of promoting sustainable/green finance options in Sri Lanka. In addition, the Central Bank of Sri Lanka has already prepared a Biodiversity Finance Plan (BIOFIN 2018 – 2024) to move towards sustainable financing solutions with an aggregate resource mobilization target ranging from LKR 20 billion – 46.7 billion.

The BIOFIN Plan has prioritized 13 finance solutions and issuing Green Bonds is one amongst them. The generic description of Green Bonds in this plan states that issuing green bonds is a new source of financing that can mobilize a large amount of financial resources by the public sector as per the financial regulatory mechanism, subject to the country’s debt servicing capacity. Sri Lankan investors too, now have an enviable opportunity to join this lobby as partners during the restructuring process especially, in transforming the Sri Lankan Sovereign Bond debts.

Payment for Ecosystem Services (PES)

Payment for Ecosystem Services is yet another financial solution that the BIOFIN 2018-2022 Plan has put forward which it claims to be another new financing source for paying directly or indirectly for ecosystem services and negative externalities either with private or public involvement in Sri Lanka. The BIOFIN plan considers that an introduction of PES in the energy sector is important because the current modes of power generation have significant negative implications on the country’s biodiversity and ecosystem services whilst the condition of watersheds also influences power generation efficiencies, especially in hydropower. The BIOFIN plan details out the information needed for developing three different business models under the PES system (pages 28-37). They are (i) Payment for watershed management in lands above mini-hydro power plants, (ii) Payment for watershed management for hydropower generation at Moragahakanda, and, (iii) Payment for negative externalities of coal power generation.

PES for Watershed management in the Central Highlands

Management of watersheds has been recognized as a national priority for sustainable development in Sri Lanka in the most recent National Physical Planning Policy and the Plan for Sri Lanka 2017-2050 and its immediate predecessor – NPP – 2030. Both these plans have recognized the Central Highlands and the Coast Conservation Zone as fragile regions (see the figures) that need urgent conservation interventions for the sustainable development of practically the entire country.

The ‘Central Fragile Area’ is the geographic entity that consists of lands with sensitive natural ecosystems, highly vulnerable to landslides, and plays a crucial role in sustaining water resources. A major portion of these areas are located above 300 meters from mean sea level and cover the upper catchments of all major rivers on the island. Almost all major economic enterprises in Sri Lanka, including downstream irrigated agriculture and associated livelihood sustenance, hydro-power generation, and inland and coastal tourism are very much dependent upon the ecological health of this fragile region.

Therefore, the prioritization of watershed management in at least a few selected areas as a priority area under the Payment for Ecosystem Services by the BIOFIN project of the Central Bank of Sri Lanka as a start is praiseworthy. The National REDD+ Investment Framework and Action Plan (NRIFAP) 2017 and its subsequent updates including that of the Forestry Sector Master Plan for Sri Lanka 2021-2030 (still in draft) would be able to provide a strong foundation for developing investment models in this vital sphere of sustainable development.

Conversion of exotic monoculture plantations in critical watersheds into native and naturalized species mixes in these central highlands according to proven scientific guidelines would be yet another green financial proposition for both public and private sector engagement for which intriguing business models can be developed under PES schemes. We have developed two ecologically sustainable Pinus conversion models, one in the NW buffer zone of the Sinharaja World Heritage Site and the other in Peradeniya University Lower Hantana campus land. These can be scaled up into other Pinus plantations in critical watersheds of the island with public-private collaboration as Corporate Social Responsibility projects, especially in the plantation sector.

Similarly, the World Bank-funded Landscape Management Plan for Sinharaja Forest Range prepared recently is yet another superlative green financing option for such investors. (See maps)

PES for Coastal Zone Management

On the other hand, the ‘Coast Conservation Zone’, the second fragile region identified by the NPP includes the area for which boundaries have been delineated by the Coast Conservation Department under the provisions of the Coast Conservation Act No. 57 of 1981. Even though a large quantum of physical developments in Sri Lanka has been taking place in this zone, conservation of the lagoons, estuaries, swamps, riverine, and other sensitive environments, is important because of the eco-services that they provide, the attractions they have, and the ever-expanding economic activities associated with them.

The ‘Sri Lanka Coastal Zone and Coastal Resource Management Plan – 2018’ prepared by the Coast Conservation and Coastal Resource Management Department would be an ideal foundation document for developing investment and business models in this critical coastal belt that covers a circum-island coastline of 1,620 km. Due to its abundant natural resources and consequent social and economic benefits supporting millions of livelihoods, the coastal zone has experienced immense development and urbanization over the decades. This calls for the sustainable management of the coastal zone to ensure that resources are not exploited beyond their regeneration capacity and that the remaining habitats are not further degraded or destroyed.

Similar projects with appropriate business models have been developed in other regions/countries that Sri Lanka could take a cue from. They are the following:

i.) Mangrove Restoration in Senegal – The mangrove restoration project in Senegal, coordinated by the Livelihoods Carbon Fund (LCF) since 2011, aims at restoring an ecosystem that protects arable land from salinization and produces fish resources (fish, shellfish, crustaceans) and wood. With the support of the Livelihoods Carbon Fund, the mangrove restoration project in Casamance and Sine Saloum estuaries of Senegal has helped 450 local villages replant 10,415 out of the existing 185,000 hectares of mangrove, between 2009 and 2012. It stands like a rampart against climate change impacts and at the same time a nourishing ecosystem for the inhabitants. Carbon finance has enabled vulnerable communities to restore their mangroves through the commitment of private companies that have committed to investing in sustainable projects. In return for their investment in the Livelihoods-Senegal project, the companies that are supporting the Livelihoods Carbon Fund receive carbon credits with high social and environmental value to offset their CO2 emissions.

Investors in the Carbon Livelihoods Fund have provided Océanium – the local NGO with the necessary funding for replanting (population awareness, validation of scientific models, intervention logistics, etc.) and are going to continue to finance its monitoring and evaluation until 2029, for a total duration of 20 years.

The project was validated by the United Nations Framework Convention on Climate Change (UNFCCC) Board. The Project Detailed Document made by Carbon Decisions in December 2010 was audited by Ernst & Young and the Dept. of Environment in May 2011. The approval of the Senegalese authorities was obtained in March 2011 and was subject to a tripartite Memorandum of Understanding of 10 years between Livelihoods, OCEANIUM, and the Senegalese government (Ministry of Environment). The long-term impacts of the project is being measured using the ‘Sustainable Livelihoods Approach’ since 2017. ().

Lessons learned from this project would be beneficial for Sri Lanka to design her own mangrove restoration and coastal and marine conservation initiatives with a public-private partnership. These projects are already being done in an uncoordinated ad hoc manner, especially after the Tsunami event in 2004

. The Sri Lanka Coastal Zone and Coastal Resource Management Plan – 2018 prepared by the Coast Conservation and Coastal Resource Management Department would provide the necessary underpinning for the development of investment and business models for our fragile coastal zone extending over a circum-island coastline of 1,620 km.

ii.) Blue Bond Initiative of Seychelles: Seychelles is a Small Island Developing State dependent on its marine natural resources to derive its economic prosperity. In recent years there have been a decline in the fish stocks and marine resources linked to i) overexploitation of fisheries resources and subjected to environmental pollution. The benefits expected from the blue bond initiative. A blue bond was issued in 2018 for US$ 15 million over a maturity period of 10 years. Among the benefits expected were the development of a Blue Economy through sustainable use of marine resources securing private sector participation, raising awareness of the critical role of the ocean and marine resources, and the overall global need for environmental protection. (). The early indications are claimed to be very positive and there are several lessons that Sri Lanka can learn from this in designing her own blue bond initiatives.

iii.) Grain for Green Programme of China: China initiated its “Grain for Green” programme in 1999 as an ambitious conservation programme designed to mitigate and prevent flooding and soil erosion. It is an example of Payment for Ecosystem Services (PES) which is helping to solve Environmental issues in China. The programme is designed to retire farmland that is susceptible to soil erosion, although some farmers may go back to farming the land after the program ends. China started the Grain for Green program in the western parts of the country for example Shanxi Province. These areas were known for their rather poorly performing economy that was affiliated with an endangered ecological environment. The environment was being further damaged by soil erosion which was a result of cultivation on sloping land as people were changing forests into farmland. By 2010, around 15 million hectares of farmland and 17 million hectares of barren mountainous wasteland were converted back to natural vegetation (From Wikipedia, the free encyclopedia).

This project has a strong appeal for the restoration of the Central Fragile Area of Sri Lanka as recommended in the NPP 2017 – 2050. The unproductive tea lands, areas under unsustainable vegetable cultivation susceptible to excessive soil erosion and degradation, and monoculture exotic tree plantations in critical watersheds are prime candidates to be sustainably developed under appropriate PES-type business models. It is hoped that the Chinese experience and expertise in the above example would be taken on board in restructuring some of our outstanding Chinese debts.

iv.) Great Green Wall Initiative – An ambitious project partnered by the European Union and the UNCCD and implemented across 22 African countries in 2007 to restore 100 million ha of currently degraded land; sequester 250 million tons of carbon and create 10 million green jobs by 2030. More than USD 8 billion has been raised and pledged to support this game-changing initiative in the Sahel region in Africa to provide fertile land, food security, and economic opportunities for the millions and climate resilience in a region where temperatures are rising faster than anywhere else on earth ().

If the world renowned ‘ellanga’ irrigated agricultural systems (small tank cascade systems) spread across the dry zone of Sri Lanka, can be further enriched through a similar program, not only the sustainability of the agricultural heritage system but the chronic health issues currently afflicted with the farming communities could be successfully addressed. Prototype business models well supported by socio-ecological research are already available for these regions for rebuilding agricultural resilience in the Dry Zone of Sri Lanka.

Debt-for-Climate Swaps

Debt-for Climate Swaps are also emerging as yet another viable option that can generate the much-needed fiscal space for Middle-Income Countries like Sri Lanka to focus on climate ambitions and economic recovery while reducing their overall debt burdens.

A debt for climate swap is an agreement between a sovereign debtor and one or more of its international creditors by which the latter forgives all or a portion of the debtor’s external debt in exchange for a commitment by the debtor to invest, in domestic currency, in specific climate projects during a commonly agreed period. The rationale of debt swaps is that debt can be acquired at a discount. When creditors do not expect to recover the full nominal value of debts, they may be willing to accept less. In exchange for (partial) cancellation of the debt, the debtor government is prepared to mobilize the equivalent of the reduced amount in local currency for agreed purposes on agreed terms. The Debt for Climate swaps help countries struggling to service their debts to reduce the debt and free up fiscal space (cash flow) for climate-friendly investments.

Debt swaps provide opportunities for raising capital especially in low-income countries to address environmental and other policy challenges and support green growth. For the debt for climate swaps, the debtor government commits to invest the accrued savings from debt forgiveness in climate adaptation or mitigation. Debt-for-climate swaps have the potential to transform daunting debt into opportunities to reduce climate vulnerability and implement much-needed adaptation. These swaps would thus contribute to the Paris Agreement, which stipulates that developed countries should mobilize climate finance from a wide variety of sources through a variety of actions.

The potential for using debt-for-climate swaps as an innovative financial solution to the twin crises of climate change and debt distress is very high. Such debt swaps provide opportunities for raising capital in debt-stridden low-income countries to address environmental and other policy challenges and support green growth. However, only when the debt has been made sustainable, the swaps can transfer resources for climate purposes.

A number of developing countries are engaging in debt-for-climate swaps since Seychelles secured the world’s first debt-for-climate swap deal for protecting the world’s oceans with the Paris Club group of developed country creditors in 2016, aimed at ocean conservation and climate resiliency. Since then, several Small Island Developing States (SIDS), especially those in the Caribbean region too have joined this program. These countries are facing situations similar to those that we in Sri Lanka, are currently undergoing. They too are heavily indebted countries with tourism-dependent economies more recently worsened by COVID -19 pandemic and subjected to serious climate vulnerabilities.

Activities that can be funded through this debt structuring, include management of marine reserves, coral and mangrove restoration, improving marine, fisheries, and coastal policies, economic diversification, and climate resiliency of coastal communities.

Debt for Climate Swaps provide excellent opportunities for promoting climate change mitigation projects such as the accelerated phasing-out of coal power projects. Quite fortuitously, 40 countries including Sri Lanka pledged at the COP 26 meeting of the UNFCCC held in Glasgow in 2021 and also agreed not to build/fund any new coal power plants. In the light of these recent developments in relation to the UN Convention on Climate Change and the internationally binding Paris Agreement, the Long-term Generation Expansion Plan (LTGEP) for Sri Lanka may need to be reworked. This plan envisages the retirement of several thermal power plants that are likely to be taken off from operation due to their age-related mal-functioning and more importantly, the construction of two more coal-fired power plants totaling 1500MW in the late 2020s. Debt for Climate Swaps are strong candidates for facilitating the early retirement of coal/thermal power plants and investing in energy-efficient clean energy projects in Sri Lanka.

Debts for Climate Swaps are also eligible for climate change adaptation which include Nature- based Solutions that include conservation and enhancing diversity by restoration of degraded lands including wetlands. The rationale for undertaking such projects, which are often not commercially viable business models, is that their benefits, such as enhanced biodiversity, higher water tables, carbon capture, improved well-being of citizens, green jobs created, etc. far outweigh the costs involved. Their socio-economic benefits being intangible are often not captured or are externalized in standard benefit/cost analyses. However, in this Decade of Forest Restoration declared by the United Nations, such ventures partnered with developed countries are being used to reduce the debt burden of developing countries.

Conclusions

In summary, Sri Lanka has in place most of her key development strategies and plans for the next several years in conformity with major global conventions on biodiversity, climate change, and combating land degradation. They are the following:

 National Biodiversity Action plan (NBSAP 2016-2022),

 National REDD+ Investment Framework and Action Plan (NRIFAP 2018-2022),

 National Action Program for Combating Land Degradation in Sri Lanka (NAP-CLD 2015 -2024),

 National Adaptation Plan for Climate Change Impacts in Sri Lanka (2016 – 2025).

Using the information provided by these strategic action plans, the Central Bank of Sri Lanka together with Ministry of Environment has prepared a Biodiversity Finance Plan (BFP) for Sri Lanka (2018 – 2024) with 13 prioritized finance solutions some of which I have highlighted in this article. The donor agencies are also very much interested in entering into green financing partnerships with countries in need of investment capital. Therefore, every effort should be made to make this current adversity an opportunity of a lifetime.

The Prime Minister informed the parliament on 06th July 2022 that Sri Lanka is participating in the bailout negotiations with the IMF as a bankrupt country and is going into a deep recession this year and have to face current difficulties extending into 2023, as well. As such, the country needs to submit a plan on Sri Lanka’s debt sustainability separately to the IMF for which a strong political leadership to take visionary decisions is the order of the day.

At this critical juncture of our nation, it may be well worth reminding ourselves of the historic words of John F. Kennedy at his inaugural address as the 35th president of the United States in 1961‘My fellow Americans, ask not what your country can do for you – ask what you can do for your country’ which challenged every American to contribute some way to the public good. Also, what a one-time prime minister of Sri Lanka SWRD Bandaranaika wrote in his son -Anura’s album which later became a more public proclamation ‘the main duty of man is to serve man’ are words that we need to convert to deeds at this moment of despair.

This is in stark contrast to protesting with the stereotypic slogans ‘Diyaw, diyaw, diyaw’ by the politically indoctrinated trade unions and the misguided young intelligentsia at every turn during this period of despondency with much inconvenience and annoyance, in particular, to the already suffering working class people. We are in need of a socially astute political leader with a vision who can stand tall and adapt the words of JFK as ‘My fellow Sri Lankans, ask not what your country can do for you – ask what you can do for your country’ in this hour of deep political and socio-economic crisis and turmoil to steady the ship and steer it safely to calmer waters. Finding a national figure with such qualities at this moment is the Quadrillion Rupee (inflation accounted for) problem!



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Midweek Review

Aragalaya: GR blames CIA in Asanga Abeyagoonasekera’s explosive narrative

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Asanga

Did CIA chief William Burns visit Colombo in Feb 2023? Sri Lanka and the US refrained from formally confirming the visit. The Opposition sought confirmation of the then CIA Chief’s visit to Colombo in terms of the Right to Information Act but the Wickremesinghe-Rajapaksa government sidestepped the query. A former Republican congressman from Texas and Director of National Intelligence (2020–2021) John Ratcliffe succeeded Burns in late January 2025.

 

On the sheer weight of new evidence presented by Asanga Abeyagoonasekera’s ‘Winds of Change’, readers can get a clear picture of the forces that overthrew President Gotabaya Rajapaksa in 2022.

Even five years after the political upheaval, widely dubbed ‘Aragalaya,’ controversy surrounds the high-profile operation that forced wartime Defence Secretary Gotabaya Rajapaksa to literally run for his dear life.

Gotabaya Rajapaksa, formerly of the Army but a novice to party politics, comfortably won the 2019 November presidential election against the backdrop of the Easter Sunday carnage that caused uncertainty and suspicions among communities. The economic crisis, also clandestinely engineered from abroad, firstly by crippling vital worker remittances from abroad, almost from the onset of Gotabaya Rajapaksa’s presidency, overwhelmed the government and created the environment conducive for external intervention. Could it have been avoided if the government, that enjoyed a near two-thirds majority in Parliament, sought the help of the International Monetary Fund (IMF)?

The costly and well-funded book project, undertaken at the time Abeyagoonasekera was working on a governance diagnostic report for the IMF, in the wake of the change of government in Sri Lanka, meticulously examined the former Lieutenant Colonel’s ouster, taking into consideration regional as well as global developments. Abeyagoonasekera dealt efficiently and furiously with rapidly changing situations and developments before the unprecedented 03 January, 2026, US raid on Venezuela.

Lt. Col. (retd) Gotabaya Rajapaksa, for some unexplainable reason and a considerable time after the events, has chosen to blame his ouster on the United States. We cannot blame him either, by the way we have seen how other regime changes had been engineered, in our region, by Washington, since and before Gotabaya’s ouster. The accusation is extraordinary as Gotabaya Rajapaksa in his memoirs ‘The conspiracy to oust me from presidency’ refrained from naming the primary conspirator, though he clearly alluded to an international conspiracy.

April 8, 2019 meeting

Launched in March 2024, in the run-up to the presidential election that brought Anura Kumara Dissanayake (AKD) to power, almost in a dream ride, if not for the intervening outside evil actors, ‘The conspiracy to oust me from presidency’ discussed the international conspiracy, but conveniently failed to name the primary conspirator. What made the former President speak so candidly with Abeyagoonasekera, the founding Director-General of the national security think tank, the Institute of National Security Studies Sri Lanka (INSS), under the Ministry of Defence, from 2016 to 2020?

Abeyagoonasekera also served as Executive Director at the Lakshman Kadirgamar Institute (LKI), under the Ministry of Foreign Affairs (2011–2015), during Mahinda Rajapaksa’s second term as the President. The author, both precisely and furiously, dealt with issues. Readers may find very interesting quotes and they do give a feeling of the author’s general hostility towards the US, India, as well as to the US-India marriage of convenience. Those who sense so may end up thinking ‘Change of Winds’ being supportive of the Chinese strategy. Among the highly sensitive quotes that underlined the Indian approach were attributed to Indian Defence Secretary Sanjay Mitra. The author quoted Mitra as having declared: “We need the MRCC centre [Maritime Rescue Coordination Centre], and you cannot give it to another nation.” As pointed out by the author, it was not a request but an order given to Sri Lanka on 8 April, 2019, meant to prevent Sri Lanka from even considering a competing proposal from China. Against that background, the author, who had been present at that meeting at which the Sri Lanka delegation was led by then Defence Secretary Hemasiri Fernando, questioned the failure on the part of the delegations to take up the Easter Sunday attacks. Terrorists struck two weeks later. Implications were telling.

That particular quote reveals the circumstances India and the US operated here. No wonder the incumbent government does not want to discuss the secret defence MoUs it has entered into with India and the US as they would clearly reveal the sellout of our interests.

The following line says a lot about the circumstances under which Gotabaya Rajapaksa was removed: “In Singapore, a senior journalist recounted how Gotabaya Rajapaksa’s resignation was scripted, under duress, at a hotel, facilitated by a foreign motorcade.”

In the first Chapter that incisively dealt with the Belt and Road Initiative (BRI), the author was so lucky to secure an explosive quote from the ousted leader in an exclusive, hitherto unreported, interview in June 2024, a few months after the launch of Gotabaya Rajapaksa’s memoirs. The ex-President hadn’t minced his words when he alleged that the Central Intelligence Agency (CIA) orchestrated his removal. He also claimed that he had been under US surveillance throughout his presidency.

The ousted leader has confidently cleared India’s Research and Analysis Wing (RAW) of complicity in the operation. What made him call Indian National Security Advisor (NSA) Ajit Doval ‘a good man,’ in response to Abeyagoonasekera’s pointed query. Abeyagoonasekera quoted Gotabaya Rajapaksa as having said: “… he would never do such things.” The ex-President must have some reason to call Doval a good friend, regardless of intense pressure exerted on him and the Mahinda Rajapaksa government by the Indians to do away with large scale Chinese-funded projects. (Doval in late October last year declared “poor governance” was the reason behind uprisings that led to change of governments in Bangladesh, Nepal, and Sri Lanka over the period of past three-and-a-half years. The media quoted Doval as having said, during a function in New Delhi, that democracy and non-institutional methods of regime change in countries, such as Bangladesh, Sri Lanka and Nepal, created their own set of problems. That was the first time a senior Indian government official made remarks on Nepal’s government change, followed by the Gen Z uprising in early September, 2025.)

Gotabaya Rajapaksa also cleared the Chinese of seeking to oust him. It would be pertinent to mention that China reacted sternly when at the onset of the Gotabaya presidency, the President suggested the need to re-negotiate the Hambantota Port deal.

During the treacherous ‘Yahapalana’ administration (2015 to 2019) Gotabaya Rajapaksa told me how Doval had pressed him to halt not only the Colombo Port City project but to take back Hambantota Port as well. By then, the Chinese had twisted the arms of the Yahapalana leaders Mairthpala Sirisena and Ranil Wickremesinghe and secured the Hambantota Port on a 99-year lease in a one-sided USD 1.2 bn deal. The Colombo Port City project, that had been halted by the Yahapalana government, too, was resumed possibly under Chinese threat or for some money incentive.

Once Wijeyadasa Rajapakshe, PC, declared, at a hastily arranged media briefing at Sri Lanka Foundation (SLF), that Sri Lanka would be relentlessly targeted as long as the Chinese held the Hambantota Port. The writer was present at that media briefing.

Wijeyadasa Rajapakshe said so in the aftermath of the 2019 Easter Sunday carnage, while disclosing his abortive bid to convince the Yahapalana government to abrogate the Hambantota Port deal. Did the parliamentarian know something we were not aware of? The author’s assessment, regarding the Easter Sunday attacks, based on interviews with Chinese officials and scholars, is frightening and an acknowledgement of a possible Western role in Sri Lanka’s destabilisation plot.

The ousted leader, in his lengthy interview with Abeyagoonasekera, made some attention-grabbing comments on the then US Ambassador here, Julie Chung. The ex-President questioned a particular aspect of Chung’s conduct during the protest campaign but his decision not to reveal it all in his memoirs is a mystery. Perhaps, one of the most thought-provoking queries raised by Abeyagoonasekera is the rationale in Gotabaya Rajapaksa’s claim that he didn’t want to suppress the protest campaign by using force against the backdrop of his own declaration that the CIA orchestrated the project.

Author’s foray into parliamentary politics

Gotabaya

For those genuinely interested in post-Chandrika Bandaranaike Kumaratunga developments, pertaining to international relations and geopolitics, may peruse ‘Winds of Change’ as the third of a trilogy. ‘Sri Lanka at Crossroads’ (2019) dealt with the Mahinda Rajapaksa period and ‘Conundrum of an Island’ (2021) discussed the treacherous Sirisena–Wickremesinghe alliance. The third in the series examined the end of the Sri Lanka Podujana Peramuna’s (SLPP) President Gotabaya Rajapaksa’s rule and the rise of Anura Kumara Dissanayake (AKD) whom the author described as a Marxist, though this writer is of the view the JVP and NPP leader AKD is not so. AKD has clearly aligned his administration with US-India while trying to sustain existing relationship with China.

Among Asanga Abeyagoonasekera’s other books were ‘Towards a Better World Order’ (2015) and ‘Teardrop Diplomacy: China’s Sri Lanka Foray’ (2023, Bloomsbury).

Had Abeyagoonasekera succeeded in his bid to launch a political career in 2015, the trilogy on Sri Lanka may not have materialised. Abeyagoonasekera contested the Gampaha district at the August 2015 parliamentary election on the UNP ticket but failed to garner sufficient preferences to secure a place in Parliament. That dealt a devastating setback to Abeyagoonasekera’s political ambitions, but the Wickremesinghe-Sirisena administration created the Institute of National Security Studies Sri Lanka (INSS), under the Ministry of Defence, for him. Abeyagoonasekera received the appointment as the founding Director-General of the national security think tank, from 2016 to 2020.

Several persons dealt with ‘Aragalaya’ (the late Prof. Nalin de Silva used to call it (Paragalaya) before Abeyagoonasekera though none of them examined the regional and global contexts so deeply, taking into consideration the relevant developments. Having read Wimal Weerawansa’s (Nine: The hidden story), Sena Thoradeniya’s (Galle Face Protest; Systems Change or Anarchy?). Mahinda Siriwardena’s (Sri Lanka’s Economic Revival – Reflection on the Journey from Crisis to Recovery) and Prof. Sunanda Maddumabandara’s (Aragalaye Balaya), the writer is of the opinion Abeyagoonasekera dealt with the period in question as an incisive insider.

Abeyagoonasekera, as a person who left the country, under duress, in 2021, painted a frightening picture of a country with a small and vulnerable economy trapped in major global rivalries. The former government servant attributed his self–imposed exile to two issues.

The first was the 2019 Easter Sunday carnage. Why did the Wickremesinghe-Sirisena government ignore the warning issued by Abeyagoonasekera, in his capacity as DG INSS, in respect of the Easter Sunday bombing campaign? There is absolutely no ambiguity at all in his claim. Abeyagoonasekera insists that he alerted the government four months before the National Thowheed Jamath (NTJ) bombers struck. The bottom line is that Abeyagoonasekera had issued the warning several weeks before India did but those at the helm of that inept administration chose to turn a blind eye.

The second was the impending economic crisis that engulfed the country in 2022. Abeyagoonasekera is deeply bitter about his arrest on 21 July, 2024, at the Bandaranaike International Airport (BIA) over an alleged IRD –related offence as reported at that time, especially because he was returning home to visit his sick mother.

Asanga’s father Ossie, a member of Parliament and controversial figure, was killed in an LTTE suicide attack at Thotalanga in late Oct. 1994. The Chairman and leader of Sri Lanka Mahajana Pakshaya had been on stage with then UNP presidential election candidate Gamini Dissanayake when the woman suicide cadre blasted herself. The assassination was meant to ensure Kumaratunga’s victory. The LTTE probably felt that it could manipulate Kumaratunga than the experienced Dissanayake who may have had reached some sort of consensus with New Delhi on how to deal with the LTTE.

Let me reproduce a question posed to Asanga Abeyagoonasekera and his response in ‘Winds of Change’ as some may believe that the author is holding something back. “Didn’t they listen?” a US intelligence officer had asked me incredulously after the bombings. Years later, during my role as a technical advisor for the International Monetary Fund (IMF) amid Sri Lanka’s collapse, the question resurfaced: “How did you foresee the collapse of a powerful regime with a majority in parliament?” My answer remained the same—patterns. Rigorously gathered data and relentless analysis reveal the arcs of history before they unfold.

Perhaps, readers may find what former cashiered Flying Officer Keerthi Ratnayake had to say about ‘Aragalaya’ and related developments (https://island.lk/ex-slaf-officer-sheds-light-on-developments-leading-to-aragalaya/)

Bombshell claim

Essentially, Abeyagoonasekera, on the basis of his exclusive and lengthy interview with former President Gotabaya Rajapaksa, confirmed what Wimal Weerawansa and Sena Thoradeniya alleged that the US spearheaded the operation.

But Prof. Maddumabandara, a confidant of first post-Aragalaya President Ranil Wickremesinghe has bared the direct Indian involvement in the regime change operation. In spite of Gotabaya Rajapaksa confidently clearing Indian NSA Doval of complicity in his ouster, Prof. Maddumabandara is on record as having said that the then Indian High Commissioner here Gopal Baglay put pressure on Speaker Mahinda Yapa Abeywardena to take over the government for an interim period. (https://island.lk/dovals-questionable-regional-stock-taking/)

Obviously, the US and India worked together on the Sri Lanka regime change operation. That is the undeniable truth. India wanted to thwart Wickremesinghe receiving the presidency by bringing in Speaker Abeywardena. That move went awry in spite of some sections of both Buddhist and Catholic clergy throwing their weight behind New Delhi.

The 2022 violent regime change operation cannot be discussed without taking into consideration the US-led project that also involved the UNP, JVP and TNA to engineer retired General Sarath Fonseka’s victory at the 2010 presidential election and their backing for turncoat Maithripala Sirisena at the 2015 presidential election.

The section, titled ‘Echoes of Crisis from Sri Lanka to Bangladesh: South Asia’s Struggle in a Polycrisis’, is riveting and underscores the complexity of the situation and fragility of governments. Executive power and undisputable majorities in Parliament seems irrelevant as external powers intervene thereby making the electoral system redundant.

Having meticulously compared the overthrowing of Gotabaya Rajapaksa and Bangladesh’s Premier Sheikh Hasina, the author condemned them for their alleged failures and brutality. Abeyagoonasekera stated: “When the military sides with the protesters, as it did in Sri Lanka and now in Bangladesh, it reveals the rulers’ vulnerabilities.” The author unmercifully chided the former President for seeking refuge in the West while alleging direct CIA role in his ouster. But that may have spared his life. Had he sought a lifeline from the Chinese so late the situation could have taken a turn for worse.

The comment that had been attributed to Gotabaya Rajapaksa seemed to belittle Ranil Wickremesinghe who accepted the challenge of becoming the Premier in May 2022 and then chosen by the ruling SLPP to complete the remainder of Gotabaya Rajapaksa’s five-year term. Ranil was definitely seen as an opportunistic vulture who backed ‘Aragalaya’ without any qualms till he saw an opening for himself out of the chaos.

On Wickremesinghe’s path

Abeyagoonasekera discussed the joint US-Indian strategy pertaining to Sri Lanka. Whatever the National People’s Power (NPP) and its President say, the current dispensation is continuing Wickremesinghe’s policy as pointed out by the author. In fact, this government appears to be ready even to go beyond Wickremesinghe’s understanding with New Delhi. The Memorandum of Understanding (MoU) on defence and the selling of the controlling interests of the Colombo Dockyard Limited (CDL) to India, mid last year, must have surprised even those who always pushed for enhanced relations at all levels.

The economic collapse that resulted in political upheaval has given New Delhi the perfect opportunity to consolidate its position here. Uncomplimentary comments on current Indian High Commissioner Santosh Jha in ‘Winds of Change’ have to be discussed, paying attention to Sri Lanka’s growing dependence and alleged clandestine activities of India’s Research and Analysis Wing (RAW). Abeyagoonasekera seemed to have no qualms in referring to RAW’s hand in 2019 Easter Sunday carnage.

Overall ‘Winds of Change’ encourages, inspires and confirms suspicions about US and Indian intelligence services and underscores the responsibility of those in power to be extra cautious. But, in the case of smaller and weaker economies, such as Sri Lanka still struggling to overcome the economic crisis, there seems to be no solution. Not only India and the US, the Chinese, too, pursue their agenda here unimpeded. Utilisation of political parties, represented in Parliament, selected individuals, and media, in the Chinese efforts, are obvious. Once parliamentarian Wijeyadasa Rajapakshe raised the Chinese interventions in Sri Lanka. He questioned the Parliament receiving about 240 personal laptops for all parliamentarians and top officials. The then UNPer told the writer his decision not to accept the laptop paid for by China. Perhaps, he is the only Sri Lankan politician to have written a strongly worded letter to Chinese leader Xi warning against high profile Chinese strategy.

Winds of Change
is available at
Vijitha Yapa and Sarasavi

By Shamindra Ferdinando

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Midweek Review

Beginning of another ‘White Supremacist’ World Order?

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Donald Trump’s complete lack of intelligence, empathy and common sense have become more apparent during the current term of his presidency.  Ordinarily, a country’s wish to self-destruct as the United States seemingly does at present, and as the violence against US citizens and immigrants alike at the hands of federal authorities have shown in Minnesota, can be callously considered the business of that country. If the Trumpian imbecility was unfolding in Sri Lanka, anywhere else in South Asia or some other country of the purported Third World, the so-called World Order, led by the United States, would be preaching to us the values of democracy and human rights.  But what happens when the actions of a powerful country, such as the United States, engulfs in the ensuing flames the rest of us? Trump and his madness then necessarily become our business, too, because combined with the military and economic power of the United States and its government’s proven lack of empathy for its own people, and the rest of the world, is quite literally a matter of global survival. Besides, one of the ‘positive’ outcomes of the Trumpian madness, as a friend observed recently, is that “he has single-handedly exposed and destroyed the fiction of ‘Western Civilisation’, including the pretenses of Europe.”

It is in this context that the speech delivered by the Canadian Prime Minister, Mark Carney, at the World Economic Forum, in Davos, on 20 January, 2026, deserves attention.  It was an elegant speech, a slap in the face of Trump and his policies, the articulation of the need for global directional change, all in one. But, pertinently, it was also a speech that did not clearly accept responsibility for the current world (dis)order which Carney says needs to change.  The reality of that need, however, was overly reemphasised by Trump himself during his meandering, arrogant and incohesive speech delivered a day later, spanning over one hour.

My interest is in what Carney did not specifically say in his speech: who would constitute the new world order, who would be its leaders and why should we believe it would be any different from the present one?

Speaking in French, Carney observed that he was talking about “a rupture in the world order, the end of a pleasant fiction and the beginning of a harsh reality, where geopolitics, where the large, main power, geopolitics, is submitted to no limits, no constraints.” He was, of course, responding to the vulgar script for global domination put in place by the Trumpian United States, given Trump’s declared interest in seeing Canada as part of the United States, his avarice for Greenland, not to mention his already concluded grab for Venezuelan oil. But within this scenario, bound by ‘no limits’ and ‘no constraints’ he was also talking of Russia and China albeit in a coded language.

He reiterated, “that the other countries, especially intermediate powers like Canada, are not powerless. They have the capacity to build a new order that encompasses our values, such as respect for human rights, sustainable development, solidarity, sovereignty and territorial integrity of the various states. The power of the less power starts with honesty.”

Who could disagree with Carney? His words are a refreshing whiff of fresh air in the intellectual wasteland that is the Trumpian Oval Office and the current world order it prevails over. But where has been the ‘honesty’ of the less powerful in the specific situation where he equates Canada itself within this spectrum? He tells us that “the rules-based order is fading, that the strong can do what they can, and the weak must suffer what they must.”

That is stating the obvious. We have known this for decades by experience. Long before Canada’s relative silence with regard to Trump’s and US’ facilitation of the assault on Palestine and the massacre of its people, and the US President’s economic grab in Venezuela and the kidnapping of that country’s President and his wife, Canada’s own chorus in the world order that Carney now critiques has been embellished by silence or – even worse – by chords written  by the global dominance orchestra of the United States.

He says the fading of the rules-based order has occurred because of the “strong tendency for countries to go along, to get along, to accommodate, to avoid trouble, to hope that compliance will buy safety.” Canada fits this description better than most other nations I can think of. But would Canada, along with other nations among the silent majority within the ‘intermediate powers’ take the responsibility for the mess in the world precisely that silence has directly led to creating? Who will pay for the pain many nations have endured in the prevailing world order? Will Canada lead the way in the new world order in doing this?

Carney further articulates that “for decades, countries like Canada prospered under what we called the rules-based international order. We joined its institutions, we praised its principles, we benefited from its predictability. And because of that, we could pursue values-based foreign policies under its protection.”

But this is not true, is it?  Countries like Canada prospered not merely because of the stability of rules of the world order, but because they opted for silence when they should not have.  The rupture and the chaos in the world order Carney now critiques and is insanely led by Trump today is not merely the latter’s creation. It has been co-authored for decades by countries such as Canada, France, the United Kingdom to mention just a few who also regularly chant the twin-mantras of human rights and democracy. Trump is merely the latest and the most vocal proponent of the nastiness of that World Order.

It is not that Carney is unaware of this unpleasant reality.  He accepts that “the story of the international rules-based order was partially false, that the strongest would exempt themselves when convenient, that trade rules were enforced asymmetrically. And we knew that international law applied with varying rigour depending on the identity of the accused or the victim.”

While Canada seems to be coming to terms with this reality only now, countries like Sri Lanka and others in similarly disempowered positions in this world order have experienced this for decades, because, as I have outlined earlier, Canada et al have been complicit sustainers of the now demonised and demonic world order.

It is not that I disagree with the basic description Carney has painted of the status of the world. But from personal experience and from the perspective of a citizen from a powerless country, I simply do not trust those who preach ‘the gospel of the good’ not as a matter of principle, but only when the going gets tough for them.

At this rather late stage, Carney says, Canada is “amongst the first to hear the wake-up call, leading us to fundamentally shift our strategic posture.” Unfortunately, we, the people of countries who had to dance to the tunes of the world order led by the First World, have heard it for years, with no one listening to us when our discomforts were articulated. Now, Carney wants ‘middle powers’ or ‘intermediate powers’ within which he also locates Canada, “to live the truth?” For him, the truth means “naming reality” as it exists; “acting consistently” towards all in the world; “applying the same standards to allies and rivals” and “building what we claim to believe in, rather than waiting for the old order to be restored.” This appears to be the operational mantra for the new world order he is envisioning in which he sees Canada as a legitimate leader merely due to its late wakeup call.

He goes on to give a list of things Canada has done locally and globally and concludes by saying, “we have a recognition of what’s happening and a determination to act accordingly. We understand that this rupture calls for more than adaptation. It calls for honesty about the world as it is.” He goes on to say Canada also has “the capacity to stop pretending, to name reality, to build our strength at home and to act together.” He notes this is “Canada’s path. We choose it openly and confidently, and it is a path wide open to any country willing to take it with us.” Quite simply, this a leadership pitch for a new world order with Canada at its helm.

Without being overly cynical, this sounds very familiar, not too dissimilar to what USAID and Voice of America preached to the world; not too dissimilar to what the propaganda arms of the Soviet Union and the Chinese Communist Party used to preach in our own languages when we were growing up. It is difficult to buy this argument and accept Canadian and middle country leadership for the new world order when they have been consistently part of the problem of the old one and its excuses for institutionalised double standards practiced by international organisations such as the likes of the United Nations, the World Bank, the International Monetary Fund and other hegemonic entities that have catered to the whims of that world order.

As far as Canada is concerned, it is evident that it has suddenly woken up only due to an existential threat at home projected from across its southern border and Trump’s threats against the Danish territory of Greenland. When Gaza was battered, and Venezuela was raped, there was no audible clarion call. Therefore, there is no real desire for democracy or human rights in its true form, but a convenient and strategic interest in creating a new ‘white supremacist’ world order in the same persona as before, but this time led by a new white warrior instead. The rest of us would be mere followers, nodding our heads as expected as was the case before.

As the 20th century American standup comedian Lenny Bruce once said, “never trust a preacher with more than two suits.” Mr. Carney, Canada along with the so-called middle powers and the lapsed colonialists have way more than two suits, and we have seen them all.

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Midweek Review

The MAD Spectre

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Lo and behold the dangerous doings,

Of our most rational of animals,

Said to be the pride of the natural order,

Who stands on its head Perennial Wisdom,

Preached by the likes of Plato and Confucius,

Now vexing the earth and international waters,

With nuke-armed subs and other lethal weapons,

But giving fresh life to the Balance of Terror,

And the spectre of Mutually Assured Destruction.

By Lynn Ockersz

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