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Sri Lanka in Lee Kuan Yew’s words

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Prime Minister and Mrs Lee Kuan Yew presenting gifts to President of Sri Lanka Junius Richard (J R) Jayewardene (back to camera), who is on a one-day stopover in Singapore after attending the Commonwealth Heads of Government Regional Meeting in Sydney, during dinner in honour of the visiting Sri Lankan leader at Mandarin Hotel in Orchard Road. Image courtesy of Ministry of Information and the Arts Collection, courtesy of National Archives of Singapore

By Hasala Perera

It is often said that Lee Kuan Yew (LKY) once considered Sri Lanka as a development model, but no one has questioned the veracity of this claim, and it will be interesting to see what he has said about Sri Lanka.

LKY’s views about Sri Lanka have been published in three books, one is his memoirs, ‘From Third World to First’, second in a compilation of his speeches titled ‘LKY -The man and his ideas’ and ‘Giants of Asia – Conversations with LKY’, which contains interviews American journalist Tom Plate had with LKY.

In his book, ‘From Third World to First’, LKY has dedicated an entire chapter to his views of India, Pakistan and Sri Lanka, and it titled ‘South Asia’s Legends and Leaders’ and seven out of these 22 pages are devoted to Sri Lanka.

For easy reference, ‘From Third World To First’ as [1], ‘LKY – Man and his ideas’ is mentioned as [2], and ‘Giants of Asia – Conversations with LKY’ as [3] with the corresponding page number where appropriate. It is important to note here that LKY refers to the country both as Ceylon and Sri Lanka.

LKY’s first Impression

LKY visited Sri Lanka on four occasions. His first visit was in 1956 and during each visit he had happened to meet a new leader in the country.

He states that ‘Ceylon was Britain’s model commonwealth country’ [1, p 461] and that ‘Ceylon had more resources and better infrastructure than Singapore’ [1, p 460], he attributes this to Lord Mountbatten’s presence in Kandy [ibid], which could be some proof that he had a positive outlook of Sri Lanka and wished if Singapore had the same infrastructure as Sri Lanka.

He was full of praise of the capital city Colombo when he states that ‘Colombo was a better city than Singapore’ [2, pg.14/22], and he was ‘impressed by the public buildings’ in the city [1, p 460].

His View of Sri Lankan Leaders

LKY gave his opinion on six Premiers of Sri Lanka namely S.W.R.D. Bandaranaike, Dudley Senanayake, Sirimavo Bandaranaike, J.R Jayewardene, Ranasinghe Premadasa and on Mahinda Rajapaksa just a. few years before his death

His first visit to Sri Lanka coincided with the victory of Bandaranaike’s newly created Sri Lanka Freedom Party, he calls him a dapper little man, well dressed, articulate and a ‘Pukka Sahib’ [1, p 460] a term invented by the British to call the inhabitants of their colonies who followed their ways.

LKY says that Bandaranaike was elated to have won the election mandate from a Sinhala majority and he had promised to make Sinhalese the official language and Buddhism the state religion and did not seem troubled by the disadvantage caused by the minorities as a result of it [1, p 460], during his conversations with him he felt that Bandaranaike spoke to him as if he had still been a member of the Oxford Union debating society [1, p461], despite all his effort to be a champion of the Sinhalese Language, he states that three years later he was not surprised to hear about his assassination by a Buddhist monk [ibid].

LKY’s second visit to Sri Lanka was in 1966, when Dudley Senanayake was the prime minister of the Country, who he refers as a gentle, resigned and a fatalistic elderly man [1, p 462], while playing golf together in Colombo he describes an incident where Dudley Senanayake apologised to him about the huts, goats and cows encroached by squatters at the fairway, as he was unable to justify people for keeping open spaces in the city, unlike our present leaders Senanayake quite casually sent LKY by train from Colombo to Nuwara Eliya, where he played a game of golf and witnessed the same problem with the squatters as in Colombo [ibid]. He felt that Senanayake was a weak leader and did not have control over the citizens of the country.

When he visited Sri Lanka for the third time in 1970, the prime minister of Sri Lanka was Sirimavo Bandaranaike, whom he believed had won due to a sympathy vote [1, p 461] but he describes her as a tougher, determined and less voluble leader than her husband S.W.R.D Bandaranaike [ibid]. He praises her policy on the non-aligned ideology, but he is not in favour of her policy-based decision on supporting the removal of US troops from several South East Asian Countries as he felt that Singapore could be at a disadvantage if they were removed as there was a possibility of communism taking over those countries which could have a negative impact on Singapore [ibid].

It was through one of her Cabinet Ministers Felix Dias Bandaranaike that he learnt Sri Lanka spent only 2.5% of its budget on defence [1, p 461], and the reason he gives is that Sri Lanka is “blessed” with peace and security as a result of its good fortune in geography and history. LKY calls him a bright but an ‘unprofound’ person, but despite its ‘blessings’ he ironically mentions that 10 years later Sri Lanka spends more than half of its budget on defence and arms to crush a rebellion that took place inside the Country [ibid], he is the only Sri Lankan minister ever mentioned by him.

LKY further states the futility of Mrs Bandaranaike’s decision to change the name of the country from ‘Ceylon’ to ‘Sri Lanka’ and making the country a republic as it did not improve the fortunes of the country, the best example he takes here is that Sri Lankan Tea was still been sold as Ceylon Tea [1, pg.463] as a matter of fact even to this day Sri Lankan Tea is known as Ceylon Tea. He further states that by changing names sometimes you could deceive gods, but you can’t deceive the people who live in it [2, pg.15/22]

His meeting with President J R Jayewardene took place outside Sri Lanka, which was at the CHOGRM Conference held in Sydney. He says that during this meeting Jayewardene wanted Sri Lanka to move away from socialist policies which had bankrupted the country and wanted Singapore to get involved in the development of Sri Lanka; he says that he was impressed by his practical approach which made him visit Sri Lanka for the fourth time in 1978 [1, pp 463,464].

Despite the positive outlook LKY had on President Jayewardene, as time went by he started seeing his drawbacks, the former thought that the latter’s decision to start a national airline as a symbol of progress and employ a pilot as a chairman of the newly built airline as a weakness [1, p 464]. He finally states Jayewardene retired as a tired man who had run out of solutions [1, p 465], which indicates that his opinion of Jayewardene had changed.

He calls Ranasingha Premadasa, who succeeded him a ‘Sinhala Chauvinist’ [1, p 465] and considers the latter’s decision to remove Indian Soldiers brought down during the Jayawardena government to fight the civil war as insensible [ibid]. He did not have a positive attitude towards Ranasinghe Premadasa.

A few years before his death in an interview he had given to the American journalist Tom Plate he gives his views on the former President and the incumbent Prime Minister Mahinda Rajapaksa as follows: “He thinks he has finished the war, I have read his speeches, I knew he was a Sinhalese extremist and I cannot change his mind” [3], he felt that Rajapaksa was an obstinate leader and extremist.

His View on Sri Lanka’s Economy and Management

LKY was aware that Sri Lanka was a country with wealth. ‘Sri Lanka had large Sterling Reserves’ [2, p 14/22], yet he knew that the country lacked management principles and sound policies that could one day challenge the ability to retain that wealth.

One of his first experiences was when the Prime Minister Dudley Senanayake sent LKY from Colombo to Nuwara Elya by train in a special carriage, the food given on that train was ‘poisonous’, and the crab meal that was served to him was stinking and badly contaminated [1, pg.462], which showed carelessness and irresponsible management by the railway department. He went into the toilet and spewed it all [ibid].

LKY realised that Sri Lankan leaders were not intelligent in identifying priorities. When Jayewardene wanted to start an airline as he thought that it was a symbol of progress, LKY advised him that it should not be his priority because to start an airline one needed many talented and good administrators, in addition to that an airline is a glamour project and is not of great value for developing Sri Lanka [1, p 464] instead he advised the Sri Lankan President that priority should be given to other projects in the country such as irrigation, agriculture, industrial development and housing [ibid].

LKY observed the lack of meritocracy in Sri Lankan administration when Jayewardene decided to employ a pilot as a Chairman of the newly formed Airline, his simple question to him was this: ‘How can an airline pilot run an airline?’ [1, pg.464], he firmly believed that it should be done by a capable administrator. However Jayewardene insisted on it so LKY helped him to launch it in six months with the help of the staff of Singapore Airlines. This was the beginning of Air Lanka (now Sri Lankan Airlines), but it lacked a proper top management and when the newly elected chairman decided to buy certain aircraft against their advice, the Singaporean government decided to withdraw its support.

LKY foresaw that Air Lanka was doomed to fail, and he gave five reasons for it, and they were excessive capacity expansion, negative cash flow, lack of trained staff, unreliable services and insufficient passengers. [1, p 464].

LKY noticed the absence of meritocracy when he saw the condition of the tea estates here; he was very disappointed of the way tea estates were managed and criticised the locals who managed it when he states that ‘the locals who had been promoted were not good supervisors as their British predecessors’ [1, p 463], and as a result there was no strict discipline, plucking was not done appropriately and the tea plantations were in a deplorable condition’[ibid]; if responsibilities are not given based on meritocracy the industries wouldcollapse and as a result the economy of the country is doomed to fail.

LKY’s on the Education System of Sri Lanka and his visit to the Peradeniya University

LKY had a very positive view of the education system introduced by the British in Sri Lanka. He says, ‘It (Sri Lanka) had a relatively good standard of education’ [1, p 462]. He says Sri Lanka had some universities of high quality in Colombo and Kandy (Peradeniya) that was teaching in English [ibid] and before the war they had thick layer of educated talent [2, pg. 14/22], but he was disappointed at its change of medium to local languages and the standards of the education after his visit to the Peradeniya University.

LKY mentions his visit to the Peradeniya University, which he calls the University of Kandy, when he learnt from the Vice Chancellor that the medium of instruction in the university Sinhala for Sinhalese students, Tamil for students from Jaffna and English for Burgher students. [1, pg.463]

LKY asks the Vice Chancellor, ‘How can three engineers educated in three different languages build one bridge?’ And the VC replied: ‘That, Sir is a political question for the ministers to answer’ [1, p 463]. This statement showed how qualified educationists in Sri Lanka became helpless because of the decisions made by politicians.

The Vice Chancellor further mentions that all the basic textbooks which were printed in English had to be translated to Sinhala and Tamil and by the time they were translated and printed, they were three to four editions old; LKY calls this translation a slow and unwieldy process [1, p 463].

Although LKY does not mention the name of the Vice Chancellor, he describes him as a Burgher gentleman who wore a Cambridge University tie, and this description matches Professor E. O. E Periera, who held the position of the Vice Chancellor of Peradeniya University from 1969 to 1971.

Even though LKY was full of praise of the Sri Lankan education system, which was initially conducted in English, after his visit to the Peradeniya University his views changed as he witnessed the switch over from English to local languages and the helplessness of the academics.

What Sri Lanka did was the opposite of what LKY did to Universities in Singapore; he changed the medium of instruction at the Nanyang University in Singapore from Chinese to English, when he realised that it could not be done as the lecturers lacked the proper skills he merged it with the University of Singapore and thus was the beginning of the National University of Singapore [2, p 3/4], several years later reflecting about his decision he says Nanyang University no longer taught in Chinese and its graduates could easily find employment. [1, pg702].

LKY’s view on ethnic problem of Sri Lanka

LKY was very sympathetic towards the Tamils of Sri Lanka. He states that ‘they were active and intelligent fellows who worked hard and got themselves penalised as a result of the domination of the Sinhala majority’ [2, p 14/22]: ‘Sinhalese who are less capable are putting down Tamils who are more capable [3].

He was critical of Sri Lanka’s election. He mentions that ‘one-man-one-vote system did not solve a basic problem’ [1, p 462]. He believed that that the voting system did not give a fair representation. He states, ‘The majority Sinhalese could outvote the Tamils’ [Ibid] and ‘Sri Lanka is a democracy based on one citizen one vote’ [3] and he is not against democracies when they work, but he was against defending countries because of democracy [ibid].

J R Jayewardene told LKY that he was willing to give autonomy control to the Tamil people in Jaffna but later realised that he could not giveaway to the supremacy of Sinhalese to the Tamil, which led to the civil war [1, pg.464].

LKY firmly believed that a political solution was the only way to sort out the ethnic problem of Sri Lanka. During his meetings with President Premadasa he tried to convince him that the conflict could not be solved by force of arms and the political solution was the only way [1, p 465].

LKY believed that the civil war that took place in Sri Lanka destroyed the hope of a prosperous Sri Lanka for many years if not many generations [1, p 464], which is true as every successive government in Sri Lanka from the 1980s had to deal with it and despite ending the war, we are yet overcome the scars and horrors of it.

His view on reasons for Sri Lanka’s failure

LKY thought that S.W.R. D Bandaranaike’s decision to make Sinhala the national language and Buddhism the national religion as the start of the ‘unravelling’ of Ceylon [1, p 460]; he further states that the minority Tamils felt disadvantaged and disposed as a result of it [1, p 462].

He wanted English to be made the primary language of use in Singapore. ‘We inherited the English Language from the British and adopted it as our common working language’ [1, p 78] and when Singapore got independence from the British, the Chinese Chamber of Commerce wanted him to make Chinese the official language of Singapore. Although the Chinese were the majority community in Singapore and LKY was himself a Chinese, his answer to them was ‘You must be mad’. [2, pg.2/4].

LKY was against the concept of welfare. ‘Welfare undermines Self Reliance’ [1, p 126] as he believed everyone had to work. ‘The world does not owe us a living; we cannot live by the begging bowl’ [1, p 70] but successive Sri Lankan governments depended on loans and aid while the people of Sri Lanka depended on welfare and concessions.

In 1994, during a debate in the Singapore Parliament LKY asked, ‘Can you have a good government without having good men in charge?’ [2, pg13/22], his simple view was that you can’t have a good Country without good administrators and referring to Sri Lanka he states, ‘During my visits over the years I watched the promising country go to waste [1, pg.462] and it failed because they had wrong or weak leaders like the Philippines [2, p 15/22].

Conclusion

Was LKY aware that Sri Lanka was looking at Singapore as a model? He did, and what was his opinion about it? He says, ‘It was ‘flattering’ for Sri Lanka to model its Country from Singapore’ [1, pg464]. He knew that Sri Lanka can never be a Singapore.

LKY never wanted any prestige and honour. ‘I had no desire to rewrite the past and perpetuate ourselves by renaming streets or buildings or putting our faces on postage stamps or currency notes’. However, in Sri Lanka majority of the road names in Colombo were changed and many Prime Ministers and Presidents had their faces in postage stamps, coins and banks notes.

LKY ends the chapter on Sri Lanka in his memoir thus: “It’s sad that the country whose ancient name Serendip [sic] has given the English Language the word ‘serendipity’ is now the epitome of conflict, pain, sorrow and hopelessness’ [1, pg.466]. According to the Oxford Dictionary the word serendipity means ‘Something interesting or pleasant happening by chance’.

In another speech, LKY states that Sri Lanka can never be put together again and somebody should have told Sri Lankans to change the system, loosen up or break off [2, pg.14/22]. Today, Sri Lankans have come on to the streets protesting the rulers to leave and change the system, something LKY expected Sri Lanka to do, or the Country would break.

A few years before his death, LKY mentioned that despite the end of the civil war ‘It (Sri Lanka) is not a happy, united country’ [3], so will Sri Lanka groom itself to be a united and a happy Country, this will be possible only if its citizens are confident in achieving it, as Lee Kwan states ‘If I have to choose one word to explain why Singapore succeeded, it is CONFIDENCE’ [1, p 87]. Hopefully, if Sri Lankans move forward with confidence, the country will be able to achieve its goal.



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Opinion

Sri Lanka’s Food Safety Imperative

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safe food handling

From Burden to Solutions:

Every year on 07 June, the world pauses to reflect on a truth that is at once mundane and profound: the food on our plate should not make us sick. This year, the World Health Organization and the Food and Agriculture Organization of the United Nations have chosen a theme that is both a diagnosis and a directive “From burden to solutions – safe food everywhere.”

The framing is deliberate. For too long, conversations about food safety have been dominated by the language of loss counting the sick, tallying the dead, lamenting the economic damage. The 2026 theme demands that we harness that data not as an epitaph, but as a map that guides us toward targeted, evidence-based action.

Globally, foodborne diseases cause illness in at least 600 million people and claim an estimated 420,000 lives every year. These are not abstractions. They are children who did not return to school, breadwinners who could not return to work, and farmers whose produce never reached a market.

For Sri Lanka, the stakes are deeply personal. As a food scientist who has spent over a decade studying, teaching, and working across our food systems from university laboratories and hotel kitchens to dairy processing plants and international sporting events, I have witnessed both the fragility and the resilience of food safety in this country.

The burden is real. Foodborne infections from Campylobacter, Escherichia coli, Vibrio cholerae, and Hepatitis A continue to be recorded by the Epidemiology Unit. Pesticide residues in vegetables, aflatoxin in stored grains, and heavy metal contamination in seafood present chronic, low-visibility risks that rarely make headlines but accumulate silently in our bodies and in our healthcare bills. The unchecked proliferation of informal food establishments has widened the exposure surface significantly.

Sri Lanka’s food safety architecture rests primarily on the Food Act No. 26 of 1980. A legislation conceived in an era that could not have anticipated the complexity of today’s supply chains, the growth of modern retail, or the risks posed by climate-driven changes in microbial ecology. While amendments in 1991 and 2011 have partially modernised the framework, the foundational challenge of fragmented, multi-ministerial oversight remains unresolved. No single authority commands the end-to-end food chain from farm to fork.

The consequences are visible. Sri Lanka has repeatedly seen food export consignments rejected at international borders due to non-compliance with safety standards. A reputational and economic wound that strikes our tea, spices, fish, and fruit sectors. These rejections are not merely trade disputes; they are data points, signalling systemic gaps in Good Agricultural Practices, cold chain infrastructure, and laboratory testing capacity. The 2026 World Food Safety Day theme is therefore a clarion call to Sri Lanka’s policymakers, industry leaders, academics, and consumers alike. We have data. We have science. What we need is the collective will to act.

The solution begins with data.

The WHO’s landmark 2026 release of national-level foodborne disease burden estimates the first of their kind, covering the period 2000–2021 provides an unprecedented opportunity. For the first time, Sri Lanka will have access to country-specific data on the incidence, mortality, and disability-adjusted life years attributable to specific foodborne hazards. This is not merely an academic resource; it is a policy instrument. Ministries of Health, Agriculture, and Industries must treat it as such, using it to identify where risk is highest, which population groups are most vulnerable, and which interventions deliver the greatest return on public health investment.

Having served as a Food Safety Officer/Trainer and Trainer at the FIFA 2022 World Cup in Qatar, I observed first-hand how a structured, data-driven approach to food safety management grounded in HACCP principles and supported by rigorous real-time monitoring can successfully feed tens of thousands of people across dozens of venues without a single outbreak. The lesson for Sri Lanka is not that we must import foreign systems wholesale, but that the underlying principles of evidence, accountability, and prevention translate universally.

Education is the second pillar of transformation.

In my years of teaching food safety to university students, hotel management students, tourism professionals, and food industry workers, the most consistent finding is that unsafe food practices are rarely born of malice. They arise from ignorance of microbial growth temperatures, of cross-contamination pathways, of the invisible consequences of inadequate handwashing. Behaviour change at scale requires education that begins early. We must embed food safety literacy into our school curricula, not as an elective topic in home economics, but as a fundamental life skill taught alongside reading and arithmetic. Food safety must be as instinctive as looking before crossing a road. Industry bears its own responsibility. Food business operators from the multinational processor to the neighbourhood bakery must understand that food safety is not a compliance cost to be minimised. It is a brand asset, an ethical obligation, and ultimately, a business survival strategy. The investment in quality management systems, whether ISO 22000, FSSC 22000, or the foundational GMP and GHP frameworks, pays returns in consumer trust, export market access, and reduced liability. Safe food is not a luxury reserved for export markets or five-star hotels. It is a right that belongs equally to a schoolchild buying a kottu roti from a street cart and a tourist dining in a star hotel. The 2026 theme reminds us that the burden is well-documented. The solutions exist. The only thing left is the resolve to implement them everywhere, for everyone.

PRIORITY ACTIONS FOR SRI LANKA

= Enact a unified Food Safety Authority consolidating fragmented regulatory mandates under a single body

= Establish mandatory HACCP certification for food businesses beyond the large-scale sector

= Invest in regional food testing laboratories with accredited capacity (ISO/IEC 17025)

= Integrate food safety education into the national school curriculum from primary level

= Strengthen cold chain infrastructure, particularly for seafood and fresh produce destined for export

= Adopt the WHO 2026 national burden data to prioritise health spending on highest-risk hazards

= Empower Public Health Inspectors with digital reporting tools and updated training mandates

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Opinion

“The path of freedom: Dismantling the imperialist debt trap

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I must first thank Gayantha Dehiwatte for inviting me this afternoon to the launch of his book, The Path of Freedom: Dismantling the Imperialist Debt Trap. The title itself suggests that Sri Lanka has yet to achieve genuine independence, particularly in the sphere of economic decision-making. In recent years, most economic decisions of major importance appear to have emanated from Washington. During the initial phase, these decisions reached Colombo in the form of International Monetary Fund- World bank conditionalities. In more recent years, however, many of these policies have been designed locally by the economists and bureaucrats in the Treasury and the Central Bank of Sri Lanka who are trained in western academic institutions. As a result, local and international experts have worked in synergy united by their adherence to what may be called the TINA (There Is No Alternative) doctrine.

According to Dehiwatte, ‘the current economic structure in Sri Lanka is guided by the principles of neo-liberal free-market economics. This economic theory has been steering the course of Sri Lankan economy since 1978’ (page iii). It was consistently claimed that the policy package introduced in 1978 would generate higher rates of growth, lower unemployment, poverty alleviation, reduced dependency and inequality transforming Sri Lanka into the Singapore or South Korea of the Indian ocean region.

In this talk, I would focus on three main points. My first thesis is that Sri Lanka is now facing a simultaneous presence of three crises namely, the structural, conjunctural and contingent crises, as a direct consequence of the neo-liberal economic policies introduced in 1977. Second, the decision to invite the IMF to play a central role in managing the 2022 debt crisis was a serious mistake. Third, although the de-dollarisation is an essential step towards resolving the crisis it is not by itself sufficient to transform the existing global economic architecture.

The performance of the Sri Lankan economy over the last 48 years (1978- 2026) does not support the contention that the adoption of neo-liberal economic policies as outlined in Washington Consensus would pave the way for sustained economic growth and development. Compared to the period from 1950- 77 period, there has been no significant improvement in either the rate of economic growth or in the level of employment. Dehiwatte reports: ‘As of 2024, approximately one-third of Sri Lankan population -around 7 million people – are living below the poverty line, with about 2.3 million children suffering from hunger due to inadequate access of food. That is, exactly half of the children are going hungry. The total number of families in Sri Lanka is about 5.7 million, of which 3.7 million seeking assistance to survive’ (p. 18). data on consumption patterns strongly corroborate these findings. The top 1% of the population accounts for 22% of GDP whereas the bottom 50% accounts for only about 14%. The crisis Sri Lanka has experienced over the last 48 years is an all-embracing structural crisis, the resolution of which requires far-reaching changes to the existing economic structure. Following Istvan Meszaros, four characteristics of the present crisis may be identified:

(1) It is not confined to a particular sector of the economy;

(2) It is global in scope, being closely linked to the process of globalization;

(3) Its temporal scale is continuous rather than limited and cyclical, making it difficult to identify a clear beginning or point;

(4) Its mode of unfolding is gradual and creeping rather than in contrast to sudden and explosive. (Beyond Capital. pp. 680- 81).

The structural crisis is the product of a conjunction of three interrelated developments: the absence of an independent macroeconomic policy framework, the nature of the bourgeoisie, and the nature of the state and its relationship to different social classes. Given the limited time available, I will not attempt a detailed analysis of these three dimensions. Nonetheless, two observations deserve emphasis. First, the average annual growth rate during the last 48 years has not been significantly higher than that achieved during the preceding period of the so-called dirigisme regime. Second, although Sri Lanka experienced two periods of relatively rapid growth (1978- 1982 and 2010- 2915), it failed to sustain the momentum generated during these periods. Consequently, these episodes were ultimately reduced to little more than infra-structure driven bubbles.

Cyclical fluctuations within a prolonged structural crisis are not uncommon in market economies. Sri Lanka is no exception. During the public debate surrounding the 2022 economic crisis, it was frequently argued that the crisis began in 2019 because of misguided economic policies. However, as data demonstrates, the current conjunctural crisis began not in 2019 but in 2016. The recession that started in 2016 culminated in negative growth in 2020. A modest recovery in 2021 was followed by a negative growth both in 2022 and 2023. The economy returned to a limited recovery in 2024, but by 2026 that recovery appears to have lost momentum. If one plots annual growth rates between 2026- 2026 a W-shaped cycle emerges, with its lowest point in 2022. The debt crisis in 2022 should therefore be viewed not as an isolated event, but as the trough of the 2016- 2025 cycle. Of course, the acceleration of the crisis in 2022 was triggered by excessive borrowing in the global capital market through ISDs (International Sovereign Bonds). Prof Prabath Patnaik depicts this specific phenomenon as a contingent crisis: a crisis that appears manageable until a sudden financial crunch exposes underlying vulnerabilities. The IMF’s own projection that annual growth will remain around 3 per cent in 1926 together with its assessment that debt sustainability remains fragile, suggests that Sri Lanka is once again approaching a tipping point.

Confronted with these three interrelated crises, the neoclassical economists, CBSL and Treasury officials and politicians representing bourgeoisie parties argued that seeking IMF support was the only available solution. According to this view, it was imperative to accept a comprehensive IMF program at any cost. The irony is that these same actors have failed to acknowledge that Sri Lanka has been operating under the IMF program for seven out of ten years under consideration. (2017- 2020 and 2022- 2026). A second group adopted a more critical position. While accepting the need for IMF engagement, they argued for greater local input, theoretical as well as practical, into the program and advocated modifications and incorporation of selected elements of the augmented-Washington consensus. Both groups, however justified IMF intervention on the grounds that the IMF is an international institution of which Sri Lanka is a member and that the country therefore has a legitimate right to seek assistance during a foreign exchange crisis.

This argument suffers from three fundamental defects. First, it overlooks that the IMF and the IBRD established in 1945 are very different institutions from those that emerged during the mid-1970s. The original purpose of the IMF and IBRD was to assist war-ravaged countries in Western Europe and Japan facing balance of payment difficulties and reconstruction needs. By the 1970s these tasks had largely been completed rendering the original mandate of the institutions increasingly redundant Following the quadrupling of oil prices and the accumulation of petro-dollars in the US banks, the IMF effectively assigned itself a new role: that of managing the interests international finance capital during the neo-liberalist phase of the capitalist development. Its primary responsibility thus shifted away from member states and towards the preservation and upholding of the interests of the global capital market and its institutions. (For a detailed discussion, see : Unholy Trinity: the IMF, World Bank and WTO by Richard Peet) 2003.

Second, the dominant approach is based on the presupposition that there is no alternative. Consequently. The magnitude of the crisis was exaggerated in order to ensure Sri Lanka’s continued integration into the global financial system and therefore its continued entrapment with a cycle of indebtedness. Third, the argument rests on a fundamental misunderstanding of the IMF’s mode of crisis management. When dealing with a crisis ridden country, the IMF typically intensifies the crisis by imposing deflationary policies designed to restore creditor confidence.

The Sri Lankan experience illustrates this pattern clearly. Although the economy achieved a modest but positive rate of growth in 2021, growth contracted sharply in 2022 and 2023 following the implementation of IMF-backed policies. Once an economy reaches the trough of the cycle, its internal dynamics tend to generate some degree of recovery because aggregate demand rarely falls to zero. Consequently, the stability achieved since 2024 should be understood as a low-level stability -an outcome of economic contraction and adjustment rather than genuine transformation.

Let me turn to my third thesis that Dehiwatte had raised in his proposal for de-dollarization. The book appears to suggest that de-dollarization is imperative if the imperialist debt trap is to be dismantled. In a different historical context, some French economists argued that replacing the franc with a currency based on labour value would provide a solution to balance-of-payments crises. Commenting on this view, Marx observed:

“In order to balance the decrease of domestic production by means of imports on the one side and the increase of industrial undertakings abroad on the other side, what would have been required were not symbols of circulation which facilitate the exchange of equivalents but the equivalents themselves, not money but capital” (Grundrisse, p. 121).

However, the context to which Gayantha Dehiwatte refers is substantially different. In 1944–45, when the advanced capitalist countries debated the design of the post-Second World War international financial architecture, they arrived at a consensus that it should be centred on the U.S. dollar. The principal reason for this decision was the overwhelming dominance and productive superiority of the U.S. economy.

By the early 1970s, however, this superiority had begun to erode. Nevertheless, as Costas Lapavitsas has argued, “dollar dominance persisted and deepened through structural dependence as global trade, finance and reserves remained locked into dollar circuits, sustained by military power and institutional inertia despite the declining share of the United States in the world economy.”

It is in this context that Gayantha Dehiwatte’s argument acquires its significance. For him, de-dollarization does not simply mean replacing the dollar with another international currency. Rather, it entails transforming the structures of power that underpin dollar hegemony and reproducing a global order based on dependence and financial subordination. In this sense, de-dollarization is not merely a monetary reform but part of a broader project of restructuring the international order itself.

Ultimately, the argument points toward the possibility of imagining a new world order founded on the principles of democracy, equality, and ecological sustainability.

The writer is a retired teacher at the University of Peradeniya

Email: sumane_l@yahoo.com

Revieved by Sumanasiri Liyanage
(Text of a recent speech.)

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Opinion

Is Sri Lanka on the wrong side of history?

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To say that the developing new world order is history in the making may not be an exaggeration, because the economic, military and hegemonic landscape of the world may be undergoing radical realignment in these troubled times.  Multipolarity and the emergence of the Global South’s economic and political clout may be the defining features of the new world order. There may be several evidential happenings around the world that give credence to the above observation. For instance, at the 61st Munich Security Conference, held in 2025, multipolarity was accepted as a historical inevitability and a reality. The Munich Security Report 2025, themed “Multi-polarization,” explicitly states that the world already lives in a multipolar order. The Munich Security Council, traditionally dominated by Europe and the US, saw 30 percent of its speakers, this time, representing the Global South, a testament to the world’s multipolar trajectory

The Munich Security Report 2025 highlights that BRICS nations contribute to approximately 40 percent of global trade, as well as crude oil production and exports. Further, according to the International Monetary Fund, the GDP of emerging markets and developing economies accounted for 58.9 percent of the global economy in 2023.

Countries in the Global South are asserting greater independence in global affairs. They have actively promoted greater democracy in international relations through platforms such as BRICS and the Shanghai Cooperation Organisation, injecting vital momentum into the world multi polarisation process.

Another clear indicator of this reality is the way the US failed to impose its will in the affairs of the Middle East. Significantly, it could not achieve its objectives in the war against Iran and, furthermore, its European allies refused to join, saying that it was not their war. The fact that the war, which the US and Israel expected to be a quick “strike and take over,” has ended up in a stalemate, with Iran holding all the cards, according to Prof Jeffrey Sachs, points to the changing balance of power in the world. Obviously, Iran was able to enhance its military capability due to the significant development of the multiple military power blocs.

In this regard it is interesting to see that most of the countries in Asia, Africa and Latin America, which have suffered due to western hegemony and economic exploitation, tariffs and sanctions and dollar weaponisation, are beginning to make moves towards realigning their relationship with world powers. Several African nations, Egypt, Ethiopia, Algeria, Kenya, Tanzania, are actively realigning toward the Global South, shifting away from Western-aligned partnerships to pursue multipolarity, resource sovereignty, and new economic ties with powers like China, Russia, and India.

In Asia, too, the trend is apparent; Malaysia has adopted an explicit Global South policy, focusing on outreach to the Middle East, Africa, and Latin America, as well as deepening ASEAN institutional ties. Indonesia focuses on inclusive multilateralism and critical balancing in global governance, ensuring the developing world’s economic needs are prioritised. Iran, Saudi Arabia, and the United Arab Emirates joined BRICS in 2023, reflecting a strategic shift to diversify their diplomatic and economic alliances away from purely Western orbits. There are several other countries that are emerging as economically independent and diplomatically articulative states, like Nigeria, Turkiye, and Mexico.

What is the position of Sri Lanka in this rapidly changing world order? Are we going to be left behind? Why aren’t there any signs that Sri Lanka is projecting itself as a willing partner of this journey in the South?  Why isn’t it attempting to break away from the neo-liberal grip that keeps it in poverty and turn to the South? Are there any tangible economic, political or geopolitically strategic projections, reaching out to the Global South, that Sri Lanka has launched, at present, like so many other countries are doing? Even when opportunities knock on its door, Sri Lanka doesn’t seem to be interested. A case in point is the BRICS meeting in 2024, held in Russia. Though Sri Lanka was invited, none of its state leaders attended the meeting, resulting in the loss of an opportunity to establish vital economic, political and cultural links and bonds with Global South countries.

What is restraining Sri Lanka? Is it its present economic vulnerabilities and dependence on the West? It is the Global North that controls the Sri Lankan economy at present. We are tied to the IMF and controlled by their conditions and the IMF is under the thumb of the West. Further 60 percent of our exports go to the Global North. It seems likely that our export oriented, debt-burdened economy cannot afford to turn towards the Global South because of our utter dependence on the West. We saw that there was no hesitation to slap tariffs on us though we show the least tendency to disobey. One could imagine what could happen if we turn southwards, even a little bit. This is the reason why Sri Lanka would dare not change direction the slightest.

Countries that turn southwards do so to escape from the hegemony, exploitation and coercive power of the West. Isn’t there a way out for Sri Lanka to get out of this vicious global economic system and become economically independent? We were bankrupt in 2022 and people rose up against the system and wanted a change. The present government rode that tide and came to power promising a change. But there was no change and not even an attempt to change. What needed a change was the economy in the main, which would be meaningless unless a break from the fetters of neo-liberalism was the aim. What did not change was exactly that, though there were attempts to change other less vital areas, such as going after the corrupt in the Opposition.

It must be said that the government had an excellent opportunity to correct decades long mistakes. The people were asking for a change which means they were prepared to participate and support the government if it wanted to go for that change. An attempt should have been made to gradually change the export-import-debt based economy and lessen the  dependence on the Global North and its economic system. A turn towards the Global South would have facilitated the desired change. The government was left-oriented, or so they said. But it appeared to be helpless to break away from the neo-liberal shackles, leave alone negotiating a better deal with the IMF.

True, we are not strong enough to go for such radical change but we could have made ourselves strong by achieving self-sufficiency, the only way to become economically independent. Such a move, no doubt, would initially result in hardship for the people, but eventually the country would come out of its poverty. Now they are condemned to eternal privation.

The government’s plan, if it wanted to go for the change, they promised, should have been to first launch a comprehensive programme to achieve self-sufficiency in our essential needs like food, cloth, medicine and green energy. The other critical move that Sri Lanka should have made was to join the Global South in its march towards a new world order. Such a strategy would have helped us to achieve a stronger and independent economy.

An important outcome of adopting such a policy would be that our economy would not be vulnerable to external shocks such as tariffs, drop in tourism, turmoil in the Middle East that disrupts fuel supply and migrant-remittances, and external trade vagaries. Further, when we are not dependent on our essentials, nobody would be able to dictate to us or interfere in our internal affairs.

 Another important factor in Sri Lanka’s favour is its strategic position in the Indian Ocean and the fact that due to this everybody needs it. India would like to have a firm grip on it, so does the US. China has invested heavily in it due to this reason.  However, Sri Lanka, at present, is not strong enough  to leverage this geographical strategic situation to its advantage because of its highly dependent and vulnerable status. As a consequence of this strategic situation could be exploited by powerful countries as is now happening.

What Sri Lanka could do in this regard is to develop its airports and harbours as a transit trade hub by leveraging its strategic geographical position in the Indian Ocean to serve as a central stopping point where cargo, vehicles, and raw materials are consolidated, temporarily stored, or re-exported, primarily connecting East Asia, the Middle East, Africa and the Indian subcontinent. This would facilitate trade among the Global South countries and enhance Sri Lanka’s role and image in the new world order. At present Sri Lanka’s true potential in this business has not been realised due to its vulnerabilities, but if it chooses to take the path outlined above it could succeed. For this to happen Global South assistance is vital. There is no choice for Sri Lanka but to grab this moment of history and join the journey towards the new world order before we are left behind.

by N. A. de S. Amaratunga

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