Business

Sri Lanka’s crisis seen as highlighting lessons from Greece

Published

4 years ago

2022/10/4

‘In some of the key metrics, such as debt/GDP, fiscal and current account deficit, you can see a lot of similarities between the crisis in Greece and that in Sri Lanka, which also has a lot to do with the actual incidents of the crisis, including accumulating of early warning signals and the failure to see the signals, rising deficits and debt to around 10% of GDP and triple deficits in 2009, in the case of Greece, former Finance Minister of Greece, Dr. George Papaconstantinou said at a Sri Lanka Institute of Directors (SLID)-initiated webinar recently.

‘The deeper causes behind the crisis was a combination of clientelism, a dysfunctional political system and weak institutions that could not act as a counterbalance to check political decision-making, Dr. Papaconstantinou added.

A SLID press release said: ‘The Sri Lanka Institute of Directors recently held a webinar titled Sri Lanka’s Economic Crisis: Lessons from Greece, featuring Dr George Papaconstantinou, the former Finance Minister of Greece. The session drew several pertinent lessons from Greece’s own experience through its tumultuous period of unprecedented economic crisis in 2009-2018 and its road to recovery. The session was moderated by Faizal Salieh, chairman of SLID. It had a 30-minute keynote speech by Dr Papaconstantinou followed by a 30-minute Q & A discussion.

‘Dr Papaconstantinou in his keynote said; “No two crises are the same. but there are many similarities such as warning signals, incidents, and unfortunately the same long and painful recovery periods.” He spoke about the key learnings from the Greek experience, critical actions that are required from a political and economic sense, the roles of business, government, and citizens in trying to find right solutions, short term quick fixes vs long term sustainability, and gave some broad recommendations that can be considered as Sri Lanka moves forward.

‘Greece had three bail outs, by far the biggest in any country. Unsustainable debt levels, excessive public expenditure, massive tax evasion, huge credit expansion and wages outstripping productivity gains contributed to the decline in the economy’s competitiveness.

‘He said that the Greek crisis was longer than it should have been due to mistakes that were made which need to be avoided in Sri Lanka, and that it is important to focus on the logic of the IMF bailout which is to provide funds until Sri Lanka regains access to international financial markets. In order to continue getting these funds, a combination of fiscal consolidation, monetary and exchange rate policies, and reforms in product, labour, and financial markets must be implemented which can be extremely unpleasant. He pointed out that fiscal consolidation would lead to recession but would eventually restore investor confidence and enable the return of long-term investors. He stressed the importance of long-term investors over the short-term opportunity-seekers for the economy’s long-term sustainability.’

‘Dr. Papaconstantinou cautioned that the country risk immediately spilled over to the corporate sector and had stayed over a long period in Greece, and they had a hard time tapping into international markets and had to grapple with issues such as acute forex shortages, and flight of highly skilled human capital that was essential for rebuilding the economy. He said the Greek economy was still carrying the cost of lost human talent.

“A lesson that we learnt was that one should not delay taking painful decisions, which is important for politics as well, because the longer it waits the tougher it becomes.” He stressed the need to move fast on the restructuring of debt. “Delay entails costs and typically, time is not in your favour. There is also a trade-off between short and long-term transformation with IMF asking for a lot of short-term measures which makes it harder to have long-term reforms. It is important to push for long-term transformation and growth potential of the country. In the private sector, when the bubble bursts there will be many losses and very few wins,” he added. “The crisis inevitably entails political polarisation, and even good companies can go bust. That’s where the Government should step in and support them.”

‘Speaking of the role of the citizens, business, and government, he said “Crises are transformative, dramatic and tend to completely upend a society, politics and business and often go through the 5 stages of grief – denial, anger, bargaining (Sri Lanka’s current stage), depression, and acceptance. Crises consume governments. It is important to keep the political climate non-toxic helping to keep the crisis duration shorter as in Portugal and Ireland and elites must also take the pain. If they are sheltered it is going to prolong the crisis. Social partners need to be part of the solution and should have a seat at the table even with IMF discussions on what needs to be done, and often IMF also gets it wrong as their recipes are not necessarily useful for every country.”

“The pain which accompanies every crisis needs to be apportioned in a socially fair manner. Everyone will suffer but the vulnerable will suffer more. If it is seen that business and political elites were carving out a secure environment, it will backfire. The government needs to be fully accountable with maximum publicity, honesty, and openness. Greece passed a law where every government expense is published on the web, if it is not, then it is not legal. Also, a realistic fiscal path needs to be determined, if not it could lead to a vicious circle and lead to economic collapse which happened in Greece. Embrace the necessary reforms whether they are public sector, product/market reforms, opening up markets, professions or reforming SOEs, and privatisation. It is important for the government to stand firmly behind these rather than as an afterthought to fiscal consolidation. Finally, it is important to get the narrative right, and recognize the reasons how you got to this situation, and who is accountable. In Greece, we blamed the IMF, the Germans for being too tough, and blamed everyone else except for ourselves, the government and the business community for making some wrong decisions like relying too much on the government and not standing on its own feet,” he concluded.

‘In response to a question from the moderator that the usual criticism levelled against IMF was that it has a “one-size-fits-all” prescription for remedy and how it was managed in Greece, Dr George explained that the IMF is now different from the Asian crisis times, “it is a different beast, they do actively try to be more understanding of the social situation and they are open to keeping a recipe of measures that is balanced and protects the vulnerable, and they are open as long as you got the data to back it up, and arguments to exchange some measures for others if you can show them that a specific measure is detrimental. At the end of the day, they have the money and therefore the veto rights, so it’s a delicate situation and they have to be convinced of your sincerity and competence. The conversation with the IMF does not finish with the signing of the agreement.”

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Business

Lanka eyes bigger share of Asia’s growth networks

Published

9 hours ago

2026/09/20

Thilina Walpola

As Asia continues to account for a growing share of global economic activity, Sri Lanka faces an important opportunity to strengthen its links with regional trade networks, supply chains and economic corridors. How the country can make better use of these connections to attract investment, expand trade and strengthen its position in regional value chains will be among the key questions at the Sri Lanka Economic & Investment Summit 2026, organised by The Ceylon Chamber of Commerce on 12-13 October 2026.

Titled “Linking Sri Lanka to Asia’s Growth Networks: Trade, Corridors, and Value Chains,” the session will examine the opportunities for Sri Lanka to deepen its integration with the wider Asian economy and build stronger connections with regional and global markets.

The session keynote will be delivered by P.D Singh – Chief Executive Officer, India and South Asia, Standard Chartered Bank. He will be joined for a panel discussion by Chathuranga Abeysinghe – Deputy Minister of Industry and Entrepreneurship Development, Akio Isomata – Ambassador of Japan to Sri Lanka, Masaaki Kawabata – Chairman – Toyota Lanka (Private) Limited, and Ravi Jayawardena – Group Chief Executive Officer-Maliban Biscuits (Private) Limited. The session will be moderated by Subhashini Abeysinghe – Research Director- Verité Research.

For Sri Lanka, stronger regional integration can open opportunities beyond traditional export markets. Greater participation in regional supply chains, improved trade connectivity and closer links to economic corridors can support investment in areas such as logistics, manufacturing, export services and other sectors connected to international production networks.

The discussion will consider what Sri Lanka needs to do to strengthen its position within these networks, including improving trade connectivity, attracting investment and creating a business environment that enables companies to participate more effectively in regional and global value chains.

It will also look at the experience of businesses and international institutions operating across the region, providing perspectives on how companies assess markets, build supply chains and identify locations for investment. With supply chains and investment flows increasingly shaped by regional connectivity, the session will also consider the partnerships and strategies needed to position Sri Lanka as a more competitive participant in Asia’s growth networks, while creating opportunities for trade, investment, innovation and economic growth.

The session will form part of the second day of SLEIS 2026, held under the theme “Positioning Sri Lanka in a Changing Global Economy: Resilience, Reform, and the Future of Economic Policy.”

The Sri Lanka Economic & Investment Summit 2026 is supported by its valued sponsors and partners. Platinum Sponsor – Standard Chartered Bank Sri Lanka, Gold Sponsor – VISA Worldwide (Pvt) Ltd., Bronze Sponsor – South Asia Gateway Terminals (Pvt) Ltd., Strategic Development Partner – Asian Development Bank, Telecommunication Partner – Dialog Telecommunication, Television Partner – Dialog Television, Session Sponsors – David Pieris Motor Company (Pvt) Ltd., Hemas Holdings PLC, Sunshine Holdings PLC, International Construction Consortium (Pvt) Ltd., Official Logistics Partner – Hayleys Advantis Limited, Official Airline – SriLankan Airlines Ltd., Official Hospitality Partner – Shangri-La Colombo, Airline Partner – China Eastern Air Holding Co. Ltd.

Business

Lanka’s famed beach shack battles demolition

Published

9 hours ago

2026/09/20

Thilina Walpola

This photograph taken on September 10, 2026 shows people at the entrance of Beach Wadiya shack in Colombo. (Photo: AFP)

The government gave Colombo beach restaurant Wadiya 10 days to pack up and leave — or face demolition

by Amal Jayasinghe
Pix by Ishara Kodikara

(AFP)Sri Lanka’s famed seafood shack Beach Wadiya has hosted royalty including Britain’s Princess Anne and sporting legends such as cricketer Sachin Tendulkar, but now faces demolition under a government-ordered coastal clean-up.

The simple Colombo beach restaurant has welcomed a string of celebrities, featured in Madhur Jaffrey’s culinary travels and received rave reviews in international publications, including London’s Financial Times.

“Beach Wadiya comes with a lot of history,” said Suhara Chandrasekera, the founder’s granddaughter, now a director of the restaurant.

But more than half a century after it opened, the glamour is giving way to grief at Wadiya — which means “shack” in the island’s Sinhala language.

The government’s Coast Conservation and Coastal Resource Management Department gave Wadiya 10 days to pack up and leave — or face demolition.

That deadline expired on September 10, but the restaurant is resisting the order to leave.

Seven other beach properties were given extensions of about four days to salvage furniture and fittings.

: Co-owner Suhara Chandrasekera displaying a photo album of celebrities who visited Beach Wadiya shack in Colombo

: A busser setting a table at Beach Wadiya shack.

: This photograph taken on September 10, 2026 shows a busser setting a table at Beach Wadiya shack in Colombo

A few shops near Wadiya were demolished last month as part of a broader government plan to remove businesses within 10 metres (33 feet) of the shoreline.

“There shouldn’t be any buildings within the 10-metre coastal reservation from the shoreline,” Environment Minister Dammika Patabendi told AFP.

“We have identified 82 such premises and we are taking steps to remove them.”

Beach Wadiya is the only establishment resisting the order and has taken the matter to court.

: People walk along Wellawatte Beach

: This photograph taken on September 10, 2026 shows co-owner Suhara Chandrasekera displaying the signature of Britain’s Princess Anne in a guest book at Beach Wadiya shack in Colombo.

The family of its late founder, Olwyn Weerasekera, argues that the restaurant existed before the 1981 Coast Conservation Act being used to evict them.

“We built in 1974, which predates the law that they were talking about… We have permits dating all the way back to 1974,” 26-year-old Chandrasekera said.

“In addition to the appeal to the Coast Conservation Department, we also took the decision to file a writ,” she told AFP, referring to a case filed in the Court of Appeal.

The family has won a temporary reprieve, with the court ordering the department not to demolish the restaurant for two weeks pending a hearing.

When Wadiya was established, the beach was wider and cleaner, with rows of coconut trees, most of which have since been lost to sea erosion.

“Right now we have lost two of our huts… We’ve lost parts of our bathroom due to sea erosion,” Chandrasekera said.

She said Wadiya was the only restaurant on the beach before Sri Lanka’s tourism boom in the late 1970s.

Princess Anne had dinner at Wadiya in 1995. Nepali royals have also dined there.

British tycoon Richard Branson visited the restaurant during a family holiday in Sri Lanka in 1992, although the guestbook he signed was washed away in the December 2004 tsunami, according to the family.

Indian singing sensation Asha Bhosle, and cricket stars including India’s Rahul Dravid and former Pakistan skipper Wasim Akram, have also dined there.

One of the restaurant’s walls has a reproduction of a Financial Times cartoon of a guitar-playing lobster that accompanied a March 1994 food review headlined: “Cook me tender.”

The restaurant is best known for offering diners a platter of fresh seafood from which they can choose how it should be cooked.

There is no air conditioning and small tables are set up on the beach. An upper floor was added as the beachfront shrank over the years.

Experts blame worsening erosion on large-scale land reclamation farther north near Colombo port.

If the courts allow the restaurant to survive the government’s coastal clean-up, Chandrasekera says Wadiya will return to its roots.

“The only restaurant on the strip,” she said.

Business

Sampath Bank wins Euromoney corporate responsibility award

Published

9 hours ago

2026/09/20

Thilina Walpola

From Left: Allan Wu, MC for the event, Dr. Lalith Weragoda, Chief Transformation Officer, Sampath Bank PLC, Nuwan Pathirana, Head of Sustainability, Sampath Bank PLC, David Byrne, Head of Asia, Euromoney and Ajantha de Vas Gunasekara, Executive Director/Chief Financial Officer, Sampath Bank PLC.

Sampath Bank PLC has been named Sri Lanka’s Best Bank for Corporate Responsibility at the Euromoney Awards for Excellence 2026, marking its third win in the category.

The award was presented at the Asia-Pacific regional awards ceremony in Singapore recently. Euromoney’s Awards for Excellence recognise performance, leadership and innovation in the global banking and financial services sector.

Sampath Bank said its flagship ‘Wewata Jeewayak’ programme was central to its corporate responsibility strategy. In 2025, the programme invested Rs. 63.7 million in 11 tank restoration projects, benefiting 14,780 people and rejuvenating 3,370 acres of paddy land.

The initiative focuses on restoring neglected irrigation tanks while improving water management, agricultural practices and climate resilience through collaboration with farmers, government authorities and farmers’ associations. Water-efficiency measures introduced under the programme can reduce wastage by 20% to 30%.

Sampath Bank Managing Director and Chief Executive Officer Sanjaya Gunawardana said the recognition reflected the bank’s commitment to creating meaningful and lasting value for communities while strengthening national resilience.

The bank’s wider corporate responsibility initiatives include coral reef, turtle and mangrove conservation, ocean plastic reduction, entrepreneurship support, financial literacy, education, healthcare and financial inclusion.

Sampath Bank previously won the Sri Lanka award in 2022 and 2024 and was named Asia’s Best Bank for Corporate Responsibility by Euromoney in 2024.