Business
Sri Lanka’s crisis seen as highlighting lessons from Greece
‘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.”
Business
Sri Lanka to build a new tourism workforce to project a stronger national voice
Specialised training programme set to begin
The Sri Lanka Institute of Tourism & Hotel Management (SLITHM) has launched a new initiative that could quietly reshape the country’s tourism industry – the National Tourist Interpreter Training Programme.
The idea, explained by SLITHM Chairman Dheera Hettiarachchi, is simple but important. Sri Lanka does not need to rely only on bigger tourist numbers or louder promotion. It needs to help visitors understand the country better.
“This is where the concept of a tourist interpreter comes in”, he said.
“Unlike traditional tour guides, who mainly explain and show places, interpreters are trained to go deeper. They connect the story behind what visitors see; linking history, culture, environment and local life. In a country like Sri Lanka, where ancient heritage, rich biodiversity and living communities are closely connected, this approach can make a real difference,” Hettiarachchi explained.
The programme itself will run for three months and focus more on field visits and practical learning rather than classroom teaching. It is open to academics and professionals with knowledge in areas such as history, culture, environment and research. Those who complete the course will receive a National Tourist Interpreter Licence from the Sri Lanka Tourism Development Authority, along with a digital badge.
With a course fee of around Rs. 250,000, this is not meant for mass entry. The target is a smaller, more specialised group. These interpreters are expected to work with destination management companies, serving high-end travellers who are looking for meaningful and informed experiences, not just sightseeing.
Speaking further, the SLITHM chairman said: “Globally, this trend is already visible; visitors increasingly expect detailed explanations about nature, conservation and local communities in the destinations they visit. They want to know not just what they are seeing, but why it matters. Sri Lanka has the natural and cultural depth to offer this kind of experience. What has been missing is the structured way of delivering that knowledge. That is where this initiative fits in.”
According to SLITHM, there is also a wider benefit. Visitors who understand a place tend to respect it more. This can reduce damage to sensitive sites and support conservation efforts, creating a better balance between tourism and the environment.
In this context, a new group of trained interpreters could gradually change how Sri Lanka is presented to the outside world. Instead of quick impressions shaped by social media, these interpreters can offer informed, thoughtful accounts of the country, combining knowledge with storytelling.
For a destination long promoted mainly for its beaches and scenery, this shift towards deeper storytelling may be both timely and necessary.
By Sanath Nanayakkare
Business
Savers squeezed by lower returns as liquidity surge eases borrowing costs
A quiet but persistent strain is being felt by Sri Lanka’s savers, particularly retirees and fixed-income households who depend on bank interest to meet daily expenses such as groceries, medicine and utility bills. As deposit rates remain subdued, this segment continues to absorb the impact of a changing monetary environment with little visibility, even as broader conditions begin to ease for borrowers.
The latest economic indicators show that this pressure on savers is unfolding alongside a gradual shift towards lower lending rates and improved liquidity in the banking system.
At the centre of the transition is the Average Weighted Prime Lending Rate (AWPR), which declined to 9.63% in the week ending April 24, 2026, easing by 16 basis points from the previous week. This signals that borrowing costs are beginning to edge down, offering some relief to businesses and individuals reliant on credit.
In practical terms, housing loans, business overdrafts and working capital facilities could become marginally cheaper in the period ahead. However, as banks tend to adjust lending rates cautiously, the full benefit may take time to reach small businesses and ordinary consumers.
In contrast to the relief expected for borrowers, savers are likely to remain under pressure. Deposit rates have not shown a corresponding upward movement, meaning that interest income, a crucial lifeline for many households remains constrained in real terms, especially against the backdrop of rising living costs.
Monetary developments during the week also reflect a careful balancing act by policymakers. Reserve money declined, largely due to a reduction in currency in circulation, which stood at around Rs. 1.79 trillion by April 24. This suggests tighter control over physical cash in the system, possibly aimed at maintaining price stability and managing inflation expectations.
Yet, within the banking system itself, liquidity conditions have eased significantly. Total outstanding market liquidity rose sharply to a surplus of Rs. 199.17 billion, nearly doubling from the previous week. This increase indicates that banks have plenty of cash, which typically encourages lending and places downward pressure on interest rates.
For the public, the implications are mixed and unevenly distributed. Borrowers stand to gain gradually from lower interest rates, and businesses may find credit more accessible as liquidity improves. Consumers could also benefit from increased competition among banks to lend.
But for savers – a significant yet often overlooked segment – the story is different. With deposit returns remaining relatively low, their purchasing power continues to be tested, underscoring a growing divide in how monetary policy outcomes are experienced across society.
By Sanath Nanayakkare
Business
ComBank expands agency banking network to 26 locations
Commercial Bank of Ceylon has expanded its ‘ComBank Shakthi’ Agency Banking network to 26 strategic locations nationwide, adding 22 new outlets to the four pilot sites launched earlier.
The initiative partners with trusted local businesses or individuals who act as bank intermediaries, equipped with specialised POS devices running proprietary software for secure, real-time transactions. Customers can perform cash deposits, withdrawals, fund transfers, balance inquiries, and bill payments closer to home—reducing travel time and cost.
The expansion strengthens financial inclusion for underserved and unbanked communities, particularly in rural areas, and integrates closely with the Bank’s Agriculture and Micro Finance Units (AMFU), leveraging existing community trust. Agency outlets now complement Commercial Bank’s 272 traditional branches, bringing total physical access points to 298.
New locations include Katupotha, Oddusudan, Baduraliya, Vankalai, Akkaraipattu, and Lahugala, among others. The four pilot outlets remain at Tissamaharama, Hambantota, Siyambalanduwa, and Buttala.
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