Features

Sri Lanka’s great IMF lie

Published

4 years ago

2023/02/26

Decades of looking to the IMF for salvation has yielded only crises. Sri Lanka’s economic crisis demands urgent relief measures for a desperate citizenry and a new, self-sufficient model of development

by Ahilan Kadirgamar and Devaka Gunawardena

Sri Lanka has been subject to a great lie: the IMF solution! For close to a year now, the country has been implementing the International Monetary Fund’s recommendations with complete obedience. The sudden devaluation of the Sri Lankan rupee, a drastic increase in interest rates, the withdrawal of fuel subsidies and severe cuts to state expenditure all amount to harsh austerity measures. The consequence is economic devastation as the country sinks into a depression. Millions now suffer dwindling incomes, tremendous increases in the cost of living, food insecurity and even starvation.

Yet the much-touted IMF funds presented as a way to salvation, a meagre USD 2.9 billion over four years under the proposed agreement, have proved elusive. Compare this amount to Sri Lanka’s foreign earnings for last year, which added up to USD 18 billion. The IMF insists that Sri Lanka first convince a range of creditors to commit to restructuring its defaulted external debt before the organisation’s Executive Board will release the funds. But Sri Lanka’s economy is in free fall. Its GDP contracted by roughly a tenth last year and is on the path to continued contraction this year. Under these circumstances, the IMF agreement and its paltry funds may as well go into the dustbin.

Some of us have seen this crisis coming for a long time. A few months after the end of the civil war in May 2009, Sri Lanka obtained an IMF Stand-By Arrangement of USD 2.6 billion. This gave the green light to a considerable inflow of speculative foreign capital, in addition to commercial borrowings at extremely high interest rates in the form of International Sovereign Bonds (ISBs). At that point, the warning bells began ringing for critical analysts who could see the consequences. But back-slapping and self-congratulation among Sri Lanka’s elites continued amid a boom in economic growth built on a dubious basis, including speculative investment in urban beautification and needlessly large infrastructure projects. This debt-driven boom soon petered out.

Sri Lanka then faced balance-of-payments problems, which pushed it towards an IMF Extended Fund Facility of USD 1.5 billion in June 2016. Some of us sounded the alarm again as the government at the time, led by Ranil Wickremesinghe, pursued another IMF-led solution. But, again, our critique fell on deaf ears. Worryingly, the following month, with the IMF’s approval, Sri Lanka went ahead and floated another USD 1.5 billion in ISBs. Indeed, the latest IMF agreement – the 16th deal between Sri Lanka and the organisation over the decades – offered nothing new. Rather, it promoted Sri Lanka’s continued liberalisation of trade and capital accounts, dating back to the opening of the economy in 1978. The crisis tendencies in the Sri Lankan economy were ramified through adherence to IMF packages.

Historical memory is short in Sri Lanka, particularly among the elite. The crisis accelerated with the onset of the Covid-19 pandemic three years ago. Again, we warned of the imminent dangers of an unsustainable balance of payments and the need to drastically reassess and reprioritise imports for the purpose of maintaining foreign reserves, given decreasing streams of foreign earnings. That would have meant restricting the import of luxury consumer goods while using the available foreign exchange for essential supplies and intermediate goods necessary to boost domestic production. The arrogant Rajapaksa regime then in power nevertheless persisted in the blind hope that fortunate times were just around the corner. It argued that tourism, for example, would soon pick up. Meanwhile, the opposition and neoliberal think-tanks proposed yet another IMF agreement as the magic bullet. Worse, they even started calling for an early default on Sri Lanka’s external debt. Their convoluted logic was that once the country defaulted, it would have to surrender to the IMF and all its conditionalities, such as austerity and fiscal consolidation. There could be no way forward other than with the IMF.

That is exactly what the government led by Gotabaya Rajapaksa did in April 2022. It prematurely defaulted on its external debt while the finance minister went on pilgrimage to Washington DC to the annual meetings of the IMF and the World Bank. The default was premature because only USD 78 million in debt-servicing was due that month, while the next large ISB repayment, of USD 1 billion, was due in July 2022. Only in Sri Lanka could the elite celebrate when the country defaulted on its sovereign debt for the first time in its history. They were confident that Sri Lanka would get bridge financing from donors, an IMF agreement with additional funds in three months, and a rapid process of debt restructuring. Ten months later, the outcome of these expectations remains a shameful zero. There is no more bridge financing. No IMF funds. And an agreement on debt restructuring appears uncertain at best.

Given all the above, Sri Lanka is a case in point of consistently insipid economic policymaking. It is also a study in how the myth of an IMF quick-fix can paralyse a country, putting on hold policies and relief measures urgently needed to help a citizenry drowning in economic depression. As the country awakes to the great lie of an IMF solution, it is forced to go back to the drawing board – not just to deal with the social devastation and political backlash that the IMF agreement is bound to generate, but also because the global order that provided its reference points is unravelling.

From debt to a new development model

Sri Lanka’s long engagement with the IMF and the broader neoliberal policy consensus – austerity, privatisation, and the liberalisation of trade and capital markets – has been an utter and complete failure. Nevertheless, for the IMF and Sri Lanka’s establishment, resolution of the crisis appears to call for the introduction of austerity measures like the ones applied to many other countries that have experienced sovereign default, along with restructuring of defaulted debt. The idea is that Sri Lanka’s problems are rooted in a fundamental mismatch between its macroeconomic indicators and the debt it has accumulated.

This framework is being applied, however, in the context of a world order that is fast breaking down because of the contradictions of neoliberal globalisation. Over the last decades, the push for free trade, unfettered global financial flows and the privatisation of essential services has continued to expose countries to the crisis-ridden dynamics of global capitalism. But everything appears to be coming to a head, epitomised in many ways by the case of Sri Lanka. As major publications such as the Financial Times have noted, although exogenous shocks such as the Covid-19 pandemic and war in Ukraine have played a role, these have interacted with underlying trends in the global economy. This includes extreme wealth inequality and an unsustainable model of growth driven by financialisation, exposed most vividly by the global financial crisis of 2008.

In the aftermath of the 2008 crisis, however, and coincident with the end of the civil war, Sri Lanka was one of a series of emerging market “success stories” celebrated by boosters of neoliberalism. Now that the country’s shaky financial structure has been exposed, establishment commentators around the world are instead using Sri Lanka as an example of crony capitalism and corruption. Supposedly, such bad actors can only be routed by further imposing the rationality of the market on public institutions. Whereas the big banks in the United States responsible for the 2008 crisis obtained bailouts from the state because they were “too big to fail,” Sri Lanka is apparently small enough that the rules of moral hazard once again apply. The failed logic of the neoliberal development model – including the reliance on external-oriented policies, from tourism to foreign commercial borrowings – here justifies further entrenching it through austerity. Because of the country’s severe economic crisis, however, such a remedy means that people suffer and possibly even perish from what the sociologist Karl Polanyi called “social exposure.” Child malnutrition is skyrocketing and food insecurity is becoming pervasive – recent estimates from the UN’s Food and Agriculture Organisation indicate that roughly a fourth of Sri Lanka’s population is food insecure. Even this extreme suffering is unlikely to dislodge the elite consensus about an IMF solution. But the disruptive political and social consequences, and resulting waves of agitation, will continue.

Moreover, Sri Lanka’s crisis is occurring at the conjuncture of major global developments. Global growth, especially in trade, is likely to continue slowing in the face of a complex set of challenges, from geopolitical polarisation to the impact of climate change. In this scenario, how can Sri Lanka’s debt be made sustainable by further exposing the country to these chilling headwinds? The central plank of the IMF solution – that Sri Lanka achieve a primary surplus by 2025 – stands in direct contradiction to the lack of the public investment needed to cope with these shocks. Conventional debt-sustainability analysis is predicated on the belief that by engaging in macroeconomic reforms such as fiscal consolidation, defaulting countries can regain their financial footing by having the surplus funds to both repay old loans and service new ones. However, in the case of Sri Lanka, which is already undergoing an economic depression, national private investment is withdrawing, and speculative capital is fleeing the country. The idea that foreign investors will step in to fill the breach flies in the face of Sri Lanka’s long experience with similar false projections.

Sri Lanka did not always have an unshakeable belief in the benefits of subordination to global capital. After the 1956 general election, there was a clear push to challenge the colonial relations in which the country’s comprador elites were embedded. Through a new balance of class forces, there was much greater emphasis on industrialisation focussed on import substitution, to try and diversify the economy away from plantation exports. Sri Lanka undertook major investments in critical industries, such as those producing intermediate and capital goods, including with support from socialist countries. But even these efforts were constrained by over-reliance on a narrow political base among the urban working class and a lack of rural mobilisation. By the time of the global economic downturn of the 1970s, the radical wing of the left-leaning United Front was led by NM Perera, the finance minister. It made a belated attempt to prioritise self-sufficiency in food production and address the immediate concerns of working-class people, especially given rising global prices for essential goods. But these efforts failed due to internal contradictions within the ruling coalition led by the bourgeois Sri Lanka Freedom Party, the consolidation of Sinhala Buddhist nationalism and state repression, external pressure from the West and the rising frustration of the electorate.

The subsequent regime, led by JR Jayewardene, introduced the open-economy reforms in 1978, which meant a strong emphasis on liberalisation. Sri Lanka’s engagement with the outside world reverted to subordination to powerful institutions that represented the interests of global capital. The IMF and the World Bank provided the necessary justification in terms of access to external finance. Meanwhile, the Jayewardene regime suppressed organised labour, including by crushing the general strike of 1980. In this and other ways, the regime prepared a more conducive terrain for extraction and exploitation. The beginning of the civil war between the government and Tamil separatists in the country’s north and east in 1983 put some constraints on this approach, as the state continued to rely on mobilisation in the south. But the overall trajectory was epitomised by the collapse of any real alternative to neoliberal policies. The consensus was that for Sri Lanka to develop it would have to import its economic vision from outside – a vision clearly shaped by the interests of global capital. The processes of financialisation and debt-driven growth accelerated with the end of the civil war.

This strategy has failed to bear fruit in terms of real improvements in working people’s livelihoods. It has also triggered the current crisis. Nevertheless, in the many years since Sri Lanka embarked on liberalisation, justification for foreign commercial borrowing has been rooted in the enduring assumption that the country need only “unlock its growth potential”. A range of services and industries meant to earn foreign exchange have been bandied as model opportunities. After the early days of the open economy, it became clear that a developed garment industry was not a precursor to moving up the “global value chain.” This was especially true in the absence of a clear, concerted intervention by the state in the form of industrial policy. Global institutions and policy-makers then pivoted to celebrating the rise of the service economy, including the boom in tourism. Sri Lanka continued to depend, however, on a hidden economy of remittances from migrant workers abroad, which is also now under strain.

The idea that Sri Lanka can achieve higher stages of development by pursuing the same growth path rooted in dependency on the external sector is a non-starter. The neoliberal development model has collapsed. The Sri Lankan establishment has practically admitted as much by seeking lower-income status for the country to obtain more concessional financing from international donors and aid agencies. At the same time, the government, led by Ranil Wickremesinghe, is eager to celebrate the return of tourists after a long absence caused by the Covid-19 pandemic and the Easter Sunday terror attacks in 2019. But the reality is that tourism will not be enough to revive Sri Lanka’s growth during a period of painful austerity. The same goes for any number of hare-brained ideas that may now be touted by the country’s economic establishment in the absence of serious thinking about an alternative development model.

Sri Lanka’s lop-sided economic structure, with a bloated import bill and unrestrained financial speculation, now faces a reckoning. The years of conspicuous consumption through imports from abroad are over. The question is, how can investment be channelled into those sectors necessary for the country to achieve self-sufficiency in the goods and services ordinary people need for survival? This perspective is a far cry from the IMF solution, which presupposes Sri Lanka’s continued subordination to a global economic structure that has clearly failed. Taking up the question of an alternative means returning to issues that had supposedly been bypassed with the triumph of neoliberal globalisation. It requires revisiting the many “reforms” – from the push for trade and capital-account liberalisation to the promotion of foreign direct investment and privatisation – that it has entailed.

Towards self-sufficiency

Under these circumstances, the idea of self-sufficiency offers a crucial response to the rapidly changing, uncertain global order. This churn may provide an opportunity for foresighted actors within Sri Lanka to demand a fundamental re-conceptualisation of how external engagement fits into the country’s development model. If it is imperative to revive the country’s domestic food production, for example, how would this flow into a broader rethinking of the composition of intermediate imports needed for production? What type of external financing would be necessary to develop the domestic food system?

Sri Lanka’s domestic debt is also a critical part of the equation for overcoming the current economic depression. That includes the need for counter-cyclical spending, as opposed to pro-cyclical policies of fiscal consolidation. But external development finance would also continue to play a role. The key question is whether such borrowings are integrated into a process of planning, so that an alternative development vision takes precedence over the mainstream understanding of market-steered investment that has long shaped countries such as Sri Lanka. The country must push back against global capital geared towards the sole end of financial extraction. Indeed, the lion’s share of foreign direct investment into Sri Lanka went into speculative investment in real estate rather than ventures that increased local industrial production. Development financing should be reconfigured as part of a bottom-to-top restructuring of the economy, along with changes in trade policy away from excessive imports. That is necessary both to repay the current debt – with deep haircuts for creditors, if not debt cancellations – and as a means to develop Sri Lanka in the long run.

This alternative goes back to similar points made by development economists such as Ha-Joon Chang and Abhijit Sen, who were early critics of the Washington Consensus. Such critical economists recognised the flaws in the previous model of import substitution, but they framed it as an ongoing concern of the balance of social and class forces required to ensure that capital, as it grows, is also disciplined to invest in critical sectors. In Sri Lanka’s case, that process of disciplining capital must now include prioritising imports of essential and intermediate goods necessary for production. It also requires revamping the defunct public-distribution system to ensure food security and prevent outright starvation. As the economy stabilises, further measures must also include redistribution and investment through a wealth tax on existing property and assets.

Sri Lanka has to have stronger debates about its development vision, including a rethink on relations between its rural and urban arenas. There must be greater room for rural industries rooted in the livelihoods and reproductive needs of ordinary people. This is a far cry from the elites’ vision of the economy, which has repeatedly driven Sri Lanka into financial difficulties. There is now tremendous anger in the country because of the devastating fall in living standards. This discontent, in addition to the unravelling global order, may finally trigger a break with liberalisation.

For the IMF, of course, a programme rooted in self-sufficiency with wealth taxes and reinvigorated public investment will be a step too far. It is entrenched in its own institutional processes, despite the organisation’s fuzzy rhetoric around its newfound supposed awareness of the social implications of austerity-driven bailout agreements. Nevertheless, Sri Lanka’s crisis may offer a turning point for those global and domestic coalitions that are aiming to push back against renewed subordination to global financial capital. That means rethinking a number of trends that have long coalesced under the banner of economic liberalisation. After decades of repeated mistakes and failures, with consequences for the people on an unprecedented scale, will the establishment at last be forced to reconsider Sri Lanka’s development model? Himal Southasian

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Features

Odds and Ends: Horse racing and the business of sports betting – IV

Published

13 hours ago

2026/09/23

Sahan Weerasooriya

by Prof. C. A. Saliya
(The fourth instalment in a five-part series on
the business of gambling, legal and illegal)

Here’s a puzzle worth thinking about. For well over a century, Sri Lankan law has treated a village card game as a criminal offence, punishable by fine or imprisonment. In that same period, it has treated betting on horse racing as a perfectly legitimate, taxable business, one the state has actively collected revenue from for generations, under a Horse Racing Betting Ordinance older than most of the country’s other gambling law. Same basic activity, risking money on an uncertain outcome, one version illegal since 1889, the other legal the entire time.

Why? Follow the money, and the class lines, back to the colonial era. Horse racing arrived in Ceylon as a pastime of the British administrative and planter class, a “sport,” played and watched at clubs and racecourses, with betting bolted on as a respectable, even sophisticated, accompaniment. Card games played by ordinary people in villages, on the other hand, were exactly the kind of activity the same colonial authorities were eager to label a vice and criminalise. It’s the same pattern we saw with casinos in Part 2: gambling done by the wealthy tends to get called a sport, a tradition, or an investment. Gambling done by everyone else tends to get called a crime.

That history matters, but the economics of horse racing betting matter just as much, because once you understand how a bookmaker actually prices a race, you understand something that applies to almost every form of sports betting on Earth, from a Colombo racecourse to a global football sportsbook.

How a bookmaker guarantees a profit

Imagine a simple race with only two horses running, and imagine, just for the sake of the maths, that both horses genuinely have an exactly 50-50 chance of winning. A perfectly fair bookmaker, offering perfectly fair odds, would price both horses at even money: bet 100 rupees, win 100 rupees plus your stake back, on either horse.

No real bookmaker does this. Instead, they’ll price both horses slightly below their true odds, say, offering odds that imply each horse has a 55 percent chance of winning, even though the true chance is only 50 percent. Add those two implied percentages together and you get 110 percent, not 100. That extra 10 percent is called the “overround,” or sometimes the “vig” (short for vigorish), and it is the bookmaker’s guaranteed margin, built directly into the prices on the board before a single horse leaves the starting gate. It doesn’t matter which horse wins. The bookmaker’s overround wins regardless, on every single race, all day, every day.

There’s a second, subtler effect that decades of studying racing data has confirmed again and again, all over the world: bettors as a group are slightly too generous to favourites and slightly too generous to long-shots. Favourites tend to win a bit more often than their odds suggest they should, meaning betting on the favourite loses you money slightly more slowly than average over the long run, while betting on the rank outsider, the 50-to-1 shot that everyone secretly dreams will come in, loses you money considerably faster than average, because the public consistently overpays for that lottery-ticket dream. Bookmakers know this. It’s baked into their pricing, and it has a name: the favourite-longshot bias.

It’s not just horses anymore

Horse racing used to be the flagship product of the entire betting industry. It still matters enormously, including here in Sri Lanka, where it remains one of the very few genuinely legal betting products, but globally, its share of the total betting market has shrunk as sports betting on football, cricket, tennis and everything else has exploded, especially since a landmark 2018 United States Supreme Court ruling opened the door to state-by-state legal sports betting across America.

The newest and, frankly, most dangerous evolution of all this is “in-play” or “live” betting, placing bets not before a match starts, but continuously, in real time, on what happens in the next five minutes: the next corner, the next wicket, the next point. Regulators studying gambling harm consistently find that in-play betting produces worse outcomes fo bettors than traditional pre-match betting, precisely because there are so many more moments to place a bet, so much less time to think between decisions, and so much more opportunity to chase a loss five minutes after you made it.

Where the skill actually is, and isn’t

Now, a confession from this column, which has spent plenty of ink over the years analysing racecards: professional handicapping, studying trainer and jockey form, course and distance records, the draw, the going, the weight a horse is carrying, is a genuinely real skill, and it can meaningfully improve your chances of picking a winner compared to a random guess. That’s not a myth. Good handicapping works, in the narrow sense that it improves your odds of identifying the horse most likely to win any given race.

But “improving your odds of picking a winner” and “beating the house edge” are two completely different things, and this is the single most important distinction in this entire series. Even the sharpest, most statistically literate handicapper in the country is still betting into odds that already have the bookmaker’s overround baked in. Skill can narrow the gap. It essentially never closes it completely over the long run, for the simple reason that the house built the gap on purpose, and prices every race to make sure it stays open.

When the “form” is fake: Virtual meetings

One genuinely strange wrinkle worth flagging here: some betting products dress themselves up in the full costume of horse racing, trainer names, jockey silks, past form lines, even fake race commentary, while actually being nothing more than a random number generator behind the scenes, deciding the winner with no horses, no trainers, and no real race involved at all; just a computer simulation.

These “virtual racing” products exist specifically to borrow the credibility that real handicapping has earned over more than a century, and apply it to something that has no skill element whatsoever, chance and chance alone. It’s worth knowing the difference, because the two products look almost identical on a betting slip, and only one of them rewards the kind of analysis this column has always tried to teach.

Are manipulations possible?

Bookmakers don’t secretly insert horses into races to beat favorites instead they simply publish odds based on form and betting demand. The real risk comes from insiders with knowledge, such as trainers or syndicates, who can exploit undervalued horses to stage betting coups. These events are rare but welldocumented, leaving a lasting mark on regulation. In the past, bookmakers were reactive, allowing coups to succeed before odds adjusted. Today, they are far more proactive, using AI systems and integrity units to detect anomalies quickly. Even so, insider coups still occur, though they are rarer and swiftly investigated. The balance has shifted: bookmakers now lose less often, but punters continue to chase “value” in overlooked horses, keeping the contest alive between house margins and human ingenuity.

Betting Coups: When the Odds Tilt

Horse racing has always carried a mystique of glamour and risk, but behind the silks and starting gates lies a business model designed to ensure bookmakers never lose. As explained earlier, the “overround”, that invisible margin built into every price, guarantees profit before the first horse even breaks stride. Yet history shows that punters, syndicates, and insiders have occasionally turned the tables, staging coups that shook the industry and exposed its vulnerabilities. Timeline of such incidents are shown in the Table.

These stories remind us that while bookmakers build their margins into every race, the human element, ambition, deception, or sheer audacity, can still disrupt the system. Today’s safeguards, from AIdriven monitoring to integrity units, make coups rarer, but not impossible. And that tension between certainty and surprise is precisely what keeps the public fascinated. Horse racing is not just about speed and stamina; it is about the eternal contest between the house edge and human ingenuity.

The road ahead for racing in Sri Lanka

Horse racing’s legal status in Sri Lanka looks set to remain intact under the new Gambling Regulatory Authority, folded alongside casinos and licensed online sports betting operators. What’s new is that offshore online platforms, which have long taken bets from Sri Lankan customers without local approval, are now—at least on paper—being brought under the same regulatory umbrella as the racecourse. Whether this shift results in genuine oversight or simply adds a licence requirement that foreign operators quietly ignore remains an open question, one to be explored in the final instalment of this series as we assess what fair, joinedup gambling regulation would truly require.

Next week:

Part 5, the final instalment, Closing the Book, on what real gambling reform would look like, and whether Sri Lanka’s new law gets us there.

(Prof. C. A. Saliya, is a charted accountant, academic, researcher and former banker. He is the author of SAMAJA GAVESHAKAYA and Springer Publication DOING SOCIAL RESEARCH. He can be contacted at saliya.ca@gmail.com. The views expressed in this article are his own and do not necessarily represent those of the organisations with which he is affiliated.)

Features

When slogans meet scrutiny

Published

14 hours ago

2026/09/23

Sahan Weerasooriya

An unhealthy politics still rents the finished war — and that is why society stays divided

by Mahil Dole
Senior Superintendent of
Police (Retd.)

True national stability requires a transition this country has postponed for seventeen years: from a military victory to civic reforms that penalise divisive actors and build a unified identity. Last week showed, with unusual clarity, why that transition keeps failing. It was not a failure of slogans. It was a failure of consistency. Democracy, in the narrow sense of ballots and benches, is still standing. What is unhealthy is the use to which those ballots and benches are put. An unhealthy politics does not close a war. It rents it.

Three scenes, one week

In Chavakachcheri, President Anura Kumara Dissanayake told a housing gathering that racism would not be tolerated in any form, against Sinhalese, Tamils or Muslims, in the North, South or East. He named the old kindling: heritage sites and religious places still used to ignite tension. He spoke of houses for the displaced and a stadium for children in Jaffna. Those are the right words for a head of State. A country that meant them would be doing the unglamorous work of peace: making the next generation less useful to anyone who needs a quarrel.

In Anuradhapura, on an SLPP stage, a different performance was under way. Jaffna Member of Parliament Archchuna Ramanathan referred to himself as a “Tiger” and to the elected President as a “fox”. The name of a proscribed organisation was spoken in a town that carries the memory of the sacred-city attack. Party figures who have spent years treating any mention of the LTTE as contamination were reported to have cheered. By Monday a civil-society group styling itself the “Joint Opposition” had taken a complaint to the CID. The Police confirmed receipt. Opposition voices had already raised the alarm on Sunday.

Let the record be exact, because the rumour was not. The complaint now on the CID file is that remarks on an SLPP stage, and the cheer that met them, crossed from political insult toward promotion of a banned group. The government, for its part, has said there is no room for LTTE promotion and that remembrance of the dead is another matter. Those are two different files. Mixing them is itself a kind of politics.

A third voice belonged to the same week. Professor Savitri Goonesekere spoke with the clarity that public law, when it is still a discipline and not a campaign colour, can still produce: thoughtful, articulate, addressed to the country rather than to a faction. The speech deserves the praise it has received. The caution it invites is as important as the praise. Worthy slogans, unity, an end to racism, one law for all, are easily hijacked. They are most easily hijacked by those whose own conduct is under scrutiny, and who need the language of virtue more than they need the discipline of it. A speech of that quality raises the standard. It does not lower the duty to watch who picks the slogan up next.

What an unhealthy democracy does

People vote. Governments change. Parliament sits. That is not a failed democracy in the textbook sense. It is also not a healthy one. A healthy system converts a military victory into civic rules that bind the winners as well as the defeated, and that make division expensive. An unhealthy system keeps the war useful. It farms fear. It treats identity as a turnout machine. It issues a guarantee against racism in one district and applauds a banned name in another. That practice is not a lapse of taste. It is a structural reason society remains split.

Duplicity is the method. The same platform that built a career on the defeat of terrorism can, when the arithmetic of a rally requires it, tolerate the self-description of a Tiger. The same voices that demand a ban on LTTE propaganda can discover, the following week, that a rival’s meeting is the real offence. The same guarantee against racism can be issued in the North on one day and left unenforced in the South on the next. Two standards, again — not between Colombo and an overseas capital this time, but between the microphone and the statute book.

The LTTE remains a proscribed organisation. That is law, not a mood. Remembrance of the dead is a human act and must be protected as such. Glorification of the organisation that killed them is not remembrance. A serious State draws that line once, publishes it, and applies it without regard to who is speaking and which party owns the stage. Selective outrage is not law enforcement. It is campaigning.

The same is true of the word “racism”. No President can abolish it by declaring that he will not tolerate it. The declaration is necessary. It is not sufficient. Racism in this country has rarely been only a private vice. It has been a public business model: a way to harvest fear, postpone reform, and keep a constituency enlisted after the guns fell silent. Heritage sites and religious places become kindling because someone lights them. Universities become martyr theatres because someone books the hall. A Member of Parliament can call himself a Tiger on a southern stage because someone calculated that the cheer would be louder than the cost.

Why this divides a people

Division is not produced only by the last war and not only by those who live outside the island. It is produced, week by week, by a politics that cannot address a crowd except through Sinhala, Tamil or Muslim injury. A politics of that kind is not representing a community. It is farming one. The young, who have no memory of the last bunker, inherit the quarrel instead of a country. Serving officers watch the treatment of their predecessors and the theatre of their politicians and draw a rational conclusion about what the country values. Families who lost their own to the LTTE hear “Tiger” cheered and conclude that their dead have been repriced. Families who lost their own to the State hear a pledge against racism and wait to see whether the pledge runs south as well as north.

That is how an interval is mistaken for peace. The guns are silent. The inventory is not. “Tiger” and “traitor”, “racist” and “patriot”, remain stock in trade. So long as those words pay, in applause, in airtime, in a complaint that wounds an opponent, someone will keep them in circulation. Professor Goonesekere’s warning sits exactly there. Leadership means going beyond rhetoric. The law is not written for those who already respect it. It is written for those who violate it. When violation carries no cost, the slogan itself becomes a form of impunity.

What civic reform would actually look like

The work is unglamorous, which is why it is avoided. First, equal enforcement. If the organisation is proscribed, the prohibition travels with the speaker. An SLPP stage in Anuradhapura and a commemoration in the North are not two legal systems. The CID complaint now on the file should be treated as a test of that rule, not as a trophy for whoever lodged it.

Second, an end to ethnic first-identity as an electoral method. A civic identity, Sri Lankan first, faith and language held without being turned into a passport, will not appear by exhortation. It appears when the dividend for division falls and the dividend for competence rises.

Third, a cost for lighting kindling. Heritage sites and religious places are not campaign props. Universities are not martyr calendars. Media that carry a charge must carry the correction. Records that hold an untested allegation must not shadow a working life after the allegation has failed.

Fourth, one standard for those who served the State and those who fought it. Wrongdoers on every side belong in a court, not in a diplomatic weather system and not in a rally chant. Collective punishment of a profession is not accountability. A cheer for a banned name is not unity. A slogan against racism is not a policy until it binds the speaker’s own side.

None of this requires a new brand of commission. It requires a State that stops allowing division to be a career. South Africa’s imperfect bargain at least tried to bind both sides inside one process. Colombia wrote one jurisdiction for guerrillas, paramilitaries and State forces. We have preferred two international ledgers and a third, domestic one on which the war is rented out by the evening. Last week’s scenes, a guarantee in Chavakachcheri, a cheer in Anuradhapura, a serious speech that must not be stolen, are not opposites. They are the same unfinished settlement, spoken in three registers.

The President’s sentence should be kept, and then made expensive to break. Professor Goonesekere’s standard should be kept, and then applied to those who clap for it. Racism will not be defeated by a rally, and a proscribed organisation will not be dissolved by a complaint. They will be reduced only when the State, and the parties that live off the State, stop treating the finished war as inventory. True national stability is not the memory of a victory. It is the construction of a civic order that no longer needs that victory to be refought, in Anuradhapura or in Geneva, in order for someone to remain relevant.

The writer is a retired Senior Superintendent of Police who served in intelligence and counter-terrorism. He is the author of Security Beyond Enforcement: Practical Approaches for a Safer Nation. This column is a stand-alone extension of an earlier argument on two standards in one conflict. Views expressed are his own.

Features

Defend civic space upon which peace is built

Published

2 days ago

2026/09/22

Sahan Weerasooriya

by Jehan Perera

International Peace Day was observed on 21 September. It finds Sri Lanka with a genuine achievement to record and a demanding test to meet. The UN’s theme this year was “Invest in Peace: For Everyone, Everywhere, Every Day.” It also honoured the “everyday architects of peace”—people driving local action and building a lasting peace from the ground up. In the 2026 Global Peace Index, Sri Lanka rose 30 places, from 97th to 67th among 163 countries. Over the same period, global peacefulness declined for the twelfth consecutive year to its lowest level since the index began, and South Asia suffered the sharpest regional deterioration. The test is whether the government will protect the civic space in which those architects of peace work.

Sri Lanka’s improvement is real and deserves acknowledgement. In this year’s review, issued a few weeks ago, the UN High Commissioner for Human Rights acknowledged progress in the form of action against corruption, arrests and investigations linked to political killings, enforced disappearances and the 2019 Easter Sunday attacks, and continued official denunciation of racism. A ranking, however, records conditions at a particular moment. It does not guarantee that they will last. Sustainable peace will depend on three factors. These are whether the government addresses the unresolved causes of conflict, whether it strengthens accountability for past and present abuses, and whether it protects the civic space in which peace is built from below. On the first two the record is incomplete. On the third, the draft NGO law threatens to weaken the very organisations that press for the other two.

What holds Sri Lanka back from a higher place are the same things that fed the war at home and also feed international conflict that rages elsewhere in the world. These are racism or ethnic nationalism that is narrow-focused, corruption and lawlessness. Equality, accountability and the rule of law are their remedies. The present government has committed itself to these, and is a significant improvement over governments of the recent past. But these pillars are not held up by governments alone. Peace is made in villages, workplaces and university campuses. It is made by families who insist on the truth about their disappeared, by journalists and lawyers who expose abuse, and by community organisations that bring Tamils, Muslims and Sinhalese into practical cooperation.

Unfinished Work

The UN High Commissioner’s report to the current Human Rights Council session, covering October 2025 to July 2026, shows how much remains to be done. The Prevention of Terrorism Act is still being applied, producing arbitrary arrests and long detention without charge. The report calls for a moratorium pending repeal and for the release of long-term detainees. Military-occupied land has not been released, memorialisation lacks support, and tensions over land and religious sites persist. The Batticaloa district illustrates how such problems endure. In the past three years, two Presidents, Ranil Wickremesinghe and Anura Kumara Dissanayake, have visited and instructed that the dispute over grazing land in Mailaththamadu and Mathavanai be resolved. It is a dispute between Tamil cattle farmers and outside Sinhala cultivators, and it has not been resolved. When two Presidents issue instructions and nothing changes, the fault lies in the machinery of State. An unresolved dispute does not stand still. It hardens into the next grievance.

Accountability shows the same pattern. The report documents torture and deaths in custody, and surveillance and intimidation of activists, journalists and civil society. Serious cases remain stalled for years, among them the killing of seventeen aid workers of Action Contre la Faim in Muttur two decades ago. Sharper still is the case of the Eastern University refugee camp at Vantharamoolai, where in 1990 the army took away 158 persons in a single day. They were never seen again. The camp’s officer-in-charge, Dr T. Jayasingam, later Vice Chancellor of the university, identified the officers responsible. More than three decades on, those officers have not been questioned. These cases are still remembered because families, survivors and independent witnesses have refused to let them be forgotten. Meanwhile several commissions of inquiry have completed their investigations but nothing further has happened.

What South Africa, Argentina and other post-conflict societies have found indispensable are four pillars of what is called “Transitional Justice” which are truth, accountability, reparations and non-recurrence. In Sri Lanka’s circumstances, truth means credible, independent investigation of what happened to the disappeared, and support for memorialisation. Accountability means prosecuting Muttur, Vantharamoolai and comparable cases, and removing credibly accused persons from senior office. Reparations mean compensation for victims and the return of military-held land. Non-recurrence means repealing the Prevention of Terrorism Act, releasing those held under it in the meantime, and resolving local disputes such as Mailaththamadu before delay hardens them. A country that buries its past does not escape it. The past returns in the next generation.

Civil Society

It is against this background that the draft NGO law is most troubling. The proposed legislation contains sweeping provisions for State oversight and control of civil society organisations. Among these are enforcing a licensing requirement on NGOs, which is to be renewed every three years, and severe penalties for not submitting reports on time, or for spending on emergency flood relief (for instance) when the NGOs mandate is peacebuilding (as an example) with possible sanctions including deregistration and having to shut down. Civil society groups have warned that it would confer excessive discretion over their registration and operations. Officials in Sri Lanka have abused such powers in the past. Additional power without effective checks invites further abuse. Sound regulation would have clear criteria for registration, an independent registrar and a right of appeal to the courts. What cannot be justified is a regime in which registration becomes a licence to be withheld from organisations that scrutinise policy, expose abuses or advocate for the rights of citizens.

Democracy is based on checks and balances. Those who press for accountability are part of those checks. The contradiction is plain. A government that has pledged accountability, equality and the rule of law ought not to be preparing to weaken the very organisations that press for their fulfilment. The organisations most exposed are those working on disappearances, land, memorialisation and reconciliation in the North and East, where the State’s record is weakest and the need for independent witnesses greatest. Silencing them would not remove the grievances they document. It would remove the channel through which those grievances are addressed peacefully. The government appears to be relenting, which is welcome, but a pause is not a withdrawal. The bill should be withdrawn and any replacement drafted in genuine consultation with those it would govern.

Investment in peace as called for by the UN in its International Peace Day theme implies commitment over time, with returns that come slowly. Sri Lanka’s 30-place rise on the Global Peace Index is a first dividend and nothing more. It can be built upon only if the government matches its commitments with action: withdrawing or fundamentally redrafting the NGO law, repealing or suspending the Prevention of Terrorism Act, and bringing Muttur, Vantharamoolai and Mailaththamadu to resolution. A higher place in a global index is not a certificate of success. Sri Lanka’s higher ranking is an encouraging start, but it will endure only if the space in which citizens speak, question and organise is protected. Peace is built from below, and a government that is serious about it will treat civil society as a partner rather than a threat.