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Surpassing neoliberal fictions towards mission-oriented state

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by Dr Amali Wedagedara

In Sri Lanka, public policy lost in the neoliberal haze treats the market as a cure for all ills. Not only is the market omnipresent, but it is also omniscient and omnipotent. The charm of the ‘market’ that research and advocacy lobbyists are creating is so alluring that only a few wonder what abyss the neoliberal pied pipers are leading Sri Lanka into.

We have resorted to market solutions out of desperation. Starting from the Balance of Payment crises in the 1960s and 70s to ‘pani kuppi’ at the time of the COVID-19 pandemic, to pyramid schemes in want of quick cash, to microfinance to drive financial inclusion and eradication of poverty, we have a plethora of experiences in seeking market-based solutions.

Walking at the edge of economic bankruptcy, we are also entertaining market-fostering surgical operations to transform failing State-Owned Enterprises (SOEs) into thriving private enterprises with the hope of earning quick dollars. On the side lines, a few wonders where selling national assets will lead us. What are we going to sell next when everything sellable is sold? Is privatisation the correct strategy to take the Sri Lankan economy out of the crisis? What alternate policies should be adopted so that a second default and chronic dependence on debt can be averted?

This article invites the readers to revisit dominant narratives on the market and business. While historicising the dominant narratives on the market and industry along with the local and global examples, the article builds a case for repurposing the Sri Lankan State towards the mission of steering the economy out of the crisis. Economic theories and frameworks do not stand alone in the history.

They evolve and adapt to changing circumstances. The Internet and mobile phones, built through government-funded projects, offer a vast pool of knowledge and wisdom at our fingertips. So, we need not act as if we are trapped in a time capsule of a bygone era where information was scarce, and people lived in isolation and disconnected.

Markets work; govts don’t

Contrary to popular belief, markets cannot exist by themselves. They need to be created. From the point of creating necessary legal frameworks for the markets to exist, governments regulate them to ensure democratic control of the market. Government investments in technology, IT, medicine, and biotech have been fundamental to modern miracles like the Internet and the iPhone.

In times of crises, markets fail. Countless examples from the post-World War II, 9/11, the Global Financial Crisis in 2008, and the COVID-19 pandemic in 2020 illustrate the proactive role played by the governments in resurrecting the markets. Governments built markets from scratch, injected extra cash into troubled industries, provided concessional loans and subsidies or simply bailed them out.

Governments from the US, the UK, and Sri Lanka used public money to correct the market failures even when the markets were at fault. The best example is the Global Financial Crisis in 2008. After the Easter Bomb attack in 2019, the Government of Sri Lanka provided concessional loans to exporters and hoteliers using public money. Yet, many evade or dodge tax payments. In that sense, markets are parasites seeking benefits and externalising social costs.

‘Trickle down’ is the common belief that justifies lower taxes to the corporate sector. Even though it’s proven wrong innumerable times, pro-corporate policymakers and research and advocacy lobbies still hold onto it. For example, the non-implementation of a tax on bondholders who did not participate in the Domestic Debt Optimisation (DDO) in Sri Lanka was commended by saying it would have become a ‘revenge tax’ and discourage investments.

An incalculable number of tax holidays and concessions given to BOI companies, big agribusinesses, and others in the corporate sector to encourage private sector-led growth in Sri Lanka for decades have not nurtured a robust private sector economy. In an article in the New York Times in 2010, Paul Krugman compared the belief in trickle-down to “old voodoo economics – the belief, refuted by study after study, that tax cuts pay for themselves.

” Instead of trickle-down, tax relief to the rich ‘vacuums up’ the income and wealth of the working people. Wealth segregation in the upper echelons of income groups is the outcome. The UNDP Report in 2023 identified Sri Lanka as one of the four Asian countries having the highest wealth inequality.

Markets are efficient; govts are not

‘Efficiency and productivity’ of the markets are another idea blown out of proportion by the market pundits. They forget that the markets are heterogeneous, differing from the goods and services they exchange. There are rice markets, shoe markets, toothpaste markets, fuel markets, education markets, health markets, organ trading markets and many more. Governments are better placed to provide some goods and services. For example, the government is the most efficient and productive provider of public goods and services such as health care, education, infrastructure, social security, energy, and R&D.

The Nobel Laureate economist Kenneth Arrow, in 1963, argued that private healthcare markets were inefficient due to uncertainty related to risks of illness and information. Adverse selection pushes the cost of health insurance up, excluding many who cannot afford to pay. According to OECD statistics, the per capita cost of health care is much lower and people are healthier in countries with a more significant government role in public health care services than in countries with private health care, such as the USA.

Free markets and perfect competition

The market is neither free nor perfectly competitive. Well-connected and big market players create information asymmetries that enable them to take advantage. The notorious Bond Scam in Sri Lanka is a good example. Cartels and oligopolistic control, hoarding and artificial scarcities, corporate lobbying, and shell companies are all about corporate corruption and market manipulations.

Apart from the bond scam, our day-to-day lived existences are heavily affected by corporate corruption. Take the sugar, cigarette, and forex scam at the height of the economic crisis. Even the immunoglobulin fraud unravelling. The private market players are equally at fault as the politicians involved. The same goes for privatising SOEs. Each privatising project, past and present, has involved significant corruption.

A creative and innovative government is crucial in a crisis, even for a market-led economy. A government that parrots enunciations of the multilateral lending institutions such as IMF and World Bank is at the risk of becoming a puppet of global and local capital and will end up deepening the crisis while killing the local economy.

In contrast, a visionary mission-oriented government will take swift actions to alleviate the pain of crisis on the public, nurture agriculture and local industries to ensure that the local economy will not suffer in the short and medium term, use SOEs efficiently and effectively to drive economic growth in the medium and long run. Instead of short-termism, a mission-oriented government will focus on the optimal use of resources while enhancing the capabilities of the State.

Mission-oriented govts

The history of governments (or states) illustrates how imaginative and creative governments have led the economy and society towards progress. Be it the US government in 1800 mired in a Civil War, in the aftermath of the Great Depression, Japan in the post-World War II, or poverty-stricken South Korea in the 1980s, or poverty-stricken Taiwan also faced with an existential crisis in 1950s or poverty-stricken China, or our own neighbour India, governments near and afar have shown that they have a central role in leading the economy forward. These governments, encountering their respective challenges, underwent radical transformations to deliver impressive outcomes.

They undertook high-risk investments in technology, infrastructure, manufacturing, and pharmaceutical industries while orienting business towards a social purpose through market regulations. Public agencies in Europe, Japan, Taiwan, China, Singapore, and South Korea, public banks in Europe and Germany, and multiple arms of the Department of Defence in the US (Defence Advanced Research Projects, CIA, US Navy) have been the bedrock of subsequent technological and manufacturing revolutions that these countries are known for. These breakthroughs functioned as stimulants for private businesses and were open to take advantage.

SL Developmental state and SOEs

The bold post-colonial State in Sri Lanka gearing national resources for innovation and change necessary to drive the industrial policy to advance development established SOEs in critical sectors of the economy. Mindful of the national sovereignty as a newly independent small State and accounting for the need for equitable development as a Third World country, foreign-held industries in energy and banks were nationalised. It was a with futuristic vision, courageous to withstand the risk of facing backlash from countries in the Global North which owned these industries.

SOEs have played a vital role, from fostering domestic industries while creating the domestic market to expanding electrification beyond income barriers and driving domestic production of textiles and manufactured goods. Even in their dilapidated form due to long-term neglect and purposeful undoing, SOEs remain valid and critical for post–crisis growth today. SOEs represent the necessary infrastructure that enables Sri Lanka to break free from debt dependency and move forward as an innovative and industrialised economy.

The market Pied Pipers argue that privatising SOEs will bring in quick dollars to finance the budget deficit. Privatising SOEs will appease the IMF and World Bank. While privatising SOEs would be the easiest, and most lazy public policy position that the government could assume, there are many other ways to lead market reforms and bridge budget deficits. SOEs should not be the scapegoats for lacklustre political leaders and unimaginative and mundane policymakers.

Privatising SOEs is a costly affair. Leave alone the cost of transforming SOEs into sellable enterprises and listing them in the Stock Market. The social cost, including the distributional cost of privatisation, is immense. For example, how long did it take the Ceylon Electricity Board to expand the electrification in Sri Lanka to include low-income households?

Tariff revisions over a few months have undone years of hard work by denying over 500,000 households their right to electricity. What is the social and distributional cost of 500,000 households going dark? Spillovers of denial of electricity to children, their education, and small and medium industries have a generational effect in regressing into history. Going back to the dark ages!

What reforms do the SOEs need? This is a valid question that we should mull over.

Political reforms should lead the way. It’s common knowledge that the use of SOEs as avenues to create employment for political clientele is at the root of the deterioration of SOEs. All the ministers holding public office since 1977 are guilty of overstaffing SOEs and appointing mediocre managers and CEOs. Not even a private business would survive such mismanagement. While creating employment opportunities is essential, it needs far-sighted approaches linked to the distribution of wealth, a better education system, and a balanced approach to the agriculture, manufacturing, and services sectors of the economy.

Organisational reforms should follow political reforms. Reorienting SOEs for their public purpose and holding the management accountable to the mandate of respective SOEs is essential. It could be harnessed with incentives to reward managers and employees for their contributions to enhance efficiency, productivity, and public service.

Create a mechanism to monitor SOEs. Ministerial oversight on SOEs as practised in Sri Lanka now is not working. Often, the Minister and the bureaucracy neither have the expertise nor information to supervise and monitor SOEs. As much as SOEs should generate quarterly and annual reports on their performance, the oversight agency should have the necessary skills to monitor and supervise them. Mariana Mazzucatto, influenced by examples from Italy, Spain, the UK, Sweden, and France, introduces the idea of a ‘State Holding Company’ as an overarching oversight agency to supervise and monitor SOEs.

To locate the idea in the SOE landscape in Sri Lanka would roughly be as follows: (See chart)

Rather than attempting to be prescriptive or to plant models from elsewhere, I want to expand the debate beyond the privatisation discourse. Democratic ownership and control of SOEs is not limited to Sri Lanka. It is a successful model which benefits the public, including private businesses. An entrepreneurial State could be the engine of growth, navigating society and the economy out of the crisis.

The writer is a feminist political economist.


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Relief without recovery

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A US airstrike on an Iranian oil storage facility

The escalating conflict in the Middle East is of such magnitude, with loss of life, destruction of cities, and global energy shortages, that it is diverting attention worldwide and in Sri Lanka, from other serious problems. Barely four months ago Sri Lanka experienced a cyclone of epic proportions that caused torrential rains, accompanied by floods and landslides. The immediate displacement exceeded one million people, though the number of deaths was about 640, with around 200 others reported missing. The visual images of entire towns and villages being inundated, with some swept away by floodwaters, evoked an overwhelming humanitarian response from the general population.

When the crisis of displacement was at its height there was a concerted public response. People set up emergency kitchens and volunteer clean up teams fanned out to make flooded homes inhabitable again. Religious institutions, civil society organisations and local communities worked together to assist the displaced. For a brief period the country witnessed a powerful demonstration of social solidarity. The scale of the devastation prompted the government to offer generous aid packages. These included assistance for the rebuilding of damaged houses, support for building new houses, grants for clean up operations and rent payments to displaced families. Welfare centres were also set up for those unable to find temporary housing.

The government also appointed a Presidential Task Force to lead post-cyclone rebuilding efforts. The mandate of the Task Force is to coordinate post-disaster response mechanisms, streamline institutional efforts and ensure the effective implementation of rebuilding programmes in the aftermath of the cyclone. The body comprises a high-level team, led by the Prime Minister, and including cabinet ministers, deputy ministers, provincial-level officials, senior public servants, representing key state institutions, and civil society representatives. It was envisaged that the Task Force would function as the central coordinating authority, working with government agencies and other stakeholders to accelerate recovery initiatives and restore essential services in affected regions.

Demotivated Service

However, four months later a visit to one of the worst of the cyclone affected areas to meet with affected families from five villages revealed that they remained stranded and in a state of limbo. Most of these people had suffered terribly from the cyclone. Some had lost their homes. A few had lost family members. Many had been informed that the land on which they lived had become unsafe and that they would need to relocate. Most of them had received the promised money for clean up and some had received rent payments for two months. However, little had happened beyond this. The longer term process of rebuilding houses, securing land and restoring livelihoods has barely begun. As a result, families who had already endured the trauma of disaster, now face prolonged uncertainty about their future. It seems that once again the promises made by the political leadership has not reached the ground.

A government officer explained that the public service was highly demotivated. According to him, many officials felt that they had too much work piled upon them with too little resources to do much about it. They also believed that they were underpaid for the work they were expected to carry out. In fact, there had even been a call by public officials specially assigned to cyclone relief work to go on strike due to complaints about their conditions of work. This government official appreciated the government leadership’s commitment to non corruption. But he noted the irony that this had also contributed to a demotivation of the public service. This was on the unjustifiable basis that approving and implementing projects more quickly requires an incentive system.

Whether or not this explanation fully captures the situation, it points to an issue that the government needs to address. Disaster recovery requires a proactive public administration. Officials need to reach out to affected communities, provide clear information and help them navigate the complex procedures required to access assistance. At the consultation with cyclone victims this was precisely the concern that people raised. They said that government officers were not proactive in reaching out to them. Many felt they had little engagement with the state and that the government officers did not come to them. This suggests that the government system at the community level could be supported by non-governmental organisations that have the capacity and experience of working with communities at the grassroots.

In situations such as this the government needs to think about ways of motivating public officials to do more rather than less. It needs to identify legitimate incentives that reward initiative and performance. These could include special allowances for those working in disaster affected areas, recognition and promotion for officers who successfully complete relief and reconstruction work, and the provision of additional staff and logistical support so that the workload is manageable. Clear targets and deadlines, with support from the non-governmental sector, can also encourage officials to act more proactively. When government officers feel supported and recognised for the extra effort required, they are more likely to engage actively with affected communities and ensure that assistance reaches those who need it most.

Political Solutions

Under the prevailing circumstances, however, the cyclone victims do not know what to do. The government needs to act on this without further delay. Government policy states that families can receive financial assistance of up to Rs 5 million to build new houses if they have identified the land on which they wish to build. But there is little freehold land available in many of the affected areas. As a result, people cannot show government officials the land they plan to buy and, therefore, cannot access the government’s promised funds. The government needs to address this issue by providing a list of available places for resettlement, both within and outside the area they live in. However, another finding at the meeting was that many cyclone victims whose lands have been declared unsafe do not wish to leave them. Even those who have been told that their land is unstable feel more comfortable remaining where they have lived for many years. Relocating to an unfamiliar area is not an easy decision.

Another problem the victims face is the difficulty of obtaining the documents necessary to receive compensation. Families with missing members cannot prove that their loved ones are no longer alive. Without official confirmation they cannot access property rights or benefits that would normally pass to surviving family members. These are problems that Sri Lanka has faced before in the context of the three decade long internal war. It has set up new legal mechanisms such as the provision of certificates of absence validated by the Office on Missing Persons (OMP) in place of death certificates when individuals remain missing for long periods. The government also needs to be sensitive to the fact that people who are farmers cannot be settled anywhere. Farming is not possible in every location. Access to suitable land and water is essential if farmers are to rebuild their livelihoods. Relocation programmes that fail to take these realities into account risk creating new psychological and economic hardships.

The message from the consultation with cyclone victims is that the government needs to talk more and engage more directly with affected communities. At the same time the political leadership at the highest levels need to resolve the problems that government officers on the ground cannot solve. Issues relating to land availability, legal documentation and livelihood restoration require policy decisions at higher levels. The challenge to the government to address these issues in the context of the Iran war and possible global catastrophe will require a special commitment. Demonstrating that Sri Lanka is a society that considers the wellbeing of all its citizens to be a priority will require not only financial assistance but also a motivated public service and proactive political leadership that reaches out to those still waiting to rebuild their lives.

 

by Jehan Perera

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Supporting Victims: The missing link in combating ragging

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A recent panel discussion at the University of Peradeniya examined the implications of the Supreme Court’s judgement on ragging, in which the Court recognised that preventing ragging requires not only criminal penalties imposed after an incident occurs but also systems and processes within universities that enable victims to speak up and receive support. Bringing together perspectives from law, university administration, psychology and students, the discussion sought to understand why ragging continues to persist in Sri Lankan universities despite the existence of legal prohibitions. While the discussion covered legal and institutional dimensions, one theme emerged clearly: addressing ragging requires more than laws and disciplinary rules. It requires institutions that are capable of supporting victims.

Sri Lanka enacted the Prohibition of Ragging and Other Forms of Violence in Educational Institutions Act No. 20 of 1998 following several tragic incidents in universities, during the 1990s. Among the most widely remembered is the death of engineering student S. Varapragash at the University of Peradeniya in 1997. Incidents such as this shocked the country and revealed the consequences of allowing violent forms of student hierarchy to persist. The 1998 Act marked an important legal intervention by recognising ragging as a criminal offence. The law introduced severe penalties for individuals found guilty of engaging in ragging or other forms of violence in educational institutions, including fines and imprisonment.

Despite the existence of this law for nearly three decades, prosecutions under the Act have been extremely rare. Incidents continue to surface across universities although most are not reported. The incidents that do reach university administrations are dealt with internally through disciplinary procedures rather than through the criminal justice system. This suggests that the problem does not lie solely in the absence of legal provisions but also in the ability of victims to come forward and pursue complaints.

The tragic reminders; the cases of Varapragash and Pasindu Hirushan

Varapragash, a first-year engineering student at the University of Peradeniya, was forced by senior students to perform extreme physical exercises as part of ragging, resulting in severe internal injuries and acute renal failure that ultimately led to his death. In 2022, the courts upheld the conviction of one of the perpetrators for abduction and murder. The case illustrates not only the brutality of ragging but also how long and difficult the path to justice can be for victims and their families. Even when victims speak about their experiences, they may not always disclose the full extent of what they have endured. In the case of Varapragash, the judgement records that the victim told his father that he was asked to do dips and sit-ups. Varapragash’s father had testified that it appeared his son was not revealing the exact details of what he had to endure due to shame.

More than two decades after the death of Varapragash, the tragedy of ragging continues. The 2025 Supreme Court judgement arose from the case of Pasindu Hirushan, a 21-year-old student of the University of Sri Jayewardenepura, who sustained devastating head injuries at a fresher’s party, in March 2020, after a tyre sent down the stairs by senior students struck him. He became immobile, was placed on life support, and returned home only months later. If the Varapragash case exposed the deadly consequences of ragging in the 1990s, the Pasindu Hirushan case demonstrates that universities are still failing to prevent serious violence, decades after the enactment of the 1998 Act. It was against this background of continuing institutional failure that the Supreme Court issued its Orders of Court in 2025. Among the key mechanisms emphasised by the judgement is the establishment of Victim Support Committees within universities.

Why do victims need support?

Ragging in universities can take many forms, including verbal humiliation, physical abuse, emotional intimidation and, in some instances, sexual harassment. While all forms of ragging can have serious consequences, incidents involving sexual harassment often present additional barriers for victims who wish to come forward. Victims may hesitate to complain due to weak institutional mechanisms, fear of retaliation, or uncertainty about whether their experiences will be taken seriously. In many cases, those who speak out are confronted with questions that shift attention away from the alleged misconduct and onto their own behaviour: why did s/he continue the conversation?; why did s/he not simply disengage, if the harassment occurred as claimed?; why did s/he remain in the environment?; or did his/her actions somehow encourage the accused’s behaviour? Such responses illustrate how easily victims can be subjected to a second layer of scrutiny when they attempt to report incidents. When individuals anticipate disbelief, minimisation or blame, silence may appear safer than disclosure. In such circumstances, the presence of a trusted institutional body, capable of providing guidance, protection and support, become critically important, highlighting the need for effective Victim Support Committees within universities.

What Victim Support Committees must do

As expected by the Supreme Court, an effective Victim Support Committee should function as a trusted institutional mechanism that places the safety and dignity of victims at the centre of its work. The committee must provide a safe and confidential point of contact through which victims can report incidents of ragging without fear of intimidation or retaliation. It should assist victims in understanding and pursuing available complaint procedures, while also ensuring their immediate protection where there is a risk of continued harassment. Recognising the psychological harm ragging may cause, the committee should facilitate access to counselling and emotional support services. At a practical level, it should also help victims document incidents, record statements, and preserve evidence that may be necessary for disciplinary or legal proceedings. The committee must coordinate with university authorities to ensure that complaints are addressed promptly and responsibly, while maintaining strict confidentiality to protect the identity and well-being of those who come forward. Beyond responding to individual cases, Victim Support Committees should also contribute to broader awareness and prevention efforts, within universities, helping to create an environment where ragging is actively discouraged and students feel safe to report incidents. Without such support, the process of pursuing justice can become overwhelming for individuals who are already dealing with the emotional impact of abuse.

Making Victim Support Committees work

According to the Orders of Court, these committees should include representatives from the academic and non-academic staff, a qualified counsellor and/or clinical psychologist, an independent person, from outside the institution, with experience in law enforcement, health, or social services, and not more than three final-year students, with unblemished academic and disciplinary records, appointed for fixed terms. Further, universities must ensure that committees consist of individuals who possess both expertise and genuine commitment in areas such as student welfare, psychology, gender studies, human rights and law enforcement, in line with the spirit of the Supreme Court’s directions, rather than consisting largely of ex officio positions. If treated as routine administrative positions, rather than responsibilities requiring specialised knowledge, sensitivity and empathy, these committees risk becoming symbolic rather than functional.

Greater transparency in the appointment process could strengthen the credibility of these committees. Universities could invite expressions of interest from individuals with relevant expertise and demonstrated commitment to supporting victims. Such an approach would help ensure that the committees benefit from the knowledge and dedication of those best equipped to fulfil this role.

The Supreme Court judgement also introduces an important safeguard by giving the University Grants Commission (UGC) the authority to appoint members to university-level Victim Support Committees. If exercised with integrity, this provision could help ensure that these committees operate with greater independence. It may also help address a challenge that sometimes arises within institutions, where individuals, with relevant expertise, or strong commitment to addressing issues, such as violence, harassment or student welfare, may not always be included in institutional mechanisms due to internal administrative preferences. External oversight by the UGC could, therefore, create opportunities for such individuals to contribute meaningfully to Victim Support Committees and strengthen their effectiveness.

Ultimately, the success of the recent judgement will depend not only on the directives it issued, the number of committees universities establish, or the number of meetings they convene, or other box-checking exercises, but on how sincerely those directives are implemented and the trust these committees inspire among students and staff. Laws can prohibit ragging, but they cannot by themselves create environments in which victims feel safe to speak. That responsibility lies with institutions. When universities create systems that listen to victims, support them and treat their experiences with seriousness, universities will become places where dignity and learning can coexist.

(Udari Abeyasinghe is attached to the Department of Oral Pathology at the University of Peradeniya)

Kuppi is a politics and pedagogy happening on the margins of the lecture hall that parodies, subverts, and simultaneously reaffirms social hierarchies.

by Udari Abeyasinghe

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Big scene … in the Seychelles

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Mirage: Off to the Seychelles for fifth time

Several of our artistes do venture out on foreign assignments but, I’m told, most of their performances are mainly for the Sri Lankans based abroad.

However, the group Mirage is doing it differently and they are now in great demand in the Seychelles.

Guests patronising the Lo Brizan pub/restaurant, Niva Labriz Resort, in the Seychelles, is made up of a wide variety of nationalities, including Russians, Chinese, French and Germans, and they all enjoy the music dished out by Mirage, and that is precisely why they are off to the Seychelles … for the fifth time!

The band is scheduled to leave this month and will be back after three weeks, but their journey to the Seychelles will continue, with two more assignments lined up for 2026.

In August it’s a four-week contract, and in December another four-week contract that will take in the festive celebrations … Christmas and the New Year.

Donald’s birthday
celebrations

According to reports coming my way, it is a happening scene at the Lo Brizan pub/restaurant, Niva Labriz Resort, whenever Mirage is featured, and the band has even adjusted its repertoire to include local and African songs.

They work three hours per day and six days per week at the Lo Brizan pub/restaurant.

Donald Pieries:
Leader, vocalist,
drummer

Led by vocalist and drummer Donald Pieries, many say it is his

musical talents and leadership that have contributed to the band’s success.

Donald, who celebrated his birthday on 07 March, at the Irish Pub, has been with the group through various lineup changes and is known for his strong vocals.

He leads a very talented and versatile line up, with Sudham (bass/vocals), Gayan (lead guitar/vocals), Danu (female vocalist) and Toosha (keyboards/vocals).

Mirage performs regularly at venues like the Irish Pub in Colombo and also at Food Harbour, Port City.

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