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The Milk Powder Formula – making of Anchor

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by Sumi Moonesinghe narrated to Savitri Rodrigo

Now began the process of picking up the pieces (after the July 1983 riots). In 1984, Killi transferred the staff from Berec, the battery company, to Jones Overseas. We had already drawn up plans to begin the import and distribution of Anchor Milk Powder from New Zealand. Killi recruited an excellent marketing director from India, Jojo Kanjirath, who was a highly-experienced marketer and advertising whiz-kid from J Walter Thompson, and I recruited Metha Abeygunewardene, a well-trained sales manager from Unilever, to be my Sales Director.

I knew my team was powerful and had sufficient strength to compete against Nespray, which was produced by Nestle, the world’s largest Swiss-based company with very deep pockets, I might add. It was a well-established brand, having been in Sri Lanka for over 100 years and thus gaining not just brand loyalty but becoming a generic household name for powdered milk.

This entire idea was a very bold move. We were taking on the world’s largest dairy company and even the New Zealand Dairy Board heads were sceptical of our plans. I still recall the breakfast meeting I had with the Regional Managing Director of NZDB’s subsidiary in Singapore, Alistair Betts, and Global Marketing Director of NZDB in Wellington. “How are you going to take on Nestle?” they asked me and I could hear doubt in their voices. Never in any of the NZDB markets, had anyone been audacious enough to take Nestle head-on.

Then came the next question. “Where do you plan on packing the milk powder?” I had my answer at the ready, having anticipated their questions. I talked at length and finally convinced them that we could and we would take on Nespray. “Here’s my plan,” I said and laid it out on the table. By the end of that meeting, I had their fullest support. That breakfast meeting was the start of the Anchor journey in Sri Lanka and Alistair Betts betting on Sri Lanka.

When I met Alistair initially, I was struck not just by his enthusiasm and personality, but by his work ethic, talent and dynamism. He was always attuned to what was going on and willing to change with the times and it was undoubtedly these traits that saw him spearhead the expansion of NZDB’s markets in South-East Asia. I was saddened by his death in 2005 and it was fitting that he was honoured posthumously in the Queen’s New Year honours list, becoming a companion of the Queen’s Service Order.

In an appreciation written by the Chairman of NZDB Sir Dryden Spring when Alistair passed away, Sir Dryden called him a legend and the face of NZDB, and “the first to crack those (South-East Asian) markets and get New Zealand dairy industry brands into Sri Lanka, Malaysia and Taiwan. Many of those brands are still the strongest we have today.”

I negotiated with the Bank of Ceylon for a line of credit to meet our working capital requirements. We then set up a packing plant in an abandoned garment factory in Ratmalana, on the outskirts of Colombo city, owned by Killi’s dear friend Nari Sabnani. While the hardware was being established aligned with our plan, our biggest challenge emerged with the sales agents. Nespray remained No 1 in their minds, and persuading them to place even just 10 packs of Anchor on the shelves was an uphill task. They were fearful of losing the Nespray distribution rights, which was technically their bread and butter. They didn’t want to put their businesses on the line for this newcomer that no one had heard of.

But we had a trump card —our strong marketing team, picked from the best among the best. We rounded up that expert marketing knowledge and began to pull rabbits out of the hat. Our marketing strategies proved to be the winner. Our brand hyped the concept of Anchor Milk Powder being from New Zealand — the fact that the milk was imported was our first scoring point because the Sri Lankan mindset of ‘imported goods being superior’ was yet a strong thread.

Our packaging and marketing collateral evoked the clean pure air of New Zealand with cows grazing on green grass on pristine plains, adding the innuendo that the cows did not have artificial feed but only consumed natural grass. This subtle canvas was our second scoring point. Our third was reiterating that mothers trusted Anchor because Anchor was pure wholesome milk powder.

And we had more! The mother we espoused needed to have a face. We picked Rosy Senanayake as the face of Anchor. She was a young mother who, before getting married, had represented Sri Lanka at beauty pageants. She had just the right blend of beauty and that young motherly disposition which fitted in well with the pristinely pure marketing strategy we were portraying. In hindsight, Rosy was a great pick as she continued to be associated with Anchor throughout her career, even after she won the Mrs. World title.

Our strategies worked and our sales began growing exponentially. In just 12 years, my very dedicated team, whom I liked to call my Anchor A Team (named after the famous TV series, the A-Team) and were truly like my family, had gained more than 70% market share. Beating the world’s No. 1 food corporation into second place was one of the biggest highlights of my business career.

I could never have done all this without Maha and Killi, and of course Susil, who was always there with a strong shoulder to cry on after major arguments with principals and suppliers. While Killi and Maha were always positioned together as the brothers running the Maharaja Group, they were diametrically opposing personalities. I knew Killi from our days in Singapore when he would visit us, but my first meeting with Maha was in their office at Bankshall Street, when I had been appointed Managing Director of the newly incorporated Jones Overseas Limited.

Maha, the older of the two, possessed a calm and collected personality, while Killi was very visionary, daring, outgoing and equipped with the courage to be different. But they got on extremely well, sharing company responsibilities with Killi’s personality fitting in well to travel the world to rally business for the company and Maha, managing the finances and controlling expenses.

Now that we had beaten Nespray and we were well entrenched in the milk powder market, it was time for another challenge. I wanted to tackle the milk tea segment, which was dominated by Lakspray, a cheaper product with only 26% fat. NZDB refused to supply us an equivalent to Lakspray as their thought process was that it would affect Anchor’s positioning. But on the ground, we were very aware of the market sentiment and so I arranged a meeting with the Directors of the UK Milk Marketing Board at the Savoy in London. My friend Baba Vairasinghe, who was the local agent for the UK Milk Marketing Board, arranged the meeting and accompanied me to it.

Some tough negotiations later, I left London with a signed contract for the supply of milk powder and payment arranged via a Letter of Credit. Not long after, two container loads of milk powder from the UK Milk Marketing Board arrived in Colombo – one went to Lanka Milk Foods, the producers of Lakspray, and the other to Jones Overseas for our new brand. This was a tough call for me and in fact, put to test the relationship and trust that had been built with NZDB. I knew Anchor was strong and the new brand didn’t pose any competition to Anchor. Eventually I was proved right and that little smudge in our relationship was obliterated.

My very able marketing team, headed by Shehara de Silva who created the brand name Ratthi, which in the Sinhala language means calf, was working overtime literally to make sure we continued our winning streak. We went into the market with a real clarion call and Ratthi didn’t disappoint. The calf was on a winning streak.

But our victories were not without some pain. It goes without saying that the world of business is one of ups and downs, but the challenge we faced in 1986 felt like an abyss and I was falling right into it. It was alleged that I was responsible for a consignment of contaminated weevil-infested full cream milk powder, which had been shipped to a semi-government entity under the Ministry of Trade, from the New Zealand Dairy Board.

The story made headlines in major newspapers with my name splashed across the front pages, even though I was only an indenting agent. I was devastated as I had nothing to do with it. This entity then sent a Letter of Demand for USD 1 million to NZDB and blacklisted the world’s largest exporter of dairy products, from supplying to Sri Lanka. The entire episode was impacting my company’s business very badly.

With the situation in dire straits, NZDB sent a technical team to Sri Lanka for an investigation. It was finally confirmed that this consignment of milk powder had been unloaded into a go-down which previously held rice. The importer had not fumigated the go-down prior to the milk powder being unloaded into it. The technical team then spent months sorting out our bags of milk powder. Even with these findings, the ban remained and our business reputation was suffering badly.

Finally, I couldn’t take the stress anymore and decided to meet my friend Lalith Athulathmudali who was the Minister of Trade. The best time to meet Lalith was when he was at breakfast because we could sit and chat undisturbed. I dealt a lot with him as Minister of Trade, due to the nature of my business. I told him what had happened, the findings of the technical team, and asked him to intervene in lifting the blacklist as the fault was not ours. It had already been proven that we had nothing to do with the unclean go-down.

“I can’t deal with this man,” I told Lalith exasperated, referring to the head of the semi-government entity, and not without a touch of anger. Lalith took one look at me, smiled and said, “Sumi, there’s no man you can’t deal with!” but assured me that he will sort things out, which he did. Looking back, this has been a pattern in my life. Just when I seem to be thrown into challenges that have taken me to the end of my tether sometimes, I seem to find the right person to pull me away from the edge of that precipice.

When it came to the intricacies of business, I was fundamentally self-taught. I had been thrown into the deep end and learned the ropes of commerce and industry on the run, but inherent wisdom told me that some professional value addition in business management would be helpful if I was to conquer the heights I had set for the company. In 1988, I had taken a short course in portfolio management and financial analysis in Geneva. This was a very exciting trip for me as Susil and I had travelled many times to Switzerland and revisiting some of the sites he and I went to, like Mont Blanc and the Matterhorn, gave me much joy. My fellow students and I would study during the week, and on weekends, put our studies aside and take a break doing these tourist runs.

In my quest for upskilling my business acumen, in 1992, I attended a course for chief executives at Wharton Business School at the University of Pennsylvania. This was a great opportunity for me to benchmark my knowledge and business skills with the other course attendees who turned out to be a Who’s Who of global business. I remember the CEOs of ASEA Brown Boveri (ABB) – a Swedish-Swiss MNC, Hewlett-Packard, Procter & Gamble, and ATT being among the participants. Besides learning from an honour roll of erudite economists and financial gurus from the USA, one of the biggest advantages I gained at Wharton was being taught speed reading.

With all the success our milk powder business was having, it was time for us to expand to a new office and factory complex. We obtained a loan of Rs. 600 million from BOC (for the construction of a state-of-the-art milk packing plant, liquid milk processing plant and an office complex. The entire complex was in Biyagama and was designed by Architect Navin Gooneratne. The complex was constructed by Mitsui and Sanken Lanka, which was headed by Ranjith Gunathilake. It housed some of the best dairy processing equipment imported from Holland, Denmark and Germany.

I was completely involved in the project from its very genesis. Both Navin and Ranjith were used to me poring over the designs and asking hundreds of questions, so I could visualise what the end-complex would be like. I knew the measurement of every wall, every angle and every area. I would make frequent visits to the site to keep tabs on progress except when I went on a six-week holiday to Europe with Susil, Anarkali and Aushi. When I returned, my first stop was in Biyagama.

As I drove in I was horrified. There were 16 giant concrete columns running the entire height of the facade of this five storey tall building. I knew this was not a design feature I had approved and immediately called Navin. “What are these monstrous columns doing in the front of my building?” I asked. “I want to make this a green building,” explained Navin patiently. “Those concrete columns are pergolas where plants can be grown. No one will see the concrete building as a result, only green, which will be very pleasing.”

However, I was not pleased. I turned to Ranjith who was privy to this conversation and asked him to remove the 16 columns immediately. “I don’t want to see even a trace of it. You’ll have to saw it off from ground level,” I told him. Ranjith was appalled and Navin was upset. Both tried to talk me out of it but to no avail. I had made up my mind.

The 16 columns disappeared, I was happy and Navin named himself the draftsman of the complex and me, the architect. The rest of the construction period was uneventful and went according to plan.

As Managing Director of Jones Overseas, I had the task of making a speech at the inauguration of the complex. In my address, I said, “I am 51 years old and have worked in this company now for over two decades. The time has come for me to hand over the reins of Managing Director to a younger person.”

No one expected this announcement but in my heart, I knew it was time. We were doing exceptionally well and judging by Sri Lanka’s corporate results, we were only second to Ceylon Tobacco Company in turnover. It’s always good to quit, while at the top!

After the ceremony, while we were returning from Biyagama, the Managing Director of NZDB Warren Larsen who listened to my speech at the inauguration asked me, “Sumi, are you willing to sell the business?” I didn’t think twice and quipped, “If the price is right, we will, but the final decision lies with Killi.”

Warren was determined to pursue the conversation. I had apprised Killi of the inquiry and when Killi hosted the NZDB team to lunch at his home, the subject of the sale of the company came up for discussion. Killi, who was always astute when it came to business deals, gave Warren the sale price based on future earnings. Then began a spate of lengthy negotiations with the finance director of the Maharaja Group entrusted with the task of number crunching. An agreement was reached.

The sale was completed in September 1996 and the same year in December, I resigned as Managing Director. And that was how we sold Jones Overseas to the New Zealand Dairy Board. With the sale of the company, I was considerably ‘well off’ as they say in Sri Lanka, having made sufficient money to enjoy life without running the rat race I had been used to for so long. I looked inwards and said to myself, “It is time to retire, spend time with our girls and travel the world.” And that is exactly what I did.

But I did keep abreast of news of my milk powder baby and was very happy when I learned eventually that Ratthi had got into the No. 1 position in the milk powder market, beating even Anchor, although a little part of me was sad that Anchor had lost that premier spot which we had built quite painstakingly.

However, while everything was looking good at this moment, during the time of the construction of new factory and office complex, I suffered a setback in my health.

I had become very stressed at work with this construction, travelling to Biyagama and back nearly every day, while ensuring our daily operations were on track, and helping Susil with his political affairs as he was now Chief Minister of the Western Province. The pressure was taking its toll on me.

I had a nagging pain in my spine which became quite debilitating. I consulted Prof. Henry Nanayakkara who referred me to Dr. Wijenaike. I was immediately hospitalised at Nawaloka Hospital and an ECG plus a plethora of other tests done.

Every test result came back negative but the debilitating pain persisted. I then flew to London and got myself admitted to Cromwell Hospital. A battery of tests later, every result was negative once again. There was nothing physically wrong with me. However, the doctor at Cromwell Hospital went a step further and referred me to a psychiatrist. A few sessions later, I was told that the pain was induced by stress. I was on the verge of a breakdown.

Killi was continually in touch with me and when I told him the diagnosis, he read the gravity of the situation and checked me into the Givenchy Spa at Trianon Palace Hotel in Versailles. I was placed on a special diet, received daily treatments with injections to my neck, had an exercise regime, revelled in massages and cycled in the evenings on the luscious 250-acre gardens. It was a total ten days of complete R&R and absolute bliss. One of the rules though was having no contact with the outside world, not even with family. The treatment, which I found out later that Killi had paid for in its entirety, worked.

Through these ten days, Susil was tasked with looking after Anarkali and Aushi. They went off on holiday to Yala with our lifelong friend Navin Gooneratne and his family. Ten days later, I returned to Sri Lanka – with no back pain – refreshed, rejuvenated and having regained my strength. I was ready to complete one of the biggest projects I had taken on – the construction of the new factory and office complex.

Just like everything in my life, I needed to be in control, even when it came to my illness. Through my bouts in hospitals, tests and spa treatment, I would absorb the details of the medical information by listening to doctors, scouring the reports and conducting my own extensive research. Susil himself had various medical issues – from cardiac, to cataract to kidney stones to septicaemia and everything else in-between, and I learned early on that I needed to be as well informed as the medical professionals, to be able to ask the relevant questions. Now I had added to my medical information arsenal and was becoming quite adept at dishing out medical advice, acquiring the title of having an honorary MBBS!

While this was generally a subject that prompted some mirth at dinner conversations, the arsenal I had collated did come in handy. When Anarkali developed a spine ache similar to mine while she was at Merrill Lynch, I knew exactly what to do. Her job was stressful, had long hours and gave her no free time. I organised a treatment regimen for her, similar to what I had at the Givenchy Spa, but at her apartment at Kensington Green, which was a gated community and close to Cromwell Hospital. Ten days later, Anarkali’s back pain disappeared and she was free from pain.

(Extracted from Sumi Moonesinghe’s Memoirs)



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Your six-year-old needs a tablet like a fish needs a smartphone

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THE GREAT DIGITAL RETHINK — PART II

Nordic countries handed tablets to toddlers and called it early childhood education. Now they’re taking the tablets back, handing out pencils, and hoping nobody noticed. Meanwhile, the Global South is still signing the tablet contracts. Someone should probably warn them.

The Tablet Arrives in Preschool

It is 2013, a government minister stands in a preschool in Stockholm, handing a shiny tablet to a four-year-old. Press cameras click. A press release announces that Sweden is building the digital classrooms of the future. The child, who until recently had been learning to hold a crayon, now swipes confidently at a screen. Innovation! Progress! The future!

Fast forward to 2023, the same Swedish government, or at least its successors, announces that preschools were wrong to make digital devices mandatory. Children’s reading comprehension is declining. Books are going back on the shelves. Pencils are making a comeback. The preschool tablets are being quietly wheeled into storage, and nobody wants to talk about the press release.

What Finland Actually Did — And Is Now Undoing

Finland has long held a special place in the global education imagination. When PISA scores are published and Finland sits at or near the top, education ministers from Seoul to São Paulo take note and wonder what they are doing wrong. Finland is the benchmark. Finland is the proof that good education is possible.

Which makes it all the more significant that Finland, in 2025, passed legislation banning mobile phones from classrooms. Not just recommending restraint. Not just issuing guidelines. Banning them, with teachers empowered to confiscate devices that disrupt learning. The law covers both primary and secondary schools. It came after years of evidence that children were distracted, and that Finland’s own PISA scores had been falling.

But the phone ban is only part of the story. The deeper shift in Finnish primary education has been a quiet reassertion of analogue fundamentals. Early literacy is being treated again as a craft that requires time, patience, practice and, crucially, a pencil.

Sweden gave tablets to toddlers. Then took them back. The pencils were in a drawer the whole time.

Sweden’s Spectacular U-Turn

Sweden’s reversal is arguably the most dramatic in recent educational history, because Sweden had gone further than most in embracing early-years digitalisation. The country had not merely allowed devices in preschool, it had in places mandated them, treating digital interaction as a developmental right alongside physical play and social learning. There was a logic to it, however misplaced: if the future is digital, surely children should encounter that future as early as possible.

The problem is that young children are not miniature adults navigating a digital workplace. They are human beings in the early stages of acquiring language, developing fine-motor-skills, building concentration and learning to regulate their own attention. These are not processes that are enhanced by a swipeable screen. Research on early childhood development is consistent on this point: young children learn language through conversation, storytelling, and physical manipulation of objects. They learn to write by writing, by the slow, muscular, tactile process of forming letters with a hand.

By 2023, Swedish education authorities had seen enough. Reading comprehension scores were down. Handwriting was deteriorating. Teachers were reporting that children were arriving in primary school unable to hold a pen properly. The policy reversed. Books came back. Cursive writing was reintroduced. The national curriculum was amended. And Sweden became, instead, a cautionary tale about what happens when you swap crayons for touchscreens before children have learned what crayons are for.

Australia: Banning Phones at Lunch

Australia’s approach to primary school digitalisation has been somewhat less ideologically charged than Scandinavia’s, and accordingly its reversal has been more pragmatic than philosophical. Australian states and territories arrived at phone bans largely through the accumulating pressure of parent complaints, teacher frustration and growing evidence that smartphones were damaging the social fabric of school life, not just in classrooms, but in playgrounds.

Queensland’s ‘away for the day’ policy, introduced in Term 1 of 2024, was notable precisely because it extended beyond lesson time to cover break times as well. This was a direct acknowledgement that the problem was not simply digital distraction during learning, it was the way that always-on connectivity was transforming childhood itself. Children who spend every break time on a phone are not playing, not resolving social conflicts face to face, not developing the unstructured social skills that primary school has always, if accidentally, taught.

The cyberbullying dimension added particular urgency in Australia, where research showed that many incidents of online harassment between primary-school children were occurring during school hours, facilitated by the phones sitting in their pockets. Banning the phone at the school gate did not solve the problem of online cruelty, but it did remove the school day as a venue for it.

The Science of the Pencil

The cognitive argument for handwriting in primary education is, it turns out, and far more interesting than the popular ‘screens bad, pencils good’ slogan suggests. The research on note-taking in university students, the finding that handwritten notes produce better conceptual understanding than typed notes, has a more fundamental parallel in primary education.

When a young child learns to write by hand, they are not merely practising a motor skill. They are encoding letters through physical movement, which activates memory systems that visual recognition alone does not reach. Studies in developmental psychology suggest that children who learn to write letters by hand recognise them faster and more accurately than those who learn through typing or tracing on screens. The hand, it appears, teaches the brain in ways the finger-swipe does not.

This does not mean that digital tools have no place in primary education, nobody sensible is arguing that children should graduate from primary school unable to use a keyboard. The question is sequencing and proportion. The emerging consensus, hard-won through a decade of failed experiments, is that foundational literacy and numeracy need to be established through analogue means before digital tools are introduced as supplements. Screens can follow pencils. Pencils, it turns out, cannot follow screens without catching up on what was missed.

The hand teaches the brain in ways the finger-swipe does not. And it took a decade of falling scores to rediscover this.

The Rest of the World Is Still Buying Tablets

Here is the uncomfortable part. While Finland legislates, Sweden reverses course and Australia bans phones from playgrounds, a large portion of the world’s primary schools are doing the opposite. Governments across South and Southeast Asia, Sub-Saharan Africa and Latin America are actively expanding device programmes in primary schools. Tablets are being distributed. Interactive whiteboards are being installed. AI tutoring apps are being piloted. The logic is identical to the logic Finland and Sweden followed 15 years ago: modernise, digitalise, equip children for the future.

The vendors selling these systems are not telling ministers about the Swedish U-turn. The development banks financing device programmes are not adjusting their models to reflect the OECD’s inverted-U curve. The international consultants advising education ministries are largely still working from a playbook written in 2010.

The lesson of the Nordic reversal is not that screens are evil, it is that screens at the wrong stage, in the wrong proportion, without the right pedagogical framework, undermine the very foundations they are supposed to build on. That lesson is available. The question is whether anyone is listening.

What Primary Schools Actually Need

Literacy and numeracy are not enhanced by early device saturation. They are built through reading aloud, through writing by hand, through mathematical reasoning with physical objects, and through the irreplaceable medium of a skilled teacher who knows their students.

Technology in primary education works best when it supplements a strong foundation, not when it substitutes for one that has not yet been built. Sweden and Finland did not fail because they used technology. They failed because they used it too extensively, and without asking what it was actually for. That question — what is this for? — is the one that every primary school system in the world should be asking before it signs another tablet contract.

SERIES ROADMAP Part I: From Ed-Tech Enthusiasm to De-Digitalisation | Part II: Phones, Pens & Early Literacy (this article) | Part III: Attention, Algorithms & Adolescents | Part IV: Universities, AI & the Handwritten Exam | Part V: A Critical Theory of Educational De-Digitalisation

(The writer, a senior Chartered Accountant and professional banker, is Professor at SLIIT, Malabe. The views and opinions expressed in this article are personal.)

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Government is willing to address the past

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Minister Ratnayake

Minister Bimal Rathnayake has urged all Sri Lankan refugees in India to return to Sri Lanka, stating that provision has been made for their reintegration. He called on India to grant citizenship to those who wished to stay on in India, but added that the government would welcome them back with both hands if they chose Sri Lanka. He gave due credit to the Organisation for Eelam Refugees Rehabilitation (OfERR), an NGO led by S. C. Chandrahasan, the son of S. J. V. Chelvanayakam, widely regarded as the foremost advocate of a federal solution and a historic leader of the Federal Party. OfERR has for decades assisted refugees, particularly Sri Lankan Tamils in India, with documentation, advocacy and voluntary repatriation support. Given the slow pace of resettlement of Ditwah cyclone victims, the government will need to make adequate preparations for an influx of Indian returnees for which it will need all possible assistance. The minister’s acknowledgement indicates that the government appreciates the work of NGOs when they directly assist people.

The issue of Sri Lankan refugees in India is a legacy of the three-decade long war that induced mass migration of Tamil people to foreign countries. According to widely cited estimates, the Sri Lankan Tamil diaspora today exceeds one million and is often placed between 1 and 1.5 million globally, with large communities in Canada, the United Kingdom and Australia. India, particularly Tamil Nadu, continues to host a significant refugee population. Current figures indicate that approximately 58,000 to 60,000 Sri Lankan Tamil refugees live in camps in India, with a further 30,000 to 35,000 living outside camps, bringing the total to around 90,000. These numbers have declined over time but remain one of the most visible human legacies of the conflict.

The fact that the government has chosen to make this announcement at this time indicates that it is not attempting to gloss over the human rights issues of the past that continue into the present. Those who suffered victimisation during the war may be encouraged that their concerns remain on the national agenda and have not been forgotten. Apart from those who continue to be refugees in India, there are more than 14,000 complaints of missing persons still under investigation according to the Office on Missing Persons, which has received tens of thousands of complaints since its establishment. There are also unresolved issues of land taken over by the military as high security zones, though some land has been released, and prisoners held in long term detention under the Prevention of Terrorism Act, which the government has pledged to repeal and replace.

Sequenced Response

In addressing the issue of Sri Lankan Tamil refugees in India, the government is sending a message to the Tamil people that it is not going to gloss over the past. The indications are that the government is sequencing its responses to problems arising from the past. The government faces a range of urgent challenges, some inherited from previous governments, such as war era human rights concerns, and others that have arisen more recently after it took office. The most impactful of these crises are not of its own making. Global economic instability has affected Sri Lanka significantly. The Middle East war has contributed to a shortage of essential fuels and fertilizers worldwide. Sri Lanka is particularly vulnerable to rising fuel prices. Just months prior to these global pressures, Sri Lanka faced severe climate related shocks, including being hit by a cyclone that led to floods and landslides across multiple districts and caused loss of life and extensive damage to property and livelihoods.

From the beginning of its term, the government has been compelled to prioritise economic recovery and corruption linked to the economy, which were central to its electoral mandate. As the International Monetary Fund has emphasised, Sri Lanka must continue reforms to restore macroeconomic stability, reduce debt vulnerabilities and strengthen governance. The economic problems that the government must address are urgent and affect all communities, whether in the north or south, and across Sinhalese, Tamil and Muslim populations. These problems cannot be postponed. However, issues such as dealing with the past, holding provincial council elections and reforming the constitution are not experienced as equally urgent by the majority, even though they are of deep importance to minorities. Indeed, the provincial council system was designed to address the concerns of the minorities and a solution to their problems.

Unresolved grievances tend to reappear in new forms when not addressed through political processes. Therefore, they need to be addressed sooner rather than later, even if they are not the most immediate priorities for the government. It must not be forgotten that the ethnic conflict and the three decade long war it generated was the single most destructive blow to the country, greatly diminishing its prospects for rapid economic development. Prolonged conflict reduced investment, diverted public expenditure and weakened institutions. If Sri Lanka’s early leaders had been able to negotiate peacefully and resolve their differences, the country might have fulfilled predictions that it could become the “Switzerland of the East.”

Present Opportunity

The present government has a rare opportunity to address the issues of the past in a way that ensures long term peace and justice. It has a two thirds majority in parliament, giving it the constitutional space to undertake significant reforms. It has also demonstrated a more inclusive approach to ethnic and religious minorities than many earlier governments which either mobilized ethnic nationalism for its own purposes or feared it too much to take political risks to undertake necessary reforms. Public trust in the government, as noted by international observers, remains relatively strong. During her recent visit, IMF Director General Kristalina Georgieva stated that “there is a window of opportunity for Sri Lanka,” noting that public trust in the government provides a foundation for reform.

It also appears that decades of public education on democracy, human rights and coexistence have had positive effects. This education, carried out by civil society organisations over several decades, sometimes in support of government initiatives and more often in the face of government opposition, provides a foundation for political reform aimed at justice and reconciliation. Civil society initiatives, inter-ethnic dialogue and rights-based advocacy have contributed to shaping a more informed public about controversial issues such as power-sharing, federalism and accountability for war crimes. The government would do well to expand the appreciation it has deservedly given to OfERR to other NGOs that have dedicated themselves addressing the ethnic and religious mistrust in the country and creating greater social cohesion.

The challenge for the government is to engage in reconciliation without undue delay, even as other pressures continue to grow. Sequencing is necessary, but indefinite postponement carries risks. If this opportunity for conflict resolution is not taken, it may be a long time before another presents itself. Sri Lanka may then continue to underperform economically, remaining an ethnically divided polity, not in open warfare, but constrained by unresolved tensions. The government’s recent reference to Tamil refugees in India is therefore significant. It shows that even while prioritising urgent economic and global challenges, it has not forgotten the past. Sri Lanka has a government with both the mandate and the capacity to address that past in a manner that secures a more stable and just future for all its people.

By Jehan Perera

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Strategic diplomacy at Sea: Reading the signals from Hormuz

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The unfolding tensions and diplomatic manoeuvres around the Strait of Hormuz offer more than a snapshot of regional instability. They reveal a deeper transformation in global statecraft, one where influence is exercised through calibrated engagement rather than outright confrontation. This is strategic diplomacy in its modern form: restrained, calculated, and layered with competing interests.

At first glance, the current developments may appear as routine diplomatic exchanges aimed at preventing escalation. However, beneath the surface lies a complex web of signalling among major and middle powers. The United States seeks to maintain deterrence without triggering an open conflict. Iran aims to resist pressure while avoiding isolation. Meanwhile, China and India, two rising powers with expanding global interests are navigating the situation with careful precision.

China’s position is anchored in economic pragmatism. As a major importer of Gulf energy, Beijing has a direct stake in ensuring that the Strait of Hormuz remains open and stable. Any disruption would reverberate through its industrial base and global supply chains. Consequently, China advocates de-escalation and diplomatic resolution. Yet, this is not purely altruistic. Stability serves China’s long-term strategic ambitions, including the protection of its Belt and Road investments and maritime routes. At the same time, Beijing remains alert to India’s growing diplomatic footprint in the region. Should India deepen its engagement with Iran and other Gulf actors, it could gradually reshape the strategic balance in areas traditionally influenced by China.

India’s approach, in contrast, reflects a confident and increasingly sophisticated foreign policy. By engaging Iran directly, while maintaining working relationships with Western powers, New Delhi is positioning itself as a credible intermediary. This is not merely about energy security, though that remains a key driver. It is also about strategic autonomy the ability to act independently in a multipolar world. India’s diplomacy signals that it is no longer a passive player but an active shaper of regional outcomes. Its engagement with Iran, particularly in the context of connectivity and trade routes, underscores its intent to secure long-term strategic access while countering potential encirclement.

Iran, for its part, views the situation through the lens of survival and strategic resilience. Years of sanctions and pressure have shaped a cautious but pragmatic diplomatic posture. Engagement with external actors, including India and China, provides Tehran with avenues to ease isolation and assert relevance. However, Iran’s trust deficit remains significant. Its diplomacy is transactional, focused on immediate gains rather than long-term alignment. The current environment offers opportunities for tactical advantage, but Iran is unlikely to make concessions that could compromise its core strategic objectives.

Even actors on the periphery, such as North Korea, are closely observing these developments. Pyongyang interprets global events through a narrow but consistent framework: regime survival through deterrence. The situation around Iran reinforces its belief that leverage, particularly military capability, is a prerequisite for meaningful negotiation. While North Korea is not directly involved, it draws lessons that may shape its own strategic calculations.

What emerges from these varied perspectives is a clear departure from traditional bloc-based geopolitics. The world is moving towards a more fluid and fragmented order, where alignments are temporary and issue-specific. States cooperate on certain matters while competing with others. This creates a dynamic but unpredictable environment, where misinterpretation and miscalculation remain constant risks.

It is within this evolving context that Sri Lanka’s strategic relevance becomes increasingly visible. The recent visit by the US Special Envoy for South and Central Asia, Sergio Gor, to the Colombo Port; is not a routine diplomatic courtesy call. It is a signal. Ports are no longer just commercial gateways; they are strategic assets embedded in global power competition. A visit of this nature underscores how Sri Lanka’s maritime infrastructure is being viewed through a geopolitical lens particularly in relation to sea lane security, logistics, and regional influence.

Such engagements reflect a broader reality: global powers are not only watching the Strait of Hormuz but are also positioning themselves along the wider Indian Ocean network that connects it. Colombo, situated along one of the busiest east–west shipping routes, becomes part of this extended strategic theatre. The presence and interest of external actors in Sri Lanka’s ports highlight an emerging pattern of influence without overt control a hallmark of modern strategic diplomacy.

For Sri Lanka, these developments are far from abstract. The island’s strategic location along major Indian Ocean shipping routes places it at the intersection of these global currents. The Strait of Hormuz is a vital artery for global energy flows, and any disruption would have immediate consequences for Sri Lanka’s economy, particularly in terms of fuel prices and supply stability.

Moreover, Sri Lanka must manage the competing interests of larger powers operating within its vicinity. India’s expanding regional role, China’s entrenched economic presence, and the growing attention from the United States all converge in the Indian Ocean. This requires a careful balancing act. Aligning too closely with any one power risks alienating others, while inaction could leave Sri Lanka vulnerable to external pressures.

The appropriate response lies in adopting a robust foreign policy that engages all major stakeholders while preserving national autonomy. This involves strengthening diplomatic channels, enhancing maritime security capabilities, and investing in strategic foresight. Sri Lanka must also recognise the growing importance of non-traditional security domains, including cyber threats and information warfare, which increasingly accompany geopolitical competition.

Equally important is the need for internal coherence. Effective diplomacy abroad must be supported by institutional strength at home. Policy consistency, professional expertise, and strategic clarity are essential if Sri Lanka is to navigate an increasingly complex international environment.

The situation in the Strait of Hormuz thus serves as both a warning and an opportunity. It highlights the fragility of global systems, but also underscores the potential for skilled diplomacy to manage tensions. For Sri Lanka, the challenge is not merely to observe these developments, but to position itself wisely within them.

In a world where power is no longer exercised solely through force, but through influence and presence, strategic diplomacy becomes not just an option, but a necessity. The nations that succeed will be those that understand this shift now and act with clarity, balance, and foresight.

Mahil Dole is a senior Sri Lankan police officer with over four decades of experience in law enforcement and intelligence. He previously served as Head of the Counter-Terrorism Division of the State Intelligence Service and has conducted extensive interviews with more than 100 suicide cadres linked to terrorist organisations. He is a graduate of the Asia-Pacific Centre for Security Studies (Hawaii).

By Mahil Dole
Senior Police Officer (Retd.), Former Head of Counter-Terrorism Division, State Intelligence Service, Sri Lanka

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