Midweek Review

The Sri Lankan debt crisis: A layman’s review

Published

4 years ago

2022/06/1

Figure 1. Sri Lanka’s foreign debt from 2000 -2020 ( from https://www.reuters.com/markets/rates-bonds/sri-lanka-edge-debt-burden-mounts-2022-01-17/)

By Nimal Gunatilleke

As a layman in the subject of political economy, nonetheless interested in discerning the real background to the historic debt crisis that Sri Lanka is undergoing at present, I have been reading many reports, including expert views, opinion statements, institutional press releases, think-tank analyses, COPE reports, etc., that are plentiful on the internet. Based on these readings, I was able to synthesize a layman’s review, which I thought of putting out to a wider readership to stimulate constructive discourses from the more knowledgeable authorities and others alike, especially on the solutions that are available for our country to come out of this huge debt crisis. One of the major criticisms of the general public is that although warnings of this impending disaster had been made repeatedly at official meetings among technocrats and bureaucrats, the general public was not sufficiently alerted early enough, especially via popular media, to shake up the bureaucracy to make a timely course correction.

We all are now aware that Sri Lanka has an accumulated foreign debt of US $ 51 billion at the time of pre-emptive sovereign default of foreign currency repayment which happened in March/April 2022. The following Figure 1, with a series of histograms that appeared on the web, provides a relatively easy understanding of the progression of our cumulated foreign debt over the years since 2000 and its proportional ownership of creditors/lenders. It had been prepared by Reuters in January 2022 sourcing Central Bank information and colour-coded to apportion the foreign debt accumulated since 2000. The proportional ownership has been grouped into several categories of lenders in this chart, such as International Financial Institutions (IDA, ADB, etc. in red), foreign governments (Japan, China, India, etc. in orange), International Sovereign Bond Issuers (Goldman Sachs, Black Rock, and Pacific Investment Management, Vanguard, etc., in green!!) and other capital market lenders (Exim banks, etc., in pale green).

This figure reveals that a higher proportion of foreign funding for Sri Lanka’s development projects as well as to bridge the annual budget deficits in the early 2000 period, came via bilateral and multilateral donor contributions (red and orange color codes), when Sri Lanka was still a Lower Middle-Income Country (LMIC). However, this trend has been changing since 2007 or so, when Sri Lanka started obtaining loans at relatively higher interest rates from International Sovereign Bonds (ISBs) and other Financial Capital Markets. The contribution of ISBs increased significantly from around 2015 and reached an all-time high in 2019 almost at the same time when Sri Lanka was elevated to an Upper Middle-Income category (UMIC) for a short period of time by the World Bank. However, a year later, Sri Lanka was down-graded again as a lower-middle income country after it recorded a US$ 4,020 per capita income for 2020. Apparently, when a country reaches an Upper Middle-Income level, it is not entitled to concessionary loans but must seek funding from International Capital Markets at the internationally prevailing competitive interest rates. Sri Lanka’s access to international capital markets (with International Sovereign Bonds issuances since 2007) brought a shift to commercial borrowing and an increase in external interest rates to be paid back in short periods of time.

Consequently, Sri Lanka’s foreign debt apportioning in 2022, as per Figure 1, which has been computed using information from Sri Lanka’s Central Bank, indicates that over 35% of the island’s debt is owned by US and UK-based ISBs. The balance of foreign debt in 2022 is owned by the aforesaid bi-lateral and multilateral agencies. Some of these latter agencies, usually charge lower interest rates on concessionary terms. They have even gone to the extent of being more compassionate to express their willingness to further delay the debt repayment while at the same time being charitable enough to donate humanitarian aid in the form of food, fuel, and medicine during this crisis period. It is clear that the root cause of Sri Lanka’s default, at this time, is due to the disproportionate accumulation of ISBs and other such financial instruments in recent times. Higher interest rates over short periods of time needed to be paid, for refinancing the loans already taken. (See the graph)

This annual progression of the ‘sovereign debt trap’ also led to the speculation of unsustainability of Sri Lanka’s foreign debt from 2019 onwards leading to a progressive downgrading of credit ratings by the three leading credit rating agencies – Moody’s Investor Services, Standard and Poor’s (S&P), and the Fitch Group. This downgrading by credit rating agencies further deepened Sri Lanka’s debt crisis, pushing us into one of the worst economic crises in modern history.

The Verite Research Strategic Analysis Working Paper published in October 2021provides an analysis on this. For the five years, from 2021 to 2025, the annual average repayments due on servicing external debt maturities is US$ 4,400 million. In contrast, from 2015 to 2018, the government only had to repay an annual average of US$ 2,700 million as external debt repayment. To meet those debt repayments, during 2015 to 2018, the government borrowed on average US$ 1,900 million through ISBs in a year, as indicated in Figure 1. Since the beginning of 2020, the yields of ISBs have more than doubled and the credit ratings of the sovereign bonds were also downgraded multiple times, in 2020, leading to high risks of default in 2021 preventing further borrowing from the international markets. This forced the government to use its already depleting reserves to meet the external debt obligations, while at the same time, meeting the urgent healthcare emergencies resulting from the rapid spread of the COVID 19 pandemic which demanded lockdowns over months, associated economic losses and also for meeting increasing healthcare needs.

While it has been widely reported in the western media that Sri Lanka is a victim of a ‘Chinese debt trap’, our increased dependency on International Sovereign Bonds, over recent times is also equally, if not more, responsible for the default, at this time, as Sri Lanka has been compelled to borrow money from international capital markets at higher rates to be paid back over short periods of time. These funds were needed for the repayment of the loans already taken for the settlement of earlier taken loans/their interests while providing at the same time, the shortfall of social welfare benefits from the lost tax revenue as a result of ill-advised tax rebates granted in 2019. The resultant drop in revenue amounted to 3% of GDP – from 12.6% in 2019 to 9.2% in 2020. The revenue as a share of GDP for 2020 has apparently been the lowest in the post-independence history of Sri Lanka that led to huge deficits which need to be financed through borrowing, resulting in increasing debt.

Notwithstanding some of these unanticipated debilitating economic cataclysms, some political analysts speculate whether Sri Lanka was duped into a situation of ‘pumped and dumped’ by the Western interests. The World Bank up-graded Sri Lanka to a Lower Middle-Income Country (LMIC) in 1997, and then to the short-lived Upper Middle-Income Country in 2019 thus making it ineligible for lower interest rates for national development thus compelling to borrow from International Capital Markets. This fortuitously coincided with the 2019 Easter Sunday bombing spree which started the rapid downward spiraling of Sri Lanka’s economy.

On top of these, internal mismanagement of our economy also has contributed in no small measure to this predicament. The infamous bond scams, unbridled corruption and nepotism at the highest levels, imprudent decisions of the then monitory board of the Central Bank, and more significantly, holding on to such irrational decisions for a long period thus bleeding our foreign exchange reserves by over US$ 5.5, as reported by one of its members at a recent COPE meeting.

So, it surmises that both external interventions as well as internal economic mismanagement has contributed to the present-day debt crisis leading to ‘Arab Spring’ style protests by segments of the general public fueled by opportunistic politicians and their invisible handlers. It has been transmitted in some academic fora that Sri Lanka’s default seemed to follow a systematic, deliberate, and planned route to haul Sri Lanka into IMF’s and Washington’s clutches. This likelihood had apparently been in the air for some time – at least since the rejection of the Millennium Challenge Corporation (MCC) compact by the Sri Lankan Government in December 2019.

The MCC compact for Sri Lanka was designed to reduce poverty through improved transportation network and providing secure land titles to small holder farmers and other Sri Lankan landholders. The Special Presidential Commission Report which examined the draft MCC Compact has recommended the rejection of the Compact in its current form as it not only imperils Sri Lanka’s economic sovereignty but also undermines the land and human rights of her citizens. We need to be vigilant at this stage at which we are in a desperate situation in meeting day-to-day needs of the people as well as fulfilling debt obligations through their restructuring. There are indications that a number of stealthy moves are already at play to undermine the rights of the people (see recent press releases by Dr. Gunadasa Amarasekera of the Federation of National Organisations).

Some political analysts argue that this ‘staged default’ would enable the IMF to effectively take control of strategic geopolitical positioning by influencing Sri Lanka’s economic policy initiatives compromising its sovereignty. It is also speculated that by doing so, they can stave off the Chinese influence (despite China being a leading member of the IMF) and more significantly, make it difficult for Sri Lanka to source its oil, gas and other energy requirements at discounted rates from sanctions-hit Russia. Ironically, India continues to avail themselves to the discounted oil and gas supplies from Russia despite some resistance from her western partners while helping to meet our energy needs through loans and grants. It is a pity that Sri Lanka is far too late in looking into this possibility of negotiating with Russia directly for supplementing our long-term fossil fuel and other energy needs in exchange for our tea exports.

Sri Lanka is apparently caught between the devil and the deep blue sea for being located in a geostrategic position abundantly endowed with strategically important natural resources. While being at the centre of the Indian Ocean Sea Lanes of Communication (SLOC) with an extensive ocean and land-based mineral resources, including premium grade graphite and rare earth elements, some political analysts are of the view that Sri Lanka suffers from a ‘Paradox of Plenty’ or perhaps, a geostrategic ‘Resource Curse’. This phenomenon often afflicts countries blessed with abundant natural resources, like Sri Lanka. According to the Global Wealth Databook 2020 of the Credit Suisse Research Institute, the total wealth of Sri Lanka is estimated to be USD 351 billion while admitting at the same time that the quality of wealth data used for this estimation to be poor. A more realistic estimate could indeed yield even a higher value and Sri Lanka appears to be far from bankrupt, on that count. Despite all these, we have been having a slower economic development prone to poor governance, corruption and cronyism over successive political regimes since independence. This economic wealth of Sri Lanka may be a key constituent put on offer in attracting creditors to our national-scale real estate assets at this crucial stage of negotiations for debt relief.

The US Ambassador to Sri Lanka and the Maldives, Julie Chung, in a recent press release remarked that Sri Lanka is at the heart of the Indo-Pacific oceanscape, sitting next to some of the world’s busiest shipping lanes through which about half the world’s container ships and two-thirds of the world’s oil shipments pass. According to her, Sri Lanka has the potential to play a pivotal role in the health of world trade. It is not surprising, therefore, the former US Under Secretary for South and Central Asia, Alice G. Well, a few years ago, called Sri Lanka a ‘valuable piece of real estate’ in the Indian Ocean. Still others have termed Sri Lanka ‘an unsinkable aircraft carrier’ in the Indian Ocean – much more strategic than the Chargos Island which was handed back to the people of Mauritius by the British (and hence US occupation ended) in February 2019 after the International Court of Justice in the Hague ruled that the latter’s occupation of Chargos Island was illegal under International Law.

Furthermore, it was none other than the US Secretary Blinken who had recently reported that in today’s world, cyberspace and cyber security are increasingly important and, as part of their vision for the Indo-Pacific, the United States looks to coordinate with partners to ensure an open and secure internet and to implement a framework for responsible behavior in cyberspace.

With a background of this politico-geostrategic wealth, the Sri Lanka Government is up against tough bargaining with the IMF and their designated creditors to raise USD 8 – 12 billion or perhaps even more from the lease or sale of at least some of these valuable ‘real estate’ assets belonging to the public of Sri Lanka which have been grossly mismanaged over decades by successive governments. Dr. Nishan De Mel of Verite Research says, “When the IMF determines that a country’s debt is not sustainable, the country needs to take steps to restore debt sustainability prior to IMF lending”. These steps would undoubtedly feel quite painful in particular to the poorest and most vulnerable sectors of the country.

Prime Minister Wickremasinghe recently stated in the Parliament that SriLankan Airlines, with all its assets would be the first to be privatized to relieve the debt burden. Among the other valuable public assets that are being considered to go under the hammer according to reports on the web are Mattala and Ratmalana airports, Sri Lanka Telecom shares, and the Sri Lanka Insurance Corporation to name a few. Then there are physical assets like Sri Lanka’s marine Exclusive Economic Zone which include the already identified oil and gas deposits, Under-sea Data Cable Routes, the strategic island’s telecom frequencies important for cyber-security. These are a part of this ‘real estate’ package – the cynosure of many powerful global political players backed by leading international financiers – up for negotiations in the name of debt restructuring. Some economists are of the opinion that divesting these strategic public assets resulting from mismanagement, corruption, and ignorance of the potential value of these resources, is tantamount to throwing the baby with the bath water!

The debt restructuring and bridge financing negotiations with the IMF, if successful, may be able to provide us short term debt relief tied with very stringent conditions such as tightening our monitory policy, raising taxes, reduction of government expenditure and wastage, introducing a fuel and utilities pricing formula reflecting the market prices, among others. Although Sri Lanka promised a number of similar adjustments in the during earlier rounds of negotiations with the IMF (in 2009 and 2016), none of them were implemented in full as planned since these would have resulted in high social and political costs.

With such a track record, the conventional IMF debt restructuring formula may not help to overcome our efforts in moving toward bridging the trade deficit. This is primarily because Sri Lanka continues to spend more foreign exchange than its receipt of revenue through the export of goods and services. This indeed has been the root cause of our long-term external debt problem. Economists argue that going to the IMF alone will not fix this problem. According to them, the IMF will simply put a sticking plaster on our arterial wound and send us home. If Sri Lanka continues haemorrhaging foreign exchange with its typical laissez-faire approach, we may have to go back again to the IMF in two years’ time asking for yet more debt relief!.

IMF has just concluded a joint technical session with Sri Lanka to determine a roadmap for restoring macro-economic stability and debt sustainability that will serve as a platform for the negotiations with other creditors/lenders, later. Furthermore, this joint initiative once implemented in compliance with IMF conditions, is expected to increase investors’ confidence and also in securing additional resources from the IMF, the World Bank, Asian Development Bank, and other such agencies.

Amidst all these, there appears to be a silver lining in the dark financial clouds that hovering over Sri Lanka at present where even an adversity of this magnitude could be turned into an excellent medium or long-term investment opportunity. The silver lining in the dark horizon is that the leading international donor agencies are steadily moving towards ‘sustainable financing’ in compliance with the Paris Agreement on Climate Change in the present green economic era.

(To be continued tomorrow)

The author can be contacted at
nimsavg@gmail.com

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Midweek Review

Dr. Jaishankar drags H’tota port to reverberating IRIS Dena affair

Published

7 hours ago

2026/03/11

Sahan Weerasooriya

Sri Lanka reached an agreement with China to build the Hambantota port after India declined the then President Mahinda Rajapaksa’s request to take charge of the high profile project. The Indian decision may have been influenced by the war raging in the northern region at that time.

Indian Foreign Minister Dr. S. Jaishankar recognised Hambantota harbour as a Chinese military facility that underlined intimidating foreign military presence in the Indian Ocean. Jaishankar was responding to queries regarding India’s widely mentioned status as the region’s net security provider against the backdrop of a US submarine blowing up an Iranian frigate IRIS Dena, off Galle, within Sri Lanka’s Exclusive Economic Zone.

This happened at the Raisina Dialogue 2026 (March 5 to 7) in New Delhi. Raisina Dialogue was launched in 2016, three years after Narendra Modi became the Prime Minister.

The query obviously rattled the Indian Foreign Minister. Urging the moderator, Ms. Pakli Sharma Ipadhyay, to understand, what he called, the reality of the Indian Ocean, Dr. Jaishankar pointed out the joint US-British presence at Diego Garcia over the past five decades. Then he referred to the Chinese presence at Djibouti in East Africa, the first overseas Chinese military base, established in 2017, and Chinese takeover of Hambantota port, also during the same time. China secured the strategically located port on a 99-year lease for USD 1.2 bn, under controversial circumstances. China succeeded in spite of Indian efforts to halt Chinese projects here, including Colombo port city.

The submarine involved is widely believed to be Virginia-class USS Minnesota. The crew, included three Australian Navy personnel, according to international news agencies. However, others named the US Navy fast-attack submarine, involved in the incident, as USS Charlotte.

Diego Garcia is responsible for military operations in the Middle East, Africa and the Indo-Pacific. Dr. Jaishankar didn’t acknowledge that India, a key US ally and member of the Quad alliance, operated P8A maritime patrol and reconnaissance flights out of Diego Garcia last October. The US-India-Israel relationship is growing along with the US-Sri Lanka partnership.

The Indian Foreign Minister emphasised the deployment of the US Fifth Fleet in Bahrain, one of the countries that had been attacked by Iran, following the US-Israeli assassination of Iranian Supreme Leader, and key government functionaries, in a massive surprise attack, aiming at a regime change there. The Indian Minister briefly explained how they and Sri Lanka addressed the threat on three Indian navy vessels following the unprovoked US-Israeli attacks on Iran. Whatever the excuses, the undeniable truth is, as Sharma pointed out, that the US attack on the Iranian frigate took place in India’s backyard.

Sri Lankan Foreign Minister Vijitha Herath who faced Sharma before Dr. Jaishankar, struggled to explain the country’s position. Dr. Jaishankar made the audience laugh at Minister Herath’s expense who repeatedly said that Sri Lanka would deal with the situation in terms of the UN Convention on the Law of the Sea (UNCLOS) and international laws. Herath should have pointed out that Hambantota was not a military base and couldn’t be compared, under any circumstances, with the Chinese base in Djibouti.

Typical of the arrogant Western power dynamics, the US never cared for international laws and President Donald Trump quite clearly stated their position.

Israel is on record as having declared that the decision to launch attacks on Iran had been made months ago. Therefore, the sinking of the fully domestically built vessel that was launched in 2021 should be examined in the context of overall US-Israeli strategy meant to break the back of the incumbent Islamic revolutionary government and replace it with a pro-Western regime there as had been the case after the toppling of the democratically elected government there, led by Prime Minister Mossadegh, in August, 1953.

US Defence Secretary Pete Hegseth declared that IRIS Dena “thought it was safe in international waters’ but died a quiet death.” A US submarine torpedoed the vessel on the morning of March 4, off Galle, within Sri Lanka’s exclusive economic zone and that decision must have been made before the IRIS Dena joined International Fleet Review (IFR) and Exercise Milan 2026, at Visakhapatnam, from February 15 to 25.

The sinking of the Iranian vessel, a Moudge –class frigate attached to Iran’s southern fleet deployed in the Gulf of Oman and Strait of Hormuz, had been calculated to cause mayhem in the Indian Ocean. Obviously, and pathetically, Iran failed to comprehend the US-Israeli mindset after having already been fooled with devastating attacks, jointly launched by Washington and Tel Aviv against the country’s nuclear research facilities, while holding talks with it on the issue last June. Had they comprehended the situation they probably would have pulled out of the IFR and Milan 2026. Perhaps, Iran was lulled into a false sense of security because they felt the US wouldn’t hit ships invited by India. The US Navy did not participate though the US Air Force did.

The US action dramatically boosted Raisina Dialogue 2026, but at India’s expense. Prime Minister Modi’s two-day visit to Tel Aviv, just before the US-Israel launched the war to effect a regime change in Teheran, made the situation far worse. BJP seems to have decided on whose side India is on. But, the US action has, invariably, humiliated India. That cannot be denied. The Indian Navy posted a cheery message on X on February 17, the day before President Droupadi Murmu presided over IFR off the Visakhapatnam coast. “Welcome!” the Indian Navy wrote, greeting the Iranian warship IRIS Dena as it steamed into the port of Visakhapatnam to join an international naval gathering. Photographs showed Iranian sailors and a grey frigate gliding into the Indian harbour on a clear day. The hashtags spoke of “Bridges of Friendship” and “United Through Oceans.”

US alert

Dr. Jaishankar

Altogether, three Iranian vessels participated in IFR. In addition to the ill-fated IRIS Dena, the second frigate IRIS Lavan and auxiliary ships IRIS Bushehr comprised the group. Dr. Jaishankar disclosed at the Raisina Dialogue 2026 that Iran requested India to allow IRIS Lavan to enter Indian waters. India accommodated the vessel at Cochin Port (Kochi Port) on the Arabian Sea in Kerala.

At the time US torpedoed IRIS Dena, within Sri Lanka’s EEZ, IRIS Lavan was at Cochin port. Sri Lanka’s territorial waters extend 12 nautical miles (approximately 22 km) from the country’s coastline. The US hit the vessel 19 nautical miles off southern coastline.

Sri Lanka, too, participated in IFR and Milan 2026. SLN Sagara (formerly Varaha), a Vikram-class offshore patrol vessel of the Indian Coast Guard and SLN Nandimithra, A Fast Missile Vessel, acquired from Israel, participated and returned to Colombo on February 27, the day before IRIS Lavan sought protection in Indian waters.

Although many believed that Sri Lanka responded to the attack on IRIS Dena, following a distressed call from that ship, the truth is it was the Indo-Pacific Command (INDOPACOM) that alerted the Maritime Rescue Coordination centre (MRCC) after blowing it up with a single torpedo. The SLN’s Southern Command dispatched three Fast Attack Craft (FACs) while a tug from Sri Lanka Ports Authority (SLPA) joined later.

The INDOPACOM, while denying the Iranian claim that IRIS Dena had been unarmed at the time of the attack, emphasised: “US forces planned for and Sri Lanka provided life-saving support to survivors in accordance with the Law of Armed Conflict.” In the post shared on X (formerly Twitter) the US has, in no uncertain terms, said that they planned for the rescuing of survivors and the action was carried out by the Sri Lanka Navy.

IRIS Lavan and IRIS Bushehr are most likely to be held in Cochin and in Trincomalee ports, respectively, for some time with the crews accommodated on land. With the US-Israel combine vowing to go the whole hog there is no likelihood of either India or Sri Lanka allowing the ships to leave.

Much to the embarrassment of the Modi administration, former Indian Foreign Secretary Kanwal Sibal has said that IRIS Dena would not have been targeted if Iran was not invited to take part in IFR and Milan naval exercise.

“We were the hosts. As per protocol for this exercise, ships cannot carry any ammunition. It was defenseless. The Iranian naval personnel had paraded before our president,” he said in a post on X.

Sibal argued that the attack was premeditated, pointing out that the US Navy had been invited to the exercise but withdrew at the last minute, “presumably with this operation in mind.”

Sibal added that the US ignored India’s sensitivities, as the Iranian ship was present in the waters due to India’s invitation.

He stressed that India was neither politically nor militarily responsible for the US attack, but carried a moral and humanitarian responsibility.

“A word of condolence by the Indian Navy (after political clearance) at the loss of lives of those who were our invitees and saluted our president would be in order,” Sibal said.

Iran and even India appeared to have ignored the significance of USN pullout from IFR and Milan exercise at the eleventh hour. India and Sri Lanka caught up in US-Israeli strategy are facing embarrassing questions from the political opposition. Both Congress and Samagi Jana Balwegaya (SJB), as well as Sri Lanka Podujana Peramuna (SLPP), exploited the situation to undermine respective governments over an unexpected situation created by the US. Both India and Sri Lanka ended up playing an unprecedented role in the post-Milan 2026 developments that may have a lasting impact on their relations with Iran.

The regional power India and Sri Lanka also conveniently failed to condemn the February 28 assassination of Iranian Supreme Leader Ayatollah Ali Khamenei, while that country was holding talks with the US, with Oman serving as the mediator.

Condemning the unilateral attack on Iran, as well as the retaliatory strikes by Iran, Leader of the Opposition in the Lok Sabha and Congress leader Rahul Gandhi on Tuesday (March 3, 2026) questioned India’s silence on the Middle East developments.

In a post on social media platform X, Gandhi said Prime Minister Narendra Modi must speak up. “Does he support the assassination of a Head of State as a way to define the world order? Silence now diminishes India’s standing in the world,” he said.

Under heavy Opposition fire, India condoled the Iranian leader’s assassination on March 5, almost a week after the killing. Foreign Secretary Vikram Misri met the Iran Ambassador in Delhi and signed the condolence book, though much belatedly.

SL-US relations

The Opposition questioned the NPP government’s handling of the IRIS Dena affair. They quite conveniently forgot that any other government wouldn’t have been able to do anything differently than bow to the will of the US. Under President Trump, Washington has been behaving recklessly, even towards its longtime friends, demanding that Canada become its 51st state and that Denmark handover Greenland pronto.

SJB and Opposition leader Sajith Premadasa cut a sorry figure demanding in Parliament whether Sri Lanka had the capacity to detect submarines or other underwater systems. Sri Lanka should be happy that the Southern Command could swiftly deploy three FACs and call in SLPA tug, thereby saving the lives of 32 Iranians and recovering 84 bodies of their unfortunate colleagues. Therefore, of the 180-member crew of IRIS Dena, 116 had been accounted for. The number of personnel categorised as missing but presumably dead is 64.

There is no doubt that Sri Lanka couldn’t have intervened if not for the US signal to go ahead with the humanitarian operation to pick up survivors. India, too, must have informed the US about the Iranian request for IRIS Lavan to re-enter Indian waters. Sri Lanka, too, couldn’t have brought the Iranian auxiliary vessel without US consent. President Trump is not interested in diplomatic niceties and the way he had dealt with European countries repeatedly proved his reckless approach. The irrefutable truth is that the US could have torpedoed the entire Iranian group even if they were in Sri Lankan or Indian Exclusive Economic Zone (EEZ) that extends to 200 nautical miles from its coastline.

In spite of constantly repeating Sri Lanka’s neutrality, successive governments succumbed to US pressure. In March 2007, Mahinda Rajapaksa’s government entered into Acquisition and Cross- Servicing Agreement (ACSA) with the US, a high profile bilateral legal mechanism to ensure uninterrupted support/supplies. The Rajapaksas went ahead with ACSA, in spite of strong opposition from some of its partners. In fact, they did not even bother to ask or take up the issue at Cabinet level before the then Defence Secretary Gotabaya Rajapaksa, a US citizen at the time, and US Ambassador here Robert O. Blake signed it. Close on the heels of the ACSA signing, the US provided specific intelligence that allowed the Sri Lanka Navy to hunt down four floating LTTE arsenals. Whatever critics say, that US intervention ensured the total disruption of the LTTE supply line and the collapse of their conventional fighting capacity by March 2009. The US favourably responded to the then Vice Admiral Wasantha Karannagoda’s request for help and the passing of intelligence was not in any way in line with ACSA.

That agreement covered the 2007 to 2017 period. The Yahapalana government extended it. Yahapalana partners, the SLFP and UNP, never formally discussed the decision to extend the agreement though President Maithripala Sirisena made a desperate attempt to distance himself from ACSA.

It would be pertinent to mention that the US had been pushing for ACSA during Rail Wickremesinghe’s tenure as the Premier, in the 2001-2003 period. But, he lacked the strength to finalise that agreement due to strong opposition from the then Opposition. During the time the Yahapalana government extended ACSA, the US also wanted the Status of Forces Agreement (SOFA) signed. SOFA, unlike ACSA, is a legally binding agreement that dealt with the deployment of US forces here. However, SOFA did not materialise but the possibility of the superpower taking it up cannot be ruled out.

Gotabaya Rajapaksa, who won the 2019 presidential election, earned the wrath of the US for declining to finalise MCC (Millennium Challenge Corporation) Compact on the basis of Prof. Gunaruwan Committee report that warned that the agreement contained provisions detrimental to national security, sovereignty, and the legal system. In the run up to the presidential election, UNP leader Ranil Wickremesinghe declared that he would enter into the agreement in case Sajith Premadasa won the contest.

Post-Aragalaya setup

Since the last presidential election held in September 2024, Admiral Steve Koehler, a four-star US Navy Admiral and Commander of the US Pacific Fleet visited Colombo twice in early October 2024 and February this year. Koehler’s visits marked the highest-level U.S. military engagement with Sri Lanka since 2021.

Between Koehler’s visits, the United States and Sri Lanka signed a Memorandum of Understanding (MoU) formalising the defence partnership between the Montana National Guard, the US Coast Guard District 13, and the Sri Lanka Armed Forces under the Department of War’s State Partnership Programme (SPP). The JVP-led NPP government seems sure of its policy as it delayed taking a decision on one-year moratorium on all foreign research vessels entering Sri Lankan waters though it was designed to block Chinese vessels. The government is yet to announce its decision though the ban lapsed on December 31, 2024.

The then President Ranil Wickremesinghe was compelled to announce the ban due to intense US-Indian pressure.

The incumbent dispensation’s relationship with US and India should be examined against allegations that they facilitated ‘Aragalaya’ that forced President Gotabaya Rajapaksa out of office. The Trump administration underscored the importance of its relationship with Sri Lanka by handing over ex-US Coast Guard Cutter ‘Decisive ‘to the Sri Lanka Navy. The vessel, commanded by Captain Gayan Wickramasooriya, left Baltimore US Coast Guard Yard East Wall Jetty on February 23 and is expected to reach Trincomalee in the second week of May.

Last year Sri Lanka signed seven MoUs, including one on defence and then sold controlling shares of the Colombo Dockyard Limited (CDL) to a company affiliated to the Defence Ministry as New Delhi tightened its grip.

Sri Lanka-US relations seemed on track and the IRIS Dena incident is unlikely to distract the two countries. The US continues to take extraordinary measures to facilitate war on Iran. In a bid to overcome the Iranian blockade on crude carriers the US temporarily eased sanctions to allow India to buy Russian oil.

Treasury Secretary Scott Bessent declared a 30-day waiver was a “deliberate short-term measure” to allow oil to keep flowing in the global market. The US sanctioned Russian oil following Moscow’s invasion of Ukraine, forcing buyers to seek alternatives.

The US doesn’t care about the Ukraine government that must be really upset about the unexpected development. India was forced to halt buying Russian oil and now finds itself in a position to turn towards Russia again. But that would be definitely at the expense of Iran facing unprecedented military onslaught.

By Shamindra Ferdinando

Midweek Review

A Living Legend of the Peradeniya Tradition:

Published

7 hours ago

2026/03/11

Sahan Weerasooriya

Prof. H. L. Seneviratne

A Tribute to Professor H. L. Seneviratne – Part I

My earliest memories of the eminent anthropologist, Professor H. L. Seneviratne date back to my childhood, when I first encountered his name through the vivid accounts of campus life shared by my late brother, Sugathapala de Silva, then a lecturer in the Department of Sinhala at the University of Peradeniya. By the time I became a first-year sociology student in 1968/69, I had the privilege of being taught by the Professor, whose guidance truly paved the way for my own progression in sociology and anthropology. Even then, it was clear that he was a towering presence—not just as an academician, but as a central figure in the lively cultural and literary renaissance that defined that era of the university’s intellectual history.

H.L. Seneviratne stood alongside a galaxy of intellectuals who shaped and developed the literary consciousness of the Peradeniya University. His professorial research made regular appearances in journals such as Sanskriti and Mimamsa, published Sinhala and English articles, and served as channels for the dissemination of the literary consciousness of Peradeniya to the population at large. These texts were living texts of a dynamic intellectual ferment where the synthesis of classical aesthetic sensibilities with current critical intellectual thought in contemporary Sri Lanka was under way.

The concept of a ‘Peradeniya tradition or culture’, a term which would later become legendary in Sri Lankan literary and intellectual circles, was already being formed at this time. Peradeniya culture came to represent a distinctive synthesis: cosmopolitanism entwined with well-rooted local customs, aesthetic innovation based on classical Sinhala styles, and critical interaction with modernity. Among its pre-eminent practitioners were intellectual giants such as Ediriweera Sarachchandra, Gunadasa Amarasekara, and Siri Gunasinghe. These figures and H.L. Seneviratne himself, were central to the shaping of a space of cultural and literary critique that ranged from newspapers to book-length works, public speeches to theatrical performance.

Unlimited influence

H.L. Seneviratne’s influence was not limited to the printed page, which I discuss in this article. He operated in and responded to the performative, interactive space of drama and music, situating lived artistic practice in his cultural thought. I recall with vividness the late 1950s, a period seared into my memory as one of revelation, when I as a child was fortunate enough to witness one of the first performances of Maname, the trailblazing Sinhala drama that revolutionised Sri Lankan theatre. Drawn from the Nadagam tradition and staged in the open-air theatre in Peradeniya—now known as Sarachchandra Elimahan Ranga Pitaya—or Wala as used by the campus students. Maname was not so much a play as a culturally transformative experience.

H.L. Seneviratne was not just an observer of this change. He joined the orchestra of Maname staged on November 3, 1956, lending his voice and presence to the collective heartbeat of the performance. He even contributed to the musical group by playing the esraj, a quiet but vital addition to the performance’s beauty and richness. Apart from these roles, he played an important part in the activities of Professor Sarathchandra’s Sinhala Drama Society, a talent nursery and centre for collaboration between artists and intellectuals. H.L. Seneviratne was a friend of Arthur Silva, a fellow resident of Arunachalam Hall then, and the President of the Drama Circle. H.L. Seneviratne had the good fortune to play a role, both as a member of the original cast, and an active member of the Drama Circle that prevailed on lecturer E.R. Sarathchandra to produce a play and gave him indispensable organizational support. It was through this society that Sarachchandra attracted some of the actors who brought into being Maname and later Sinhabhahu, plays which have become the cornerstone of Sri Lanka’s theatrical heritage.

The best chronicler of Maname

H.L. Seneviratne is the best chronicler of Maname. (Towards a National Art, From Home and the World, Essays in honour of Sarath Amunugama. Ramanika Unamboowe and Varuni Fernando (eds)). He chronicles the genesis of Ediriweera Sarachchandra’s seminal play Maname, framing it as a pivotal attempt to forge a sophisticated national identity by synthesizing indigenous folk traditions with Eastern theatrical aesthetics. Seneviratne details how Sarachchandra, disillusioned with the ‘artificiality’ of Western-influenced urban theatre and the limitations of both elite satires and rural folk plays, looked toward the Japanese Noh and Kabuki traditions to find a model for a ‘national’ art that could appeal across class divides. The author emphasises that the success of Maname was not merely a solo intellectual feat but a gruelling, collective effort involving a ‘gang of five’ academics and a dedicated cohort of rural, bilingual students from the University of Ceylon at Peradeniya. Through anecdotes regarding the discovery of lead actors like Edmund Wijesinghe and the assembly of a unique orchestra, Seneviratne highlights the logistical struggles—from finding authentic instruments to managing cumbersome stage sets—that ultimately birthed a transformative ‘oriental’ theatre rooted in the nadagama style yet refined for a modern, sophisticated audience.

Born in Sri Lanka in 1934, in a village in Horana, he was educated at the Horana Taxila College following which he was admitted to the Department of Sociology at the University of Peradeniya. H.L. Seneviratne’s academic journey subsequently led him to the University of Rochester for his doctoral studies. But, despite his long tenure in the United States, his research has remained firmly rooted in the soil of his homeland.

His early seminal work, Rituals of the Kandyan State, his PhD thesis turned into a book, offered a groundbreaking analysis of the Temple of the Tooth (Dalada Maligawa). By examining the ceremonies surrounding the sacred relic, H.L. Seneviratne demonstrated how religious performance served as the bedrock of political legitimacy in the Kandyan Kingdom. He argued that these rituals at the time of his fieldwork in the early 1970s were not static relics of the past, but active tools used to construct and maintain the authority of the state, the ideas that would resonate throughout his later career.

The Work of Kings

Perhaps, his most provocative contribution arrived with the publication of The Work of Kings published in 1999. In this sweeping study, H.L. Seneviratne traced the transformation of the Buddhist clergy, or Sangha, from the early 20th-century ‘social service’ monks, who focused on education and community upliftment, to the more politically charged nationalist figures of the modern era. He analysed the shift away from a universalist, humanistic Buddhism toward a more exclusionary identity, sparking intense debate within both academic and religious circles in Sri Lanka.

In The Work of Kings, H.L. Seneviratne has presented a sophisticated critique and argued that in the early 20th century, influenced by figures like Anagarika Dharmapala, there was a brief ‘monastic ideal’ centred on social service and education. This period saw monks acting as catalysts for community development and moral reform embodying a humanistic version of Buddhism that sought to modernize the country while maintaining its spiritual integrity.

However, H.L. Seneviratne contends that this situation was eventually derailed by the rise of post-independence nationalism. He describes a process where the clergy moved away from universalist goals to become the vanguard of a narrow ethno-religious identity. By aligning themselves so closely with the state and partisan politics, H.L. Seneviratne suggests that the Sangha inadvertently traded their moral authority for political influence. This shift, in his view, led to the ‘betrayal’ of the original social service movement, replacing a vision of broad social progress with one centred on political dominance.

The core of his critique lies in the disappearance of what he calls the ‘intellectual monk.’ He laments the decline of the scholarly, reflective tradition in favour of a more populist and often inflammatory rhetoric. By analysing the rhetoric of key monastic figures, H.L. Senevirathne illustrates how the language of Buddhism was repurposed to justify political ends, often at the expense of the pluralistic values that he believes are inherent to the faith’s core teachings.

H.L. Seneviratne’s work remains highly relevant today as it provides a framework for understanding contemporary religious tensions. His analysis serves as a warning about the consequences of merging religious institutional power with state politics. By documenting this historical shift, he challenges modern Sri Lankans—and global observers—to reconsider the role of religious institutions in a secular, democratic state, urging a return to the compassionate and socially inclusive roots of the Buddhist tradition.

Within the broader context of Sri Lankan anthropology, H.L. Seneviratne is frequently grouped with other towering figures of his generation, most notably Stanley Jeyaraja Tambiah and Gananath Obeyesekere. Together, this remarkable cohort revolutionized the study of Sri Lanka by applying structural and psychological analyses to religious and ethnic identity. While Tambiah famously interrogated the betrayal of non-violent Buddhist principles in the face of political violence, H.L. Seneviratne’s work is often seen as the essential sociological counterpart, providing the detailed historical and institutional narrative of how the monastic order itself was reshaped by these very forces.

Reation to Seneviratne’s critque

The reaction to H.L. Seneviratne’s critique has been as multifaceted as the work itself. In academic circles, particularly those influenced by post-colonial theory, he is celebrated for speaking truth in a public place. Scholars have noted that because he writes as an insider—both a Sinhalese and a Buddhist, that makes them both credible and, to some, highly objectionable. His work has paved the way for a younger generation of Sri Lankan sociologists and anthropologists to move beyond traditional functionalism towards more radical articulations of competing interests and political power.

However, his analysis has also made him a target for nationalist critics. Those aligned with ethno-religious movements often view his deconstruction of the Sangha’s political role as an attack on Sinhalese-Buddhist identity itself. These detractors argue that H.L. Seneviratne’s intellectualist or universalist view of Buddhism fails to account for the necessity of the clergy’s role in protecting the nation against neo colonial and modern pressures. This tension highlights the very descent into ideology that H.L. Seneviratne has spent his career documenting.

H.L. Seneviratne’s legacy is defined by this ongoing dialogue between scholarship and social reality. His transition from the detached scholar seen in his early work on Kandyan rituals to the socially concerned intellectual of The Work of Kings mirrors the very transformation of the Sangha and Buddha Sasana he studied. By refusing to look away from the complexities of the present, he has ensured that his work remains a cornerstone for any serious discussion on the future of religion and governance in Sri Lanka.

Focus on good governance

In his later years, H.L. Seneviratne has pivoted his focus toward the practical application of his theories, specifically examining how the concept of ‘Good Governance’ interacts with traditional religious structures. He argues that for Sri Lanka to achieve true stability, there must be a fundamental reimagining of the Sangha’s role in the public sphere—one that moves away from the ‘work of Kings’ and returns to a more ethical, advisory capacity. This shift in his recent lectures reflects a deep concern about the erosion of democratic institutions and the way religious sentiment can be harnessed to bypass the rule of law.

Building on this, contemporary scholars like Benjamin Schonthal have expanded H.L. Seneviratne’s inquiry into the legal and constitutional dimensions of Buddhism in Sri Lanka. While H.L. Seneviratne provided the anthropological groundwork for how monks gained political power, this newer generation of academics examines how that power has been codified into the very laws of the state. They explore the ‘path dependency’ created by the historical shifts H.L. Seneviratne documented, looking at how the legal privileging of Buddhism creates unique challenges for a pluralistic society.

New Sangha

Furthermore, his influence is visible in the work of local scholars who focus on ‘engaged Buddhism.’ These researchers look back at H.L. Seneviratne’s description of the early 20th-century social service monks as a blueprint for modern reform. By identifying the moment where the clergy’s mission shifted from social welfare to political nationalism, these scholars use H.L. Seneviratne’s historical milestones to advocate a ‘New Sangha’ that prioritizes reconciliation and inter-ethnic harmony over state-aligned power.

The enduring power of H.L. Seneviratne’s work lies in its refusal to offer easy answers. By mapping the transition within Buddhist practice from ritual to politics, and from social service to nationalism, he has provided an analytical framework in which the nation can see its own transformation. His legacy is not just a collection of books, but a persistent, rigorous habit of questioning that continues to inspire those who seek to understand the delicate balance between faith and the modern state.

H.L. Seneviratne continues to challenge his audience to think beyond the immediate political moment. By documenting the arc of Sri Lankan history from the sacred rituals of the Kandyan kings to the modern halls of parliament, he provides a vital sense of perspective. Whether he is being celebrated by the academic community or critiqued by nationalist voices, his work ensures that the conversation regarding the soul of the nation remains rigorous, historically grounded, and unafraid of its own complexities.

Anthropology and cinema

H.L. Seneviratne identifies the mid-1950s as the critical turning point for this cinematic shift, specifically anchoring the move to 1956 with the release of Lester James Peries’s “Rekava.” This period was a watershed moment in Sri Lankan history, coinciding with a broader nationalist resurgence that sought to reclaim a localized identity from the influence of colonial and foreign powers. H.L. Seneviratne suggests that before this era, the ‘South Indian formula’ dominated the screen, characterized by studio-bound sets, theatrical acting, and musical interludes that felt alien to the island’s actual social fabric. The pioneers of this movement, led by Lester James Peries and later followed by figures like Siri Gunasinghe in the early 1960s, deliberately moved the camera into the open air of the rural village to capture what H.L. Seneviratne describes as the ‘authentic rhythms’ of life. This transition was not merely aesthetic but deeply ideological; it replaced the mythical, exaggerated heroism of commercial cinema with a nuanced exploration of the post-colonial middle class and the crumbling feudal hierarchies. By the 1960s, through landmark works like ‘Gamperaliya,’ these filmmakers were successfully crafting a modern mythology that reflected the internal psychological tensions and the social evolution of a nation navigating its way between traditional Buddhist values and a rapidly modernizing world.

His critique of the relationship between art and the state is particularly evident in his analysis of historical epics, where he has argued that certain cinematic portrayals of ancient kings and battles serve as a form of ‘visual nationalism,’ translating the ideological shifts he documented in The Work of Kings onto the silver screen. By analysing these films, he shows how popular culture can become a powerful tool for constructing a simplified, heroic past that often ignores the multi-ethnic and pluralistic realities of the island’s history.

(To be concluded)

by Professor M. W. Amarasiri de Silva