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WB says Lanka needs urgent policy measures to tackle unsustainable debt, Balance of Payment challenges

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World Bank Country Director for Maldives, Nepal, and Sri Lanka Faris Hadad-Zervos

The World Bank last week said Sri Lanka faces unsustainable debt and Balance of Payment challenges.

“Sri Lanka’s economic outlook is highly uncertain due to the fiscal and external imbalances. Urgent policy measures are needed to address the high levels of debt and debt service, reduce the fiscal deficit, restore external stability, and mitigate the adverse impacts on the poor and vulnerable,” says the World Bank in its twice-a-year regional update.

The latest ‘South Asia Economic Focus Reshaping Norms: A New Way Forward’ projects the region to grow by 6.6% in 2022 and by 6.3% in 2023. The 2022 forecast has been revised downward by 1.0% age point compared to the January projection, mostly due to the impacts of the war in Ukraine.

Countries in South Asia are already grappling with rising commodity prices, supply bottlenecks and vulnerabilities in financial sectors. The war in Ukraine will amplify these challenges, further contributing to inflation and deteriorating current account balances.

“The World Bank is deeply concerned about the uncertain economic outlook in Sri Lanka and the impact on people,” said World Bank Country Director for Maldives, Nepal, and Sri Lanka Faris Hadad-Zervos.

“We are working on providing emergency support for poor and vulnerable households to help them weather the economic crisis and we remain committed to the wellbeing of the people of Sri Lanka, and to a narrative of sustainable and inclusive growth that will require concerted and collective action.”

Sri Lanka needs to address the structural sources of its vulnerabilities. This would require reducing fiscal deficits especially through strengthening domestic revenue mobilisation. Sri Lanka also needs to find feasible options to restore debt sustainability. The financial sector needs to be carefully monitored amid high exposure to the public sector and the impact of the recent currency depreciation on banks’ balance sheets.

The necessary adjustments may adversely affect growth and impact poverty initially but will correct the significant imbalances, subsequently providing the foundation for stronger and sustainable growth and access to international financial markets. Mitigating the impacts on the poor and vulnerable would remain critical.

In South Asia, though GDP growth continues to be solid during the recovery, all countries in the region will face challenges ahead. On a positive note, exports of services from the region are on the rise as the pandemic subsides.

The war and its impact on fuel prices can provide the region with much-needed impetus to reduce reliance on fuel imports and transition to a green, resilient and inclusive growth trajectory. The report recommends that countries steer away from inefficient fuel subsidies that tend to benefit wealthier households and deplete public resources. South Asian countries plan to move towards a greener economy by gradually introducing taxation that puts tariffs on products which cause environmental damage.

Another challenge the region faces is the disproportionate economic impact the pandemic has had on women. The report includes in-depth analysis of gender disparities in the region and their link with deeply rooted social norms, and recommends policies that will support women’s access to economic opportunities, tackle discriminatory norms and improve gender outcomes for inclusive growth.



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Colombo Law Society objects to judges’ retirement age move

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…Urges President not to undermine public confidence in independence of judiciary

The Colombo Law Society has urged President Anura Kumara Dissanayake not to proceed with any constitutional amendment to extend the retirement age of Supreme Court and Court of Appeal judges, warning that such a move could undermine public confidence in the independence of the judiciary.

In a letter dated July 2, 2026, the Society said its Executive Committee had unanimously resolved to convey its concerns following reports of a proposal to increase the retirement age of judges of the superior courts.

The Society said any amendment affecting the tenure of sitting judges should be approached with caution, adding that public confidence in the independence of the judiciary must be safeguarded.

Full text of the letter: The Executive Committee of the Colombo Law Society, at its duly convened meeting held on 25 June 2026, deliberated extensively on the reported proposal to increase the retirement age of Judges of the Court of Appeal and the Supreme Court.

Having carefully considered the matter, the Executive Committee unanimously resolved to convey its concerns to Your Excellency and to express its support for the position taken by the Bar Association of Sri Lanka in its letter addressed to Your Excellency, dated 25 May, 2026.

The Colombo Law Society recognizes and appreciates the invaluable contribution made by members of the higher judiciary to the administration of justice in Sri Lanka. However, we respectfully take the view that any alteration to the constitutionally established retirement age of Superior Court Judges must be approached with the utmost caution and only after broad consultation with all relevant stakeholders.

The existing retirement ages of Judges of the Court of Appeal and the Supreme Court have remained unchanged since the promulgation of the 1978 Constitution. Any departure from this long-standing constitutional framework, particularly where it affects serving judges, may give rise to public concern and perceptions that could undermine confidence in the independence and impartiality of the judiciary.

The independence of the judiciary is one of the cornerstones of the Rule of Law and democratic governance. Equally important is the public perception of such independence. The judiciary must not only be independent in fact but must also be seen to be independent and free from any appearance of influence or accommodation.

The Colombo Law Society further notes that the number of Judges of both the Court of Appeal and the Supreme Court was increased through constitutional reform in 2020. In those circumstances, questions naturally arise as to whether there exists a compelling institutional necessity to alter the retirement age of Superior Court Judges at this juncture.

We respectfully submit that constitutional amendments relating to the judiciary should be undertaken only after careful consideration of their long-term impact on judicial independence, public confidence, and the constitutional framework of the Republic.

Accordingly, the Colombo Law Society respectfully urges Your Excellency to give the fullest consideration to the concerns expressed by the legal profession and to refrain from proceeding with any constitutional amendment seeking to extend the retirement age of Judges of the Court of Appeal and the Supreme Court.

We remain confident that Your Excellency will continue to uphold and safeguard the independence, integrity, dignity, and public confidence in the judiciary, which remain essential to the preservation of the Rule of Law and democratic governance in Sri Lanka.

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Freedom 250: US Embassy celebrates America’s 250th Independence Day through magic of American cinema

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Fireworks illuminate the Colombo night sky on Thursday as the US Embassy in Sri Lanka commemorated America’s semiquincentennial—the 250th anniversary of the United States’ independence.

The US Embassy in Sri Lanka commemorated America’s semiquincentennial—250 years of independence—with Chief Guest, Minister of Health and Mass Media Nalinda Jayatissa, and hundreds of Sri Lankan partners, government officials, business leaders, diplomats and friends of the United States, at a Freedom 250 celebration honouring the enduring power of freedom through the lens of American cinema. The July 2 celebration highlighted the ideals that have shaped the United States for two and a half centuries—individual liberty, self-government, freedom of expression, and the belief that free people can dream, create, and shape their own future. The Embassy grounds were transformed into an immersive cinematic experience, celebrating how American films have reflected those freedoms while inspiring audiences across generations and around the world, including in Sri Lanka.

Welcoming guests to the celebration, Chargé d’Affaires Jayne Howell reflected on the profound connection between American freedom and cinematic storytelling. “Tonight, we celebrate 250 years of American independence by honouring one of our nation’s greatest gifts to the world—the art of cinema,” she said.

“For more than a century, American filmmakers have used their creative freedom to craft stories that resonate across every border and culture. From the opening of the world’s first dedicated movie theater in New Orleans, in 1896, to the groundbreaking animation of Snow White, from the sweeping epics like The Godfather to the technological marvels of Avatar, Star Wars and Jurassic Park, and classics like The Bridge on the River Kwai—filmed in Sri Lanka and forever linking the island to Hollywood history—our films reflect the very freedoms we celebrate today—the freedom to dream boldly, to question deeply, and to imagine new possibilities.”

CDA Howell continued, “As we share this cinematic journey with our Sri Lankan friends—fellow champions of democracy and freedom—we’re reminded that the best American stories are universal stories. They speak to the courage we see in The Wizard of Oz, the unity we witness in The Avengers, the wonder we experience through E.T., the spirit of exploration and achievement captured in films like Apollo 11, and the resilience we admire in Forrest Gump. Tonight, we celebrate not just American cinema, but the freedom that makes it possible—the freedom to tell any story, to show America at its best and its most complex, and to believe that movies can change how we see ourselves and each other. That freedom is what we honour on this 250th anniversary and the enduring values that will guide us forward.”

The evening opened with a stunning visual spectacle: rooftop screens displayed on the Embassy building celebrating 250 years of American independence and commemorating the signing of the Declaration of Independence on July 4, 1776. The centerpiece was an open-air screening, under the stars, featuring carefully curated clips that traced American cinema’s evolution—from silent films that established visual storytelling techniques still used today, through Disney’s Snow White and the Seven Dwarfs (the first full-length animated feature), The Matrix’s groundbreaking “bullet time” effects, to Christopher Nolan’s The Dark Knight, which redefined superhero cinema as a vehicle for exploring complex questions about justice and society.

The celebration concluded with fireworks illuminating the Colombo sky as the III Marine Expeditionary Force Band, the US Marine Corps’ forward-deployed band in the Indo-Pacific region, based in Okinawa, Japan, performed a montage of American songs that have inspired generations. Guests enjoyed a menu featuring high-quality US beef and other American food and beverages, showcasing the global reputation of American agricultural exports.

As the United States marks 250 years of independence, Freedom 250 celebrates the enduring idea that has defined America since 1776—that freedom unlocks human potential, fuels creativity and innovation, and empowers individuals to shape a better future. Through education, trade, investment, security cooperation, and the enduring ties between our people, the United States and Sri Lanka continue to strengthen a partnership built on opportunity and shared democratic values.

The US Embassy extends its sincere gratitude to the generous sponsors whose support made this year’s Independence Day celebration possible, including Diamond Sponsors Brandix, Hayleys, Hirdaramani, MAS Holdings, Mastercard, RM Parks, and Visa, along with our other valued partners.

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CA dismisses application filed by Yoshitha seeking to quash conspiracy charge in money laundering case

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The Court of Appeal yesterday dismissed a revision application filed by Yoshitha Rajapaksa seeking to quash a conspiracy charge in the money laundering case, pending before the Colombo High Court.

Rajapaksa had challenged the conspiracy count in the indictment filed by the Attorney General, under the Prevention of Money Laundering Act, contending that the charge was not legally maintainable.

A Court of Appeal Bench, comprising Justices Amal Ranaraja and Dr. Sumudu Premachandra, rejected the application, ruling that the conspiracy charge could proceed before the Colombo High Court.

The ruling clears the way for the High Court to continue hearing the money laundering case, filed by the Attorney General against Rajapaksa.

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