Opinion
Why is Singapore dollar strong and SL rupee weak?
by Jayampathy Molligoda
Inflation is too high in Sri Lanka; people are finding it unbearable. How can we control the inflation from further slipping?
Singapore experience and structure of our CBSL:
Singapore has the Monetary Authority Singapore (‘MAS’) as their Central Bank, where in Sri Lanka, we have the Central Bank of Sri Lanka (which is not a body corporate in legal terms) and within the CBSL, they have the ‘Monetary Board’. Basically, the Singapore Central Bank (MAS) has managed to keep the inflation under control even during this period of global economic recession, where most of the other countries have not been able to contain the inflation. The Singapore used the exchange rate to influence inflation, not the other way around.
Our view is that there must be a sound, practical and legal mechanism guaranteeing the independence of the CB whilst making the CBSL accountable and transparent as in the case of MAS. John Exter, the founding Governor of the Central Bank of Ceylon, in his report stated that Governor of the Central Bank should be of unquestioned integrity and responsibility. This is very critical because an independent CB is essential for maintaining price stability, meaning containing inflationary pressure.
As for maintaining the price stability objective, the simplest test is whether CB can continue to resist demands from the government of the day to print money and/or continue to maintain low interest rate regime when a higher interest rate is necessary to maintain price stability. This is because the government of the day would naturally tend to push economic growth rates to run at a faster rate than its capacity limit permits and their desire to incur budget deficits try to secure funds by borrowing from CB. Ours is somewhat politicized.
However, the reality is most of the economic activities will come to a grinding halt if CBSL doesn’t print new money for the government. Besides the suffering of the people on the road, non- repatriation, avoiding sovereign breaches, not letting money market domino effect failure, payment to foreign parties, all of these have to be considered. No salary payments to government servants for a particular month if money printing is stopped.
Why can’t our CB do the same thing as MAS?
Sri Lankan situation is totally different because it has a persistently high ‘twin deficits’ meaning (1) government budget deficits since independence and (2) BOP current account deficit with rest of the world. And CB has been compelled to resort to ‘money printing’ more that the required/ desired level and continue to borrow, thus increasing foreign debt service beyond unsustainable levels.
The real issue has been that our Exports as a % of GDP has come down from closer to 28% in four to five decades to 12% especially since 2014 to date. Now GDP real per capita is coming down. We were boosting US $ 25 billion has increased to US $ 75 billion within 10 years, but it was through services and high spending on infrastructure development without corresponding increases in return on such investments by way of increased exports.
CBSL policy towards curbing inflation:
Since August 21, CB has been trying to control inflation by way of increasing bank interest rates through increasing CB rates and Statutory reserve ratios (tightening the monetary policy accelerated wef March 22, however. this badly affects SMEs – the micro and small and medium enterprises have serious issues in the area of access to financial facilities or in simple terms, borrowing costs are so high that they cannot afford to borrow any more. Depending on whether the marketable – products of these businesses are in the “buyers; market’ or “sellers’ market” they could either survive or eventually collapse- only the ‘rich’ become richer (only in certain sectors) because they are in possession of own surplus money – they earn a substantial amount as interest income at current deposit rates and also have the option of keeping dollars without repatriation as stipulated in the relevant directives issued under Monetary Law Act of 1949. This is despite the rupee exchange rate was allowed to be flexible and floated from Rs 203/ per $ and now it’s Rs 368/.
Further, during the period 2019 till august 2021, the private sector was benefited under low tax rates and low bank interest regime, where they borrowed rupee loans at 4-6 %, otherwise the exporters were compelled to go for $$ packing credit for financing export orders. In my view, our private sector is smarter than the government policy makers and some top officials in the financial/banking sector. It was the private sector who insisted that SL rupee should be floated not even a “managed float currency policy. Are we now getting the export proceeds according to the applicable regulations and if not, does the CB strictly enforce penalties for non- compliance?
Two News items published on 29/07/22:
“Earnings from merchandise exports increased by 20% Y-o-Y to USD 1,208.2 Mn in June 2022 as per data released by Sri Lanka Customs, mainly due to increase in earnings from export of Apparel & Textiles (1/2)”
“World Bank does not plan to offer new financing to Sri Lanka until an adequate macroeconomic policy framework is in place – WB”
Sri Lankan Export industries such as textile and apparel, tea sub sector, minor export crops, etc., should be able to be more competitive in the global market place due to the policy of currency depreciation wef 7 March 22 from Rs 203/- to around Rs 368 (at present), but the associated local costs including the import content of the export value chain and the additional costs due to difficulties in ‘doing business’ under current conditions tend to move up sharply in the near future, thus eroding the cost competitiveness enjoyed by our exporters. As for doing business, one of the most critical current issues has been the shortage of fuel. It is in that context only the importance of making available sufficient FOREX income, be set aside for importation of fuel on a monthly basis, say US$ 300 million, should be viewed. Now that the backlog of LCs being cleared and most of the payments have been made and the incoming $$$ are now being reserved, it is important to set aside a part of export proceeds towards meeting fuel bills on a monthly basis.
Vital information on ‘FOREX’ monitoring not made available yet:
Stemming from the above argument, the CB’s priority number one should be to ensure whether export proceeds in dollars are received within the stipulated timeframes and in accordance with the directives issued under Monetary Law Act of 1949. In fact, the CB mandate by law is ensuring price stability and financial system stability and management of FOREX is the critical success factor here.
In August 21, then Governor Prof WDL appointed a working committee and liaised with customs and started putting in place the EPMS. (As far as direct documentation of export (‘cusdecs’) is concerned, the commercial banks do not receive those docs and what they can monitor is what they actually receive as proceeds only, that’s why this ICT system is needed.)
It seems that export proceeds monitoring system (EPMS) is still not functioning at CB level. Also, CB doesn’t provide the information on actual amounts of foreign exchange proceeds received on a monthly basis.
According to the Governor, CB, only about 20% of the FOREX is getting converted in to the banking system out of US$ 1,000 million export proceeds per month. It is not clear how much has actually received within the ‘180 day rule’ on a monthly basis AND how much converted.
The present Governor, CB is now making an appeal to exporters to remit all export proceeds and convert at least 50% of the proceeds after keeping $$ for ‘eligible expenditure’. It is expedient for the CB to advise the government to set aside (out of monthly export+ direct remittances) at least US$ 300 million per month for petroleum product imports and only the deficit if any, be funded through credit lines. In the meantime, our renewable energy sources must be explored with a view to reducing dependence on diesel and petroleum inputs.
Apparently, the Strategy adopted by the Ministry of Finance on 12 April 22 by pre-emptive debt defaults announcement has created some negative sentiments as well. Fuel imports can only be done through advance payments. LCs cannot be opened without paying an advance as most of our banks are considered untrustworthy customers in the international trading operations.
Light at the end of the tunnel:
We are into a vicious economic cycle. What is really worrisome is that there seems to be no serious process of problem identification by following a more scientific ‘research methodology’. First and foremost, we need to find out what went wrong? Some kind of a truth commission is needed. Our policymakers together with the private sector, the government and Opposition politicians all must get together to find out what went wrong without ‘blame assigning game’. Our policymakers must learn to admit that we don’t know fully the reasons, until a detailed analysis is done. No sustainable solutions can be expected in a situation where we all have full of ‘beliefs’ -some may be true others false, therefore the real facts need to be separated out from mere opinions based on beliefs although belief is the starting point of any intellectual thought process as claimed by world renowned philosopher, Bertrand Russell. No point in blaming politicians only – maybe as national leaders they have failed to provide transformational leadership and inspire other stakeholders to drive the economy. Also, successive governments have not created conducive environment for private sector to do business and improve economic welfare of the people, otherwise, it is the private sector that is managing the economy; at least 70% of the economic activities are undertaken by the private sector. Our private sector is capable of driving the businesses as ‘engine of growth’ for national economic development.
What can the government do under the current circumstances?
The solution is for the government authorities to follow one important process, undertake some research using scientific methods to ascertain why we have failed. It is suggested the government appoint an ‘expert panel’. It should come out with immediate, short and medium- term strategic plan based on a long-term vision. But who is going to appoint this expert panel and who are the members? Ideally, it has to be a Presidential commission.
Treasury does not have any money at all and when CPC is held up with no payment to banks. That is why our economists have been advocating stringent fiscal measures be enforced by the government so that the government expenditure could be drastically reduced. Most of the state- owned enterprises (SOEs) need to be restructured by liberalising the sectors and put in place a more transparent system to look for ‘PPP projects’ to drive economic activities using under- performed state assets. However, these measures need to be taken after a due process of obtaining the final recommendations of the Presidential commission.
Social unrest, achieving political stability and economic revival:
What we have discussed up to now pertains to our economic problems, but we have major issues in socio-political arena. We need to admit that there are a number of genuine grievances coming out from the ordinary people and also a mass uprising against corruption and mismanagement of the governments, although no concrete evidence is forthcoming to justify these claims, that’s why the truth commission findings are important. On the other hand, there is this conspiracy theory that some unexplained, hidden and most powerful forces operating outside Sri Lanka are at work -may be trying to weaken the “STATE” and portray Sri Lanka as a failed state as articulated by the Head of SIS at a high- level meeting chaired by the President Ranil Wickremesinghe. Surely, there must be some valid reasons for the government under President, GR to adopt a ‘soft’ policy. We don’t know the ‘real things’ yet.
We have been hearing as a slogan that political stability is a prerequisite for achieving much needed economic growth and revival. However, the writer is of the view that in today’s context, it should be other way around. If the government of the day cannot provide basic needs of the people, at least fuel without people waiting in long queues, it will not be possible to restore political stability, and social unrest could further accelerate. That’s why some kind of economic revival is needed to fulfil ‘basic needs’ of the people to restore some kind of ‘political stability’. Otherwise this so-called ‘political stability’ becomes a mere superficial phrase.
In the meantime, it is the responsibility of the government of the day to uphold the constitutional provisions to the letter and spirit as stipulated in the Constitution of the Democratic Socialist Republic of Sri Lanka.
The authorities need to respect the different views of the people without resorting to suppress people’s non-violent socio-political movements, whilst maintaining law and order to safeguard the peoples’ sovereign rights guaranteed under our Constitution.
Opinion
Bleeding Treasury: Multi-billion rupee liquor sticker scam and urgent need for systemic reform
by Prof. Asoka. S. Seneviratne
For a nation navigating the perilous waters of economic recovery, fiscal discipline is not a mere bureaucratic preference, it is a matter of absolute national survival. Every single rupee leaked from the state Treasury directly compromises public services, infrastructure, and the socioeconomic welfare of millions of citizens. Yet, while the public bears the burden of high taxation, a monumental revenue hemorrhage has been silently occurring at the heart of the state’s revenue framework.
The security sticker system, ironically introduced by the Department of Excise to curb tax evasion and regulate alcohol production, has evolved into an unprecedented conduit for systemic fraud. Recent disclosures by the Parliamentary Committee on Public Finance (COPF) and the Committee on Public Accounts (COPA) have laid bare a terrifying reality: a multi-billion rupee scam that has starved the state treasury of critical revenue while enriching an entrenched network of colluding officials, foreign contractors, and unscrupulous local distilleries. This article deconstructs the anatomy of this institutional disaster, exposes those who turned a blind eye, and outlines the radical legislative and structural overhaul required to permanently safeguard our national revenue.
Shocking Scale of Treasury Revenue Leakage
The financial dimensions of the liquor security sticker fraud are staggering. According to parliamentary oversight committee revelations, the calculated revenue leakage resulting from the circulation of counterfeit and illegally diverted genuine security stamps has reached an estimated tens of billions of rupees annually. To contextualize this loss for the public, legislative watchdogs noted that the volume of state funds evaporating through this single loophole is equivalent to financing multiple massive national health infrastructure projects on the scale of the Suwaseriya ambulance service.
When an illicitly produced or unrecorded bottle of liquor enters the formal retail supply chain bearing a compromised sticker, the treasury loses the entirety of the heavy excise duty levied on it. For every bottle of standard spirits pushed through this parallel economy, thousands of rupees bypass the state completely and flow straight into the pockets of criminals. This is not a minor leak; it is a macroeconomic catastrophe.
The Anatomy of an Exploitative Procurement Blueprint
The foundation of this multi-billion rupee hemorrhage was laid not in illicit distilleries, but within the fine print of a deeply compromised state procurement contract. The state entered into a long-term agreement with an external vendor, Madras Security Printers (MSP), to supply physical tax stamps and digital authentication features. Under the terms of this active contract, which runs until January 2, 2027, the state has been paying an inflated rate of approximately US$ 7.99 per 1,000 digital markings—inclusive of port and customs levies.
The technical absurdity of this arrangement was laid bare by COPF: over 80% of local alcohol manufacturers have transitioned away from physical paper stickers to digital markings printed directly onto bottles during high-speed production. Despite the total elimination of physical paper, printing, and shipping costs, the state continues to pay the maximum contract rate for a digital label that inherently costs fractions of a single cent to generate. The treasury is effectively subsidizing an extortionate profit margin for an external vendor under the guise of security procurement.
Deliberate Inaction: Who Ignored Warning Signs?
A fraud of this magnitude cannot survive in a vacuum; it requires the oxygen of institutional indifference. Multiple administrative layers systematically ignored glaring red flags for years. When the initial procurement process was floated, the Presidential Secretariat’s Procurement Appeal Board intercepted the project and ordered a complete recall due to glaring technical and procedural irregularities. Yet, administrative bodies willfully bypassed these warnings, re-tendering and locking the state into a contract with the exact same questionable entity.
Furthermore, international watchdogs and civil society groups had repeatedly raised alarms regarding the specific foreign contractor’s operational history, citing severe software manipulation disputes, security breaches, and counterfeit controversies in developing nations such as Kenya, South Sudan, and Bangladesh. By turning a blind eye to these verified international precedents, the high-level decision-makers who finalized this framework effectively left the keys to Sri Lanka’s revenue vault in compromised hands.
The primary regulatory bulwark against liquor tax evasion is the Department of Excise, yet its leadership presided over a total collapse of operational oversight. In an era dominated by rapid technological advancement, oversight committees exposed a staggering vulnerability: the Excise Department completely lacked an integrated, automated backend database system to cross-reference and validate the serial numbers of stamps issued.
By keeping the monitoring framework fundamentally manual, rudimentary, and disconnected, the department created the perfect blind spot. Even worse, the physical QR codes printed on the labels were found to be non-functional for field verification by standard smartphones, making point-of-sale authentication an impossibility. This technical failure ensured that whether a sticker was poorly counterfeited or illicitly leaked from an official batch, it could circulate in retail outlets with complete impunity.
Systemic Inside Collusion and Forensic Truth
Recent law enforcement interventions have shattered the narrative that this scam is merely the work of isolated, low-level bootleggers. Following extensive raids conducted by the Criminal Investigation Department (CID) at illicit distribution hubs, such as the massive bust in Malabe where thousands of liters of untaxed alcohol were seized, forensic teams uncovered a dark truth. Many of the “fake” security stamps affixed to the illegal bottles were not counterfeits at all; they were authentic, officially generated high-security labels.
Arrested suspects and trade union whistleblowers have detailed a deeply entrenched criminal nexus inside the regulatory apparatus. Corrupt excise officials reportedly coordinated directly with sub-agents to divert genuine sticker batches straight into illicit blending plants. There are even documented allegations of senior executives actively calling field teams to abort ongoing raids on compromised retail outlets, and in some cases, transporting seized illicit stocks into regional offices to manually paste genuine stickers after the fact to contaminate legal evidence.
Abolishing the Corrupt “Spot Fine” Loophole
For decades, the wealthy masterminds behind revenue fraud have exploited a massive legal loophole embedded within antiquated sections of the Excise Ordinance: the compounding of offenses via “spot fines.” Under this archaic system, when a prominent distillery or major retail distributor is caught manufacturing or selling untaxed liquor with fraudulent stamps, the department frequently settles the matter quietly behind closed doors through an administrative fine.
This spot fine framework must be completely and unconditionally abolished. It strips the judicial system of its jurisdiction and allows corporate criminals to view state penalties as a minor, predictable cost of doing business. A multi-billion rupee assault on the state treasury cannot be settled with an administrative slap on the wrist. Every instance of sticker fraud must be automatically escalated to the Attorney General’s Department for mandatory criminal prosecution, eliminating the arbitrary discretionary powers currently weaponized by corrupt bureaucrats to shield their corporate conspirators.
A Mandate for Drastic Punishments: Confiscation and Mandatory Prison
To break the back of these deeply entrenched syndicates, the state must introduce an overwhelming “fear factor” into the law. Populist rhetoric and minor financial penalties have failed. The legislative framework governing both the illicit liquor industry and the narcotics trade must be overhauled to introduce draconian, non-negotiable statutory punishments (see graph 1).

When an illicit operation is raided, the state should not wait for a decade of exhausting litigation to freeze assets. The law must allow for the immediate, on-the-spot physical confiscation of all manufacturing infrastructure, land, distribution vehicles, and liquid capital involved in the crime. Combining this immediate economic destruction with a mandatory 20-year minimum prison sentence will fundamentally alter the risk-reward calculus for these criminal syndicates.
It is essential that the above-mentioned penalties be imposed on those who possess illegal firearms and on individuals involved in their unlawful use, possession, or distribution.
Tracing the Spoils: Wealth Investigations and Absolute Asset Forfeiture
The corporate directors, high-ranking state officials, and external collaborators who orchestrated this scam did so driven by unadulterated greed, funneling their illicit gains into luxury real estate, high-end vehicle fleets, and hidden offshore accounts. True justice demands that the prosecution extend far beyond the physical boundaries of the distilleries.
Under the Prevention of Corruption Act and modern anti-money laundering statutes, the state must launch aggressive, retroactive wealth investigations into every single public official, technical evaluation committee member, and excise executive associated with the liquor sticker procurement and enforcement timeline. If an official’s lifestyle, property holdings, or family assets fail to align with their legitimate state-salaried income, those assets must be frozen under public property laws and permanently forfeited to the treasury. Jail time is insufficient if the perpetrator is allowed to return to a hoard of hidden wealth upon release.
Global Best Practices
The systemic vulnerabilities paralysing Sri Lanka’s revenue collection are entirely preventable, as demonstrated by the stringent protocols enforced in developed jurisdictions. Countries like the United Kingdom, Germany, and Singapore do not rely on disconnected, manual validation systems or unchecked external monopolies to collect excise duties.
* Integrated Digital Traceability:
Developed nations deploy advanced, state-owned encrypted track-and-trace networks. Every bottle is assigned a unique, cryptographically secure digital identifier at the moment of manufacture, which is fed directly into a centralized blockchain or real-time ledger managed directly by the state’s central revenue authority, completely bypassing third-party contractors.
* Zero-Tolerance Enforcement Models:
In these jurisdictions, the discovery of a single unrecorded or falsely authenticated product results in the immediate, automated shutdown of the entire facility, multi-million dollar corporate forfeitures, and immediate criminal indictments for corporate directors.
* Independent Oversight:
Revenue departments are audited by completely independent anti-corruption bodies operating outside the ministry’s hierarchy, rendering internal bureaucratic cover-ups virtually impossible.
Uplifting Excise Department:
Architecture of True System Change
A genuine “system change” requires that we simultaneously clean out corruption and completely modernise our institutional infrastructure. The Department of Excise must undergo (i) a comprehensive operational evolution, (ii) matching the standards of modern global revenue authorities.
This transformation must begin with complete digitalisation. The entire department must be integrated into (i) a single Revenue Administration System, (ii) creating a real-time, (iii) transparent data link between the manufacturer, (iv) the customs point, (v) the department’s operations room, and (vi) the Inland Revenue Department. Field officers must be equipped with secure, state-encrypted mobile devices capable of instantly validating digital bottle markings on retail shelves. Furthermore, the human resource structure must be professionalized—merit-based recruitment, independent performance scorecards, and high technical qualifications must completely replace political appointments and arbitrary promotions, building an institution where integrity is structurally guaranteed.
The multi-billion rupee liquor security sticker scam is a stark warning of the catastrophic dangers of institutional decay. It is a textbook case of how flawed procurement, technical loopholes, and insider collusion can combine to systematically drain the lifeblood of our national economy. Sri Lanka can no longer afford to sustain these parallel criminal economies while honest citizens bear the brunt of national recovery.
The upcoming expiration of the current supplier contract on January 2, 2027, presents a critical, unmissable window for absolute reform. The government must seize this moment to dismantle the failed physical sticker framework, bypass exploitative contractor monopolies, and transition to a state-owned, transparent digital tracking architecture. Simultaneously, the legal system must act with uncompromising severity—abolishing spot fines, enacting mandatory 20-year prison sentences, and aggressively liquidating the assets of every official and corporate executive who participated in this betrayal of public trust. The eyes of the nation are wide open, and the demand for real, structural accountability can no longer be ignored.
(The writer served as the Special Adviser to the Office of the President of Namibia from 2006 to 2012 and was a Senior Consultant with the UNDP for 20 years. He was a senior economist with the Central Bank of Sri Lanka (1972-1993). He can be reached at asoka.seneviratne@gmail.com.)
Opinion
Can Sri Lankans do economics?
by Shiran Illanperuma
Back in 2022, when the Sri Lankan economy was circling the drain, the economics establishment used the term ‘voodoo economics’ to describe policies such as the 2019 tax cuts and the Central Bank financing of the budget deficit – what is popularly called money printing – which were considered to be the proximate causes of the crisis.
In the English language, the term ‘voodoo’ is synonymous with savagery and superstition – it evokes imagery of dark-skinned natives dancing around a bonfire, performing irrational rituals. This is an imagery we have learned from Hollywood and Western media. In fact, the word voodoo is steeped in a racist and colonial history.
Voodoo is an English corruption of the word vodun, which means ‘spirit’ or ‘deity’. It may be similar to the Sinhala word yaksha or yaka. During colonialism, Europeans enslaved millions of West Africans and brought them to the Caribbean to work on sugar plantations. Their labour provided the finances for the Industrial Revolution.
These slaves – from the Fon, Ewe, Yoruba, and Kongo peoples of Africa – had their own indigenous spiritual and philosophical systems. Even as slavery dehumanised them, they held on to their beliefs in whatever small ways they could. Many camouflaged their gods and beliefs through Catholic saints and imagery. Throughout the African diaspora, especially in places like Haiti, this belief system became known as voodoo.
Think of that history next time you hear the term voodoo economics. Remember that plantations came to Sri Lanka after slavery was outlawed in the Caribbean. But in fact, the labour practices in Sri Lankan and Caribbean plantations were not that different. The treatment of the indigenous peasants in the process of land acquisition, was not that different. Voodoo is, in some way, part of our history too.
Mainstream Economics Miseducation
Economists tell us that the cause of the 2022 crisis was that the people were deceived by voodoo economics. This is not to defend the short-sighted economic policies of that government, but to point out that the longer-term structural crisis of Sri Lanka’s colonial economy has been ignored. The spectre of voodoo economics became a convenient way to discredit anything that challenged the cookie-cutter prescriptions of neoclassical economics.
In a sense, it was the economics establishment’s way of absolving itself from blame – it is not mainstream economics education, but the lack of it, that is to blame. The solution was not to change the prescription but to increase the dosage.
Starting this year, the Ministry of Education plans to roll out a syllabus on Entrepreneurship and Financial Literacy from Grades 6 to 11. The syllabus is about personal budgeting, digital banking, tax literacy, and micro-business management. It is basically a self-help manual. There is nothing in this syllabus about production.
What are the economics of the production of rice, our national staple? What are the economics of the garment sector’s supply chains. How are labour contracts between workers and employers negotiated? These are not questions the syllabus is interested in. The economy as a social process, and a system of social relations, does not exist. We are all entrepreneurs in waiting.
Similarly, the Central Bank of Sri Lanka has a Financial Literacy Roadmap, which is based on a Financial Literacy Survey. According to the survey, only 58% of Sri Lankans are financially literate. That implies that 42% of Sri Lankans are financially illiterate. It’s a polite way of saying they are stupid, uneducated, and irresponsible. It is also a subtle way of placing personal blame for structural issues. Why are you poor? Well obviously, it’s because you have misbehaved, you have been irresponsible.
What mainstream economics tells people about their poverty is not so different from what the IMF, the World Bank, and the industrialised countries tell the poorer nations. You are in debt because you have misbehaved, taxed too little, and printed too much money. You have been corrupt – as if there is no corruption in the United States, the European Union, and Japan.
It’s a strange assertion. Last year, the United Nations Conference of Trade and Development (UNCTAD) published landmark report titled ‘World of Debt’. Consider the following statistics:1
1. Public debt in developing countries is growing at twice the speed as developed countries.
2. Borrowing costs are 2 to 5 times higher for developing countries than developed ones.
3. 3.4 billion people, across 46 developing countries, live under governments that spend more on interest payments than on healthcare and education (Sri Lanka is one of those countries – around 50% of the government’s budget is for debt servicing).
Is it feasible and rational that all these 3.4 billion people have been plunged into debt because of irresponsibility and corruption? Is it a strange coincidence that all these 3.4 billion happen to be black and brown people in the Global South? Or, is there something more fundamentally wrong with the structure of the global economy? Is there a historical legacy that has not yet been overcome?
Reclaiming Sri Lankan Economics
The year 2025 marked 75 years since the birth of modern Sri Lankan economics. Not a single economics department in this country, not a single professional or students association, celebrated this milestone. It is not something that is memorialised or written in history books.
To explain why 2025 should be considered the 75th anniversary of Sri Lankan economics, let us first revisit that conjuncture:
* In 1948, Sri Lanka received ‘flag independence’, graduating from British colony to dominion status.
* In 1949, the Gal Oya project, the first major post-independence infrastructure project, began. The contract for that was awarded to an Idaho-based US company called Morrison-Knudsen.
* Also in 1949, US economist John Exter wrote a report which was tabled in parliament and led to the creation of the Central Bank of Sri Lanka.
Exter himself became the first governor of the central bank.
· In 1950, the Sri Lankan rupee was devalued 30% against the US dollar and the CBSL began its operations.
· Also in 1950, Ceylon joined the IMF and World Bank – two organisations headquartered in Washington DC, whose policies are directed by the US Treasury Department.
In fact, what we call independence was actually a handover from the English to the US. Colonialism was replaced by what Ghana’s first president, Kwame Nkrumah, called neocolonialism – a system of indirect control using primarily economic rather than political and military means.
It is in this milieu that, in 1950, Sri Lanka’s first economics journal was published – the Ceylon Economist. It was an attempt by the first generation of the Ceylonese intellectuals to find solutions to our own economics problems based on our own analysis of our conditions. Sadly, many of our own university professors and students hardly reference these giants, or that journal.
The contributors to the Ceylon Economist included figures such as F. R. Jayasuriya, G.V.S. De Silva, N. M. Perera, P. Kandiah, Gamani Corea, S.A. Wickramasinghe, S.B.D. De Silva, Philip Gunawardena, and others. These individuals were not simply academicians looking to publish papers or gain tenure. They were movement leaders and institutionalists, steeped in practical action. They were committed to building up a nation from the ashes of colonialism. They had the confidence to stand up and assert their intellectual sovereignty.
What happened to that spirit? To the spirit of the Ceylon Economist? Why do we not celebrate those intellectuals? Is it because we do not recognise their achievements? Or is it because today’s intellectuals have turned their backs on the project that that generation started but could not complete? Can Sri Lankans do economics?
(The article is based on a speech delivered at ‘Economic Policy Paradigms for Development: Beyond the Mainstream Horizon’, organised by the University of Colombo Department of Economics, Economics Student Association, and Tricontinental: Institute for Social Research)
(Shiran Illanperuma is a Sri Lankan journalist and political economist. He is a researcher at Tricontinental: Institute for Social Research and a co-editor of Wenhua Zongheng: A Journal of Contemporary Chinese Thought. He is a visiting lecturer at University of Colombo, Bandaranaike Center for International Studies, and National Defence College Sri Lanka.)
Opinion
Legal community has a vital duty to critique judicial decisions
Let me first, on behalf of Lake House Printers and Publishers and myself, thank you for accepting the invitation to attend this launch.
I will not say anything about the book but will leave that to others; Saliya and Dinesha have already done so. Thank you, Saliya and Dinesha, for your contribution.
Why do we need conversations about constitutional law and constitutional reform?
Sri Lanka, like most countries in the Commonwealth, is a common law country. Common law countries are distinguished by their reliance on judicial precedent and judge-made law, which evolve through case-by-case reasoning rather than comprehensive codification. This tradition emphasises flexibility, judicial independence, and the adversarial process.
In common law countries, the legal community therefore has a vital duty to critique judicial decisions, as precedent-based systems rely on ongoing scrutiny to ensure fairness, coherence, and legitimacy. Without critique, judge-made law risks stagnation, bias (whether institutional, personal, or doctrinal), or detachment from evolving social values. A critique is a structured, analytical evaluation of a work, idea, or situation that highlights both strengths and weaknesses, aiming to provide constructive insights rather than mere faultfinding. It differs from simple criticism by being more formal, balanced, and evidence-based.
Critique ensures that precedents are tested, refined, or overturned when they no longer serve justice. It often inspires legislative intervention when judicial precedent proves inadequate. Critiquing judgments trains lawyers to think critically and equips them to argue for doctrinal changes. Transparent debate reassures citizens that judicial power is exercised responsibly. Critique allows courts in different common law countries to learn from each other’s reasoning.
“The law is what the last judge said in the last case” is a pithy way of expressing a feature of the common law—that the law develops through judicial precedent and that the most recent authoritative decision ordinarily represents the current law. There is no such thing as settled law; what appears settled remains so only until a later judgment unsettles it. An example would be helpful.
The makers of the Indian Constitution debated whether the exception to the protection of life and liberty should be limited to a procedure established by law or to due process of law. If it was according to procedure established by law, the legislature ought to be trusted not to make bad laws. If it were according to due process of law, the judiciary would have the authority to question a law on the ground that it is not good law and is not in consonance with fundamental principles. The Constituent Assembly consciously decided on ‘procedure established by law’.
Soon after the Indian Constitution was adopted, it was argued in A.K. Gopalan v Madras that the word ‘law’ in Article 21 meant the principles of natural justice. That argument was rejected.
But a quarter of a century later, in Maneka Gandhi’s case, the Supreme Court headed by Chief Justice Bhagwati laid down that any law which deprives a person of his life or personal liberty is invalid unless it prescribes a fair and just procedure for such deprivation. In short, the Court read ‘due process’ into Article 21 despite the Constituent Assembly’s conscious decision not to use the phrase.
In 1991, at the first SAARCLAW conference in Colombo, Justice Bhagwati, who had retired by then, spoke on Indian developments in public law. I asked him at question time how he did it in the face of that conscious decision by the Constituent Assembly. His response was that a country must keep pace with modern legal developments and that the people are entitled to benefit from them.
A few words about the influence of foreign jurisprudence. Some in the legal community are reluctant to draw on foreign jurisprudence, viewing it as incompatible with domestic legal traditions, or just because it is foreign.
Just two examples of how foreign jurisprudence has helped develop the law in Sri Lanka.
In India, the Supreme Court had given an expansive meaning to equal protection of the law by holding that ‘anything that is arbitrary violates equal protection’. In Elmo Perera v. Jayawickrama, Mr HL De Silva PC strenuously argued for a similar expansion. A full-bench, divided 6 to 3, declined, holding that the petitioner had not shown that there was unequal treatment. Justice Wanasundera, in his dissent, held that in the case of a person in a group, the comparison would be with the norm or protection applicable to the group.
In the landmark case of Jayasinghe v Attorney-General, Justice Mark Fernando went further and held that a violation of the norm would be a violation of equal protection, as judicial notice could and should be taken of the fact that the norm is ordinarily followed. That judgment has since been followed consistently. This was made possible because of developments in India.
As to the actions of state-owned companies and corporations violative of fundamental rights, our Supreme Court initially took a restrictive view, especially in Wijetunga v Insurance Corporation, Chandrasena v National Paper Corporation, and the five-member bench case of Wijeratne v People Bank, all three judgments penned by Chief Justice Sharvananda. He was supervising my doctoral thesis at that time and used to engage in lengthy discussions with me. I expressed my reservations on the correctness of the 3 judgments, and he was ready to listen. One day, he asked me to read Sukhdev v Bhagatram, a judgment by Justice Mathew, whom he held in high esteem. That judgment supported my line of thinking, and I included it in my draft, noting that our Supreme Court has taken a very narrow view. I remember making an ‘oral submission’ as if I was in Court before him. He listened and nodded occasionally. Just that.
Later, I was junior counsel to Mr Batty Weerakoon in a fundamental rights case against some corporation; we appeared for some Sama Samajist trade unionists who had a strong case. Mr NTS Kularatne, who taught me Local Government Law at Law College, appeared for the corporation and confidently cited the three judgments of Chief Justice Sharvananda that I mentioned. Addressing him, the Chief Justice said, ‘Mr Kularatne, do you want to proceed with that argument? I have reconsidered this issue, and I am prepared to write a judgment.’ Mr Kularatne back-tracked, much to my disappointment. We were denied a judgment on the issue which, I am sure, would have been a lucid one.
But very soon, Justice Atukorale, in Rajaratne v Air Lanka, adopted the views of Justice Mathew in Sukhdev v Bhagatram.
A law student from one of the universities interviewed me for an assignment she was working on. She was outspoken and told me that my critiques of judgments seemed measured, temperate, and overtly respectful of the courts. ‘You always say “I submit”, “it is respectfully submitted”.’ I explained to her that a critique of a judgment should not become a polemical exercise, as polemics are adversarial, rhetorical attacks aimed at winning arguments rather than at deepening understanding or improving the law. In the legal community, polemics risk undermining the credibility and constructive purpose of critique.
I took the example of my treatment of Namasivayam v Gunawardena, a judgment by Chief Justice Sharvananda in a case which I myself had argued. The Police officer concerned swore an affidavit to say that he boarded the bus in which the petitioner was travelling, ‘required’ the petitioner to accompany him to the Police Station for questioning, and ‘released’ him after recording his statement. The Chief Justice held that it amounted to an arrest as the Petitioner was deprived of his liberty to go where he pleased. I have described that part of the judgment as a watershed in the field of personal liberty in Sri Lanka, but was critical of another aspect of the judgment.
The petitioner was detained under a detention order under emergency regulations, but fresh orders were not made every month, which, I argued, made continued detention unlawful.
Section 4 of the Public Security Ordinance provides that the expiry or revocation of any Emergency Proclamation shall not affect ‘any offence committed, or any right, liberty or penalty acquired or incurred’. Chief Justice Sharvananda, referring to section 4, stated that the liability to be detained was a penalty incurred by the petitioner under the Emergency Regulations. So, monthly detention orders were unnecessary. I was appalled and said this in my draft chapter:
‘By no stretch of imagination could the liability of a person arrested under Regulation 18 to be detained be termed a ‘penalty’ incurred.’
Chief Justice Sharvananda went through that part, did not say a word, but struck off the words ‘by no stretch of imagination’ with a pencil. The message was clear: ‘Be temperate in the use of language, but you are entitled to critique my judgment’.
The book now reads: ‘It is respectfully submitted that the liability of a person arrested under regulation 18 to be detained cannot be termed a ‘penalty’ incurred.’ I learnt a lot.
Soon after the judgment, the Public Security Ordinance was amended to provide that fresh orders need not be made each time the emergency is extended.
Talking about critique, once when I met Justice Shirani Bandaranayake, she inquired about the progress of the second edition of my book, ‘Fundamental Rights in Sri Lanka’, which she knew I was working on. Among other things, I told her that I was critical of the three determinations on the freedom of religious propagation she had authored. Her response was: ‘Oh! That is alright, as long as you don’t call me names.’ Now, that is the correct spirit.
This book is not only about constitutional jurisprudence but also constitutional reform. I hope the reform process will benefit from my contribution.
I want to thank Lake House Printers and Publishers for a job well done.
Now that this book is finally out, I will rest for a few weeks and start work on the 4th edition of ‘Fundamental Rights in Sri Lanka.’
Text of the speech by Dr. Jayampathy Wickramaratne
at the launch of his latest book, Constitutional Conversations in Colombo on 16 July 2026)
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