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Will NPP continue Sri Lanka’s path of Economic Suicide?

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By Sunil Abhayawardhana

Though Sri Lanka has a new government, its first budget for 2025 remains within the conditions and targets of the ongoing IMF programme (which will continue until the end of 2027).

A major shortfall in the budget is the lack of a ‘developmental thrust,’ which is essential for the country to grow out of the current crisis. Rather than discussing the minutiae of the budget, it is worth looking at how Sri Lanka got into this situation by making the same mistakes over and over again.

Though these mistakes can be pointed out, mainstream economists prefer to stick to the outdated textbook economics taught at university even when proven wrong. Therefore, the best way to bring up Sri Lanka’s mistakes is through a comparative approach with the High Performing Asian Economies (HPAEs).

Missed Opportunities

At independence in 1948, Sri Lanka (then Ceylon) was expected to develop rapidly due to advantages such as its strategic location, which was expected to be a multiplier by itself. This ‘strategic location’ has not fully been made use of to this day.

The oil tank farm in Trincomalee was a big storage facility in 1948. If the government had negotiated to buy the facility from the British (which was finally done in 1965 for 250,000 sterling pounds) and set up a refinery, Trincomalee could have become the oil hub of Asia, long before Singapore. This could have saved the country from the perennial forex crisis that it had to deal with due to the diminishing returns from the plantation economy.

The plantation economy had reached its peak over two decades before Independence and was not able to sustain a growing population. Yet, the immediate post-Independence governments did nothing about this. Though funds were available, there was a deficit in the thinking and a lack of vision for the future. The lack of immediate effort to diversify and industrialise the economy was the first act of economic suicide.

At around the same time, HPAEs such as Japan, South Korea, and Taiwan (China) embarked on their development programmes, which have brought results far exceeding their own expectations. What was it that the HPAEs got so right, and what did Sri Lanka get so wrong?

A comparison between Sri Lanka and the HPAEs brings up many differences. The four major points of interest that stand out were as follows:

1) No plan

2) Bad theory

3) Bad advice

4) Not understanding development

No Plan

A sovereign country should know where it wants to go and how it hopes to reach its objectives. This is normally expressed in a development plan that provides the public with a clear roadmap. A plan becomes more necessary when countries start out from a very low level of development. An initial burst of energy is required before markets can take over.

A fair amount of strategic thinking goes into the formulation of such a plan. It should take into account the natural and human resources available and the strategic sectors that need development. The plan should aim to keep the cost of development as low as possible.

In a country with different communities, the plan should also unite people to work towards a common objective. A development plan looks not only at growth but also at the pattern of growth. When growth becomes more widespread, it opens up more opportunities for the public.

All HPAEs began their journeys with development plans covering many decades. Some countries, like China and Vietnam, still adhere to five-year plans. Sri Lanka is the one country that tried to develop without a plan. The World Bank mission of 1952 recommended a planning process for Sri Lanka, though it was hardly implemented. The first Ten-Year Plan of 1959 (which took three years to formulate) was never implemented. The Five-Year Plan of 1972 was derailed by the 1973 oil shock.

While Sri Lanka struggled to plan, the HPAEs were already implementing their plans and seeing results. Sri Lanka drifted to depending on ad-hoc methods without long-term objectives. Even after 77 years of Independence, the country is still unable to identify the sectors for industrial development.

Bad Theory

At independence, the country did not have much know-how in economics. The few who had been educated in economics at the UK universities were taught neoclassical economics with a Keynesian tinge. The Quantity Theory of Money (QTM) was the guiding orthodoxy of the time. What the QTM says is that if the quantity of money is increased, there would be a corresponding increase in prices and therefore inflation.

However, the HPAEs realised that if new money was directed towards investment in productive industry, the result would be an expansion of the economy rather than inflation. The bulk of their funds for development came from monetary financing from the Central Bank. They would have taken inspiration from examples such as Canada in the 1940s and Japan in the 1930s, both of which used monetary financing for specific purposes.

Another point to note is the fact that all the HPAEs had multiple development banks, which helped in the development drive. In contrast, Sri Lanka got rid of its two development banks on advice from the West, thereby reducing the availability of long-term credit for the development process.

Due to Sri Lanka’s adherence to the QTM, we have had to rely on other methods of finance, which has created a dependency on foreign aid and a huge foreign currency debt. Though there is so much evidence that monetary financing used wisely can bring great results, many in Sri Lanka still adhere to the QTM. While most universities still teach the old concepts, it is sad that students at the master’s level and beyond do not think for themselves.

Bad Advice

When a country lacks knowledge and experience, it becomes necessary to seek advice from others. The World Bank and the IMF did perform this function in the early days. However, since the neoliberal onslaught, the purpose of these institutions has taken a more politicised turn.

The advice given by the IMF and other international advice has to be analysed, as it often turns out to be more damaging. For example, austerity has been proven to be counterproductive and causes more damage to the economy and social life. The present advice the government is receiving from the IMF, the CBSL, and the Ministry of Finance is no different.

When South Korean President Park Chung-Hee was offered Western economic advisors, he knew exactly what their advice would be. So, he declined the offer and obtained economic advisors from Japan instead.

Sri Lanka, on the other hand, accepted whatever came from the West. Our leaders accepted the ‘Washington Consensus,’ which we follow to this day, even though the author of the document, John Williamson, has himself declared it a dead document.

Economists advise governments towards suicidal actions without observing what has been done around the world before. There are political aspects to this bad advice. As there is an overproduction of global money, such bad advice is actually beneficial to the Western financial sector and its political interests.

Not Understanding Development

Sri Lanka has still not understood what development means. This can be seen from the fact that despite having a potential 30,000 MW of wind power generation, the government wants to give this opportunity to foreign companies and buy back the power with foreign exchange. Even the export potential is given to foreign companies, while local companies lose that opportunity.

If such a situation had been in any of the HPAEs, they would have first developed a local windmill manufacturing industry to meet their needs. That is what development is – developing productive capabilities and creating a productive ecosystem. There are many opportunities that Sri Lanka has missed because the concept of development has not been understood.

Had local inventors been encouraged and supported, a true industrial base would have been flourishing today. One example is Ray Wijewardene’s hand tractor, to which one Sri Lankan asked, “Why do we need hand tractors when there are so many buffaloes around?”. Imagine what the HPAEs would have done with a brilliant, innovative mind like Ray Wijewardene’s.

Even the few sectors of industry built up to world-class levels have been destroyed by bad government policy. One such industry was the heavy construction industry, which is vital for infrastructure development. A local company had built up its capacity to do international projects funded by the World Bank and had performed many projects in the country, but the change of policy after 1977 destroyed the company and opened the doors to foreign companies at inflated prices, for which the country struggles to pay off its loans.

The local highway construction projects are an example, where Sri Lanka’s highways are considered the most expensive in the world, which opened opportunities for corruption. The very first industry developed in the HPAEs was the heavy construction industry in order to keep the cost of development low. Sri Lanka did the opposite.

Conclusion

It is quite clear that Sri Lanka’s present position is of its own making, following quite the opposite of what the HPAEs did. However, though many learn from mistakes, Sri Lanka does not seem to have learnt any lessons. Our advisors keep telling us to repeat our mistakes, and we keep listening to them.

It was expected that the NPP government would make a radical change in thinking, but it has not expressed any meaningful change of thinking with regard to major issues. Without such a change, Sri Lanka will continue on its suicidal path.

(Sunil Abhayawardhana was CEO of Sri Lanka’s largest heavy construction company. He has a master’s degree from the University of Wales and is working on a PhD in economics. He is a member of the Asia Progress Forum, which is a collective of like-minded intellectuals, professionals, and activists dedicated to building dialogue that promotes Sri Lanka’s sovereignty, development, and leadership in the Global South. APF can be contacted at asiaprogressforum@gmail.com).



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Disaster-proofing paradise: Sri Lanka’s new path to global resilience

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iyadasa Advisor to the Ministry of Science & Technology and a Board of Directors of Sri Lanka Atomic Energy Regulatory Council A value chain management consultant to www.vivonta.lk

As climate shocks multiply worldwide from unseasonal droughts and flash floods to cyclones that now carry unpredictable fury Sri Lanka, long known for its lush biodiversity and heritage, stands at a crossroads. We can either remain locked in a reactive cycle of warnings and recovery, or boldly transform into the world’s first disaster-proof tropical nation — a secure haven for citizens and a trusted destination for global travelers.

The Presidential declaration to transition within one year from a limited, rainfall-and-cyclone-dependent warning system to a full-spectrum, science-enabled resilience model is not only historic — it’s urgent. This policy shift marks the beginning of a new era: one where nature, technology, ancient wisdom, and community preparedness work in harmony to protect every Sri Lankan village and every visiting tourist.

The Current System’s Fatal Gaps

Today, Sri Lanka’s disaster management system is dangerously underpowered for the accelerating climate era. Our primary reliance is on monsoon rainfall tracking and cyclone alerts — helpful, but inadequate in the face of multi-hazard threats such as flash floods, landslides, droughts, lightning storms, and urban inundation.

Institutions are fragmented; responsibilities crisscross between agencies, often with unclear mandates and slow decision cycles. Community-level preparedness is minimal — nearly half of households lack basic knowledge on what to do when a disaster strikes. Infrastructure in key regions is outdated, with urban drains, tank sluices, and bunds built for rainfall patterns of the 1960s, not today’s intense cloudbursts or sea-level rise.

Critically, Sri Lanka is not yet integrated with global planetary systems — solar winds, El Niño cycles, Indian Ocean Dipole shifts — despite clear evidence that these invisible climate forces shape our rainfall, storm intensity, and drought rhythms. Worse, we have lost touch with our ancestral systems of environmental management — from tank cascades to forest sanctuaries — that sustained this island for over two millennia.

This system, in short, is outdated, siloed, and reactive. And it must change.

A New Vision for Disaster-Proof Sri Lanka

Under the new policy shift, Sri Lanka will adopt a complete resilience architecture that transforms climate disaster prevention into a national development strategy. This system rests on five interlinked pillars:

Science and Predictive Intelligence

We will move beyond surface-level forecasting. A new national climate intelligence platform will integrate:

AI-driven pattern recognition of rainfall and flood events

Global data from solar activity, ocean oscillations (ENSO, MJO, IOD)

High-resolution digital twins of floodplains and cities

Real-time satellite feeds on cyclone trajectory and ocean heat

The adverse impacts of global warming—such as sea-level rise, the proliferation of pests and diseases affecting human health and food production, and the change of functionality of chlorophyll—must be systematically captured, rigorously analysed, and addressed through proactive, advance decision-making.

This fusion of local and global data will allow days to weeks of anticipatory action, rather than hours of late alerts.

Advanced Technology and Early Warning Infrastructure

Cell-broadcast alerts in all three national languages, expanded weather radar, flood-sensing drones, and tsunami-resilient siren networks will be deployed. Community-level sensors in key river basins and tanks will monitor and report in real-time. Infrastructure projects will now embed climate-risk metrics — from cyclone-proof buildings to sea-level-ready roads.

Governance Overhaul

A new centralised authority — Sri Lanka Climate & Earth Systems Resilience Authority — will consolidate environmental, meteorological, Geological, hydrological, and disaster functions. It will report directly to the Cabinet with a real-time national dashboard. District Disaster Units will be upgraded with GN-level digital coordination. Climate literacy will be declared a national priority.

People Power and Community Preparedness

We will train 25,000 village-level disaster wardens and first responders. Schools will run annual drills for floods, cyclones, tsunamis and landslides. Every community will map its local hazard zones and co-create its own resilience plan. A national climate citizenship programme will reward youth and civil organisations contributing to early warning systems, reforestation (riverbank, slopy land and catchment areas) , or tech solutions.

Reviving Ancient Ecological Wisdom

Sri Lanka’s ancestors engineered tank cascades that regulated floods, stored water, and cooled microclimates. Forest belts protected valleys; sacred groves were biodiversity reservoirs. This policy revives those systems:

Restoring 10,000 hectares of tank ecosystems

Conserving coastal mangroves and reintroducing stone spillways

Integrating traditional seasonal calendars with AI forecasts

Recognising Vedda knowledge of climate shifts as part of national risk strategy

Our past and future must align, or both will be lost.

A Global Destination for Resilient Tourism

Climate-conscious travelers increasingly seek safe, secure, and sustainable destinations. Under this policy, Sri Lanka will position itself as the world’s first “climate-safe sanctuary island” — a place where:

Resorts are cyclone- and tsunami-resilient

Tourists receive live hazard updates via mobile apps

World Heritage Sites are protected by environmental buffers

Visitors can witness tank restoration, ancient climate engineering, and modern AI in action

Sri Lanka will invite scientists, startups, and resilience investors to join our innovation ecosystem — building eco-tourism that’s disaster-proof by design.

Resilience as a National Identity

This shift is not just about floods or cyclones. It is about redefining our identity. To be Sri Lankan must mean to live in harmony with nature and to be ready for its changes. Our ancestors did it. The science now supports it. The time has come.

Let us turn Sri Lanka into the world’s first climate-resilient heritage island — where ancient wisdom meets cutting-edge science, and every citizen stands protected under one shield: a disaster-proof nation.

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The minstrel monk and Rafiki the old mandrill in The Lion King – I

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Why is national identity so important for a people? AI provides us with an answer worth understanding critically (Caveat: Even AI wisdom should be subjected to the Buddha’s advice to the young Kalamas):

‘A strong sense of identity is crucial for a people as it fosters belonging, builds self-worth, guides behaviour, and provides resilience, allowing individuals to feel connected, make meaningful choices aligned with their values, and maintain mental well-being even amidst societal changes or challenges, acting as a foundation for individual and collective strength. It defines “who we are” culturally and personally, driving shared narratives, pride, political action, and healthier relationships by grounding people in common values, traditions, and a sense of purpose.’

Ethnic Sinhalese who form about 75% of the Sri Lankan population have such a unique identity secured by the binding medium of their Buddhist faith. It is significant that 93% of them still remain Buddhist (according to 2024 statistics/wikipedia), professing Theravada Buddhism, after four and a half centuries of coercive Christianising European occupation that ended in 1948. The Sinhalese are a unique ancient island people with a 2500 year long recorded history, their own language and country, and their deeply evolved Buddhist cultural identity.

Buddhism can be defined, rather paradoxically, as a non-religious religion, an eminently practical ethical-philosophy based on mind cultivation, wisdom and universal compassion. It is  an ethico-spiritual value system that prioritises human reason and unaided (i.e., unassisted by any divine or supernatural intervention) escape from suffering through self-realisation. Sri Lanka’s benignly dominant Buddhist socio-cultural background naturally allows unrestricted freedom of religion, belief or non-belief for all its citizens, and makes the country a safe spiritual haven for them. The island’s Buddha Sasana (Dispensation of the Buddha) is the inalienable civilisational treasure that our ancestors of two and a half millennia have bequeathed to us. It is this enduring basis of our identity as a nation which bestows on us the personal and societal benefits of inestimable value mentioned in the AI summary given at the beginning of  this essay.

It was this inherent national identity that the Sri Lankan contestant at the 72nd Miss World 2025 pageant held in Hyderabad, India, in May last year, Anudi Gunasekera, proudly showcased before the world, during her initial self-introduction. She started off with a verse from the Dhammapada (a Pali Buddhist text), which she explained as meaning “Refrain from all evil and cultivate good”. She declared, “And I believe that’s my purpose in life”. Anudi also mentioned that Sri Lanka had gone through a lot “from conflicts to natural disasters, pandemics, economic crises….”, adding, “and yet, my people remain hopeful, strong, and resilient….”.

 “Ayubowan! I am Anudi Gunasekera from Sri Lanka. It is with immense pride that I represent my Motherland, a nation of resilience, timeless beauty, and a proud history, Sri Lanka.

“I come from Anuradhapura, Sri Lanka’s first capital, and UNESCO World Heritage site, with its history and its legacy of sacred monuments and stupas…….”.

The “inspiring words” that Anudi quoted are from the Dhammapada (Verse 183), which runs, in English translation: “To avoid all evil/To cultivate good/and to cleanse one’s mind -/this is the teaching of the Buddhas”. That verse is so significant because it defines the basic ‘teaching of the Buddhas’ (i.e., Buddha Sasana; this is how Walpole Rahula Thera defines Buddha Sasana in his celebrated introduction to Buddhism ‘What the Buddha Taught’ first published in1959).

Twenty-five year old Anudi Gunasekera is an alumna of the University of Kelaniya, where she earned a bachelor’s degree in International Studies. She is planning to do a Master’s in the same field. Her ambition is to join the foreign service in Sri Lanka. Gen Z’er Anudi is already actively engaged in social service. The Saheli Foundation is her own initiative launched to address period poverty (i.e., lack of access to proper sanitation facilities, hygiene and health education, etc.) especially  among women and post-puberty girls of low-income classes in rural and urban Sri Lanka.

Young Anudi is primarily inspired by her patriotic devotion to ‘my Motherland, a nation of resilience, timeless beauty, and a proud history, Sri Lanka’. In post-independence Sri Lanka, thousands of young men and women of her age have constantly dedicated themselves, oftentimes making the supreme sacrifice, motivated by a sense of national identity, by the thought ‘This is our beloved Motherland, these are our beloved people’.

The rescue and recovery of Sri Lanka from the evil aftermath of a decade of subversive ‘Aragalaya’ mayhem is waiting to be achieved, in every sphere of national engagement, including, for example, economics, communications, culture and politics, by the enlightened Anudi Gunasekeras and their male counterparts of the Gen Z, but not by the demented old stragglers lingering in the political arena listening to the unnerving rattle of “Time’s winged chariot hurrying near”, nor by the baila blaring monks at propaganda rallies.

Politically active monks (Buddhist bhikkhus) are only a handful out of  the Maha Sangha (the general body of Buddhist bhikkhus) in Sri  Lanka, who numbered just over 42,000  in 2024. The vast majority of monks spend their time quietly attending to their monastic duties. Buddhism upholds social and emotional virtues such as universal compassion, empathy, tolerance and forgiveness that protect a society from the evils of tribalism, religious bigotry and death-dealing religious piety.

Not all monks who express or promote political opinions should be censured. I choose to condemn only those few monks who abuse the yellow robe as a shield in their narrow partisan politics. I cannot bring myself to disapprove of the many socially active monks, who are articulating the genuine problems that the Buddha Sasana is facing today. The two bhikkhus who are the most despised monks in the commercial media these days are Galaboda-aththe Gnanasara and Ampitiye Sumanaratana Theras.  They have a problem with their mood swings. They have long been whistleblowers trying to raise awareness respectively, about spreading religious fundamentalism, especially, violent Islamic Jihadism, in the country and about the vandalising of the Buddhist archaeological heritage sites of the north and east provinces. The two middle-aged monks (Gnanasara and Sumanaratana) belong to this respectable category. Though they are relentlessly attacked in the social media or hardly given any positive coverage of the service they are doing, they do nothing more than try to persuade the rulers to take appropriate action to resolve those problems while not trespassing on the rights of people of other faiths.

These monks have to rely on lay political leaders to do the needful, without themselves taking part in sectarian politics in the manner of ordinary members of the secular society. Their generally demonised social image is due, in my opinion, to  three main reasons among others: 1) spreading misinformation and disinformation about them by those who do not like what they are saying and doing, 2) their own lack of verbal restraint, and 3) their being virtually abandoned to the wolves by the temporal and spiritual authorities.

(To be continued)

By Rohana R. Wasala ✍️

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US’ drastic aid cut to UN poses moral challenge to world

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An UN humanitarian mission in the Gaza. [File: Ashraf Amra/Anadolu Agency]

‘Adapt, shrink or die’ – thus runs the warning issued by the Trump administration to UN humanitarian agencies with brute insensitivity in the wake of its recent decision to drastically reduce to $2bn its humanitarian aid to the UN system. This is a substantial climb down from the $17bn the US usually provided to the UN for its humanitarian operations.

Considering that the US has hitherto been the UN’s biggest aid provider, it need hardly be said that the US decision would pose a daunting challenge to the UN’s humanitarian operations around the world. This would indeed mean that, among other things, people living in poverty and stifling material hardships, in particularly the Southern hemisphere, could dramatically increase. Coming on top of the US decision to bring to an end USAID operations, the poor of the world could be said to have been left to their devices as a consequence of these morally insensitive policy rethinks of the Trump administration.

Earlier, the UN had warned that it would be compelled to reduce its aid programs in the face of ‘the deepest funding cuts ever.’ In fact the UN is on record as requesting the world for $23bn for its 2026 aid operations.

If this UN appeal happens to go unheeded, the possibilities are that the UN would not be in a position to uphold the status it has hitherto held as the world’s foremost humanitarian aid provider. It would not be incorrect to state that a substantial part of the rationale for the UN’s existence could come in for questioning if its humanitarian identity is thus eroded.

Inherent in these developments is a challenge for those sections of the international community that wish to stand up and be counted as humanists and the ‘Conscience of the World.’ A responsibility is cast on them to not only keep the UN system going but to also ensure its increased efficiency as a humanitarian aid provider to particularly the poorest of the poor.

It is unfortunate that the US is increasingly opting for a position of international isolation. Such a policy position was adopted by it in the decades leading to World War Two and the consequences for the world as a result of this policy posture were most disquieting. For instance, it opened the door to the flourishing of dictatorial regimes in the West, such as that led by Adolph Hitler in Germany, which nearly paved the way for the subjugation of a good part of Europe by the Nazis.

If the US had not intervened militarily in the war on the side of the Allies, the West would have faced the distressing prospect of coming under the sway of the Nazis and as a result earned indefinite political and military repression. By entering World War Two the US helped to ward off these bleak outcomes and indeed helped the major democracies of Western Europe to hold their own and thrive against fascism and dictatorial rule.

Republican administrations in the US in particular have not proved the greatest defenders of democratic rule the world over, but by helping to keep the international power balance in favour of democracy and fundamental human rights they could keep under a tight leash fascism and linked anti-democratic forces even in contemporary times. Russia’s invasion and continued occupation of parts of Ukraine reminds us starkly that the democracy versus fascism battle is far from over.

Right now, the US needs to remain on the side of the rest of the West very firmly, lest fascism enjoys another unfettered lease of life through the absence of countervailing and substantial military and political power.

However, by reducing its financial support for the UN and backing away from sustaining its humanitarian programs the world over the US could be laying the ground work for an aggravation of poverty in the South in particular and its accompaniments, such as, political repression, runaway social discontent and anarchy.

What should not go unnoticed by the US is the fact that peace and social stability in the South and the flourishing of the same conditions in the global North are symbiotically linked, although not so apparent at first blush. For instance, if illegal migration from the South to the US is a major problem for the US today, it is because poor countries are not receiving development assistance from the UN system to the required degree. Such deprivation on the part of the South leads to aggravating social discontent in the latter and consequences such as illegal migratory movements from South to North.

Accordingly, it will be in the North’s best interests to ensure that the South is not deprived of sustained development assistance since the latter is an essential condition for social contentment and stable governance, which factors in turn would guard against the emergence of phenomena such as illegal migration.

Meanwhile, democratic sections of the rest of the world in particular need to consider it a matter of conscience to ensure the sustenance and flourishing of the UN system. To be sure, the UN system is considerably flawed but at present it could be called the most equitable and fair among international development organizations and the most far-flung one. Without it world poverty would have proved unmanageable along with the ills that come along with it.

Dehumanizing poverty is an indictment on humanity. It stands to reason that the world community should rally round the UN and ensure its survival lest the abomination which is poverty flourishes. In this undertaking the world needs to stand united. Ambiguities on this score could be self-defeating for the world community.

For example, all groupings of countries that could demonstrate economic muscle need to figure prominently in this initiative. One such grouping is BRICS. Inasmuch as the US and the West should shrug aside Realpolitik considerations in this enterprise, the same goes for organizations such as BRICS.

The arrival at the above international consensus would be greatly facilitated by stepped up dialogue among states on the continued importance of the UN system. Fresh efforts to speed-up UN reform would prove major catalysts in bringing about these positive changes as well. Also requiring to be shunned is the blind pursuit of narrow national interests.

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