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A golden opportunity missed due to communal mindsets

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By Rienzie Wijetilleke
(rienzietwij@gmail.com), and
Kusum Wijetilleke
(kusumw@gmail.com)

There was a period in the late 80s and early 90s when Sri Lanka’s banking sector was beginning to expand its correspondent relationships around the world and strengthening these relationships through carefully structured facilities was critical. As the CEO of HNB, I was obliged to meet officials and counterparts of various banks around the world in order to negotiate our institutional relationships and thus expand and facilitate the growing import/ export industry as well as finalizing credit lines to Sri Lanka. On quite a number of occasions, I attended meetings in the UK and in various parts of Europe with heads of some of the leading banks in that region. We would discuss Sri Lanka and its economy, politics, the threat of terrorism whilst also working out trade products and negotiating funding lines. Every so often, I would hear remarks from the British and the Europeans regarding the size of our balance sheet. They would jokingly ask whether there are any zeroes missing from our balance sheet, implying that HNB was not of an adequate size to be considered a major financial player internationally.

 

A Sri Lankan Regional Financial Force

 

When I studied the local industry at the time, it became apparent that culturally, the banking industry had an issue. The State owned and controlled banks such as BOC and People’s Bank had a major advantage due to their large deposit base and state backing, yet their loan portfolio was much weaker, mainly due to lending to State Owned Enterprises. At that time, due to state ownership, these banks viewed risk differently to private commercial banks. HNB was lending to a myriad of industries which were in their infancy but with a much smaller deposit base. Many of the private commercial banks had the necessary expertise to lend to large projects and new industries, but the institutions themselves were not large enough to participate in some of these transactions. This meant that a lot of the lending had to be syndicated with a foreign bank as well as with a state bank.

Thus, it became clear that HNB would have to grow its funding base in order to compete against the state banks and eventually against foreign banks in the region. Over many decades, Sri Lanka’s banking sector has evolved into a stable industry with an equally effective regulator and sound policy management. There was no reason why Sri Lanka’s finance industry could not find success in markets such as India, Pakistan, Bangladesh, Vietnam and Cambodia. My dream was that HNB would grow into a truly regional powerhouse, but this would require consolidation within the Sri Lankan industry to create a financial force that could compete regionally with a balance sheet large enough to entice investors.

HNB needed to buy over a competitor and perhaps through an amalgamated entity, try to enter foreign markets at least with basic financial products before expanding into infrastructure funding and investment banking. If we could start small and get our foot in the door in countries like Bangladesh and Vietnam, this Sri Lankan financial giant could open itself up to new opportunities in markets spread throughout the burgeoning South East Asian region. As the CEO of HNB, I had already overseen the purchase of the local branches of IndoSuez, Emirates Bank and Habib Bank and thus had the necessary confidence to oversee a larger, more meaningful acquisition/merger.

I engaged a few trusted advisors and we decided on presenting some preliminary numbers to key Board Members in private meetings. I had anticipated and received the unqualified support of the Chairman, the late Mr. Chrishantha Cooray and Director and one of its major shareholders: Mr. Harry Jayawardena (DHSJ). As Chairman, Mr. Cooray had always supported me, he was a thorough gentleman and always kept the organization’s best interests at heart. In DHSJ, I was always assured of the steadfast support of the country’s pre-eminent businessman and industrialist, someone that shared my vision. One sticking point was the need to raise fresh capital to partly finance the take-over. Mr. Cooray’s shareholding interest through Brown and Co. was unable to raise significant capital, but DHSJ was ready and willing to infuse the necessary capital. As CEO I had to walk a fine line, as both Mr. Cooray and DHSJ were dear friends of mine and at Mr. Cooray’s request, I had to agree not to take any action that might lead to a dilution of Brown and Co’s share-ownership.

 

Insecurity of the Regulator

 

Furthermore, many within the regulator were very much against what they perceived as an attempt by myself to promote individual ownership and domination of the banking industry in Sri Lanka. Personally, this was not a consideration for me, as I was responsible for the bank; a merger or acquisition was very much in the best interests of the organization. However given the sensitivity of the situation on all sides, I needed to be extremely tactful. It seemed obvious to me that the regulator was willing to forego international expansion to restrict individual domination of the industry and prevent a concentration of power. However, I was of the view that a consolidation would not only align with HNB’s vision, but was undoubtedly in the national interest.

Despite some reticence by members of the Board and Senior Management, I received the green light to do whatever needed to merge with or acquire Sampath Bank, even if it was interpreted as a hostile takeover. We opted for Sampath because of the enormous potential it showed at that time. I admired some of their senior management and indeed I even counted as friends some amongst their directorate, but our vision was more important than personal relationships. HNB had an opportunity and the entire country and economy would benefit from a consolidation which would have been unprecedented in Sri Lanka.

At the time, it was my expectation that the regulatory authority would have backed the creation of a Sri Lankan regional financial entity, given the obvious advantages it would bring to Sri Lanka. However, during the initial negotiations, it became apparent that Sri Lanka’s communal divisions had poisoned the hearts and minds of so many Sri Lankans: there was resistance from unexpected quarters.

 

Communal Divisions come to the Fore

 

Hatton National Bank, with its roots in the hill-country town of Hatton, was initially known to be a bank that served the plantation industry. Over the years, through the efforts of many, we successfully shed this image and created a new one. HNB came to be known as a “Partner in Progress” to all Sri Lankans and one of the things I am most proud of from my time as CEO was the Gami Pubuduwa scheme which was targeted at Sri Lankans around the country living outside urban areas, to provide them with lines of credit that were sorely lacking. I was also proud that HNB, especially during the mid-90s, had hired some of Sri Lanka’s brightest sportsmen and women, especially cricketers, both household names and up and coming youngsters with enormous potential. At HNB we celebrated all cultures and we would not spare any expense for Bakthi Gee and Christmas events for staff. HNB had become a truly multicultural organization.

To my surprise and utter disappointment, many people involved in the negotiations seemed to consider HNB a “Tamil Bank”. Thus, any potential takeover of Sampath was suddenly viewed through the lens of communal division. The idea of creating a regional powerhouse was now framed as a hostile acquisition of a ‘Sinhala’ Bank by a ‘Tamil’ Bank.

 

Personal Attacks and Posters

 

During the coming months, some enterprising members of the Sampath Bank Union began printing “kalapathara” (posters) making various allegations about HNB, its Directors and its management, myself included. HNB’s attempted takeover of Sampath was seen as part of a movement to dilute the Sinhalese culture, and I was viewed as the foremost villain in this story; the Sinhala Buddhist CEO who was selling his people out. There were various threats issued to me and my family. The Board of Directors at HNB was so concerned that they arranged a special security detail for me. We had to shuffle some of the staff that were working under me due to allegations that they were involved. I had to warn my wife that only specific staff would be allowed to enter my residence. On many evenings we received phone calls, with a variety of threats made against me personally and against my family, some of the language used I dare not repeat. On one occasion my youngest son, who was barely a teenager at the time had answered the telephone when my wife and I were not in the house. He conveyed to us that a man had called asking for me had then proceeded to scold my son in filth and warn him that his father’s limbs would be broken soon.

Senior officials of the Central Bank would call me at odd hours and we would discuss the move at length. The accusation was that HNB was trying to take over the banking industry, but I kept repeating that we were trying to consolidate, not dominate. Many at the CBSL were worried about monopolies and I sensed they had been listening to other industry professionals who were against potential domination of the industry by HNB. I can state as fact that I know of some very prominent bankers who despite seeing the obvious advantages, did not want to see HNB succeed in this venture.

 

The Dream that Died

 

As the war went from bad to worse, with bombs striking in the business district in Colombo and the government of Sri Lanka not having adequate means to respond, the temperature was starting to increase. The pressures were immense, the negative publicity around the merger/acquisition plus my additional responsibilities were starting to take its toll and I could not in good conscience endanger my family any further. Whilst I had the support of most of the Directorate at HNB, I realized that politically, the transaction would be painted by the communal narrative; the well had been poisoned.

As I think back, the idea to build a major regional financial player would most certainly have succeeded and the rewards would have been handsome. Take the example of Mr. Ishara Nanayakkara and the recent $600 Mn transaction involving the sale of shares in his Cambodian finance company, PRASAC. LOLC and Mr. Nanayakkara are reaping the rewards of taking a long-term view and diversifying into frontier markets with immense growth potential.

In the 90s, South East Asia and the Asian region as a whole was on the cusp of an economic boom. Young economies such as Vietnam and Bangladesh were starting to get organized and open up for trade and investment. An entity with the expertise of HNB and Sampath Bank with a large balance sheet would have taken a foothold in many of these markets and would have enjoyed a stake in their shared prosperity.

Unfortunately, small minds prevailed and Sri Lanka’s communal divisions would continue to dictate the country’s policies and initiatives, it might be argued that this sorry state of affairs still continues to this day.



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Opinion

Capt. Dinham Suhood flies West

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A few days ago, we heard the sad news of the passing on of Capt. Dinham Suhood. Born in 1929, he was the last surviving Air Ceylon Captain from the ‘old guard’.

He studied at St Joseph’s College, Colombo 10. He had his flying training in 1949 in Sydney, Australia and then joined Air Ceylon in late 1957. There he flew the DC3 (Dakota), HS748 (Avro), Nord 262 and the HS 121 (Trident).

I remember how he lent his large collection of ‘Airfix’ plastic aircraft models built to scale at S. Thomas’ College, exhibitions. That really inspired us schoolboys.

In 1971 he flew for a Singaporean Millionaire, a BAC One-Eleven and then later joined Air Siam where he flew Boeing B707 and the B747 before retiring and migrating to Australia in 1975.

Some of my captains had flown with him as First Officers. He was reputed to have been a true professional and always helpful to his colleagues.

He was an accomplished pianist and good dancer.

He passed on a few days short of his 97th birthday, after a brief illness.

May his soul rest in peace!

To fly west my friend is a test we must all take for a final check

Capt. Gihan A Fernando

RCyAF/ SLAF, Air Ceylon, Air Lanka, Singapore Airlines, SriLankan Airlines

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Opinion

Global warming here to stay

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The cause of global warming, they claim, is due to ever increasing levels of CO2. This is a by-product of burning fossil fuels like oil and gas, and of course coal. Environmentalists and other ‘green’ activists are worried about rising world atmospheric levels of CO2.  Now they want to stop the whole world from burning fossil fuels, especially people who use cars powered by petrol and diesel oil, because burning petrol and oil are a major source of CO2 pollution. They are bringing forward the fateful day when oil and gas are scarce and can no longer be found and we have no choice but to travel by electricity-driven cars – or go by foot.  They say we must save energy now, by walking and save the planet’s atmosphere.

THE DEMON COAL

But it is coal, above all, that is hated most by the ‘green’ lobby. It is coal that is first on their list for targeting above all the other fossil fuels. The eminently logical reason is that coal is the dirtiest polluter of all. In addition to adding CO2 to the atmosphere, it pollutes the air we breathe with fine particles of ash and poisonous chemicals which also make us ill. And some claim that coal-fired power stations produce more harmful radiation than an atomic reactor.

STOP THE COAL!

Halting the use of coal for generating electricity is a priority for them. It is an action high on the Green party list.

However, no-one talks of what we can use to fill the energy gap left by coal. Some experts publicly claim that unfortunately, energy from wind or solar panels, will not be enough and cannot satisfy our demand for instant power at all times of the day or night at a reasonable price.

THE ALTERNATIVES

It seems to be a taboo to talk about energy from nuclear power, but this is misguided. Going nuclear offers tried and tested alternatives to coal. The West has got generating energy from uranium down to a fine art, but it does involve some potentially dangerous problems, which are overcome by powerful engineering designs which then must be operated safely. But an additional factor when using URANIUM is that it produces long term radioactive waste.  Relocating and storage of this waste is expensive and is a big problem.

Russia in November 2020, very kindly offered to help us with this continuous generating problem by offering standard Uranium modules for generating power. They offered to handle all aspects of the fuel cycle and its disposal.  In hindsight this would have been an unbelievable bargain. It can be assumed that we could have also used Russian expertise in solving the power distribution flows throughout the grid.

THORIUM

But thankfully we are blessed with a second nuclear choice – that of the mildly radioactive THORIUM, a much cheaper and safer solution to our energy needs.

News last month (January 2026) told us of how China has built a container ship that can run on Thorium for ten years without refuelling.  They must have solved the corrosion problem of the main fluoride mixing container walls. China has rare earths and can use AI computers to solve their metallurgical problems – fast!

Nevertheless, Russia can equally offer Sri Lanka Thorium- powered generating stations. Here the benefits are even more obviously evident. Thorium can be a quite cheap source of energy using locally mined material plus, so importantly, the radioactive waste remains dangerous for only a few hundred years, unlike uranium waste.

Because they are relatively small, only the size of a semi-detached house, such thorium generating stations can be located near the point of use, reducing the need for UNSIGHTLY towers and power grid distribution lines.

The design and supply of standard Thorium reactor machines may be more expensive but can be obtained from Russia itself, or China – our friends in our time of need.

Priyantha Hettige

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Opinion

Will computers ever be intelligent?

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Alan Turin and the Turin machine

The Island has recently published various articles on AI, and they are thought-provoking. This article is based on a paper I presented at a London University seminar, 22 years ago.

Will computers ever be intelligent? This question is controversial and crucial and, above all, difficult to answer. As a scientist and student of philosophy, how am I going to answer this question is a problem. In my opinion this cannot be purely a philosophical question. It involves science, especially the new branch of science called “The Artificial Intelligence”. I shall endeavour to answer this question cautiously.

Philosophers do not collect empirical evidence unlike scientists. They only use their own minds and try to figure out the way the world is. Empirical scientists collect data, repeat and predict the behaviour of matter and analyse them.

We can see that the question—”Will computers ever be intelligent?”—comes under the branch of philosophy known as Philosophy of Mind. Although philosophy of mind is a broad area, I am concentrating here mainly on the question of consciousness. Without consciousness there is no intelligence. While they often coincide in humans and animals, they can exist independently, especially in AI, which can be highly intelligent without being conscious.

AI and philosophers

It appears that Artificial Intelligence holds a special attraction for philosophers. I am not surprised about this as Al involves using computers to solve problems that seem to require human reasoning. Apart from solving complicated mathematical problems it can understand natural language. Computers do not “understand” human language in the human sense of comprehension; rather, they use Natural Language Processing (NLP) and machine learning to analyse patterns in data. Artificial Intelligence experts claim certain programmes can have the possibility of not only thinking like humans but also understanding concepts and becoming conscious.

The study of the possible intelligence of logical machines makes a wonderful test case for the debate between mind and brain. This debate has been going on for the last two and a half centuries. If material things, made up entirely of logical processes, can do exactly what the brain can, the question is whether the mind is material or immaterial.

Although the common belief is that philosophers think for the sake of thinking, it is not necessarily so. Early part of the 20th century brought about advances in logic and analytical philosophy in Britain. It was a philosopher (Ludwig Wittgenstein) who invented the truth table. This was a simple analytic tool useful in his early work. But this was absolutely essential to the conceptual basis of early computer science. Computer science and brain science have developed together and that is why the challenge of the thinking machine is so important for the philosophy of mind. My argument so far has been to justify how and why AI is important to philosophers and vice versa.

Looking at computers now, we can see that the more sophisticated the computer, the more it is able to emulate rather than stimulate our thought processes. Every time the neuroscientists discover the workings of the brain, they try to mimic brain activity with machines.

How can one tell if a computer is intelligent? We can ask it some questions or set a test and study its response and satisfy ourselves that there is some form of intelligence inside this box. Let us look at the famous Alan Turing Test. Imagine a person sitting at a terminal (A) typing questions. This terminal is connected to two other machines, (B) and (C). At terminal (B) sits another person (B) typing responses to the questions from person (A). (C) is not a human being, but a computer programmed to respond to the questions. If person (A) cannot tell the difference between person (B) and computer(C), then we can deduce that computer is as intelligent as person (B). Critics of this test think that there is nothing brilliant about it. As this is a pragmatic exercise and one need not have to define intelligence here. This must have amused the scientists and the philosophers in the early days of the computers. Nowadays, computers can do much more sophisticated work.

Chinese Room experiment

The other famous experiment is John Sealer’s Chinese room experiment. *He uses this experiment to debunk the idea that computers could be intelligent. For Searle, the mind and the brain are the same. But he warns us that we should not get carried away with the emulative success of the machines as mind contains an irreducible subjective quality. He claims that consciousness is a biological process. It is found in humans as well as in certain animals. It is interesting to note that he believes that the mind is entirely contained in the brain. And the empirical discovery of neural processes cannot be applied to outside the brain. He discards mind-body dualism and thinks that we cannot build a brain outside the body. More commonly, we believe the mind is totally in the brain, and all firing together and between, and what we call ‘thought’ comes from their multifarious collaboration.

Patricia and Paul Churchland are keen on neuroscientific methods rather than conventional psychology. They argue that the brain is really a processing machine in action. It is an amazing organ with a delicately organic structure. It is an example of a computer from the future and that at present we can only dream of approaching its processing speed. I think this is not something to be surprised about. The speed of the computer doubles every year and a half and in the distant future there will be machines computing faster than human beings. Further, the Churchlands’, strongly believe that through science one day we will replicate the human brain. To argue against this, I am putting forward the following true story.

I remember watching an Open University (London) education programme some years ago. A team of professors did an experiment on pavement hawkers in Bogota, Colombia. They were fruit sellers. The team bought a large number of miscellaneous items from these street vendors. This was repeated on a number of occasions. Within a few seconds, these vendors did mental calculations and came out with the amounts to be paid and the change was handed over equally fast. It was a success and repeatable and predictable. The team then took the sample population into a classroom situation and taught them basic arithmetic skills. After a few months of training they were given simple sums to do on selling fruit. Every one of them failed. These people had the brain structure that of ordinary human beings. They were skilled at their own jobs. But they could not be programmed to learn a set of rules. This poses the question whether we can create a perfect machine that will learn all the human transferable skills.

Computers and human brains excel at different tasks. For instance, a computer can remember things for an infinite amount of time. This is true as long as we don’t delete the computer files. Also, solving equations can be done in milliseconds. In my own experience when I was an undergraduate, I solved partial differential equations and it took me hours and a lot of paper. The present-day students have marvellous computer programmes for this. Let alone a mere student of mathematics, even a mathematical genius couldn’t rival computers in the above tasks. When it comes to languages, we can utter sentences of a completely foreign language after hearing it for the first time. Accents and slang can be decoded in our minds. Such algorithms, which we take for granted, will be very difficult for a computer.

I always maintain that there is more to intelligence than just being brilliant at quick thinking. A balanced human being to my mind is an intelligent person. An eccentric professor of Quantum Mechanics without feelings for life or people, cannot be considered an intelligent person. To people who may disagree with me, I shall give the benefit of the doubt and say most of the peoples’ intelligence is departmentalised. Intelligence is a total process.

Other limitations to AI

There are other limitations to artificial intelligence. The problems that existing computer programmes can handle are well-defined. There is a clear-cut way to decide whether a proposed solution is indeed the right one. In an algebraic equation, for example, the computer can check whether the variables and constants balance on both sides. But in contrast, many of the problems people face are ill-defined. As of yet, computer programmes do not define their own problems. It is not clear that computers will ever be able to do so in the way people do. Another crucial difference between humans and computers concerns “common sense”. An understanding of what is relevant and what is not. We possess it and computers don’t. The enormous amount of knowledge and experience about the world and its relevance to various problems computers are unlikely to have.

In this essay, I have attempted to discuss the merits and limitations of artificial intelligence, and by extension, computers. The evolution of the human brain has occurred over millennia, and creating a machine that truly matches human intelligence and is balanced in terms of emotions may be impossible or could take centuries

*The Chinese Room experiment, proposed by philosopher John Searle, challenges the idea that computers can truly “understand” language. Imagine a person locked in a room who does not know Chinese. They receive Chinese symbols through a slot and use an instruction manual to match them with other symbols to produce correct replies. To outsiders, it appears the person understands Chinese, but in reality, they are only following rules. Searle argues that similarly, a computer may process language convincingly without genuine understanding or consciousness.

by Sampath Anson Fernando

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