Opinion

A golden opportunity missed due to communal mindsets

Published

4 years ago

2021/01/12

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

KOICA – Volunteer Partner’s Day Meeting 2025

Published

11 hours ago

2025/05/22

Sahan Weerasooriya

On 20th May 2025, KOICA Volunteer Partner’s Day of year 2025 was held at the Courtyard by Marriott with the presence of the Country Director of KOICA Sri Lanka office Mrs. LEE Yooli, Mr. Samantha Bandara, the Director General of External Resources Department and officials from the Department of Technical Education & Training, National Institute of Education, Schools, Universities, National Youth Services Council, Colombo Public Library and over fifteen (15) volunteer partner organization representatives in Sri Lanka.

At present, there are thirteen (13) KOICA volunteers serving in Sri Lanka and the meeting organized by KOICA (WFK Division) was to share the know-how, experience and knowledgeable resources with the respective partner organizations. The main goals of the knowledge sharing session were to deliver relevant information about the KOICA Volunteer program and to generate insights from the partner organizations that will be useful in recalibrating WFK program’s future direction, including safety and security.

During the session, participants of partner organizations showed their strong need to obtain the services of volunteers, especially for the fields of Korean Language, ICT, Electronics, Social Welfare, Electronics and Auto-Mobile Engineering. Furthermore, they appreciated and emphasized the importance of expanding of KOICA Volunteer Program to rural areas in Sri Lanka.

Since the initiation of KOICA Sri Lanka office in 1991, volunteer dispatch activities have taken place throughout most regions in the country. There has been a significant demand for KOICA volunteers in the educational sphere targeting areas of Korean Language, ICT, etc. The expertise received from Korea has not only shown developmental potential in partner organizations but has also provided invaluable expertise for the youth to excel in the job market.

The Country Director of KOICA Sri Lanka office Mrs. LEE YOOLI expressed her gratitude to all the participants of partner organizations and added “KOICA Headquarters, together with the Sri Lanka Office, is pleased to continue the volunteer program under its ODA endeavors towards Sri Lanka; while introducing new focused volunteer fields in alignment with the SDG goals and the Sri Lankan government priorities.”

In the meeting, Mr. Samantha Bandara, Director General of the External Resources Department, extended his deep appreciation to KOICA for overall technical cooperation towards Sri Lanka and especially, appreciated the services of volunteers who contribute for the social and economic growth of the country, by sharing their expertise and Korea’s development experience.

The Korea International Cooperation Agency (KOICA), the grant aid division of the Embassy of the Republic of Korea, is the Korean government agency for grant aids under the mission of “Contributing to the common prosperity and the promotion of world peace through inclusive, mutual development cooperation leaving no one behind.”

Opinion

Has AKD lost the plot?

Published

1 day ago

2025/05/21

Sahan Weerasooriya

The election of the JVP/NPP leader as the executive president of Sri Lanka was no doubt momentous, perhaps, second only to the election of Ranasinghe Premadasa to the same coveted position. Though it was the first time the ‘caste barrier’ was broken, unfortunately, instead of hailing this social revolution Premadasa had other ideas; he attempted to rewrite history by attempting to change his heritage thus missing a great opportunity to show that Sri Lanka indeed was a country of equality and opportunity! AKD shares with Premadasa the same great achievement of reaching the top from very humble beginnings. In addition, AKD is the only leader of the country to be elected from a party with a ‘terrorist’ heritage and many were hopeful that this would not be a baggage. As recent events have shown, it looks as if he is not able to shed that baggage. It is said that a leopard cannot change its spots! This is past repeating itself, as well illustrated by the actions of our first executive president JRJ; he was a manoeuvrer who could not stop doing so, even when he reached the top, which no doubt contributed to his downfall!

AKD started well, just like all his predecessors have done, but wheels seem to be coming off the wagon pretty soon! He continues to behave like an opposition politician continuing with attacks on his opponents, past and present, instead of concentrating on statecraft, to take action to alleviate the suffering of the masses burdened with severe economic hardships and chart a course for future prosperity. Perhaps, this may at least be partly due to his having to face election after election but this should not be an excuse. Prior to the presidential election he portrayed that he was surrounded by groups of experts, of all modalities, who were ready with policies for rapid implementation but these experts seem to have disappeared into thin air! Only experts in economics seem to be from the much-maligned IMF. The message from the voters seems to be falling on deaf ears as shown by absurd explanations given for the erosion of the vote at the last local government elections.

He seems to be a one-man band which, worryingly, dashes hope for the long-promised abolition of the presidency. He would be totally ineffective without the executive powers of the presidency. This seems yet another addition to his unfulfilled promises. He is apparently being supported by a group of amateurs! Prior to elections there was much hype about the PM, a respected academic, who seems to have been pushed to the background. She does not seem to be functioning efficiently even as the minister of education. Ragging continues in universities resulting in suicides. Even worse was the suicide of a student sexually molested by a teacher, humiliated by a friend of the accused teacher, a private tutor who contested on the NPP ticket. The initial punishment for the teacher, till public protests erupted, was a transfer to a distant school. To make a terrible situation even worse was the action of the minister tasked with ensuring the safety of women and children. She claimed that the parents had not met her and handed over a petition.

This lack of leadership is replicated by the President himself. AKD’s mantra during the parliamentary election campaign was cleansing of Diyawannawa but no sooner had the guardian of the house been elected than his doctorate from a private Japanese university was questioned. After much hesitation, the speaker resigned, claiming that he would prove his academic qualifications. He has not done so and he is still an ‘honourable’ MP! Another MP, a female lawyer had the audacity to state that under the NPP government anyone was free to lie and admitted that she had lied about billions of dollars airlifted to Uganda by the Rajapaksas! AKD has taken no action against these MPs.

AKD also had an exposition of the Sacred Tooth Relic to be held in the run-up to the recent local elections. It did not pay dividends may be because the arrangements were in shambles. He visited Vietnam to deliver a lecture for the International Vesak Day but apparently did not find time to pay homage to the Buddha’s sacred relics on display a short distance away from the conference hall. He did find time to lay a wreath at the memorial of the war dead and flew back on a private jet so that he could vote in the LG elections! Another promise broken but it is claimed that a Buddhist society had paid for the private jet!

AKD’s actions regarding the ceremony to remember and honour war heroes clearly shows that he has completely lost the plot. To the shock and horror of all patriotic Sri Lankans, an announcement was made a couple of days ago by the secretary of defence that the ceremony would be presided over by the deputy minister of defence! In short, the commander of the forces is too busy or too reluctant to attend the remembrance of those who sacrificed their lives for the integrity of the country. I doubt it has happened in any country! If he was of the opinion that this event was superfluous or that it hampered reconciliation, he should have had the guts to issue a statement to that effect. Coming from a ‘terrorist’ heritage, the JVP may be having a soft corner for the terrorists killed by the armed forces and may have thought it was hypocritical for him to attend!

As the public outcry could not be patched over, he decided not only to attend the ceremony but also visit the disabled and allow them to take selfies. It is a shame that AKD seems to have developed selective amnesia for his past statements. During the time Rajapaksas were leading the campaign to eradicate the Tigers, AKD was a strong supporter and at times claimed that he told them what to do! What has brought about this change? Was it the backing from the pro-LTTE groups in other countries?

To add insult to injury, during his speech he alluded that the ‘war’ had been fought for political gains. Though it may have produced political gains, doesn’t he realise that it was fought, at a tremendous cost, to defeat terrorism for the purpose of continuing the integrity of the country? He and his acolytes are spreading the canard that this is different as we did not fight a foreign country. Had the Tigers succeeded, we may well be fighting a different country in our little island! His virtual equation of dead terrorists to our fallen heroes added further insult.

Unfortunately, we seem an ungrateful country insulting our fallen war heroes and allowing hypocritical Western nations insulting our living heroes.

by Dr Upul Wijayawardhana

Opinion

Make Sri Lanka Great

Published

2 days ago

2025/05/20

Sahan Weerasooriya

Sri Lanka holds immense untapped economic potential, bolstered by its strategic location along major global trade routes, rich natural resources, and a vibrant cultural heritage. Yet, despite these advantages, the nation has faced significant setbacks in recent decades—civil conflict, political instability, economic mismanagement, and rising poverty. Against this backdrop, the call to “Make Sri Lanka Great” is more than a slogan; it is a mission. It represents a collective vision to restore economic stability, promote inclusive growth, and unlock a future of opportunity for all Sri Lankans.

Reclaiming Sri Lanka’s Historical Greatness

Historically, Sri Lanka was a flourishing centre of commerce, education, and cultural exchange in the Indian Ocean. Its location between East and West positioned it as a maritime trade hub linking Asia, the Middle East, and Europe. Ports such as Colombo, Galle, Trincomalee, KKS connected global traders, scholars, and travelers, fostering a dynamic and prosperous economy.

Today, reviving this legacy is crucial. Economic renewal must be anchored in a fusion of historical insight, national unity, and bold innovation. To move forward, Sri Lanka must:

* Reclaim its legacy of knowledge, resilience, and productivity.

* Promote confidence in its global economic potential, encouraging innovation, entrepreneurship, and investment.

* Ensure social inclusion, recognising that unity across ethnic and religious lines is foundational to sustainable growth.

By leveraging its geographic strengths, investing in human capital, and creating a transparent, investor-friendly environment, Sri Lanka can once again become a leading player in regional and global trade.

Economic Challenges

Sri Lanka’s development path is obstructed by a complex web of systemic challenges. An ongoing economic crisis—driven by high debt, poor fiscal discipline, and import dependency—has caused inflation, job losses, and currency depreciation. Political instability and inconsistent policymaking further undermine investor confidence and long-term planning.

Social divisions, rooted in a civil war that ended in 2009, continue to impact national unity. Additionally, youth unemployment and the outmigration of skilled workers are weakening the nation’s human capital. Environmental degradation through deforestation, pollution, and unregulated urbanisation threatens tourism, agriculture, and long-term resilience. Addressing these interconnected issues is essential to laying a foundation for economic recovery and sustainable progress.

A New National Vision

To become truly great, Sri Lanka must redefine development beyond GDP and infrastructure. A developed Sri Lanka should be:

* Economically strong, with robust industries in technology, tourism, agriculture, and services.

* Socially cohesive, where every citizen is treated equally and with dignity.

* Globally respected, as a democratic, peaceful, and environmentally responsible nation.

· Empowering to youth, offering them opportunities to succeed at home, not just abroad.

Foreign-to-Local Citizen Ratios

The Foreign-to-Local Citizen Ratio is more than just a demographic statistic — it serves as a valuable indicator of a country’s openness, safety, and attractiveness to the global community. A healthy ratio often reflects a nation’s ability to provide freedom, security, and economic opportunity to foreigners who visit, live, work, or invest. (See Table)

Foreign-to-Local Citizen Ratios

For example, Singapore’s 44% foreign-to-local ratio has supported its rise as a financial and innovation hub by filling labour gaps and driving productivity. While Sri Lanka’s 1.3% ratio reflects low foreign participation, strategic immigration and talent attraction could contribute to economic revitalisation.

Singapore, the UAE, and Germany have higher foreign-to-local ratios, signaling environments where international residents feel safe, welcomed, and empowered. These nations offer stable governance, clear legal frameworks, and strong institutions that attract foreign workers, investors, and entrepreneurs.

A favourable ratio also shows that a country:

* Ensures security and legal protection for foreigners.

* Provides infrastructure and services that support international living and business.

* Encourages foreign direct investment (FDI) and startup ecosystems by reducing red tape and fostering trust.

* Embraces cultural diversity, creating a dynamic and innovative society.

For Sri Lanka, improving its foreign-to-local ratio can boost its global reputation as a safe, business-friendly, and forward-looking nation. By creating an environment where foreigners feel confident to visit, reside, invest, and contribute, the country can unlock new economic opportunities and accelerate its journey toward sustainable development.

Economic Renewal

To make Sri Lanka great, a comprehensive strategy is required:

* Good Governance: Eliminate corruption, strengthen democratic institutions, and promote transparency and rule of law.

* Economic Transformation: Support local production, SMEs, and ethical foreign investment. Create a resilient, diversified, and export-oriented economy.

* Education and Skills: Modernise the education system to meet future job demands, especially in IT, engineering, tourism, and creative sectors. Expand vocational training to empower youth.

* Social Inclusion and Reconciliation: Promote national unity through inclusive governance, equal rights, and decentralis`ation to ensure all regions benefit from development.

* Environmental Sustainability: Invest in clean energy, eco-tourism, and sustainable agriculture. Protect forests, oceans, and heritage sites to maintain long-term economic and ecological balance.

* Fiscal and Institutional Reform: Improve tax systems, streamline public spending, and create a stable investment environment to manage debt and rebuild confidence.

* Knowledge Economy: Position Sri Lanka as a digital hub in South Asia by investing in R&D, digital infrastructure, and innovation ecosystems.

Conclusion

The country has the potential to follow the path of nations like South Korea, Japan, and Singapore — countries that transformed crisis into opportunity through strong leadership, national unity, and long-term reform. To achieve this, Sri Lanka must embrace good governance, invest in human capital, promote entrepreneurship, and prioritise sustainable development. The nation’s future greatness depends on bold economic transformation rooted in its unique strengths. With a clear vision, inclusive policies, and collective commitment, Sri Lanka can rise above its challenges and secure a peaceful, prosperous, and globally respected future.

Visvalingam Muralithas is a researcher in the legislative sector, specializing in policy analysis and economic research. He is currently pursuing a PhD in Economics at the University of Colombo, with a research focus on governance, development, and sustainable growth. He holds a Bachelor of Arts in Economics (Honours) from the University of Jaffna and a Master’s degree in Economics from the University of Colombo.

by Visvalingam Muralithas