Business
Arvind Subramanian: Why hasn’t Sri Lanka’s democracy acted as a hedge against economic chaos?
In a sobering and intellectually provocative lecture delivered yesterday at the Central Bank of Sri Lanka, Dr. Arvind Subramanian, former Chief Economic Advisor to the Government of India, posed a “haunting” question to the nation’s policymakers: Why has one of the world’s oldest democracies outside the West failed to leverage its political system to ensure economic stability?
Titled ‘Reviving Growth While Maintaining Stability,’ the lecture moved beyond technical prescriptions. Dr. Subramanian, now a Senior Fellow at the Peterson Institute for International Economics, admitted that his experience with the complexities of the Indian economy had made him “humble and somber,” leading him to focus on the broader socio-political structures that dictate a nation’s fate.
Dr. Subramanian argued that in India, democracy acted as a vital pressure valve that prevented both extreme political violence and economic chaos. He noted that while the process of nation-building is historically violent – citing the West’s decimation of populations and China’s estimated 40–75 million deaths between 1950 and 1976 – India managed to maintain a relatively low degree of mass violence.
“Democracy had a key role to play in that,” he asserted. “It is one of India’s major achievements.”
The speaker extended this logic to the economic sphere, suggesting that Indian democracy created a “societal demand” for low inflation.
In India, he noted, there is a pervasive political belief that if inflation crosses the 5 percent threshold, the government is likely to lose the next election. This political accountability forced the Central Bank and the State to maintain macro-stability.
The crux of Dr. Subramanian’s address was the “intellectual puzzle” of why Sri Lanka, which received universal franchise well before India, did not experience the same stabilising effects of democracy.
He presented two charts that he described as “haunting.” The first revealed that Sri Lanka has spent 60 percent of its time under IMF programmes, indicating a state of “perennial macro-economic stress.” In contrast, India has not sought an IMF programme in the 35 years following its 1991 reforms.
“Why does Indian society demand low inflation and macro-stability, while the same doesn’t happen in Sri Lanka?” he asked. Despite its long democratic tradition, Sri Lanka has consistently seen higher inflation and greater financial instability than its neighbour.
Dr. Subramanian also highlighted a stark difference in how both nations treat foreign capital. Pointing to data on external debt stock as a share of Gross National Income (GNI), he illustrated that Sri Lanka has been consistently and significantly more reliant on foreign capital than India or China.
While some argue that Sri Lanka’s small size necessitates a reliance on foreign capital, Dr. Subramanian remained unconvinced, noting that India also suffered from low domestic savings for decades but chose a more cautious path.
“India has been much more cautious in opening up to foreign capital,” he explained. While foreign capital can drive growth, it brings the “downside of risk and volatility” as capital flows in and out – a reality that came to haunt Sri Lanka in recent years through its high exposure to foreign currency-denominated debt.
The lecture concluded not with a list of “1, 2, 3 points” for recovery as the wider audience had expected, but with a challenge to the Sri Lankan intelligentsia. If democracy is meant to be a safeguard against political and economic disorder, the breakdown of that mechanism in Sri Lanka requires deep introspection.
“Different societies differ,” Dr. Subramanian concluded. “But if democracy had a key role in avoiding volatility in India, why shouldn’t it have been so in such an old democracy as Sri Lanka? It is worth pondering over,” he said.
By Sanath Nanayakkare
Business
Cargills adopts Crow Island Beach in partnership with Clean Ocean Force Lanka
Cargills Food and Beverage Ltd. through its brands KIST and Knuckles, has signed a Memorandum of Understanding (MoU) with Clean Ocean Force Lanka (COF) to adopt Crow Island Beach for one year, reinforcing its commitment to long-term coastal conservation in Sri Lanka.
This pioneering initiative is designed to protect and preserve the coastal environment through several key measures, including the removal of plastic and other pollutants from the beach and surrounding coastal area. As part of the adoption programme, the beach will be maintained daily with the support of dedicated beach caretakers, while also supporting their livelihoods by providing meaningful income opportunities.
Marking the partnership and in celebration of World Recycling Day, a coastal clean-up programme was conducted at Crow Island Beach to remove plastic and other manmade pollutants. Volunteers from Cargills, Clean Ocean Force Lanka, the Interact Club of Colombo, the Colombo Municipal Council and the Women’s Force of COF Negombo (Sri Vimukthi Association) participated in the clean-up with support from the Marine Environment Protection Authority (MEPA), the Sri Lanka Police Environmental Division and the Ministry of Local Government and Environment as well as the Crow Island Beach Park Society.
Jerome Fernando, Chairman & Co-founder of Clean Ocean Force Lanka said that, “Marine & Coast Conservation demands a unified front. Our unique Public-Private-People Partnership model is the cornerstone of our mission, and today, we are thrilled to welcome Cargills (Ceylon) PLC as a vital partner in this journey adopting the Crow Island Beach for the next one year. This collaboration will not only amplify our efforts to eliminate plastic and manmade pollutants from our beaches, but also reinforce our commitment to empowering marginalized communities through sustainable livelihood opportunities. Cargills’ deep-rooted dedication to environmental sustainability and community wellbeing perfectly aligns with our vision.”

Jagath Gunasekara, General Manager of MEPA added, “The Marine Environment Protection Authority consistently promotes active private sector engagement in marine and coastal conservation, as well as pollution control initiatives. This approach aligns closely with our Beach Caretaker Programme. We are pleased to collaborate with Cargills (Ceylon) PLC in the adoption of Crow Island Beach through our long-standing partnership with Clean Ocean Force Lanka.”
During the event, Knuckles also launched Sri Lanka’s first tethered bottle cap, introducing a packaging innovation aimed at improving plastic waste management and supporting recycling efforts. The tethered cap is designed to remain attached to the bottle after opening, reducing the likelihood of caps being discarded separately. Bottle caps are among the most commonly littered plastic items globally and frequently enter landfills and waterways due to their small size and low collection rates.
Speaking on the initiative, Arjuna Kumarasinghe, Managing Director of Cargills Food & Beverage Ltd., said, “Cargills has always believed in taking responsibility for the communities and environments around us. By adopting Crow Island Beach, we’re able to work closely with our partners and local volunteers to protect this part of our coastline. Launching the tethered bottle cap is another way we’re addressing plastic waste and making recycling easier for everyone.”
Business
CBSL adopts cautious stance in the face of economic uncertainties
The Central Bank is keeping its overnight policy rates unchanged, adopting a cautious stance amid uncertainty over the inflationary impact of energy prices due to the Middle East crisis.
‘We maintained the overnight policy rate at 7.75 percent, considering low inflation and a restrained approach on the fallout of the US-Israeli war on Iran, Central Bank Governor Dr Nandalal Weerasinghe said.
The Governor made these remarks yesterday at a press briefing held at the Central Bank head office in Colombo to announce the monthly monetary policy stance.
Dr Weerasinghe added: ‘Inflation is now expected to reach the Central Bank’s target of 5 percent in the second quarter of 2026, after Sri Lanka raised fuel prices by about 35 percent this month.
‘However, spillovers from the ongoing conflict could weigh on domestic economic activity in the period ahead should the conflict be prolonged.
‘The rates were steady since last May as the nation recovers from a 2022 financial crisis driven by a severe dollar shortage.
‘Supported by a US$ 2.9 billion programme with the IMF, Sri Lanka posted a strong economic recovery last year, growing by 5 percent and now targeting growth between 4 percent and 5 per cent in 2026.
‘What stands out is that they see space for inflation to rise because of energy prices but still stay contained.
‘From now to June, underlying economic momentum has the space to keep pace despite the disruption because domestic liquidity and credit has been quite substantial as well.
‘An IMF team will arrive in Colombo on Friday for the combined fifth and sixth reviews of the bailout.
‘Furthermore, Gross Official Reserves increased to US$ 7.3 billion at end February 2026 and the Central Bank purchased a substantial amount of foreign exchange from the market in the first two months of the year.
‘However, the ongoing conflict in the Middle East poses risks to Sri Lanka’s external sector outlook, particularly through energy, tourism, trade and remittance flows, although the overall magnitude of the impact remains uncertain.
‘While the Sri Lanka rupee remained relatively stable in early 2026, some depreciation pressures were observed following the onset of the Middle East conflict, similar to the exchange rates of regional peers.
‘Meanwhile, the Monetary Policy Board remains prepared to implement appropriate policy measures to ensure that inflation stabilizes around the target, while supporting the economy to reach its potential.’
By Hiran H Senewiratne
Business
Dialog Unveils Dialog Play Mini with Netflix and Apple TV
Dialog Television, Sri Lanka’s #1 Pay-TV service provider, has announced the latest upgrade to its smart entertainment lineup with the Dialog Play Mini, featuring seamless access to global streaming platforms including Netflix, Apple TV and YouTube, alongside the Dialog Play entertainment ecosystem for a unified viewing experience. Previously known as the ViU Mini, the device has now been reintroduced as the Dialog Play Mini, reflecting the evolution of Dialog’s digital entertainment platform under the Dialog Play brand.
The Dialog Play Mini transforms any television into a smart 4K entertainment hub by enabling hybrid multi-platform streaming across leading global and local content platforms, delivering a smoother, more intuitive viewing experience. Whether enjoying Netflix originals, Apple TV exclusives, or local favorites, households can now experience world-class entertainment in one compact device.
The Dialog Play Mini brings a streamlined, user-friendly experience to any home setup. Its single numeric-keypad remote controls both the TV and the device, offering simplicity and convenience for everyday viewing. With multiple connectivity options including Wi-Fi, hotspot, LAN, or wingle, the device ensures uninterrupted entertainment even in areas without smart TVs or advanced broadband setups.
Bridging the gap between entry-level set-top boxes and premium Android TV devices, the Dialog Play Mini offers a plug-and-play smart experience. Supported by Dialog’s nationwide service network, local warranty, and after-sales care, it delivers a reliable, feature-rich entertainment experience for Sri Lankan homes.
“With Dialog Play Mini, entertainment becomes more directly accessible for every Sri Lankan home – with or without a Smart TV,” said Lim Li San, Group Chief Operating Officer of Dialog Axiata PLC. “By bringing Netflix, Apple TV, YouTube, and Dialog Play together in one compact 4K-ready device, we’re redefining home entertainment through simplicity, innovation, and the power of connectivity.”
The Dialog Play Mini is now available at Dialog Experience Centers and authorized retailers islandwide. To purchase online, please visit
https://dialog.lk/dialog-play-mini
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