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
Ambeon Securities hosts exclusive investor forum on Sri Lanka’s economic and market outlook
Ambeon Securities recently hosted an exclusive investor forum, bringing together clients, investors, business leaders, and market professionals for an insightful discussion on Sri Lanka’s economic outlook and investment opportunities amidst a challenging global landscape.
The event was organized with the objective of providing investors with valuable insights to make better-informed investment decisions while further strengthening the firm’s engagement with its growing client base.
The forum featured Baqar Zaidi, Director and Chief Economist for Sri Lanka and India at Citi Research, as the keynote speaker. Sharing his perspectives on the evolving global macroeconomic environment, Mr. Zaidi discussed key themes influencing emerging and frontier markets, Sri Lanka’s economic trajectory, and the opportunities lie ahead.
The keynote address was followed by an engaging panel discussion comprising Baqar Zaidi, Aravinda De Silva, respected investor, entrepreneur, and the Chairman of Arcasia Holdings. Hasitha Premaratne, Group Managing Director of Brandix and Asanka Herath, Chief Executive Officer – Unit Trusts and Head of Equities at LYNEAR Wealth Management.
Moderated by Imran Furkan, the panel explored a range of topics including Sri Lanka’s macroeconomic outlook, the future of the Colombo Stock Exchange, sectoral opportunities, capital allocation strategies, investor confidence, and the role of policy reforms in attracting investment and supporting long-term growth.
Speaking at the event, Charith Kamaladasa, Chief Executive Officer of Ambeon Securities, reaffirmed the company’s commitment to facilitate quality insights, informed perspectives, and meaningful dialogue to support their clients while building lasting relationships with them. He noted that in an environment where uncertainty has become the new normal, equipping investors with timely information and expert perspectives is essential for successful wealth creation.
The event was well attended by a distinguished gathering of institutional investors, high-net-worth investors, and business leaders. Among those present were members of the Ambeon Group Board, including Group Chairman Sujeewa Mudalige, Group CEO Dr. Sajeeva Narangoda, and Chairman of Ambeon Securities Mangala Boyagoda. Their presence, together with the participation of Ambeon Group shareholders and valued clients, enriched the discussions and contributed to a vibrant networking session, fostering meaningful dialogue and stronger connections within the investment community.
Through initiatives such as this, Ambeon Securities continues to reinforce its commitment to helping clients navigate evolving market conditions, make informed investment decisions, and achieve their long-term financial goals.
Business
Tata Group leads humanitarian education support initiative with DIMO and ChildFund
The Tata Group, in partnership with ChildFund and DIMO, has successfully implemented a humanitarian education support initiative for disaster-affected schoolchildren in Sri Lanka, reaffirming its commitment to helping communities recover from the impacts of Cyclone Ditwah and the subsequent floods.
Following a formal request for support from Sri Lanka, an on-ground assessment was conducted in December 2025. Recognizing the urgent need, several Tata companies joined forces to implement the response program.
As part of this initiative, the ‘Hope in a Backpack’ programme, which provides disaster-affected children with essential educational supplies, was launched by the Tata Group at Taj Samudra, Colombo, in the presence of the Chief Guest, Hon. Prime Minister Dr. Harini Amarasuriya; the Guest of Honour, Hon. Indian High Commissioner Santhosh Jha; Ranjith Pandithage, Chairman of DIMO; Chacko Thomas, Group Chief Sustainability Officer, Tata Sons; and Aditi Ghosh, Country Director, ChildFund.
This initiative is part of DIMO’s Social and Community Pillar, under the project theme ‘Lassana Hetak,’ which focuses on giving the future generation a helping hand towards a better future.
This collective effort was further strengthened by volunteers from Tata and DIMO, who actively mobilized on the ground to pack, distribute, and support affected communities. During the proceedings, specially invited schoolchildren received the backpacks with essential supplies as well.
Commenting on the partnership, Ranjith Pandithage, Chairman of DIMO, said: “DIMO is proud to collaborate on this meaningful initiative alongside the Tata Group and ChildFund as the local implementation and logistics partner. Our relationship with Tata spans more than six decades and has been built on a shared commitment to ethical business practices, trust, and creating lasting value for the communities we serve. These values have shaped our partnership over the years, extending beyond business to initiatives that make a meaningful difference in people’s lives.”
Business
NovaNest Properties launches Rainbow Apartments in Ratmalana
NovaNest Properties (Pvt) Ltd has officially launched Rainbow Apartments, a new residential development in Ratmalana. The announcement was made at an official launch event held at the Shangri-La Hotel, Colombo, marking the company’s latest addition to Sri Lanka’s growing apartment market.
The development is designed to cater to homebuyers seeking modern urban living, as well as investors looking for long-term value. Rainbow Apartments is located in Ratmalana, an area of increasing residential interest, and benefits from the suburb’s established social infrastructure, proximity to major transportation links, and accessibility to Colombo.
The project reflects NovaNest Properties’ commitment to delivering quality residential developments that combine contemporary design with practical living. Intended to satisfy the evolving lifestyle demands of today’s homeowners, Rainbow Apartments features thoughtfully designed living spaces supported by modern amenities. These include two infinity pools, a gym, fully functional workspaces, a mini theatre, stylish cafés, a mini-mart, and a children’s daycare. Additionally, it features a full time medical centre backed by Nawaloka Hospitals PLC Colombo, with a 24-hour ambulance service.
Commenting on the launch, the Chief Executive Officer of NovaNest Properties (Pvt) Ltd, Samitha Waidyasekera, said, “Today’s buyers are looking beyond square footage. In addition to providing long-term value, they want homes that are close to the places where they work, learn, and spend their time. With that shift in mind, Rainbow Apartments was created to bring together a strategic location, thoughtful design, and quality construction in a way that will continue to meet buyers’ needs for years to come. Through our promise of ‘Luxury Beyond Expectations,’ we are committed to delivering an elevated lifestyle experience that combines comfort, convenience, and modern living.
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