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Midweek Review

City University and utilisation of existing higher education institutions



President Gotabaya Rajapaksa launching the city university project

By Sunil Dahanayake and Samanthi Senaratne

The launch ceremony of the City University took place at the President’s Office and it was followed by a discussion, on TV Derana, among high-ranking officials of the University Grants Commission (UGC). Thereafter, we googled the words ‘City University of Sri Lanka’ and noted the following utopian phrases provided on the City University website.


There is a beginning to every story, and it is now more vital than ever, to ensure that you have the right start. City University is your platform to launch your dreams into the world.”

This is a catchy phrase used to lure prospective students to these new City Universities planned by the government. Is this a reality or a fantasy? Are Sri Lankan General Certificate of Education (GCE) Advanced Level (A/L) qualified students deceived by such a university project? In this review, we critically analyse these questions and explain the current situation of university and technical education in Sri Lanka. We also provide an alternative proposal for the City University, on how to utilise the existing higher education institutions to improve university education in Sri Lanka.

The dialogue on school and higher education in Sri Lanka was initiated by the President’s policy statement, ‘Soubagye Dakma’ or ‘Vistas of Prosperity’ in November 2019. The presidential policy statement and his verbal presentations emphasised three major areas in higher education reforms to (a) decrease the time gap between the release of GCE A/L results and the university enrolment date; (b) increase the number of students for university enrolments and (c) produce employable graduates. The President has appointed one Cabinet minister for education with four state ministers and among them; two state ministers are responsible for higher education reforms. They are State Minister of Education Reforms, Open Universities and Distance Learning Promotion, and State Minister of Skills Development, Vocational Education, Research and Innovations. This article focuses on the City University concept initiated by the State Minister for Skills Development, Vocational Education, Research, and Innovation (SMSDVERI). The relevant state ministry plans to operate the City University under the Gazette Extraordinary No.2209/14, dated January 4, 2021, as indicated on its website.

Many students who pass the GCE A/L examination fail to gain admission to state universities in Sri Lanka. As per the statistical handbook published by the UGC, the number of students admitted to state universities in 2019/2020 was 41,641 (23 percent) compared to students qualified for admission, which was 181,206. This means that 77 percent of students could not gain admission to state universities in 2019/2020. These students, who are unable to get university admissions, explore various other avenues such as overseas universities, private non-state higher education institutes, professional examinations, the Open University of Sri Lanka (OUSL), and technical colleges to continue their education. The President has emphasised the need to fulfil the aspirations of these GCE A/L qualified students by increasing the enrolment numbers of the state university system of Sri Lanka, with degree programmes that produce employable graduates. The City University project was initiated as a solution to address these concerns.

What is this City University? On the website of City University, it is described as “the first and only tertiary education institution in the country, that will establish a highly industry-centric focus on all the programmes offered.” As mentioned on the website, the focus of the degree programmes offered by the City University is the employability of graduates. Also, the students who are enrolled in its degree programmes will be given practical experience in different disciplines. Thus, the objectives of these City University campuses are human resource development, stakeholder collaboration, development of regional areas and facilitating technology transfer. The City University’s website provides the following information.

“The State Ministry of Skills Development, Vocational Education, Research and Innovation has been vested with the task of establishing City Universities. It has been planned to open a City University in every district. After a feasibility study, five locations were selected to start with. The first CU will be opened in Wagolla, Rambukkana, in the Kegalle District.”

The City University campuses plan to offer bachelor’s degree programmes in Applied Information Technology, Sustainable Tourism and Hospitality Management, Post-Harvest Management and Value Addition.

We appreciate the praiseworthy objective of this City University concept. It can increase the student enrolment numbers in the state university system. Since this project is backed by the government, there is also a possibility of securing some funds from the treasury or donor agencies such as the World Bank and Asian Development Bank. However, there are many weaknesses, which could doom the City University project in the long run, when considering the issues faced by the existing state universities and technical colleges in the country. Hence, we argue that the SMSDVERI ought to evaluate the needs of prospective students and should optimally utilise the available higher education institutions and resources for this purpose.

We are not pessimistic about the intentions of the Ministry of Education and the UGC, but we review this project pragmatically under the concept of ‘Marketing Myopia’ by Theodore Levitt. Levitt (Harvard Business Review, 1960) argues “that most of the dead and dying industries have shown the self-deceiving cycle of bountiful expansion and undetected decay.” Similarly, the designers of the City University concept seem to operate with the perception that thousands of students will enrol in this university without information on academic accreditation, programme details and standard of the academic staff. The City University website does not provide sufficient details on faculty structure, programmes and course descriptions, and the academic staff involved in these programmes. The lack of such information raises the question whether this City University and its degree programmes are properly planned. It seems that the designers of this project have adopted a production-oriented approach rather than a market-oriented approach. Thus, they should not work with the assumption that the GCE A/L qualified students are a vulnerable group who would enrol in any programme offered under a label of a university. They should realise that there are many local and international higher educational institutes operating in Sri Lanka other than state universities. As such, prospective students compare information available on this City University with that of other higher educational institutions in making their enrolment decisions. Further, the best universities in the world are not merely teaching-focused; rather they are vibrant institutions, which focus on all three functions of a university, teaching, research and community service. However, it is questionable whether this proposed City University has been designed to meet all these purposes.

There are 14 state universities, including the OUSL, operating under the UGC, apart from specific purpose universities such as Bhikku Universities and Visual and Performing Arts University. Further, the Sri Lanka Institute of Advanced Technological Education (SLIATE) and its 20 technical colleges also enrol GCE A/L qualified students in their diploma programmes. These existing universities and technical colleges are under-resourced and exhibit many hallmarks of underdevelopment. These include the lack of state-of-the-art lecture halls, the absence of well-developed informational technology (IT) platforms, largely manual administration and finance systems, inadequate funds for research and staff development, and inadequate student accommodation and other facilities. State universities in Sri Lanka except for the two oldest universities, Colombo and Peradeniya, are not among the top universities in the world as per world university rankings due to the above-mentioned limitations in the university system. Most Sri Lankan state universities are mainly teaching-focused instead of both teaching and research-focused, as research funds are inadequate. Under such a resource strained environment, the UGC and SMSDVERI plan to establish 25 City Universities throughout Sri Lanka in addition to the existing 14 main universities making a total of 49 state universities in the country.

We question the rationale behind the government’s plan to spend capital and operational outlay for these City Universities without effectively utilising the resources of existing universities and other higher educational institutions. Therefore, we provide an alternative to utilise the available infrastructure facilities of SLIATE and its technical colleges, OUSL, and Colleges of Education (Teacher Training Colleges) to increase the student enrolment numbers to state universities. We argue that the breeding of new universities does not resolve higher education problems in Sri Lanka unless the existing universities and technical college education system in the country is streamlined.

Missing link between university and technical education

One of the major flaws in our university and technical education system is that these two organisational structures are not connected for the students to enrol in the relevant degree programmes of universities after completing the diploma programmes from technical colleges. Therefore, we suggest combining university and technical college education systems under this City University concept and developing one centralised university with regional university colleges, after absorbing the technical colleges. This combined approach of higher education is similar to the system that exists in developed countries like Australia. For example, Australia has three major levels of education; schools, Technical and Further Education (TAFE) Institutes and Universities. Students who are unable to get direct admission to the universities can enrol in a TAFE College and complete a diploma programme after completing the year 12 examination. Subsequently, these students can enter a university and complete a degree programme. The TAFE Colleges in Australia also provide education options for adult learners and school dropouts to improve their careers. Therefore, the UGC and SMSDVERI can develop a similar scheme to link universities and technical colleges to increase the number of students admitted to state universities.

Technical colleges are administered by SLIATE and come under the purview of SMSDVERI. These technical colleges offer diploma level and certificate level programmes under various subjects such as business studies, accounting and engineering. Diploma qualifications of technical college students are not currently considered sufficiently in enrolling students in undergraduate and postgraduate degree programmes in the state universities despite the provisions for such, in the Sri Lanka Qualification Framework (SLQF). Examples are the Higher National Diploma in Accountancy (HNDA) and Higher National Diploma in Commerce (HNDC) conducted by the technical colleges under the SLIATE. These two diplomas are considered inferior to the degrees in Accounting and Commerce conducted by the state universities. Hence, the students of technical colleges are at a disadvantage when finding jobs and pursuing university education in Sri Lanka. This missing link between university and technical college education does not support the young and adult learners, who have missed direct entry to the university system through GCE A/L results. Therefore, we suggest combining and streamlining the higher education programmes of state universities and technical colleges under the concept of City University.

Utilising organisational structure of SLIATE and Technical Colleges

The SMSDVERI can reorganise and streamline the SLIATE and its 20 technical colleges into one centralised university with affiliated university colleges, instead of constructing 25 new universities under the City University Concept. The current 20 technical colleges can operate as affiliated university colleges, under the umbrella of the proposed centralised university. The proposed centralised university can be established in the Maradana or Dehiwala Technical College utilis­ing the available resources and facilities. This proposal may require amendments to the SLIATE and University Acts, evaluation of the diploma programmes conducted by the technical colleges and upgrading some of them as degree programmes under various faculties. Finally, this process of reorganisation should be followed by launching a marketing campaign to attract students, parents, and other stakeholders. We believe that reorganising and streamlining the SLIATE and its technical colleges will result in an increase in university student enrolment, as expected by the City University concept.

It is also necessary to evaluate skilled occupation areas identified by developed countries during reorganisation of higher education systems. We examined the Australian skilled migration occupation categories as provided in the web link of the Australian Department of Home Affairs. Accordingly, skilled employment areas with the highest demand are Medicine, Engineering, Architecture, Accounting, Auditing and Finance, Information Technology, Allied Health Sciences and Nursing and Hospitality and Tourism Management. The demand is also high for technically proficient personnel such as Motor Mechanics, Bricklayers, Welders and Electricians. Hence, we are of the view that the UGC and higher education authorities should assess the local and global employment needs when developing university education programmes instead of haphazard development of City University campuses in every district.

The proposed centralised university and its affiliated university colleges can establish schools or faculties for the subject streams based on employer demands as highlighted above. Accordingly, Engineering, Accounting and Business Administration, Information Technology, Hospitality and Tourism Management, Allied Health Sciences and Nursing can be considered as priority subject areas. Further, a Faculty of Humanities and Social Sciences should be established to cater to students’ languages and social sciences knowledge and skills improvement. Diplomas that are currently offered by SLIATE through its technical colleges should be revised under the above subject categories. The duration of the basic diploma or associate degrees should be limited to a two-year period or four semesters. Diploma holders or associate degree holders, who want to continue their studies, should enroll in university level degree programmes offered by these affiliated university colleges of the centralised university.

In this proposed centralised university and affiliated university college system, students should be allowed to complete double major diploma or degree programmes such as Engineering and Business Administration, Business Administration and English Language and Tourism and Hospitality Management and Accounting. Hence, students who want to launch their own enterprises are facilitated as they are equipped with the necessary subject knowledge and technical skills in entrepreneurship. For example, a student who wants to open a hotel can opt for a joint diploma or degree in Tourism and Hospitality Management, and Business Administration. These proposed diplomas or associate degree programmes should be incorporated with internships, in addition to the theoretical knowledge. Thereby, these students can find local and foreign jobs as soon as they complete the diploma or degree programmes. We noted that the proposed City University has given due consideration to the provision of practical training, which is commendable.

Combining with OUSL and Colleges of Education

The proposed centralised university and affiliated university college system can also be combined with the existing academic programmes of OUSL, and Colleges of Education. The OUSL with its main campus in Nawala, nine regional centres and 19 study centres operate distance mode degree programmes under six academic faculties. Consequently, this City University can introduce inter-university enrolments with OUSL. The OUSL requires classrooms that are compatible with state-of-the-art teaching technologies in the Nawala campus, which can support both in-house and distance mode education programmes to increase student enrolment numbers. The academic coordination for each subject unit can be done by a senior lecturer at the main campus with the support of a few assistant lecturers in regional centres. Therefore, opportunities and resources are available to execute this proposed university system with the support of the OUSL.

There are also several Colleges of Education in Sri Lanka such as Nilwala National College of Education, Ruwanpura National College of Education, and Sri Pada College of Education. A few of these Colleges of Education can be upgraded to universities and combined with this proposed centralised university and its affiliated university colleges. These upgraded Colleges of Education can commence degree programmes in other subject streams in addition to the diploma programmes in education. The diploma in education programmes can be upgraded into a BA degree in education. We also noted a news item in the Daily Mirror, dated September 2, 2021, which reported that Jeevan Thondaman, State Minister for Estate Housing and Community Infrastructure, was in discussion with the Chief Minister of Tamil Nadu on getting assistance to establish a university for upcountry Tamil students. As such, what we have suggested in this article on upgrading the Colleges of Education meets the demands of the social and political system. Thus, Sri Pada College of Education can be upgraded to a university to offer degree programmes in education and other subject streams. We noted that the ministerial sub-committee appointed to propose solutions for the salary anomalies of school teachers has also proposed the upgrade of these Colleges of Education into universities.

In summary, the proposed city university can be operated using the SLIATE and its technical colleges as a new centralised university with affiliated university colleges. Further, it can be linked with the OUSL and upgraded Colleges of Education as universities. In our opinion, this is a more pragmatic solution than establishing new city universities in every district, which is unrealistic when considering the fragile economic state of the country.

We have discussed the proposed City University concept and alternative solutions for the development of higher education institutions in Sri Lanka. In this analysis, we raise the question why the government is not utilising the available resources of the SLIATE and its technical college campuses, OUSL and Colleges of Education to increase the student enrolment numbers at universities and re-vitalising these organisations. We noted that the Ministry of Education focuses on constructing new universities without considering the effective utilisation of these existing resources. Hence, we argue that the City University concept is a utopian fantasy rather than a pragmatic project when considering the current economic and socio-political environment of Sri Lanka.

Universities and higher education institutions fulfil three main functions; teaching, research, and community services. However, universities and technical colleges in Sri Lanka do not have adequate resources to carry out these tasks effectively. For example, lecture halls and information technology systems are outdated and cannot compete with universities in the developed world. The administration and financial management systems are outdated and are largely manually operated. The academics are not provided with adequate research funds. State universities in Sri Lanka mostly focus on teaching and not on research as reflected in the world university rankings. State universities in Sri Lanka have received poor ratings in the world university ranking indexes such as Quacquarelli Symonds (QS) and Times Higher Education rankings due to the lack of quality research publications. The University of Colombo and the University of Peradeniya have been ranked between 1,000 and 1,200 best universities in the world by QS ranking whereas Times Higher Education ranked University of Peradeniya between 401 nad 500 and University of Colombo between 801 and 1,000. The other 12 state universities have not been included in these rankings. The City University, with the above indicated deficiencies, can lower the bar of accreditation of degrees awarded by state universities in Sri Lanka in the international arena. This would negatively impact skilled employment and higher education opportunities for Sri Lankan university graduates in developed countries.

What Sri Lanka needs is the streamlining and reorganising of existing universities, technical colleges, and colleges of education under the UGC for mutual recognition of degree and diploma programmes offered by these institutions. Hence, we have provided an alternative solution to increase the student enrolment of the existing universities, technical colleges, and colleges of education under this City University project using the available resources. The SLIATE maintains about 20 technical college campuses scattered around Sri Lanka and offers 14 diploma programmes. Therefore, it is apparent that the SLIATE and its technical colleges have the required organisational structure, staff, and academic programmes. Hence, what is required is the reorganisation or streamlining of SLIATE and its technical colleges into one centralised university with affiliated university colleges under the concept ‘City University’. A new centralised university campus can be set up either at Maradana or Dehiwala technical college.

The OUSL and its regional centres can also be used to offer degree programmes under the proposed system, which will enable an inter-university enrolment system. The OUSL can offer degree programmes for students of these affiliated university colleges. Further, a few Colleges of Education scattered around Sri Lanka can be upgraded into universities and the current diploma in education programmes can be restructured as a BA degree in Education, under its faculty of education. Further, these Colleges of Education, which are upgraded into universities, can commence degree programmes in other subject streams such as Management, Information Technology, Hospitality and Tourism Management, Engineering and Health Sciences.

We emphasise that the existing capacity of universities should be effectively utilised while focusing on obtaining international accreditation for state universities through expansion of research activities. Further, the Sri Lankan university system should be made flexible by abandoning the archaic systems of student enrolments, embracing inter-university and inter-faculty enrolments, and introducing double major degree programmes. These changes would enhance the quality of university education. We reiterate the fact that the Ministry of Education, two State Ministries for Higher Education, UGC, SLIATE, OUSL, other state universities, National Institute of Education (NIE) and Colleges of Education need to act together to optimally use the existing organisations and their resources to achieve long-term objectives of higher education in Sri Lanka.

Promoters of the City University concept have crafted an image of a utopian university, which reminds us of Thomas More’s concept of ‘utopia’ (1516) , John Henry Newman’s ‘Idea of a University’ (1873) and Robert Maynard Hutchins’ ‘The University of Utopia’ (1953). Hutchins, who served as the President of the University of Chicago, argued that the function of a university is to develop learned responsible citizens, instead of producing mere technicians. Hence, the proposed City University falls short of those philosophical concepts and will add another expenditure line item to the national budget.

Sunil Dahanayake, PhD, FCA is a Chartered Accountant and Samanthi Senaratne, PhD is Senior Professor in Accounting, Department of Accounting, University of Sri Jayewardenepura. She can be reached via email at

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Midweek Review

Growing foreign dependency and India’s USD 4 bn lifeline



Baglay on an inspection tour of the State Printing Corporation

By Shamindra Ferdinando

The Japanese embassy and UNICEF (United Nations Children’s Fund, previously known as United Nations International Children’s Emergency Fund), on 16 March, 2023, issued a joint statement that dealt with the impact the developing political-economic-social crisis is having on the poor in Sri Lanka.

The statement focused on the suffering of the children and measures taken by UNICEF, in consultation with the Governments of Japan and Sri Lanka, to provide relief to the needy.

However, what really captured public attention was the declaration made by the Japanese Ambassador, in Colombo, Mizukoshi Hideak, that with the latest contribution, amounting to USD 1.8 mn, the total Japanese financial assistance, provided through UNICEF alone, exceeded USD 3.8 mn, since the beginning of last year. That is definitely a significant package provided through a single UN agency, particularly against the backdrop of the unceremonious cancellation of the Japan- funded Light Rail Transit (LRT) project, in late Sept., 2020, by the Gotabaya Rajapaksa Government.

The directive, in this regard, was issued on 21 Sept., 2020, by Dr. P. B. Jayasundera, in his capacity as Secretary to the President, to the then Transport Secretary, Monti Ranatunga. That move ruined Sri Lanka’s relations with Japan.

Whoever advised the then President Gotabaya Rajapaksa to terminate the project, without consulting Japan, as head of the Cabinet-of-Ministers, he couldn’t absolve himself of the responsibility for the ruination of vital relationship with Tokyo. Had it not been the case, Japan, most probably, would have delivered a substantial assistance to Sri Lanka, at the onset of the ongoing unprecedented crisis.

Sri Lanka made a failed bid to secure as much as USD 3.5 bn loan from Japan, during the tenure of Sanjiv Gunasekara as Sri Lanka’s Ambassador in Tokyo. Gunasekara, a close associate of President Gotabaya Rajapaksa, resigned in the wake of the 09 May, 2022, violence, that gave a turbo boost to the campaign against his government.

Unlike Japan, India provided direct aid in various forms to Sri Lanka, struggling to cope up with what became an insurmountable crisis to overcome on our own. India has repeatedly declared that the continuing assistance is in line with Premier Narendra Modi’s much touted ‘Neighbourhood First’ policy. Sri Lanka received concessional credit facility, amounting to USD 1 bn, in March last year. In addition to that, by the second week of March this year, Sri Lanka received other lines of credit, worth over USD 3 bn. Therefore, the total Indian assistance is worth over USD 4 bn, a staggering amount as Sri Lanka’s debt before the Japanese and Indian interventions stood at over USD 53 bn. Indian intervention cannot be compared, under any circumstances, with assistance provided by any other country.

The Indian assistance is of immense importance as the International Monetary Fund (IMF), after much deliberation, promised USD 2.9 bn over a period of four years. The delay on the part of China to provide an assurance as regards debt-restructuring support, hindered the finalization of the tripartite agreement involving Sri Lanka, creditors and IMF. Finally, China gave that assurance, in writing, early this month.

Indrajit Coomaraswamy

The situation was so precarious, Sri Lanka couldn’t have even provided the free text books that have been given, annually, to the student population ,from the time of the JRJ regime. Those who had been at the helm of political power, over the past three decades, to varying degrees, ruined the economy, and, by 2021/2022, Sri Lanka was unable to provide even the basic requirements, like cooking gas, kerosene, petrol, etc., as even remittances from our expatriate workers, which in the past amounted to about seven billion dollars per year, dropped drastically due to the illegal underground banking system, hawala/undiyal, hijacking much of it from the normal banks. The government didn’t have the means to provide school text books for the 2023 academic year. In consultation with India, of the USD 1 bn concessional credit facility, over USD 10 mn was utilized by the State Printing Corporation, and private importers, to procure printing paper and other material from India. India met 45% (four mn students) of the total requirement. Indian High Commissioner Gopal Baglay visited the SPC, on 09 March, 2023, to dispatch a consignment of textbooks to schools. Education Minister Dr. Susil Premjayantha joined Baglay. The Indian High Commission statement, issued two days later,, was aptly titled ‘India’s support for text books investment in Sri Lanka’s future.’

The government and the Opposition should be ashamed of their failure to provide for the children’s need.

Perhaps, a Parliamentary Select Committee (PSC) should be appointed to examine the circumstances leading to Sri Lanka’s bankruptcy status. Decades of utterly irresponsible management of the economy, coupled with an explosive mixture of causes – waste, corruption and irregularities – caused the current crisis.

Political parties, represented in Parliament, are responsible for the continuing crisis, to varying degrees.

Controversy over ISBs

The Island discussed some of the issues at hand in last week’s midweek piece, headlined ‘All praise for Lanka’s saviours!

What Dr. Coomaraswamy didn’t say was that as the CB Governor, he was also directly responsible for the Yahapalana government borrowing a record USD 12.5 bn from the international bond market, at high interest rates, from private lenders, primarily in the West. So what did that government achieve with such huge borrowings? All that the Yahapalana regime achieved, with all that money, we cannot see, except to lay the foundation for the current debt crisis?

Our comment on the basis of recent claims that the Governor of the Central Bank, Dr. Coomaraswamy (2016-2019), only told one side of the truth, attracted responses from several parties, including the Central Bank.

Consequently, the writer discussed the borrowing of USD 12.5 bn, and related matters, and was told the following: First, it is important to point out that the Governor, Central Bank, has no authority to approve or undertake any borrowing on behalf of the government. The borrowing limit, in any given year, is set by Parliament. Therefore, the government cannot borrow beyond the limit set by Parliament. In addition, all external borrowing has to be approved by the Finance Minister, and the Cabinet of Ministers. The Governor and the CBSL only have an advisory role. On ISBs, they have marketing and issuance as additional responsibilities once the Cabinet approved the transaction.

It is also important to recognize that ISBs are only one channel for external commercial borrowings. Others include short-term SWAPs, foreign term loans/syndicated loans and external flows into government rupee securities. The article dealt with only one instrument, having ignored the switching that was undertaken during 2015-19 to increase the maturity and reduce the cost of foreign borrowing.

As regards the USD 10 bn increase in ISBs outstanding during 2015-19, USD 5 bn of this increase can be attributed to switching away from shorter term (one year or less) and more expensive SWAPs and highly volatile foreign portfolio investment (hot money) in Government rupee securities to longer term (5 and 10 years) and less costly ISBs. SWAPs were reduced from approximately USD 2.5 bn to USD 500 mn.

Volatile and foreign investment in government rupee securities was reduced from USD 3.5 bn to USD 600 mn. In addition, during the course of 2019, a second ISB of USD 2 bn was issued to create a stronger buffer of external reserves to address the inevitable increase in uncertainty going into elections due shortly thereafter. (The money required for 2019 had been raised through an ISB, issued in March 2019.)

So about USD 7 bn of the USD 10 bn increase in the stock of ISBs outstanding, during 2015-19 may be attributed to increasing the stability and reducing the cost of the ISBs outstanding by switching instruments and raising the buffer provided by external reserves prior to a period of uncertainty, associated with elections.

The remaining increase of USD 3 bn may be partly attributed to the fact that borrowing incurred earlier had not resulted in a sufficient increase and/or saving of foreign exchange. Hence money had to be borrowed to repay debt incurred earlier. In fact, Verite Research found that 89 percent of external debt, repaid during 2015-19, could be accounted for by liabilities incurred prior to 2015.

The adverse debt dynamics were recognized and the Medium Term Debt Management Strategy was published in April 2019 to chart the way to sustainability. In addition, the Active Liability Management Act (2018) was introduced to expand the tools available to the CBSL for managing external debt sustainably. The CBSL, as the economic adviser to the Government, also advocated that there should be a primary surplus in the budget and that non-debt creating inflows (such as exports, remittances, tourism proceeds, FDI, inflows into the CSE and government securities) should be increased to enhance the capacity to service debt while supporting the level of imports necessary to achieve the growth potential of the economy.

They also pointed out that only one of the ISBs, issued during 2015-19, has been settled to date. This amounted to USD 500mn. They expressed the view that it is not possible to sustain the argument that servicing ISBs, incurred during 2015-19 ,led to the standstill in debt repayments in April 2023.

Treasury bond scams and tax cuts

The US embassy released this picture of
Ambassador Chung at an event in
Colombo where the second shipment of
36,000 metric tons of Triple Super
Phosphate (TSP) was handed over to Sri
Lanka. It brings the total of USAID-supported
TSP and urea fertiliser to more than
45,000MT, over the last year.

Sweeping tax concessions to the rich and reduction of VAT, that had been introduced by President Gotabaya Rajapaksa’s government to encourage business in 2019/2020, escalated the financial crisis, leading to the declaration of the state of bankruptcy, two years later. No one in the Gotabaya Rajapaksa’s cabinet dared to challenge such far reaching tax concessions and VAT reduction.

How the loss of as much as Rs 600 bn in revenue, as alleged by the Opposition ,due to tax concessions and reduction of VAT, contributed to the current crisis, should be examined, also taking into consideration (1) Treasury bond scams perpetrated in Feb, 2015 and March 2016 at a time the CBSL has been under the then Prime Minister Ranil Wickremesinghe, in his capacity as Minister of Policy Planning and Economic Affairs (2) Enactment of new Foreign Exchange Act in 2017 in the wake of Treasury bond scams. Critics say the repealing of time-tested exchange control law that has been in place for decades paved the way for exporters to ‘park’ export proceeds overseas. Of the 225 MPs, 94 voted for the new law whereas 18 voted against. In spite of Justice Minister, Dr. Wijeyadasa Rajapakse, PC, taking up this issue, both in and outside Parliament, remedial measures hasn’t been taken, to date. The Finance Ministry owed an explanation as to how it intended to compel the exporters to bring back export proceeds (3) Continuing public-private sector partnership in corrupt practices, particularly mis-invoicing (under invoicing and over invoicing of imports/exports) (4) Pivithuru Hela Urumaya leader Udaya Gammanpila, MP, has moved the Supreme Court against the Central Bank Bill. The Attorney-at-Law alleged that the new law violated Article 3 and 4 of the Constitution hence needing the approval of the people at a referendum. In addition to Gammanpila, Dr. Gunadasa Amarasekera and Jathika Nidahas Peramuna leader Wimal Weerawansa, too, moved the Supreme Court in terms of the Article 121 against the Bill titled ‘Central Bank of Sri Lanka.’ Former JVP MP Wasantha Samarasinghe, on behalf of the Jathika Jana Balavegaya (JJB), too, moved the Supreme Court in this regard.

A warning from Hanke

The country is in a bind. In spite of the execution of the agreement with the IMF later this month, the situation remains dicey. The absence of economic recovery plan continues to cause further instability.

Therefore, the government and the Opposition should seek a consensus on a national action plan, even if Local Government polls cannot be conducted in late April, regardless of the Supreme Court intervention.

Steve Hanke, Professor of Applied Economics, at Johns Hopkins University, in the USA, recently issued a dire warning to Sri Lanka. Appearing on CNBC’s ‘Squawk Box Asia,’ Prof. Hanke declared Sri Lanka needs institutional reforms in order to achieve long-term debt sustainability.

Referring to Sri Lanka and what was described as emerging markets (Argentina and Montenegro), where he played a key role in establishing new currency regime, former economic advisor to US President Ronald Reagan warned “Unless you change the institutions and the rules of the game, governing these countries, they’re always going to remain in the same … situation that they’ve been in for a long time.”

Prof. Hanke added: “In fact, most of the personalities, involved in Sri Lanka ,at the high level, are exactly the same as they’ve been for years. So nothing has changed.”

In other words, those who have ruined Sri Lanka are spearheading the economic recovery process. The American is spot on. Sri Lanka is in a pathetic situation. Those who had systematically brought Sri Lanka to its knees, by pursuing ill-fated policies, emerged as its saviours. That is the bitter truth. The role of the executive, legislature, and judiciary, needs to be examined. Those who have moved the Supreme Court against the Bill, titled ‘Central Bank of Sri Lanka,’ have quite conveniently forgotten how the Yahapalana government, and Central Bank, twice perpetrated Treasury bond scams. What would have Prof. Hanke said if CNBC raised Treasury bonds scams during ‘Squawk Box Asia.’

If not for Deepa Seneviratne, the then head of Public Debt Department, Governor Arjuna Mahendran’s role couldn’t have been proved. Former Auditor General Gamini Wijesinghe said so at an event organized by the Colombo Municipal Council years ago.

Sri Lanka cannot forget Prof. Hanke’s remark in the CNBC programme. “You have to remember that we have a country that since 1965 has had 16 IMF programmes and they’ve all failed. You get temporary relief in anticipation of a bailout. But in the long run … none of these IMF programmes work.”

It would be pertinent to briefly examine how interested parties brazenly protected perpetrators of the Treasury bond scams.

Having named Mahendran as the Governor, regardless of the opposition from President Maithripala Sirisena, those planning to commit the first daylight robbery of the Central Bank moved Deepa Seneviratne to the Public Debt Department as its head, in spite of her not having had any previous experience in the particular division. It seems they had obviously felt comfortable in having a lady officer there they thought they could manipulate her to suit their need. But Seneviratne turned tables on the bond thieves by putting up a note to register her strong opposition to Mahendran’s move. She should have been rewarded for her fearless stand with at least a national honour if not an international one, even from bodies like the UN, the Transparency International, Amnesty International, etc. But it seems that even these international busy bodies have their own political angles.

It would be of pivotal importance to keep in mind that President Sirisena appointed a Commission of Inquiry (CoI) in January 2017, about 10 months after the second robbery, and two years after the first.

The Commission comprised Justice K.T. Chitrasiri, the late Justice P S Jayawardena and retired Deputy Auditor General V. Kandasamy. Sumathipala Udugamsuriya functioned as its Secretary. CoI issued a devastating report that implicated Perpetual Treasuries Limited (PTL) in the Treasury bond scams.

President Sirisena went to the extent of dissolving Parliament, in June 2015, to prevent the Committee on Public Enterprises (COPE) tabling its report on the first bond scam. SLFP leader Sirisena owes an explanation. Justice Chitrasiri’s CoI didn’t inquire into that aspect. Sri Lanka’s response to waste, corruption, irregularities and mismanagement is baffling. Let me end this piece reminding how the Bar Association of Sri Lanka (BASL) secured a substantial sponsorship from Perpetual Treasuries Limited (PTL) deeply mired in a bond scam, in 2016, for the Law Asia Conference during the tenure of its then President Geoffrey Alagaratnam, PC. The BASL never explained why it obtained PTL sponsorship even after the exposure of Treasury bond scams. That partnership also escaped the CoI. The rest is history.

Knowing what is now happening to the US economy with a string of bank failures and unprecedented bailouts, especially due to hoodoo economics it introduced in recent decades, like repeated quantitative easing (blindly printing trillions of dollars leading many to say the dollar is now only good as toilet paper) that has been practiced to ensure its world hegemony, the whole world might be hit with bank failures and even by a depression worse than the one that befell with the stock market crash of 1929. Already the contagion has spread to Europe with some leading banks there also requiring help.

Washington’s debt now stands at USD 31 trillion and climbing, but our own debt burden is still under USD 55 billion. So if we can get our exporters, who have stashed export earnings abroad, to bring them back, the picture here will not be as scary as it is made out to be. Even Minister Wijeyadasa Rajapakse has said that our export proceeds that have been parked overseas is in the region of USD 55 billion.

Soonwe will start receiving the IMF bailout, but our economic whiz kids have not done anything to plug the massive foreign exchange leak that has been freely draining foreign currency from the country, since the nineties, by way of private foreign exchange dealers who have been allowed to sell foreign exchange to any Tom, Dick and Harry, including drug dealers, to take their sales proceeds out of the country!

We would also like to ask the relevant authorities what they have done to recover monies stashed abroad by Lankans illegally that were exposed in great detail by the likes of Panama Papers and Pandora Papers.

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Midweek Review

A Miscellany of Thought



N. A. de S. Amaratunga (2022)

A Review by G. H. Peiris

I cannot claim to have the scholarly competence to place under critical scrutiny all items in this collection of writings authored by Professor N. A. de S. Amaratunga, and published in The Island from time to time since the early years of the present century. Accordingly, this ‘review’ is no more than an attempt to convey to a wide readership my gratitude for what I have learnt from Professor Amaratunga’s insights on a series of metaphysical and secular issues that have figured prominently during the recent past in the arena of debate and discussion among our intellectual elite, my appreciation of his rational perceptions and his subtle banter in responding to bizarre elements in our public affairs.

As a brief introduction to the author I should state that Professor Amaratunga’s career record is featured by several decades of distinguished and dedicated service to the University of Peradeniya in teaching, research and clinical work. Acquiring advanced skills in the field of ‘Maxillofacial Surgery’, he has provided physical and psychological relief of life-long impact to thousands of patients. He is also credited to have trained several of his junior colleagues in the Faculty of Dental Science, had has served as its Dean. The offer he received from the Peradeniya University of the Prestigious Award of the ‘Degree of Doctor of Science’ is testimony to his eminence in Sri Lanka’s community of scholars and professionals.

What probably enhances Professor Amaratunga’s status among the intellectual elite of Sri Lanka is the fact that his talents, interests, and concerns have not been confined to professional expertise. He has authored several creative writings in Sinhala which the cognoscenti place at par with the best works of that genre. More relevant than all else to the present ‘commentary’ is his capacity for elucidating the essence of certain complex metaphysical issues – especially those of Buddhist philosophy ‒ with the same clarity of thought seen in his contributions to media forums on current affairs.

In his ‘Introduction’ to the volume Professor Amaratunga makes a categorical statement regarding the paradigmatic guidelines of his ‘thoughts’. They are rendered below in abridged form as follows:

(a) The distinctive elements of our island civilisation are derived from Theravada Buddhism and the Sinhala language.

(b) The leadership of Sri Lanka’s mainstream politics since the termination of British rule in the mid-20th century has continued to be impaired by a cultural duality – on one side of the divide, the ‘alienated’ whose behavioural values and norms bear the imprint of subservience to values prescribed by the ‘West’, and, on the other side, those who treasure our civilisational heritage and understand the needs and aspirations of the majority of our people.

(c) His standpoint is that of an ardent ‘nationalist’, in the sense that he is unequivocally committed to safeguarding and promoting Sri Lanka’s national interests.

On literature, Professor Amaratunga adds that he is inclined towards the need for ‘social relevance’ of the fine arts, and believes that the paradigm of ars gratia artis (‘art for art’s sake’) is inappropriate for Sri Lanka, especially in creative writing.

The ‘miscellany’ of this volume is structured to constitute four ‘Sections’ – titled as: 1. ‘Literature and Culture’; 2. ‘Religion’; 3. ‘Economy’; and 4. ‘Health’. The first two of these ‘Sections’, consist respectively of 25 and 19 essays of unequal length. In these ‘Sections’ the reader could pick out from different points of the temporal sequence in which they are arranged items that constitute a mutually cohesive group from the viewpoint of content. For example, in the first ‘Section’, there are six such items, each serving as a contribution to an ongoing media debate, but when considered as a group would be seen as an invaluable enrichment of understanding on a significant feature of the educational system of the country – such as, say, the impact of the nation-wide ‘Fifth-standard Scholarship Examination’ or ‘The general decline of standards in higher education’. Likewise, in the total of 18 articles in ‘Section’ 2, thirteen items could be considered as a mutually cohesive group of thoughts that illuminates certain vitally significant aspect of Buddha Dhamma and Buddhism as practiced in Sri Lanka.

The forgoing observations do not detract from the intrinsic value of the short contributions referred to. Indeed, in my amateur assessment, in Section 1, the items titled ‘Quality of University Education’, ‘Purpose of the Novel and its Appraisal’, and the twin items titled ‘Darwinian Evolution vs. Intelligent Design’; and in Section 2, ‘Truth in Buddhism and Realism in Literature’, and ‘Mind, Matter and Nirvana in Mahayana and Theravada Buddhism’, are examples of the author’s extraordinary depth of understanding and his skill of disseminating that knowledge in a lucid form.

It is in the 3rd Section of the volume titled ‘Politics’ that the real ‘miscellany’ of Thought is found, consisting of 78 items, and accounting for well over half the total page-length of the volume. Since they have been presented in a chronological order ‒ with the first item published in 2001, and the last in 2021‒ the list of items, at first glance, looks like a total mess which, indeed, is how our politics look. But a closer scrutiny show that all items in this list could be placed in one or another of 6 ‘Sub-Sections’ titled as ‘Ethnic Relations’, ‘Foreign Affairs’, ‘Electoral Politics’, ‘Development Plans and Projects’, and ‘Constitutional Issues’, with the chronology of the list providing the vicissitudinous background of each contribution which Professor Amaratunga has made, and each discussion or debate in which he has participated.

Once again I should emphasise that foregoing observation does not imply that the ‘Thoughts’ in this section, read individually, are either uninteresting or irrelevant to our present concerns. On the contrary they offer ideal readings both as reminders of the volatile scenarios we have passed though during the past two decades as well as the unshakable faith our politicians appear to have on the widespread dementia among the voter-population and on their own ability to hoodwink the electorate. Professor Amaratunga’s thoughts could re-kindle fading memories, especially on repeated failures to fulfil campaign pledges, the large-scale losses due to financial malpractices, the allegations of ‘war-crimes’ and of ‘violation of human rights’ in the counter-attack by the major powers of the North Atlantic alliance in retaliation to Sri Lanka’s close relations with the People’s Republic of China, the ingredients of success in the US-sponsored ‘regime change’ effort culminating in the establishment in 2015 of a puppet government in Colombo, the betrayal of our national interests by our own self-seeking representatives at the protracted Geneva inquisitions, the constitutional fiasco of August 2018, the euphoric Gotabhaya victory about a year thereafter, and then, the stunning exposure by the pandemic of the fundamental weakness of our dependent economy.

In the 4th Section of the volume titled ‘Health’, most of the items are devoted to diverse experiences witnessed globally and in Sri Lanka during the Covid-19 pandemic, but in an unconventional manner in the sense that they emphasise significant aspects that have not received adequate attention in the analytical writings on the pandemic. In my view the most significant issue highlighted in this section is the need for Sri Lanka to adopt development strategies towards self-reliance, especially in the availability of medicinal drugs and on food-security. Implicit in several items of this section is a forewarning of the risks entailed in the pursuit of development policies that enhance Sri Lanka’s macroeconomic dependence on the major global and regional powers.

Many items in this miscellany of thoughts contain a prominent element of dissent and disagreement with other participants in the media debates and discussion for which The Island has served as a major forum. But that dissent has all along been featured by a laudable sense of “civilised intelligence”. As a professional whose skills have an intense demand, his interests and concerns have not remained confined to his professional expertise – a feature often seen among other ‘specialists’ including those of the university community.

This volume is, first of all, a demonstration of intense and well-informed concern on a wide range of issues of vital importance to Sri Lanka. Had that quality been more widespread it is unlikely that those earning six-figure incomes would threaten collective action to bring the economy to a standstill to express their dissatisfaction on a relatively marginal erosion of monthly emoluments at a time of unprecedented national crisis, attempting to conceal their avarice with a façade of safeguarding democracy, or eliminating public corruption, or on grounds of their capacity to earn higher incomes outside Sri Lanka.

Yet another exemplary feature I discern in this ‘Miscellany of Thoughts’ is that its contents are not angry knee-jerk reactions when provoked by thoughts different to his own. Professor Amaratunga’s dissent is entirely free of the crude clashes often seen in the so-called social media. Nor are his thoughts based on a hurried consumption of internet ‘short-eats’. In his thoughts that extend beyond brief corrective interjections of ‘common sense’, what we see is an extraordinary depth of knowledge acquired through serious reading and a thorough understanding of the issues on which he had focused.

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Midweek Review

Loneliness of the Bottom Half



By Lynn Ockersz

There you crouch by your hearth,

Seeing your fires sputtering out;

Your hopes of a bubbly pot of rice,

Ending in inflationary smoke spirals,

Leaving you with the painful thought,

That your dignity as mother and wife,

Is gravely harmed and beyond repair,

For, a turn of events not of your making,

Has reduced you and yours to penury,

So much for that Trickle-down Theory,

That Pundits say will end your misery,

But they tell you not to stop dreaming,

Because soon you will be bailed out,

Of your State of longsuffering;

Thanks to Princely tips from ancient Italy.

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