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Could Sri Lanka once again face an economic crisis similar to 2022?

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This article examines whether Sri Lanka faces the risk of once again moving towards a situation similar to the 2022 economic crisis. The 2022 crisis was not the result of a single cause, but a multidimensional crisis created by the combined effects of fiscal weaknesses, foreign exchange shortages, debt burdens, policy mistakes, and the weakening of the productive economy. Although foreign exchange reserves, the exchange rate, and the fiscal position have now stabilized to some extent, that stability remains fragile.

The continuity of the IMF programme, debt sustainability, investor confidence, and policy discipline are decisive factors in this regard. At the same time, poverty, the quality of employment, pressures on the SME sector, price levels, and income inequalities remain serious socio-economic challenges. Therefore, while it may not be accurate to say that the 2022 crisis will immediately recur, abandoning the reform path and failing to correct structural weaknesses could once again push Sri Lanka towards a crisis-prone path.

Recently, the Chief Executive Officer of the Advocata Institute issued an important warning regarding Sri Lanka’s economic future. That statement also received wide attention across various media platforms. His central argument was that if Sri Lanka moves away from the current path of economic reforms, there is a risk that a situation similar to the severe economic crisis experienced in 2022 could re-emerge.

This statement cannot be dismissed merely as a political or ideological remark. It is an important warning that deserves deeper consideration in relation to the country’s economic stability, policy continuity, and the future of the reform process. Therefore, the purpose of this note is to examine the strength and validity of that statement through selected macroeconomic indicators and structural economic factors.

A particularly important point to remember is that the 2022 economic crisis was not caused by a single factor or a single policy mistake. It was a complex economic crisis created by the accumulation of fiscal imbalances, excessive debt, foreign exchange shortages, weak export and investment growth, the decline of the productive economy, policy uncertainty, and weak institutional governance over many years.

Therefore, in assessing whether Sri Lanka could once again move towards such a situation, it is not sufficient to rely on a single indicator or a short-term trend. Instead, it is essential to consider a broad macroeconomic range, including the fiscal position, foreign exchange reserves, debt sustainability, investment and export performance, unemployment, poverty levels, the condition of small and medium-sized enterprises, price levels, interest rates, and the overall path of economic growth.

Our main question should not be whether the 2022 crisis will return tomorrow. The more important question is whether the fundamental structural weaknesses that caused that crisis have truly been corrected, or whether they have only been temporarily managed. Sri Lanka’s economic future will be determined by the answer to this question.

1. Foreign Exchange Reserves

By early 2022, Sri Lanka’s usable foreign exchange reserves had fallen to extremely low levels, making even payments for fuel, medicine, and other essential imports a serious challenge.

At present, foreign exchange reserves have recovered significantly, providing a stronger protective buffer compared with the situation in 2022. However, this stability could once again be weakened by a breakdown in the continuity of the IMF programme, a slowdown in foreign direct investment flows, a decline in tourism earnings or remittances, or disruptions to the debt restructuring process.

2. Exchange Rate Stability

In 2022, the rapid depreciation of the rupee was a major factor that increased import prices, production costs, and the cost of living.

Today, the exchange rate shows relative stability, but that stability depends on foreign exchange inflows, market confidence, and policy credibility. Therefore, if the IMF programme is disrupted, foreign exchange earnings decline, or investor confidence weakens, the rupee could once again come under severe pressure.

3. Fiscal Position

Among the root causes of the 2022 crisis were the collapse of government revenue, dependence on excessive borrowing, and the long-term weakening of fiscal discipline.

Under the IMF programme, the fiscal position has been strengthened to some extent through increased tax revenue and expenditure control. However, reversing tax reforms for political popularity, failing to reform loss-making state-owned enterprises, or losing control over public expenditure could once again widen fiscal imbalances.

4. Debt Sustainability

In 2022, Sri Lanka was forced to suspend external debt servicing for the first time in its history.

Although the debt restructuring process has now made considerable progress, debt sustainability depends on continuous economic growth, maintaining a primary budget surplus, and policy discipline. If these conditions weaken, concerns over debt stability could re-emerge.

5. Employment Conditions

Although the official unemployment rate appears to be under some control, problems relating to the quality of the labour market remain unresolved.

Many people have moved into low-income informal employment, while the shortage of employment opportunities among educated youth remains significant. In addition, the migration of skilled and educated workers has placed pressure on the country’s human capital and long-term productive capacity.

6. Poverty and Living Standards

With the 2022 crisis, poverty increased significantly. Although inflation has declined, the cost of living still remains a heavy burden for many families.

A large number of households continue to struggle to meet expenses related to food, transport, education, and health. Therefore, it is still difficult to say that the benefits of macroeconomic stability have adequately reached lower- and middle-income groups.

7. Small and Medium-Sized Enterprises

SMEs, which are a central source of employment and income generation in Sri Lanka, were severely affected by the crisis.

High interest rates, energy costs, raw material prices, and weak consumer demand forced many enterprises to close down, downsize, or become burdened with debt. The pace of economic recovery will depend heavily on the revival of this sector.

8. Weakness of the Productive Economy

A deeper structural cause of the 2022 crisis was the limited base of Sri Lanka’s productive economy.

Even today, the country remains heavily dependent on tourism earnings, remittances, and the services sector. High value-added industries, technology exports, knowledge-based services, and innovation-driven sectors have not grown at the expected pace. Without a structural transformation of the economy, long-term stability cannot be guaranteed.

9. Income and Distributional Inequalities

Although some economic groups recovered quickly after the crisis, a large section of the population has still not escaped economic pressure.

The gap between urban and rural areas, as well as between high- and low-income groups, appears to have widened. If the benefits of economic growth are not distributed more broadly, macroeconomic stability will not translate into social and political stability.

10. Price Levels and Inflation

Inflation has declined, but people are still facing price levels that have already risen and become entrenched.

A decline in inflation does not mean a decline in prices. If income growth does not keep pace with price levels, the real purchasing power and living standards of households will remain weak.

11. Interest Rates and Investment

Although interest rates have declined, private investment and new business activity have not yet grown at the expected pace.

Investment decisions are influenced not only by interest rates, but also by policy stability, legal clarity, the protection of property rights, market expectations, and investor confidence. Therefore, sustained investment growth requires broader institutional and policy stability.

12. What Could Happen If IMF Conditions Are Not Implemented?

The IMF programme is not merely a loan facility. It is a key foundation of the confidence that the international financial community places in Sri Lanka’s economic policies.

programme breaks down:

*  IMF disbursements could be suspended.

*  Support from development partners, including the World Bank and the Asian Development Bank, could weaken.

*  Confidence among creditors and international markets could deteriorate.

*  Foreign direct investment could slow down.

*  Pressure on the rupee could increase.

*  Interest rates could rise.

*  Inflation could accelerate again.

*  Fiscal crises could re-emerge.

* Economic growth could slow down.

*  Jobs, incomes, and living standards could be adversely affected.

This does not mean that Sri Lanka would return to the 2022 situation overnight. However, it could gradually weaken the protective buffers required for economic stability and significantly increase the risk of the country being drawn back into a crisis-prone path.

by Prof. Ranjith Bandara, PhD (Qld.,)



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Opinion

We were here first: The case for Malaypolitical representation in Sri Lanka

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Sri Lankan Malay father and son

There is a mosque on Slave Island in Colombo that has stood for more than three centuries. Masjidul Jamiya was not built by merchants or pilgrims. It was built by soldiers, Malay soldiers who came to this island in service to the Dutch crown and, after 1796, to the British, and who stayed, raised families, and made Ceylon their permanent home. That mosque, and the neighborhood that grew quietly around it, is perhaps the most visible monument to something the rest of this country has largely forgotten: that the Malays of Sri Lanka have been here, contributing and serving, for longer than the modern republic has existed.

Today the community that built that mosque numbers approximately 40,000 people. We are 0.2 percent of the population. We hold no seat in Parliament. We have no dedicated political voice. With each passing decade our language, our culture and our civic presence grow a little quieter. This is not an appeal for sympathy. It is a case, resting on history and on democratic principle, for a recognition that is long overdue. The Malays of Sri Lanka are not asking for charity. We are asking to be counted in the nation we helped build

A Community of Soldiers, Scholars and Statesmen

The Sri Lankan Malay story does not begin in the colonial footnotes. Austronesian seafarers reached these shores as early as 200 BC. The 13th century brought Chandrabhanu Sridhamaraja, a Javanese ruler who led an invasion from Tambralinga and briefly held dominion over northern Sri Lanka. The community that exists today, however, traces its roots most concretely to the Dutch colonial era, when soldiers, nobles and political exiles from across the Indonesian archipelago, from Sulawesi, Java, Bali, Ambon and Madura, arrived in Ceylon and never returned.

These were not passive arrivals waiting for history to happen around them. The Malays became the backbone of Ceylon’s colonial military, serving with enough distinction that the British formalised their role through the Ceylon Rifle Regiment, a unit staffed almost entirely by Malays. The regiment’s influence extended far beyond the barracks. Malay soldiers in Colombo published the first Malay-language newspaper issued anywhere in the Eastern world. They built mosques across Kandy, Badulla, Kurunegala and Hambantota. They left their mark on the Sinhala language in ways that persist to this day: the words sarong, rabana, botale, kamara, bonchi and soldaduwa all trace their roots to Malay. The nation’s beloved dodol is a Malay contribution.

In the legal and civic sphere, the record is equally substantial. Justice Maas Thajoon Akbar became the first Malay Justice of the Supreme Court of Sri Lanka in the 1920s. Tuan Burhanudeen Jayah, known as T. B. Jayah, served in the Legislative Council, the State Council and in the first post-independence Parliament. Dr. P. Drahaman, a physician who founded the All Ceylon Malay Congress in 1944, won a parliamentary seat in 1956 and argued with striking clarity that Malays deserved representation in their own right, distinct from any other community. In the armed forces, Brigadier T. S. B. Sally rose to become Chief of Staff of the Sri Lanka Army, the highest rank any Malay officer has ever held.

This is not a peripheral community. This is a community that has served at every level of Sri Lankan public life and has been rendered progressively invisible in the democratic structures of the state it helped to build. We shaped this nation’s language, defended its sovereignty and administered its laws. Yet today we hold no seat in its Parliament.

The Slow Erasure

The 2024 Census records the Malay community within a combined category alongside Burghers, Chetties, Bharathas and Veddas that together account for just 0.3 percent of Sri Lanka’s total population of 21.7 million. Within that fraction, the Malays number fewer than 40,000. Under Sri Lanka’s proportional representation system, where votes are cast for parties across multi-member electoral districts, a community of this size has no realistic prospect of parliamentary representation through any community-specific route.

The practical consequence has been absorption into broader Muslim political formations that do not always attend to the specific cultural, linguistic and civic concerns of the Malay community. The All Ceylon Malay Political Union, which fought explicitly and consistently for a distinct Malay political voice, faded from active political life decades ago. The last Malay to hold a parliamentary seat of any kind was a nominated member in 1989. That is 37 years without representation.

The Sri Lanka Malay language, a creole blending Austronesian, Sinhala and Tamil in proportions found nowhere else on earth, is classified as endangered. Senior academics who are themselves Malay acknowledge that they rarely speak it at home. The Malay Club at Slave Island, the Sri Lanka Malay Association, the Conference of Sri Lanka Malays: these institutions remain active and their members dedicated, but cultural associations cannot substitute for political representation. Without a voice in policy, a community has no mechanism to advocate for its own language, its schools or its civic recognition.

The Bonds That Remain

What makes the Malay political case distinctive, and worth the attention of any serious Sri Lankan political leader, is the particular character of the community’s relationship with the Sinhalese majority. Unlike many of the fault lines that have defined Sri Lankan politics for decades, the Malay connection with Sinhalese society runs deep and is rooted in centuries of genuine proximity. Sri Lankan scholars have documented significant intermarriage between early Malay settlers and Sinhalese communities, particularly in the south and west of the island. The linguistic overlap is not incidental; it reflects generations of neighbors, colleagues and extended family.

The Malays were never a party to this country’s most devastating ethnic conflicts. A community that is small in number and dispersed across Colombo and the western coast has always been obliged to build relationships across communal lines rather than retreat behind them.

That quality of bridge-building is not weakness, nor is it political neutrality born of indifference. It is the earned disposition of a people who have always understood that their future in Sri Lanka is inseparable from the future of the country as a whole.

In a political moment when Sri Lanka is actively pursuing national reconciliation and inclusive governance under the NPP administration of President Anura Kumara Dissanayake, that disposition is not a liability. It is a genuine political asset. The Malay community has never been an adversary in Sri Lanka’s story. We have always been partners. It is time the state recognised us as such.

What Representation Would Look Like

This is not an argument for a return to communal politics or ethnic bloc-building. Sri Lanka has paid an enormous price for that history and nobody with any sense wants to revisit it. What is being argued here is a model of civic representation rooted in culture, in documented contribution and in constitutional possibility.

The National List, the 29 proportionally allocated parliamentary seats distributed after each general election, has been used before to include communities and voices that the direct electoral system cannot accommodate. A major political party that chose to place a credible Malay representative on its National List would bear no electoral cost for doing so and would signal something genuine about its understanding of Sri Lanka’s full diversity. That is not a complicated ask.

At the local level, the Colombo Municipal Council and the relevant Pradeshiya Sabhas offer a more immediate pathway. The Malay community is concentrated enough in Slave Island, Wellawatte and the broader Colombo district that a well-organised ward-level campaign is a realistic proposition. Local government has historically been where minority community members establish the credibility that national politics eventually recognizes.

Beyond elections, there is a straightforward case for formal state recognition of the Sri Lankan Malay community’s cultural and linguistic heritage, including support for language preservation, inclusion in national school curricula and proper documentation of Malay contributions to Sri Lankan history. When Mahatma Gandhi visited Sri Lanka in 1927, he reportedly mentioned the Malays in nearly every public address he gave on the island. It would be a particular kind of failure if the modern Sri Lankan state knew less about its own communities than a visiting guest did, a century ago.

A Voice Worth Having

I write this as a Sri Lankan Malay who has a great deal of affection for this country and a clear-eyed view of both what it has been and what it can become. The NPP government came to power on a conviction that the old patterns of Sri Lankan politics needed to be broken and that the state should answer to all of its people. If that conviction is real rather than rhetorical, it must eventually reckon with the communities that have slipped through the architecture of the electoral system through no failure of their own but through the simple arithmetic of smallness.

Forty thousand Malays. Three centuries of documented service. No seat in Parliament.

That is not a record that should be comfortable for any government that takes representation seriously. It is, however, one that is entirely possible to change.

ABOUT THE AUTHOR

Thanzyl Thajudeen FCIPR FCIM FCMI is a Chartered PR Practitioner, Managing Director of Mark and Comm (Pvt) Ltd, and a board member of PRCA Asia Pacific. He was named Campaign Asia-Pacific 40 Under 40 in 2024. He is a Sri Lankan Malay. The views expressed are his own.

by Thanzyl Thajudeen,a Sri Lankan Malay ✍️

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Opinion

Role of children’s stories in learning English and their impact on children

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Children’s stories have always been an important part of childhood. From traditional fairy tales to modern picture books, stories entertain children while also helping them understand the world around them. When children are learning English as a language, stories become an especially valuable tool because they provide a natural, enjoyable, and meaningful way to develop language skills. Through characters, plots, and imaginative situations, children’s stories support vocabulary development, improve communication abilities, and encourage confidence in using English.

One of the greatest benefits of children’s stories in English language learning is that they introduce children to new vocabulary in a meaningful context. Instead of memorising isolated words from a list, children learn words through situations and actions within a story. For example, a story about a farm may introduce words such as “animal,” “field,” “farmer,” and “plant” while showing how these words relate to each other. This contextual learning helps children understand and remember new vocabulary more effectively.

Stories also improve children’s listening skills. When teachers, parents, or other speakers read stories aloud, children hear correct pronunciation, sentence structures, and natural expressions in English. Regular exposure to spoken English helps children become familiar with the rhythm, sounds, and patterns of the language. Even when children do not understand every word, they can often follow the meaning through pictures, gestures, and the events of the story. Over time, this develops their ability to understand spoken English in different situations.

Another important impact of children’s stories is the development of speaking skills. Stories encourage children to talk about characters, describe events, answer questions, and share their own ideas. Activities such as retelling a story, acting out scenes, or discussing what might happen next give children opportunities to practise English in a relaxed environment. Because stories are enjoyable and engaging, children are often more willing to participate and communicate without fear of making mistakes.

Children’s stories also support the development of grammar skills. Through repeated exposure to well-formed sentences, children gradually recognize how English works. They learn common sentence patterns, verb forms, and ways of expressing ideas. For young learners, grammar is often easier to understand when it is presented through a story rather than through direct explanations. For example, a story that describes past events naturally introduces the use of past tense verbs, allowing children to observe grammar in action.

In addition to language development, stories have a strong influence on children’s imagination and creativity. Stories allow children to enter different worlds, meet interesting characters, and explore new ideas. When learning English, imagination makes the language experience more meaningful. A child who becomes interested in a story about a brave character or a magical adventure is more likely to remember the words and expressions connected with that experience. Creativity also encourages children to create their own stories, which further strengthens their ability to use English.

Children’s stories can also help develop cultural awareness. Language is closely connected with culture, and stories often introduce children to different traditions, lifestyles, and values. English stories from different countries allow children to learn about people and places beyond their own experiences. This helps them understand that English is not only a subject to study but also a way to communicate with people around the world.

Reading stories in English can also increase children’s motivation and positive attitudes toward learning. Many children may find learning a new language challenging, especially when they focus only on textbooks or exercises. Stories make learning more enjoyable because they combine education with entertainment. When children associate English with fun and creativity, they are more likely to develop curiosity and continue learning.

The emotional impact of stories should not be overlooked. Many children’s stories contain themes such as friendship, kindness, courage, and problem-solving. Through characters and situations, children can learn important social and emotional lessons. Discussing these themes in English gives children opportunities to express feelings, opinions, and personal experiences. This not only improves language ability but also supports emotional growth.

Teachers play an important role in using stories effectively in English language classrooms. Selecting stories that match children’s age, interests, and language levels is essential. Teachers can support understanding by using pictures, asking questions, encouraging predictions, and connecting the story to children’s lives. Repetition is also valuable, as hearing the same story several times allows children to become more familiar with vocabulary and sentence structures.

Parents can also encourage language learning through storytelling at home. Reading English stories together, listening to audiobooks, or watching story-based programs can provide additional exposure to the language. A supportive environment where children feel comfortable experimenting with English can greatly improve their confidence and progress.

In conclusion, children’s stories have a powerful impact on learning English as a language. They provide children with opportunities to develop vocabulary, listening, speaking, reading, and grammar skills in an enjoyable and meaningful way. Beyond language learning, stories encourage imagination, creativity, cultural understanding, and emotional development. By making English learning engaging and enjoyable, children’s stories help young learners build a strong foundation for future communication and lifelong learning.

Saumya Aloysius

(A children’s writer contributing to both local and foreign newspapers as a freelance writer)

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Opinion

When governments destroy mangroves

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Any government that comes into power is a caretaker – of its people, environment and security. This is another glaring occasion where their lack of knowledge, or blatant disregard to the environment is causing long-lasting damage to this country.

After the devastation of the tsunami, then governments took the initiative to raise natural protection of the island by undertaking massive projects to plant mangroves. It was a long-term project, spanning 20 years, by the armed forces, to get these barriers up. Now the same army is used by this government to chop down these mangroves!!

This is happening right now in the Trincomalee lagoon. Nearly 40 lorry loads of mangrove forest have been taken away already. The excuse used for this is dengue control, a circular issued by the presidential secretariat in June. The ignorance is here; the seawater mixed lagoon does NOT breed mosquitoes. Trincomalee does not pop up in the dengue demographics, even as a high risk area. Yes, there is garbage, and plastic thrown into the mangroves that can be breeding grounds for mosquitoes. These can be cleared away in a clean-up operations, without harming the mangrove trees. It has been done a few times before, by previous government authorities, like coast conservation, who know the value of the mangrove belts. The local rumour becomes believable, that this deplorable act is done to please some local business partners of the area who run pleasure boats in the lagoon.

Yes, unhealthy mangroves can breed mosquitoes. But mangroves are ‘decease swamps’ is a dangerous myth. That mangroves are dirty, stagnant swamps teeming with decease carrying mosquitoes is a misconception that promotes harmful policies to control dengue outbreaks. This top myth justifies the illegal coastal clearance today in Trincomalee. It is destroying an important ecological asset of this country, mangroves, while failing to address the true root of dengue transmission. Where is the coast conservation department in this situ? Have they got CCD permission to carry out this butchery?

Healthy mangroves do not breed dengue mosquitoes, especially the one’s closely connected to the sea like in Trincomalee. The larvae needs completely still unmoving water to breathe at the surface, and mature. The power of tidal flushing which keeps water circulating in the mangroves makes this impossible. Also the daily ebb and flow of ocean tides keeps the water moving in the mangroves and frequently drains the forest floor. The natural hydrology of healthy mangroves, acts as an automatic self-regulating barrier against stagnant water collection, making viable breeding sites virtually impossible.

Also mangroves contain nature’s exterminators. It hosts a massive army of mosquito predators. These mangroves are not dead swamps but vibrant nurseries. Young Fish, dragon flies, crusteasians, and insectivorous birds are natural mosquito predators. Clearing mangroves collapses this natural food web, removing this natural pest control.

In fact, clearing mangroves is counterproductive and will backfire with worsened dengue cases. The heavy machinery will leave a scarred landscape with deep tyre tracks in the marshy soil making stagnant water pools and disrupted drainage. When rainwater fills these artificial depressions it will create perfect stagnant, predator free, fresh water pools, Ideal breeding grounds for Aedes aegypti. Also clearing this kind of buffers can bring in the urban sprawl with its people, housing, and garbage, to the new degraded land.

The collateral damage is even bigger. Destroying mangroves in the name of pest control leaves coastal populations poorer, hungrier, and highly vulnerable to extreme weather. One would have thought at least the people in the coast conservation department were knowledgeable enough about the loss of wave attenuation with removal of mangroves and the risk of flooding and storm surge damages to the coastal areas. Collapse of these fish nurseries should ring alarm bells in the fisheries department. Reduced fish harvest and loss of livelihood for the local fishermen should have had fisheries department people rushing to the site. But neither of the mentioned government departments have raised a murmur, in the face of political influence. This is the sad truth of the country at the moment. Sri Lanka’s climate resilience has been compromised by release of stored ‘blue carbon’ and a loss of natural buffer against rising sea levels, while the responsible people in the government are silent in front of an ignorant political hierarchy.

This is an appeal to the highest authority in the country to stop this environmentally insensitive projects of this nature being coughed up by ignorant municipal members. Clearing these forests directly violates so many policies on conservation. Our local fishermen depend entirely on healthy mangrove root systems—such as those being chopped down. From a health perspective, medical professionals have repeatedly assured us that under the current National Policy Framework, marshy lands and mangrove ecosystems pose no threat of dengue. We request your guidance and intervention to ensure our environment is not sacrificed.

Citizen S

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