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Foreign debt manageable – CB Governor

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by Sanath Nanayakkare

Doomsayers had predicted that the country’s debt burden would be unmanageable, but that was not the case when one took the alternative economic indicators into account, Central Bank Governor Prof. W.D Lakshman said yesterday at the inauguration session of Sri Lanka Economic Summit 2020, held on a virtual platform.

Prof. Lakshman said that he particularly felt obliged to touch upon the current controversies surrounding Sri Lanka’s fiscal deficits and the current level of its debt.

“There are arguments that Sri Lanka’s fiscal deficits have been excessive and the debt levels are at unmanageable levels, but let me attempt to expand on this aspect in terms of alternative thinking in economic theory,” he said.

“Several countries including Japan, Singapore, and the United States have debt levels far exceeding their GDP. Firstly, this shows that even such high levels of debt could be sustainable when domestic debt is the predominant component in the debt portfolio. It can be shown through alternative indicators that even foreign debt is more manageable than doomsayers indicate.

“The ratio of government’s foreign non-concessional debt to GDP is around 23%, and the remainder is either domestic debt that can be rolled over or dealt with upon long term concessional financing. The annual foreign debt service payments as a percentage of export earnings and remittances stand at around 12% in ‘business as usual’ years such as 2018.

“With the adoption of a fiscal consolidation path from 2021 and the increased emphasis on domestic debt when it comes to financing budget deficits, the aforementioned indicators will improve further. The fears surrounding debt sustainability, therefore, indeed appear unfounded.”

Referring to widespread concerns on import restrictions, foreign trade and foreign economic relations the Governor said: “Import restrictions on non-essential goods working along with low oil prices have provided the country with a saving of US$ 4 billion in import expenditure in 2020. This saving is almost equivalent to the foreign currency debt service payments we settled during the year.

“Import restrictions have also provided an opportunity for our local enterprises to gather steam within the domestic market and to evaluate possibilities of expansion abroad – a mechanism used in all successful growth stories of the world. Those who argue for so-called ‘debt restructuring or debt reprofiling’ must realise that this means reforms of austerity. In my view, Sri Lanka is already undergoing some austerity, but on our terms. This is evident when the ongoing programme of import compression is considered.

“Sri Lanka is introducing ground-breaking reforms to improve its domestic production economy, enhance exports and reduce foreign debt dependence. It is commendable that Sri Lanka is following this approach without being prompted by any foreign agency, while continuing to honour all its financial obligations.”



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Canada concerned about delay in holding PC polls

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Canadian High Commissioner Isabelle Martin shaking hands with Minister Abayaratne

Canada, said to be the home to the largest Tamil Diaspora community, has expressed concern over the delay in holding Provincial Council (PC) elections. Canadian High Commissioner Isabelle Martin, on Monday (16), took up the issue with Public Administration, Provincial Councils and Local Government Minister Professor Chandana Abayaratne.

Sources quoted Prof. Abayaratne as having told the Canadian HC that the delay was not deliberate on the part of the government. The Minister blamed, what the sources called, certain legal, technical and delimitation issues for the delay.

India compelled Sri Lanka to enact the 13th Amendment to the country’s Constitution to enable the setting up of the Provincial Council system, in line with the Indo-Lanka Peace Accord, which Sri Lanka signed under duress in July 1987.

Prof. Abayaratne has assured the Canadian HC that President Anura Kumara Dissanayake, too, recognised the importance of strengthening the Provincial Council system as a solution to ethnic issues and that urgent steps would be taken in that regard.

During the discussion, matters relating to strengthening political, economic and social relations between the two countries were discussed.

In May 2020, Canada declared that Sri Lanka had perpetrated genocide during the war against the LTTE. Canada also sanctioned former Presidents Mahinda Rajapaksa and Gotabaya Rajapaksa in January 2023 over alleged war crimes.

The Canadian HC also explained her country’s ‘Indo-Pacific’ strategy and how Sri Lanka could benefit from it.

In particular, Canada’s “Pathways to Peace” project will support reconciliation between nations, and to improve communication by encouraging the learning of mutual languages as a second language, and it was also agreed to provide more opportunities for Sri Lankan students to pursue higher studies in Canada.

The Canadian delegation also expressed its willingness to provide the necessary technical assistance to solve the drinking water problems in Puttalam, Mannar and the North-Eastern provinces under technical cooperation, and to implement the relevant projects after a preliminary study.

by Shamindra Ferdinando

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Sajith briefs visiting UK Deputy PM on constitutional issues

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Sajith with David Lammy at Opposition Leader's Office, in Colombo

SJB and Opposition Leader Sajith Premadasa has briefed Deputy PM of the UK, David Lammy, on the dangers posed by the proposed Protection of the State from Terrorism Act (PSTA) and the Online Safety Act.

They met at the Office of the Leader of the Opposition, in Colombo, on Tuesday (17). Discussions focused on democratic governance, trade expansion, and bilateral humanitarian cooperation.

The British delegation included High Commissioner for Sri Lanka Andrew Patrick.

Head of the Deputy Prime Minister’s International Unit David Meyer, Special Advisor Ms. Fiona Meagher, and First Secretary (Political) Tom Soper,

According to a statement issued by the Opposition Leader’s Office, Premadasa has cautioned against what he called draconian applications of the law, specifically warning against broad definitions of terrorism that could criminalize political dissent and trade union activities. Premadasa reiterated that the judiciary, not the executive, must drive legal interpretations. Regarding online safety, while acknowledging the need to protect children, he stressed that regulations must align with UK standards and international norms without infringing on civil liberties.

The Opposition Leader welcomed the UK’s leadership as the President of the Group of States against Corruption (GRECO) and its global Anti-Kleptocracy Campaign. The SJBer highlighted the critical need for transparent institutions, noting that strengthening accountability mechanisms is central to rebuilding public trust and ensuring sustainable economic recovery in Sri Lanka.

Premadasa conveyed sincere appreciation for the UK’s “Sovereign Solidarity” following the devastation caused by Cyclone Ditwah in late 2025. He thanked the UK government for increasing its humanitarian aid package to £1 million (approx. $1.32 million) in December 2025. This funding, channelled through the Red Cross, UNOPS, and local partners, has provided: Emergency shelter and repairs for damaged homes; Clean water and sanitation facilities to prevent disease; and essential medicines and food supplies for the 1.8 million people affected.

Premadasa also proposed enhanced cooperation in protecting Sri Lanka’s wild elephant population and addressing the growing human–elephant conflict. He emphasised the need for sustainable conservation strategies, scientific land-use planning, community protection measures, and international technical support to safeguard biodiversity while ensuring the safety and livelihoods of rural communities affected by human–elephant interactions.

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Pathfinder houses Read Japan Project

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Ambassador of Japan to Sri Lanka, Akio Isomata, handed over the READ JAPAN Project document to Milinda Moragoda Founder of the Pathfinder Foundation. K Balasundaram, CEO, MMBL-Pathfinder Group, was also present at the event.

The Pathfinder Foundation has established the Entsuji Room, a Japan-themed space at its headquarters at Riverpoint, Peliyagoda, as the first step toward setting up a Japan Studies Centre.

The Entsuji Room will house an important collection of books on Japan, donated under the READ JAPAN Project, administered by the Tokyo Foundation and financed by the Nippon Foundation, under the leadership of Yohei Sasakawa.

The collection was formally presented by the Ambassador of Japan to Sri Lanka, Akio Isomata, at a ceremony held yesterday (18) at Pathfinder Headquarters, at Riverpoint, and received by Milinda Moragoda, Founder of the Pathfinder Foundation.

The establishment of the Entsuji Room marks a significant step in strengthening intellectual and cultural engagement between Sri Lanka and Japan.

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