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Has Sri Lanka become a poor country?

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By Dr Laksiri Fernando

After artificially fixing the exchange rate in Sri Lanka for so many years (since 2001), whether the sudden floating of the rupee rate to dollar is a wise decision is altogether a different matter. However, because of this decision the dollar rate has jumped from Rs. 197/203 to 321/328 since this decision was taken on 9 March, just a month ago.

Has Sri Lanka become a ‘low income’ country because of this decision, and other circumstances, is the first question that this short article raises? In 2019, as a mouthpiece of the government, the Central Bank announced that “Sri Lanka graduated to the upper middle income country status as per the World Bank classification of countries published in July 2019.” On the other hand, the World Bank downgraded Sri Lanka to a ‘lower middle income’ country considering the currency crisis and inflation, in July 2020, much to the disappointment of the government and economic bureaucrats.

Inaccurate Classifications

It is the World Bank that classifies countries as ‘low income,’ ‘lower middle income,’ ‘upper middle income,’ and ‘high income’ countries whether those criteria are reasonable or accurate. The following are the measures that they use, simply said, based on the per capita GDP.

Group GDP Range(per capita)
Low Income 0 – 1036
Lower Middle Income 1036- 4,045
Upper Middle Income 4,045 – 12,535
High Income 12, 535 –

As I have raised this question previously, the income range for ‘low income’ or poor countries is arbitrary and excludes many countries who need international support from institutions and countries. The range could be up to $ 3,000 and not $ 1,036. Sri Lanka is only one country among them. There can be a tendency on the part of international organizations, including the World Bank and the IMF to avoid responsibility to help poor countries as those organizations are dominated by Western or rich countries.

Right to Seek Assistance

To seek assistance from international organisations and rich countries, however, is a right of poor and developing countries. On behalf of the people living in those countries, this right is absolutely a human right.

Strangely enough or ironically, the behaviour and attitudes of many elite politicians in poor and low-income countries go hand in glove with these elite politicians and bureaucrats in rich countries and international institutions. Sri Lanka is a very good examples, and most of the arguments in this direction come from the ‘nationalists’ and ‘leftists.’

Before going into details of this matter, let me first answer the question whether Sri Lanka has now fallen into the pit of low-income or poor countries. Sri Lanka’s GDP or per capita GDP is calculated first based on rupees. Let us take an example.

According to the Department of Census and Statistics, Sri Lanka’s GDP on market prices in 2021 was Rs. (million) 16,809,309. Sri Lanka’s population is 22 million. Therefore, Sri Lanka’s per capita income was Rs. 764,059 million.

As of today, the dollar value of this per capita GDP is just $ 2,380, based on the floating rupee (1 Dollar = Rs. 321), irrespective of the government’s ‘vision for prosperity’! The reasons are bad financial management, wishful thinking and power politics. The reasons apply not only to the present government but to all past governments.

IMF Assistance?

The second question that I want to raise is what is wrong in going to the IMF and seeking assistance? Sri Lanka joined the IMF in 1950 even before joining the UN (1955). One advantage the country has at present is ironically not seeking much assistance previously from this organisation meant to assist member countries (190 members now).

It was in 1965 that Sri Lanka first sought IMF ‘assistance’ and continued to do so until 2002 as a formality even without drawing the full amounts owed to the country under ‘Standby Arrangements.’ It was under J.R. Jayewardene that the country sought ‘Extended Fund Facility’ in 1979 due to the foreign exchange difficulties. But that amount had to be paid back in three years which raised much criticism. In 1988, the same administration sought ‘Structural Adjustment Facility’ again to be paid back in three years.

I happened to meet the IMF representative to South Asia/Sri Lanka in 1990 at a Norwegian friend’s place in Geneva (Inger Nordback). He was one who appeared in picture with JR during a famous ‘Vap Magul’ festival. Our casual meeting led to some talk about ‘IMF conditions’ and he told me that the problem with Sri Lankan representatives was that ‘they don’t bargain but leave with dissatisfaction after meetings.’ I hope this is not and should not be the case today.

Sri Lanka has received the last ‘Extended Fund Facility’ from IMF in 2016 to the amount of $ 952,230,000 to be paid in 2020 and still 892,283,000 is outstanding. Perhaps this is understandable, given the Covid pandemic and other circumstances. Otherwise, Sri Lanka has a ‘clean slate’ thanks to the ‘nationalist and leftist’ antipathy against the IMF!

Debt Restructuring

Let me touch on some other IMF matters. When Rajan Philips wrote ‘Mayhem in Mirihana; Shaken Gota is Home Under Curfew’ (Colombo Telegraph, 3 April), I posted the following comment and there were scathing attacks on me as usual!

“The declaration of curfew is acceptable to prevent further anarchy and violence today based on the experience at Mirihana and other places. However, this should not continue. The immediate root cause should soon be addressed. The government (whatever) should immediately negotiate with the IMF to obtain $ 10 billion to end the fuel crisis, energy shortages, essential imports, and loan repayments of this year. Then the unrest might subside. Debt restructuring can be done from next year. If the government is multi-partisan, it is very much better in negotiating with the IMF. There is no point in obtaining ad hoc loans from countries although those could be utilized later. It is already too late. IMF officials completed discussions with the government officials in December although the Report came out in February. This is April. Whatever the weaknesses or biases of the IMF, it is the main international mechanism to rescue countries under international monetary constraints. Undoubtedly, Sri Lanka must agree for strict conditions which could be negotiated. When you fall into a pit, you must escape from the same pit.”

I was looking at the economic side of the crisis and still maintain the same positions except the fifth sentence of the above quote: ‘Debt restructuring can be done from next year.’

Obviously, debt restructuring should start forthwith. Past governments, including the present, have irresponsibly depended on international sovereign bonds at higher rates of interest and purely on commercial conditions even with China. A poor country like Sri Lanka cannot afford that. The present debt obligations for this year appear to exceed $ 7 billion. Forex reserves at present however do not exceed 2 billion, necessary for even essential imports.

The government has appointed a good three-member expert panel to advice and negotiate with the IMF. The appointment of the present Central Bank Governor is also commendable. While negotiating with the countries, like India and China, or institutions like the Asian Development Bank and the World Bank to postpone the dept repayments, if Sri Lanka could obtain around $ 10 billion from the IMF, some of the economic reasons for the present crisis can be ameliorated.

Political Crisis

The present political mobilisations with the slogan ‘Gota, go home’ are mainly political, of course based on economic and social reasons. However, to seek IMF assistance to resolve the economic crisis there should be some political stability. This is something Sri Lanka is lacking not only under the present government, but it was there even under the last government.

The spontaneous protests from non-political sources at least have understood this calamity without supporting any political party. The question however is what are the alternatives?

During the debates on the IMF report in Parliament, no MP on the government side or in the Opposition never came up with a constructive proposal. Even Sajith Premadasa’s argument was to resolve the Forex crisis acquiring money laundering revealed in the Pandora Papers. The gravity of the crisis was undermined. The debates were focused on personal attacks and trivial political matters.

The Opposition is now proposing a ‘no confidence motion’ on the government and an impeachment against the President if the former is successful. On the other hand, the so-called ‘independents’ who broke away from the government are proposing an ‘interim government’ until the economic crisis is resolved, and the country can hold elections. That kind of a government could include Ranil Wickremesinghe, M. A. Sumanthiran, and Harsha de Silva if not Sajith Premadasa. No Rajapaksa should be included except the President who should promise to leave politics within two years. Under such an interim government the President’s power should be curtailed. This could be the opening for changing the presidential system among other things.



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Opinion

We do not want to be press-ganged 

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Reference ,the Indian High Commissioner’s recent comments ( The Island, 9th Jan. ) on strong India-Sri Lanka relationship and the assistance granted on recovering from the financial collapse of Sri Lanka and yet again for cyclone recovery., Sri Lankans should express their  thanks to India for standing up as a friendly neighbour.

On the Defence Cooperation agreement, the Indian High Commissioner’s assertion was that there was nothing beyond that which had been included in the text. But, dear High Commissioner, we Sri Lankans have burnt our fingers when we signed agreements with the European nations who invaded our country; they took our leaders around the Mulberry bush and made our nation pay a very high price by controlling our destiny for hundreds of years. When the Opposition parties in the Parliament requested the Sri Lankan government to reveal the contents of the Defence agreements signed with India as per the prevalent common practice, the government’s strange response was  that India did not want them disclosed.

Even the terms of the one-sided infamous Indo-Sri Lanka agreement, signed in 1987, were disclosed to the public.

Mr. High Commissioner, we are not satisfied with your reply as we are weak, economically, and unable to clearly understand your “India’s Neighbourhood First and  Mahasagar policies” . We need the details of the defence agreements signed with our government, early.

 

RANJITH SOYSA 

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Opinion

When will we learn?

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At every election—general or presidential—we do not truly vote, we simply outvote. We push out the incumbent and bring in another, whether recycled from the past or presented as “fresh.” The last time, we chose a newcomer who had spent years criticising others, conveniently ignoring the centuries of damage they inflicted during successive governments. Only now do we realise that governing is far more difficult than criticising.

There is a saying: “Even with elephants, you cannot bring back the wisdom that has passed.” But are we learning? Among our legislators, there have been individuals accused of murder, fraud, and countless illegal acts. True, the courts did not punish them—but are we so blind as to remain naive in the face of such allegations? These fraudsters and criminals, and any sane citizen living in this decade, cannot deny those realities.

Meanwhile, many of our compatriots abroad, living comfortably with their families, ignore these past crimes with blind devotion and campaign for different parties. For most of us, the wish during an election is not the welfare of the country, but simply to send our personal favourite to the council. The clearest example was the election of a teledrama actress—someone who did not even understand the Constitution—over experienced and honest politicians.

It is time to stop this bogus hero worship. Vote not for personalities, but for the country. Vote for integrity, for competence, and for the future we deserve.

 

Deshapriya Rajapaksha

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Opinion

Chlorophyll –The Life-giver is in peril

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Chlorophyll

Chlorophyll is the green pigment found in plants, algae, and cyanobacteria. It is essential for photosynthesis, the process by which light energy is converted into chemical energy to sustain life on Earth. As it is green it reflects Green of the sunlight spectrum and absorbs its  Red and Blue ranges. The energy in these rays are used to produce carbohydrates utilising water and carbon dioxide and releasing oxygen in the process. Thus, it performs, in this reaction, three functions essential for life on earth; it produces food and oxygen and removes carbon dioxide from the atmosphere to maintain equilibrium in our environment. It is one of the wonders of nature that are in peril today. It is essential for life on earth, at least for the present, as there are no suitable alternatives. While chlorophyll can be produced in a lab, it cannot be produced using simple, everyday chemicals in a straightforward process. The total synthesis of chlorophyll is an extremely complex multi-step organic chemistry process that requires specialized knowledge, advanced laboratory equipment, and numerous complex intermediary compounds and catalysts.

Chlorophyll probably evolved inside bacteria in water and migrated to land with plants that preceded animals who also evolved in water. Plants had to come on land first to oxygenate the atmosphere and make it possible for animals to follow. There was very little oxygen in the ocean or on the surface before chlorophyll carrying bacteria and algae started photosynthesis. Now 70% of our atmospheric oxygen is produced by sea phytoplankton and algae, hence the importance of the sea as a source of oxygen.

Chemically, chlorophyll is a porphyrin compound with a central magnesium (Mg²⁺) ion. Factors that affect its production and function are light intensity, availability of nutrients, especially nitrogen and magnesium,  water supply and temperature. Availability of nutrients and temperature could be adversely affected due to sea pollution and global warming respectively.

Temperature range for optimum chlorophyll function is 25 – 35 C depending on the types of plants. Plants in temperate climates are adopted to function at lower temperatures and those in tropical regions prefer higher temperatures. Chlorophyll in most plants work most efficiently at 30 C. At lower temperatures it could slow down and become dormant. At temperatures above 40 C chlorophyll enzymes  begin to denature and protein complexes can be damaged.  Photosynthesis would decline sharply at these high temperatures.

Global warming therefore could affect chlorophyll function and threaten its very existence. Already there is a qualitative as well as quantitative decline of chlorophyll particularly in the sea. The last decade has been the hottest ten years and 2024 the hottest year since recording had started. The ocean absorbs 90% of the excess heat that reaches the Earth due to the greenhouse effect. Global warming has caused sea surface temperatures to rise significantly, leading to record-breaking temperatures in recent years (like 2023-2024), a faster warming rate (four times faster than 40 years ago), and more frequent, intense marine heatwaves, disrupting marine life and weather patterns. The ocean’s surface is heating up much faster, about four times quicker than in the late 1980s, with the last decade being the warmest on record. 2023 and 2024 saw unprecedented high sea surface temperatures, with some periods exceeding previous records by large margins, potentially becoming the new normal.

Half of the global sea surface has gradually changed in colour indicating chlorophyll decline (Frankie Adkins, 2024, Z Hong, 2025). Sea is blue in colour due to the absorption of Red of the sunlight spectrum  by water and reflecting Blue. When the green chlorophyll of the phytoplankton is decreased the sea becomes bluer. Researchers from MIT and Georgia Tech found these color changes are global, affecting over half the ocean’s surface in the last two decades, and are consistent with climate model predictions. Sea phytoplankton and algae produce more than 70% of the atmospheric oxygen, replenishing what is consumed by animals. Danger to the life of these animals including humans due to decline of sea chlorophyll is obvious. Unless this trend is reversed there would be irreparable damage and irreversible changes in the ecosystems that involve chlorophyll function as a vital component.

The balance 30% of oxygen is supplied mainly by terrestrial plants which are lost due mainly to human action, either by felling and clearing or due to global warming. Since 2000, approximately 100 million hectares of forest area was lost globally by 2018 due to permanent deforestation. More recent estimates from the UN’s Food and Agriculture Organization (FAO) indicate that an estimated 420 million hectares of forest have been lost through deforestation since 1990, with a net loss of approximately 4.7 million hectares per year between 2010 and 2020 (accounting for forest gains by reforestation). From 2001 to 2024, there had been a total of 520 million hectares of tree cover loss globally. This figure includes both temporary loss (e.g., due to fires or logging where forests regrow) and permanent deforestation. Roughly 37% of tree cover loss since 2000 was likely permanent deforestation, resulting in conversion to non-forest land uses such as agriculture, mining, or urban development. Tropical forests account for the vast majority (nearly 94%) of permanent deforestation, largely driven by agricultural expansion.  Limiting warming to 1.5°C significantly reduces risks, but without strong action, widespread plant loss and biodiversity decline are projected, making climate change a dominant threat to nature, notes the World Economic Forum. Tropical trees are Earth’s climate regulators—they cool the planet, store massive amounts of carbon, control rainfall, and stabilize global climate systems. Losing them would make climate change faster, hotter, and harder to reverse.

Another vital function of chlorophyll is carbon fixing. Carbon fixation by plants is crucial because it converts atmospheric carbon dioxide into organic compounds, forming the base of the food web, providing energy/building blocks for life, regulating Earth’s climate by removing greenhouse gases, and driving the global carbon cycle, making life as we know it possible. Plants use carbon fixation (photosynthesis) to create their own food (sugars), providing energy and organic matter that sustains all other life forms.  By absorbing vast amounts of CO2 (a greenhouse gas) from the atmosphere, plants help control its concentration, mitigating global warming. Chlorophyll drives the Carbon Cycle, it’s the primary natural mechanism for moving inorganic carbon into the biosphere, making it available for all living organisms.

In essence, carbon fixation turns the air we breathe out (carbon dioxide) into the food we eat and the air we breathe in (oxygen), sustaining ecosystems and regulating our planet’s climate.

While land plants store much more total carbon in their biomass, marine plants (like phytoplankton) and algae fix nearly the same amount of carbon annually as all terrestrial plants combined, making the ocean a massive and highly efficient carbon sink, especially coastal ecosystems that sequester carbon far faster than forests. Coastal marine plants (mangroves, salt marshes, seagrasses) are extremely efficient carbon sequesters, absorbing carbon at rates up to 50 times faster than terrestrial forests.

If Chlorophyll decline, which is mainly due to human action driven by uncontrolled greed, is not arrested as soon as possible life on Earth would not be possible.

(Some information was obtained from Wikipedia)

by N. A. de S. Amaratunga ✍️

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