Features
How CSE is designed to fail retail investors
Six Charges, 700% More Expensive:
Imagine walking into two shops selling the same product. In the first shop, you pay a simple 0.6% fee. In the second shop, you’re hit with a bewildering array of charges from multiple entities, and by the time you’re done, you’ve paid 2.27%. And that’s for a complete transaction: buying and selling.
The Shocking Numbers
Sri Lanka loves to say it wants to “develop the capital market.” But the way we charge investors tells the real story – a story of policy confusion, fee-layering, and a system designed to favor big players while suffocating small retail investors.
The evidence isn’t hidden. It’s printed clearly in every contract note that brokers issue.
Think about what this means in real terms. If you’re a teacher, government servant, or small business owner investing Rs. 100,000 in shares, you’ll pay approximately Rs. 2,270 just to complete a buy-sell cycle in Sri Lanka. In New Zealand, that same transaction costs just Rs. 300.
Sri Lanka is nearly four times more expensive than New Zealand – for the exact same act of investing.
Death by a Thousand Cuts
The problem isn’t just the total amount – it’s the sheer complexity. While New Zealand streamlines everything into one clean charge, Sri Lankan investors face a labyrinth:
* Brokerage (negotiable, but only if you’re wealthy)
SEC Fee (Security Exchange Commission)
* CSE Fee (Colombo Stock Exchange)
CDS Fee (Central Depository Systems fees)
* STL (Share Transaction Levy)
Clearing Fee
* Foreign Brokerage for foreign transactions
* Various “special fees” are added periodically
Sri Lanka’s stock trading contract note reads like a mini-budget speech (Figure 1). Meanwhile, most modern markets charge one number. For an ordinary person trying to understand their contract note, it’s nearly impossible to figure out what they’re actually paying and why. Figures 2 and 3 show the stock trading “Sell” contract notes for a New Zealand Stock Exchange transaction and an Australian Stock Exchange transaction, (“Buy” contracts are similar) respectively.

The Rich Get Richer – By Design
Here’s where it gets truly disturbing. While small investors are locked into these punishing charges, the CSE allows brokers to negotiate lower fees for large transactions – typically those exceeding Rs. 100 million.
Let that sink in: If you’re a retail investor putting in your life savings of Rs. 500,000, you pay the full 2.27%. But if you’re moving Rs. 100 million, you get a discount.
This isn’t just unfair – it’s a systematic transfer of wealth from small investors to large players. The very people who need protection are subsidising the fees for those who need it least.
In modern markets like India, New Zealand, Canada, and Japan, all investors pay the same percentage. No negotiation. No special deals behind closed doors.

The Market Manipulation Connection
This two-tier system has darker implications. Large players, already enjoying preferential fee structures, have repeatedly been caught manipulating the market. The Securities and Exchange Commission has filed numerous cases against major investors for price manipulation, insider trading, and other violations.
These large players can:
* Move in and out of stocks quickly due to lower transaction costs
* Manipulate prices knowing small investors can’t react fast enough (their costs are too high)
* Accumulate positions while retail investors are trapped by the fear of paying 2.27% round-trip costs
Sri Lanka’s fee structure encourages large speculative swings, discourages genuine retail participation, creates an uneven playing field, and opens doors for manipulation and cornering of illiquid stocks.
The Ethical Bankruptcy of Regulatory Charges

Let’s call this what it is: regulatory authorities charging fees that actively harm the market they’re supposed to develop are ethically bankrupt. In most countries, regulators protect investors. In Sri Lanka, they bill investors. Every trade finance the regulator (SEC), the exchange operator (CSE), the clearing house (CDS), the broker, and the government (through VAT).
This is ethically questionable because:
Regulators must be neutral – not profit from transactions
Charging retail investors to fund regulation creates a conflict of interest
It reduces trust, especially after repeated market manipulation cases
When regulators impose charges that make it unprofitable for ordinary people to invest, they’re not protecting investors – they’re protecting their own revenue streams at the expense of market development. When exchanges allow discriminatory fee structures, they’re not creating a level playing field – they’re creating a rigged game.
Why Sri Lanka’s Market Cannot Grow
Sri Lanka keeps asking: “Why is liquidity so low? Why don’t more people invest? Why doesn’t the stock market support economic growth?” Based on my research, using AI tools, here’s a comprehensive comparison table of stock market participation across the countries we mentioned:
Sri Lanka stands out negatively. The CSE has 284 listed companies representing 20 business sectors. Despite having a population similar to Australia (22 million vs 26 million), Sri Lanka has an estimated 50-100 times fewer stock market participants.
According to the Central Depository Systems (CDS) Annual Report 2024 for the Colombo Stock Exchange (CSE), the total number of local account holders (traders/CDS holders) was approximately 706,864 in 2024, up from 693,415 in 2023. The number of foreign account holders was 11,082 in 2024 compared to 10,937 in 2023. This places the total number of traders around 718,000+ in 2023-2024.

Critical Implications
Sri Lanka’s stock market participation rate, estimated at a low 3-4%, starkly trails regional peers such as India, where participation hits 6-8%, roughly two to three times higher. This gap highlights a critical structural problem in the Colombo Stock Exchange (CSE) ecosystem, where high fees averaging 2.27% combined with low participation create a vicious cycle that severely impedes market development. The core issues are both systemic and strategic.
The Marketing Failure: A Stock Exchange That Doesn’t Want Customers
Unlike its counterparts globally, the CSE remains more akin to an exclusive club rather than an accessible retail investment platform.
Where India’s National Stock Exchange (NSE) partnered with fintech innovators to create user-friendly investment apps while the CSE’s outreach is limited to sporadic seminars mostly attended by brokers and affluent investors. The CSE doesn’t want millions of small investors; it wants thousands of large ones who won’t complain about the fees.
There are no robust nationwide campaigns demystifying investing, no telecom partnerships to penetrate rural markets, and the mobile apps are not intuitive and fail to simplify account opening processes as expected. The CSE’s web and social media presence remain outdated, and when India onboarded over 40 million retail investors in three years via aggressive digital marketing, Sri Lanka struggled to add even 40,000 investors. This is not accidental, but symptomatic of an institution that profits more from high fees on lower volumes than from a broad base of smaller investors. The system favors wealth extraction from a few large players while discouraging retail participation.
Bureaucratic Ossification: When Vision Dies in Committee Rooms
The CSE suffers from a stifling bureaucratic culture, trapped in colonial-era mindsets with fragmented decision-making authority dispersed over multiple regulatory bodies like the SEC, Central Bank, and ministries. Sri Lanka’s capital market leadership remains focused on maintaining the status quo, prioritizing regulatory compliance over innovation. Without a strategic vision to increase retail participation, possibly aiming for even a modest 10% target, the exchange risks remain a peripheral entity rather than a genuine engine of national wealth.
The disconnect between high market returns (close to 50% in 2024) and low investor participation underscores the urgent need for the CSE to radically change course from a fee-heavy, opaque, bureaucratic institution to a transparent, technology-enabled, investor-friendly market. Unless Sri Lanka’s capital market astrology embraces inclusive, technology-driven, and simplified structures combined with aggressive marketing and retail investor protection, it will continue to underperform relative to regional peers, hampering broader economic growth and wealth creation.
Marketing Malaise: How the CSE Misses the Retail Wave
There are no nationwide campaigns to demystify investing. No partnerships with firms like financial institutions and tertiary education establishments, such as universities, where eligible customers are abundant and to reach rural areas. When India added over 40 million new retail investors in just three years through aggressive digital outreach, Sri Lanka couldn’t add 40,000. This isn’t accidental – it’s the natural result of an institution that makes more money from high fees on low volumes than it would from low fees on high volumes.
Bureaucratic Ossification: When Vision Dies in Committee Rooms
The CSE’s administration suffers from a fatal combination: colonial-era bureaucratic mentality married to a complete absence of strategic vision. While global exchanges have transformed into technology-driven, investor-first platforms, the CSE remains trapped in a time warp protecting its turf and revenue streams. Decision-making moves at the speed of a government file, while markets move at the speed of light.
The result is an exchange governed by administrators rather than visionaries. When Singapore launched a comprehensive digital trading ecosystem, when India implemented T+1 settlement cycles, when New Zealand simplified its entire fee structure to one transparent charge, Sri Lanka’s was busy protecting the status quo. There’s no long-term strategic plan to achieve even 10% retail participation. No vision for how Sri Lanka’s capital market fits into the economy of 2030. The CSE operates like a government department completing its KPIs rather than a dynamic institution building national wealth. The entire ecosystem – from the SEC to CDS to brokers – protects a broken system because they all profit from it.
Whenever the question of low retail participation comes up, officials trot out the same tired excuses: lack of investor awareness,’ ‘risk appetite,’ budgetary constraints for promotions.’ What they never admit is the elephant in the room, Sri Lanka’s fee structure. Charging 2.27% in a fragmented, opaque system while allowing negotiated rates for the wealthy isn’t market design, it’s a wealth extraction scheme dressed in regulatory language (Figure 3).

Add to that a lethargic marketing approach for attracting a wider population. Instead of proactive campaigns, digital engagement, and investor education, the system relies on outdated methods that fail to inspire confidence. The result? A market that moves backward while global peers surge ahead.
Our regulatory authorities have created a system that achieves the exact opposite of what a stock market should do. Instead of encouraging saving and investment, we punish it. Instead of attracting retail participation, we drive small investors away. Instead of ensuring fairness, we let the rich negotiate better terms.
The Bottom Line
The Colombo Stock Exchange and its regulatory framework aren’t just failing small investors – they’re actively working against them. No stock market can flourish when fees punish participation and policy rewards big players while suffocating small ones.
If Sri Lanka wants a real capital market – not just a slogan – it must not only stop taxing retail investors to fund inefficiencies and start building a market that ordinary citizens can finally trust, but also, they should actively promote the retail participation with more promotional activities to reach them by making collaborations with relevant firms such as financial institutions and tertiary educational establishments, especially universities.
Until someone in authority has the courage to blow up this exploitative system and start fresh, ordinary Sri Lankans will continue to be better off keeping their money under the mattress.
(The writer, a senior Chartered Accountant and professional banker, is Professor at SLIIT, Malabe. The views and opinions expressed in this article are personal.)
Features
A World Order in Crisis: War, Power, and Resistance
Article 2(4) of the United Nations Charter prohibits member states from using threats or force against the territorial integrity or political independence of any state. Violating international law, the United States and Israel attacked Iran on February 28, 2026. The ostensible reason for this unprovoked aggression was to prevent Iran from developing a nuclear weapon.
The United States is the first and only country to have used nuclear weapons in war, against Japan in August 1945. Some officials in Israel have threatened to use a “doomsday weapon” against Gaza. On March 14, David Sacks, billionaire venture capitalist and AI and crypto czar in the Trump administration, warned that Israel may resort to nuclear weapons as its war with Iran spirals out of control and the country faces “destruction.”
Although for decades Iran’s Supreme Leader, Ali Khamenei, opposed nuclear weapons on religious grounds, in the face of current existential threats it is likely that Iran will pursue their development. On March 22, the head of the WHO warned of possible nuclear risks after nuclear facilities in both Iran and Israel were attacked. Indeed, will the current war in the Middle East continue for months or years, or end sooner with the possible use of a nuclear weapon by Israel or the United States?
Widening Destruction
Apart from the threat of nuclear conflagration—and what many analysts consider an impending ground invasion by American troops—extensive attacks using bombs, missiles, and drones are continuing apace, causing massive loss of life and destruction of resources and infrastructure. US–Israel airstrikes have killed Ayatollah Ali Khamenei and top Iranian officials. Countless civilians have died, including some 150 girls in a primary school in Minab, in what UNESCO has called a “grave violation of humanitarian law.” Moreover, the targeting of desalination plants by both sides could severely disrupt water supplies across desert regions.
Iran’s retaliatory attacks on United States military bases in Persian Gulf countries have disrupted global air travel. Even more significantly, Iran’s closure of the Strait of Hormuz—the critical maritime energy chokepoint through which 20% of global oil and liquefied natural gas pass daily—has blocked the flow of energy supplies and goods, posing a severe threat to the fossil fuel–driven global economy. A global economic crisis is emerging, with soaring oil prices, power shortages, inflation, loss of livelihoods, and deep uncertainty over food security and survival.
The inconsistent application of international law, along with structural limitations of the United Nations, erodes trust in global governance and the moral authority of Western powers and multilateral institutions. Resolution 2817 (2026), adopted by the UN Security Council on March 12, condemns Iran’s “egregious attacks” against its neighbours without any condemnation of US–Israeli actions—an imbalance that underscores this concern.
The current crisis is exposing fault lines in the neo-colonial political, economic, and moral order that has been in place since the Second World War. Iran’s defiance poses a significant challenge to longstanding patterns of intervention and regime-change agendas pursued by the United States and its allies in the Global South. The difficulty the United States faces in rallying NATO and other allies also reflects a notable geopolitical shift. Meanwhile, the expansion of yuan-based oil trade and alternative financial settlement mechanisms is weakening the petrodollar system and dollar dominance. Opposition within the United States—including from segments of conservatives and Republicans—signals growing skepticism about the ideological and moral basis of a US war against Iran seemingly driven by Israel.
A New World Order?
The unipolar world dominated by the United States—rooted in inequality, coercion, and militarism—is destabilising, fragmenting, and generating widespread chaos and suffering. Challenges to this order, including from Iran, point toward a fragmented multipolar world in which multiple actors possess agency and leverage.
The BRICS bloc—Brazil, Russia, India, China, South Africa, along with Iran, the UAE, and other members—represents efforts to create alternative economic and financial systems, including development banks and reserve currencies that challenge Western financial dominance.
However, is BRICS leading the world toward a much-needed order, based on equity, partnership, and peace? The behaviour of BRICS countries during the current crisis does not indicate strong collective leadership or commitment to such principles. Instead, many appear to be leveraging the situation for national advantage, particularly regarding access to energy supplies.
A clear example of this opportunism is India, the current head of the BRICS bloc. Historically a leader of non-alignment and a supporter of the Palestinian cause, India now presents itself as a neutral party upholding international law and state sovereignty. However, it co-sponsored and supported UN Security Council Resolution 2817 (2026), which condemns only Iran.
India is also part of the USA–Israel–India–UAE strategic nexus involving defence cooperation, technology sharing, and counterterrorism. Additionally, it participates in the Quadrilateral Security Dialogue (QUAD) with the United States, Japan, and Australia, aimed at countering China’s growing influence. In effect, despite its leadership role in BRICS, India is closely aligned with the United States, raising questions about its ability to offer independent leadership in shaping a new world order.
As a group, BRICS does not fundamentally challenge corporate hegemony, the concentration of wealth among a global elite, or entrenched technological and military dominance. While it rejects aspects of Western geopolitical hierarchy, it largely upholds neoliberal economic principles: competition, free trade, privatisation, open markets, export-led growth, globalisation, and rapid technological expansion.
The current Middle East crisis underscores the need to question the assumption that globalisation, market expansion, and technological growth are the foundations of human well-being. The oil and food crises, declining remittances from Asian workers in the Middle East, and reduced tourism due to disruptions in the Strait of Hormuz and regional airspace all highlight the fragility of global interdependence.
These conditions call for consideration of alternative frameworks—bioregionalism, import substitution, local control of resources, food and energy self-sufficiency, and renewable energy—in place of dependence on imported fossil fuels and global supply chains.
Both the Western economic model and its BRICS variant continue to prioritise techno-capitalist expansion and militarism, despite overwhelming evidence linking these systems to environmental destruction and social inequality. While it is difficult for individual countries to challenge this dominant model, history offers lessons in collective resistance.
Collective Resistance
One of the earliest examples of nationalist economic resistance in the post-World War II period was the nationalisation of the Anglo-Iranian Oil Company and the creation of the National Iranian Oil Company in 1951 under Prime Minister Mohammad Mosaddegh. He was overthrown on August 19, 1953, in a coup orchestrated by the US CIA and British intelligence (MI6), and Shah Mohammad Reza Pahlavi was installed to protect Western oil interests.
A milestone for decolonisation occurred in Egypt in 1956, when President Gamal Abdel Nasser nationalised the Suez Canal Company. Despite military intervention by Israel, the United Kingdom, and France, Nasser retained control, emerging as a symbol of Arab and Third World nationalism.
Following political independence, many former colonies sought to avoid entanglement in the Cold War through the Non-Aligned Movement (NAM), officially founded in Belgrade in 1961. Leaders including Josip Broz Tito, Jawaharlal Nehru, Gamal Abdel Nasser, Kwame Nkrumah, Sukarno, and Sirimavo Bandaranaike promoted autonomous development paths aligned with national priorities and cultural traditions.
However, maintaining economic sovereignty proved far more difficult. Patrice Lumumba, the first democratically elected Prime Minister of the Democratic Republic of the Congo, was assassinated in 1961 with the involvement of US and Belgian interests after attempting to assert control over national resources. Kwame Nkrumah was similarly overthrown in a US-backed coup in 1966.
In Tanzania, Julius Nyerere’s Ujamaa (“African socialism”) sought to build community-based development and food security, but faced both internal challenges and external opposition, ultimately limiting its success and discouraging similar efforts elsewhere.
UN declarations from the 1970s reflect Global South resistance to the Bretton Woods system. Notably, the 1974 Declaration on the Establishment of a New International Economic Order (Resolution 3201) called for equitable cooperation between developed and developing countries based on dignity and sovereign equality.
Today, these declarations are more relevant than ever, as Iran and other Global South nations confront overlapping crises of economic instability, neocolonial pressures, and intensifying geopolitical rivalry. Courtesy: Inter Press Service
by Dr. Asoka Bandarage
Features
Neutrality in the context of geopolitical rivalries
The long standing foreign policy of Sri Lanka was Non-Alignment. However, in the context of emerging geopolitical rivalries, there was a need to question the adequacy of Non-Alignment as a policy to meet developing challenges. Neutrality as being a more effective Policy was first presented in an article titled “Independence: its meaning and a direction for the future” (The Island, February 14, 2019). The switch over from Non-Alignment to Neutrality was first adopted by former President Gotabaya Rajapaksa and followed through by successive Governments. However, it was the current Government that did not miss an opportunity to announce that its Foreign Policy was Neutral.
The policy of Neutrality has served the interests of Sri Lanka by the principled stand taken in respect of the requests made by two belligerents associated with the Middle East War. The justification for the position adopted was conveyed by President Anura Kumara Dissanayake to Parliament that Iran had made a formal request on February 26 for three Iranian naval ships to visit Sri Lanka, and on the same evening, the United States also requested permission for two war planes to land at Mattala International Airport. Both requests were denied on grounds of maintaining “our policy of neutrality”.
WHY NEUTRALITY
Excerpts from the article cited above that recommended Neutrality as the best option for Sri Lanka considering the vulnerability to its security presented by its geographic location in the context of emerging rivalries arising from “Pivot to Asia” are presented below:
“Traditional thinking as to how small States could cope with external pressures are supposed to be: (1) Non-alignment with any of the major centers of power; (2) Alignment with one of the major powers thus making a choice and facing the consequences of which power block prevails; (3) Bandwagoning which involves unequal exchange where the small State makes asymmetric concessions to the dominant power and accepts a subordinate role of a vassal State; (4) Hedging, which attempts to secure economic and security benefits of engagement with each power center: (5) Balancing pressures individually, or by forming alliances with other small States; (6) Neutrality”.
Of the six strategies cited above, the only strategy that permits a sovereign independent nation to charter its own destiny is neutrality, as it is with Switzerland and some Nordic countries. The independence to self-determine the destiny of a nation requires security in respect of Inviolability of Territory, Food Security, Energy Security etc. Of these, the most critical of securities is the Inviolability of Territory. Consequently, Neutrality has more relevance to protect Territorial Security because it is based on International Law, as opposed to Non-Alignment which is based on principles applicable to specific countries that pledged to abide by them
“The sources of the international law of neutrality are customary international law and, for certain questions, international treaties, in particular the Paris Declaration of 1856, the 1907 Hague Convention No. V respecting the Rights and Duties of Neutral Powers and Persons in Case of War on Land, the 1907 Hague Convention No. XIII concerning the Rights and Duties of Neutral Powers in Naval War, the four 1949 Geneva Conventions and Additional Protocol I of 1977” (ICRC Publication on Neutrality, 2022).
As part of its Duties a Neutral State “must ensure respect for its neutrality, if necessary, using force to repel any violation of its territory. Violations include failure to respect the prohibitions placed on belligerent parties with regard to certain activities in neutral territory, described above. The fact that a neutral State uses force to repel attempts to violate its neutrality cannot be regarded as a hostile act. If the neutral State defends its neutrality, it must however respect the limits which international law imposes on the use of force. The neutral State must treat the opposing belligerent States impartially. However, impartiality does not mean that a State is bound to treat the belligerents in exactly the same way. It entails a prohibition on discrimination” (Ibid).
“It forbids only differential treatment of the belligerents which in view of the specific problem of armed conflict is not justified. Therefore, a neutral State is not obliged to eliminate differences in commercial relations between itself and each of the parties to the conflict at the time of the outbreak of the armed conflict. It is entitled to continue existing commercial relations. A change in these commercial relationships could, however, constitute taking sides inconsistent with the status of neutrality” (Ibid).
THE POTENTIAL of NEUTRALITY
It is apparent from the foregoing that Neutrality as a Policy is not “Passive” as some misguided claim Neutrality to be. On the other hand, it could be dynamic to the extent a country chooses to be as demonstrated by the actions taken recently to address the challenges presented during the ongoing Middle East War. Furthermore, Neutrality does not prevent Sri Lanka from engaging in Commercial activities with other States to ensuring Food and Energy security.
If such arrangements are undertaken on the basis of unsolicited offers as it was, for instance, with Japan’s Light Rail Project or Sinopec’s 200,000 Barrels a Day Refinery, principles of Neutrality would be violated because it violates the cardinal principle of Neutrality, namely, impartiality. The proposal to set up an Energy Complex in Trincomalee with India and UAE would be no different because it restricts the opportunity to one defined Party, thus defying impartiality. On the other hand, if Sri Lanka defines the scope of the Project and calls for Expressions of Interest and impartially chooses the most favourable with transparency, principles of Neutrality would be intact. More importantly, such conduct would attract the confidence of Investors to engage in ventures impartial in a principled manner. Such an approach would amount to continue the momentum of the professional approach adopted to meet the challenges of the Middle East War.
CONCLUSION
The manner in which Sri Lanka acted, first to deny access to the territory of Sri Lanka followed up by the humanitarian measures adopted to save the survivors of the torpedoed ship, earned honour and respect for the principled approach adopted to protect territorial inviolability based on International provisions of Neutrality.
If Sri Lanka continues with the momentum gained and adopts impartial and principled measures recommended above to develop the country and the wellbeing of its Peoples, based on self-reliance, this Government would be giving Sri Lanka a new direction and a fresh meaning to Neutrality that is not passive but dynamic.
by Neville Ladduwahetty
Features
Lest we forget
The interference into affairs of other nations by the USA’s Central Intelligence Agency (CIA) started in 1953, six years after it was established. The Anglo-Iranian Oil Company supplied Britain with most of its oil during World War I. In fact, Winston Churchill once declared: “Fortune brought us a prize from fairyland beyond our wildest dreams.”
When in 1951 Dr. Mohammad Mosaddegh was reluctantly appointed as Prime Minister by the Shah of Iran, whose role was mostly ceremonial, he convinced Parliament that the oil company should be nationalised.
Mohammed Mosaddegh
Mosaddegh said: “Our long years of negotiations with foreign companies have yielded no result thus far. With the oil revenues we could meet our entire budget and combat poverty, disease and backwardness of our people.”
It was then that British Intelligence requested help from the CIA to bring down the Iranian regime by infiltrating their communist mobs and the army, thus creating disorder. An Iranian oil embargo by the western countries was imposed, making Iranians poorer by the day. Meanwhile, the CIA’s strings were being pulled by Kermit Roosevelt (a grandson of former President Theodore Roosevelt), according to declassified intelligence information.
Although a first coup failed, the second attempt was successful. General Fazlollah Zahedi, an Army officer, took over as Prime Minister. Mosaddegh was tried and imprisoned for three years and kept under house arrest until his death. Playing an important role in the 1953 coup was a Shia cleric named Ayatollah Abol-Ghasem Mostafavi-Kashani. He was previously loyal to Mosaddegh, but later supported the coup. One of his successors was Ayatollah Ruhollah Mostafavi Musavi Khomeini, who engineered the Islamic Revolution in 1979. Meanwhile, in 1954 the Anglo-Iranian Oil Company had been rebranded as British Petroleum (BP).
Map of the Middle East
When the Iran-Iraq war broke out (September 1980 to August 1988), the Persian/Arabian Gulf became a hive of activity for American warships, which were there to ensure security of the Gulf and supertankers passing through it.
The Strait of Hormuz, the only way in and out of the Gulf, is administered by Oman and Iran. While there may have been British and French warships in the region, radio ‘chatter’ heard by aircraft pilots overhead was always from the US ships. In those days, flying in and out of the Gulf was a nerve-wracking experience for airline pilots, as one may suddenly hear a radio call on the common frequency: “Aircraft approaching US warship [name], identify yourself.” One thing in the pilots’ favour was that they didn’t know what ships they were flying over, so they obeyed only the designated air traffic controller. Sometimes though, with unnecessarily distracting American chatter, there was complete chaos, resulting in mistaken identities.
Air Lanka Tri Star
Once, Air Lanka pilots monitored an aircraft approaching Bahrain being given a heading to turn on to by a ship’s radio operator. Promptly the air traffic controller, who was on the same frequency, butted in and said: “Disregard! Ship USS Navy [name], do you realise what you have just done? You have turned him on to another aircraft!” It was obvious that there was a struggle to maintain air traffic control in the Gulf, with operators having to contend with American arrogance.
On the night of May 17, 1987, USS Stark was cruising in Gulf waters when it was attacked by a Dassault Mirage F1 jet fighter/attack aircraft of the Iraqi Air Force. Without identifying itself, the aircraft fired two Exocet missiles, one of which exploded, killing 37 sailors on board the American frigate. Iraq apologised, saying it was a mistake. The USA graciously accepted the apology.
Then on July 3, 1988 the high-tech, billion-dollar guided missile cruiser USS Vincennes, equipped with advanced Aegis weapons systems and commanded by Capt. Will Rogers III, was chasing two small Iranian gun boats back to their own waters when an aircraft was observed on radar approaching the US warship. It was misidentified as a Mirage F1 fighter, so the Americans, in Iranian territorial waters, fired two surface-to-air Missiles (SAMs) at the target, which was summarily destroyed.
The Vincennes had issued numerous warnings to the approaching aircraft on the military distress frequency. But the aircraft never heard them as it was listening out on a different (civil) radio frequency. The airplane broke in three. It was soon discovered, however, that the airplane was in fact an Iran Air Airbus A300 airliner with 290 civilian passengers on board, en route from Bandar Abbas to Dubai. Unfortunately, because it was a clear day, the Iranian-born, US-educated captain of Iran Air Flight 655 had switched off the weather radar. If it was on, perhaps it would have confirmed to the American ship that the ‘incoming’ was in fact a civil aircraft. At the time, Capt. Will Rogers’ surface commander, Capt. McKenna, went on record saying that USS Vincennes was “looking for action”, and that is why they “got into trouble”.
Although USS Vincennes was given a grand homecoming upon returning to the USA, and its Captain Will Rogers III decorated with the Legion of Merrit, in February 1996 the American government agreed to pay Iran US$131.8 million in settlement of a case lodged by the Iranians in the International Court of Justice against the USA for its role in that incident. However, no apology was tendered to the families of the innocent victims.
These two incidents forced Air Lanka pilots, who operated regularly in those perilous skies, to adopt extra precautionary measures. For example, they never switched off the weather radar system, even in clear skies. While there were potentially hostile ships on ground, layers of altitude were blocked off for the exclusive use of US Air Force AWACS (Airborne Warning and Control System) aircraft flying in Bahraini and southern Saudi Arabian airspace. The precautions were even more important because Air Lanka’s westbound, ‘heavy’ Lockheed TriStars were poor climbers above 29,000 ft. When departing Oman or the UAE in high ambient temperatures, it was a struggle to reach cruising level by the time the airplane was overhead Bahrain, as per the requirement.
In the aftermath of the Iran Air 655 incident, Newsweek magazine called it a case of ‘mistaken identity’. Yet, when summing up the tragic incident that occurred on September 1, 1983, when Korean Air Flight KE/KAL 007 was shot down by a Russian fighter jet, close to Sakhalin Island in the Pacific Ocean during a flight from New York to Seoul, the same magazine labelled it ‘murder in the air’.
After the Iranian coup, which was not coincidentally during the time of the ‘Cold War’, the CIA involved itself in the internal affairs of numerous countries and regions around the world: Guatemala (1953-1990s); Costa Rica (1955, 1970-1971); Middle East (1956-1958); Haiti (1959); Western Europe (1950s to 1960s); British Guiana/Guyana (1953-1964); Iraq (1958-1963); Soviet Union, Vietnam, Cambodia (1955-1973); Laos, Thailand, Ecuador (1960-1963); The Congo (1960-1965, 1977-1978); French Algeria (1960s); Brazil (1961-1964); Peru (1965); Dominican Republic (1963-1965); Cuba (1959 to present); Indonesia (1965); Ghana (1966); Uruguay (1969-1972); Chile (1964-1973); Greece (1967-1974); South Africa (1960s to 1980s); Bolivia (1964-1975); Australia (1972-1975); Iraq (1972-1975); Portugal (1974-1976); East Timor (1975-1999); Angola (1975-1980); Jamaica (1976); Honduras (1980s); Nicaragua (1979-1990); Philippines (1970s to 1990s); Seychelles (1979-1981); Diego Garcia (late 1960s to present); South Yemen (1979-1984); South Korea (1980); Chad (1981-1982); Grenada (1979-1983); Suriname (1982-1984); Libya (1981-1989); Fiji (1987); Panama (1989); Afghanistan (1979-1992); El Salvador (1980-1992); Haiti (1987-1994, 2004); Bulgaria (1990-1991); Albania (1991-1992); Somalia (1993); Iraq (1991-2003; 2003 to present), Colombia (1990s to present); Yugoslavia (1995-1995, and to 1999); Ecuador (2000); Afghanistan (2001 to present); Venezuela (2001-2004; and 2025).
If one searches the internet for information on American involvement in foreign countries during the periods listed above, it will be seen how ‘black’ funds were/are used by the CIA to destabilise those governments for the benefit of a few with vested interests, while poor citizens must live in the chaos and uncertainty thus created.
A popular saying goes: “Each man has his price”. Sad, isn’t it? Arguably the world’s only superpower that professes to be a ‘paragon of virtue’ often goes ‘rogue’.
God Bless America – and no one else!
BY GUWAN SEEYA
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