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Independence and its Detractors: The Coming of Age after 77 Years

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by Rajan Philips

Political Coming of Age

Both the observance of Independence Day and its erstwhile detractors would seem to have come of age at last, after 77 years. Tongue in cheek commentators have been harping too much on the irony of a JVP-led government celebrating independence. But the JVP was not the first political organization to question the authenticity of the island’s independence in 1948. That honour goes to the LSSP, rather the BLPI, the LSSP’s more doctrinaire variant at that time and led by a formidable triumvirate of theoreticians – Colvin R de Silva, Leslie Goonewardene and Doric de Souza. They memorably called the 1948 independence “fake independence.” It became a part of the political rhetoric of the Left and the JVP gave it a new life among the younger generations of Sri Lankans.

But over time the ‘fake independence’ characterization faded away and after 1970 when the LSSP was part of the United Front government, Leslie Goonewardene formally acknowledged that the old characterization had not been wholly correct. Sri Lanka, he conceded, was able to exercise complete independence in spite of imperial checks in the areas of defense and external affairs, and constitutional limitations. Sri Lanka was able to do whatever its parliament and government wanted to do – the good, the bad and the ugly – all in equal measures. Finally, in 1972, Sri Lanka was able to discard its dominion status, adopt a whole new autochthonous constitution, and declare itself a republic.

Challenging Times

Now after 77 years of independence and 53 years as a republic, Sri Lanka has come a full circle with a JVP President presiding over independence day celebrations last February 4. The political coming of age, so to speak, after 77 years has come at a challenging time for the country. This year’s ceremonies have been described as modest with more cultural and less militaristic emphases. The once controversial Tamil version of the National Anthem was sung to mark the end of the ceremonies. A week earlier the President had visited Jaffna and by all accounts he endeared himself to the people and was well received by them.

In his Independence Day address, President AKD spoke about the many cleavages that are tearing Sri Lanka: “Not only … the ethnic, religious, and caste divisions, … (but also) the entrenched prejudices that exist between political representatives and the populace, between institutional leaders and their staff, between passengers and public transportation operators, between government employees and the citizens they serve, between educators and students, and so forth.”

Critics will cavil that the JVP itself in its earlier incarnations had contributed to aggravating some of these cleavages. But give the man plenty of credit, we have not had a recent president who could provide such an organic assessment of our sociopolitical problems and sincerely commit himself to addressing them. But the tasks on the President and his government are tall and unrelenting. The still new JVP President and the NPP government have been in office for a little over 77 days – following the November parliamentary election. Yet there are those who seem to insist that the new government should be held responsible for solving all the accumulated problems of 77 years in just 77 days.

For the sake of argument, the NPP itself may have contributed to this notion by its own insistent campaigning that nothing has been done right ever since independence, and that only a new NPP government that will put everything right for Sri Lanka. This premise was incorrect however attractive it may have been for polemical posturing. All that said, there is no question that there are pundits who are holding the current fledgling government to a far more stringent standard of accountability than they have held governments that have come and gone in recent past. With only 77 days on, a balanced accounting of the new government should look at not only what it has done or started doing, but also what it has not been able to do as well as what it has steadfastly refused to do. Let us take the last point first.

This government has distinguished itself from its many predecessors from choosing not to do a number of things. For starters, and this is a unique start for Sri Lankan politics (save for the 1956 SWRD government), there is no family in government. There is no nepotism in government appointments. There is no interference in police matters or in government procurement. There is nothing corrupt about this government, and the main criticism appears to be that the government is not moving fast enough, or it is being selective, or even revengeful, in taking action against past corruption and corrupters.

The Rajapaksa Princely State

Corruption comes in many forms. It is corrupt not only to take bribes but also to insist on entitlements that are inappropriate even if they are interpretively legal. Former presidents are entitled to their pensions and reasonable benefits. Should every one of them be given a rent-free mansion at prime locations in Colombo, with a long retinue of security and staffers, is a legitimate question to ask even if there is self-servingly passed legislation to support such post-presidential prodigality.

Prime Minister Indira Gandhi famously terminated the payment of privy purses to the ruling families of India’s erstwhile princely states and passed a constitutional amendment in 1971 to implement it. The courts approved it with the exception of some individual cases involving those who had held ruling powers before independence in 1947. It would seem that in the reckoning of at least one former president, Mahinda Rajapaksa, the whole island has once been his princely state. Hence, his claim to palatial entitlements in retirement.

President Dissanayake and the government should handle this matter not politically; but let government officials send a formal letter to the former president explaining why it is inappropriate for him to insist on this palatial entitlement but leave the matter of either vacating the property or claiming squatter rights entirely to Mr. Rajapaksa’s discretion. Leave it to him and his family to do the explaining to the people why he thinks he is entitled to this facility whereas every other retiring person has to make ends meet within the pension or EPF. And there is no assurance that people will get their pension or EPF after what he, his brothers and their economic whiz kids had done to the economy.

If at the time of independence, Sri Lanka had the Uncle Nephew Party (UNP), 77 years later there is a Sri Lanka Privy-Purse Party (SLPP). The positive difference is that the UNP was in power in 1948, but in 2025 the SLPP is out of power and the UNP is on life support. If the SLPP thinks it can claw back to power by making a public fight over the retirement mansion of its former president, so be it. And if the SJB thinks its fortunes will swell if it throws its support behind the Rajapaksa mansion-grab, so be it too!

The 1977 Legacies

In looking at what this government has done, has been doing, and has not done or not been able to do what needs to be done, we can invoke the year 1977 as a frame of reference. 1977 is a significant watershed year that marked the displacement of parliamentary democracy with executive presidency, created the so called open economy, and expanded irrigation and agriculture that led to self-sufficiency in rice production but subject to the vagaries of weather.

Year 1977 also saw the start of the riotous deterioration of ethno-communal relations and their rapid descent into open warfare. In foreign policy, the long (1977-1994) UNP government began with a sharp turn to the west, rebuffing India and abandoning non-alignment, but ended with the controversial Indo-Sri Lanka Agreement and the 13th Amendment that came appended to it.

The 1977 watermarks are significant in themselves, but they are doubly significant now because the NPP government has set itself up to be measured by what it may or may not do with the principal legacies of 1977. For instance, the government is committed to restoring parliamentary democracy and reforming the executive presidency. These changes are now expected to be implemented within three years, but there is no indication of how the political relationship between communities will be addressed in a new constitution even though the government should be commended for its sociopolitical approach in envisaging a ‘post-racial’ Sri Lanka. For now, let us give the government kudos for its intentions and time for their implementation.

The government will ultimately succeed or fail by how and what it does about the economy. So far, it has been steady in its start and going by the old wisdom the government must be getting it right inasmuch as it is being criticized by those who fancy themselves to be to the Left of the government and others who know that they are to its Right.

The President has set a target of achieving USD 36 billion from export earnings by 2030. While there is no way out of settling our foreign debt without export expansion, the government should be mindful that the USD 36 billion target needs to be supported by a detailed and feasible plan based on an identified export product mix and importing countries. Otherwise, it will turn out to be another tall talk like what Ranil Wickremesinghe did – promising one million jobs but doing nothing to create even one thousand identifiable jobs.

Within the economy, the rice situation has already become the pinch point. If it is not rice, it is coconuts, and even if they are imported they cannot be distributed immediately, because someone is not making customs official happy enough to do the work that they are paid for. The government seems duly concerned about these problems, but it is still trying to find a way out of the cycles of surpluses and shortages, let alone resolving them.

Notably, the government and especially President AKD are now realizing the huge data gap in the supply and distribution of rice, that some of us have been harping on recently. That is a good start, but there is not too much time for the government to assemble data and make decisions. The PMB, as some of us have argued could and should be used as a regulatory and data mining agency guiding the market rather than as a direct market actor competing with private rice millers. The PMB cannot be a regulator and competitor at the same time.

In foreign policy, the government would do well to use to its advantage the chaos that the new Trump administration is unleashing on the world, by staying below the radar and dealing with reliable partner countries to steer Sri Lanka’s foreign exchange economy to stability and reasonable success. The President has proved himself to be ambidextrous between India and China, and the challenge for the government is to leverage the competing geopolitical interests of the two Asian giants to advance Sri Lanka’s economic interests without being submerged by them.

One obvious challenge facing President AKD is about making clear that the NPP is a lot more than its executive president. People are yet to see the full cabinet in full flow. President AKD is easily one of the better, if not the best, executive presidents the country has had as measured by the attributes of comportment, collegiality, and being consultative. But even he needs to possess and project a team of equals who are similarly capable. One can only wish that the restoration of cabinet government will be achieved and matched by other positive advancements as the government completes one year in office before the 78th independence anniversary.



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The Paradox of Coercion: US strategy and the global re-emergence of Iran

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Iranians vowing resistance at a mass funeral of the victims of US-Israeli airstrikes

(A sequel to the two-part article, War with Iran and unravelling of the global order, published in The Island on April 8 and 9.)

The unfolding developments in the US-Israeli coordinated military attack against Iran reveal a striking paradox at contemporary geopolitics: efforts to weaken a state through coercion may, under certain conditions, contribute to its structural elevation within the international system. What appears as short-term tactical success can generate long-term strategic consequences that are neither anticipated nor easily reversible. In this context, the policies associated with Donald Trump and Benjamin Netanyahu, marked by unilateralism and the willingness to use force, risk producing precisely such an unintended outcome. Rather than marginalising Iran, their actions may be accelerating its re-emergence, not merely as a regional actor in the Middle East, but as a consequential player in the global geopolitics and the wider architecture of international supply chains of energy economy.

Iran not merely a state

Iran is not merely a state, but a civilisation with a distinctive political trajectory. At the heart of the present transformation lies its asymmetric strategy, rooted in the strategic exploitation of geography. Few states possess the capacity to shape the global system through geography alone. Iran’s proximity to the Strait of Hormuz, a narrow maritime passage through which a substantial share of the world’s oil and liquefied natural gas flows, endows it with a latent structural power that transcends conventional measures of national capability.

In periods of stability, this position translates into economic opportunity; in moments of crisis, it becomes a lever of systemic disruption. Recent tensions have demonstrated that even limited instability in this corridor can reverberate across global markets, triggering sharp increases in energy prices, disrupting supply chains, and amplifying inflationary pressures worldwide. Should Iran consolidate its capacity to influence or control this chokepoint, whether through military deterrence, asymmetric instruments, or diplomatic maneuvering, it would shift from being a participant in global energy markets to a pivotal arbiter of their functioning.

Energy-embedded global economy

The contemporary global economy is not merely energy-dependent; it is deeply energy-embedded. Hydrocarbons underpin not only transportation and electricity generation but also the production of petrochemicals, fertilisers, and a wide range of industrial inputs essential to modern manufacturing and food systems. Disruptions linked to Iran have already illustrated how shocks in the energy sector cascade through interconnected supply chains, affecting everything from agricultural output to high-technology industries. In this sense, Iran’s leverage is no longer confined to the traditional realm of resource geopolitics. It increasingly operates within a networked global system in which control over a single critical node can generate disproportionate influence across multiple sectors. This form of power, diffuse, indirect, and systemic, marks a departure from the more linear dynamics of twentieth-century oil politics.

The implications of such a shift are profound for the structure of the international order. For decades, the global system has been underpinned by a set of institutions, norms, and economic arrangements often described as the so-called liberal international order. Sanctions, financial controls, and diplomatic isolation have been key instruments through which dominant powers have sought to discipline states that challenge this order. However, Iran’s prolonged exposure to sanctions has compelled it to develop adaptive strategies: alternative trade networks, informal financial channels, and closer ties with non-Western partners. A crisis-induced re-entry into global markets would therefore not signify reintegration into the existing order, but rather the expansion of parallel systems that operate alongside, and sometimes in opposition to, it. In this context, Iran’s rise would contribute to the gradual fragmentation of the global economy, accelerating trends toward decoupling, regionalization, and the erosion of established institutional authority.

Decline of global order based on US hegemony

This process of fragmentation is closely linked to declining global order based on U.S. hegemony. A more globally consequential Iran would inevitably become a focal point in the strategic player in emerging multipolar world. For China, whose economic growth remains heavily dependent on secure energy supplies, deeper engagement with Iran would serve both economic and geopolitical objectives, reinforcing its presence in the broader Middle East and insulating it from vulnerabilities associated with maritime chokepoints. Russia, already positioned as a major energy exporter and a challenger to Western dominance, may find in Iran a complementary partner in reshaping global energy markets and contesting sanctions regimes. Meanwhile, countries across the Global South, including major importers such as India, would face a more complex strategic environment, characterized by heightened exposure to supply disruptions and increased pressure to navigate between competing power centers. In this emerging landscape, Iran would function less as an isolated actor and more as a pivotal node within a reconfigured network of global alignments.

Dynamics enhancing Iran’s strategic importance

Paradoxically, the very dynamics that enhance Iran’s strategic importance may also accelerate efforts to reduce dependence on the conditions that enable its influence. Recurrent energy shocks tend to catalyze policy responses aimed at diversification and resilience. States are likely to expand strategic reserves, invest in alternative supply routes, and accelerate transitions toward renewable energy and nuclear power. Over the longer term, such measures could diminish the centrality of fossil fuel chokepoints, thereby constraining Iran’s leverage. However, this transition will be uneven and contested. Advanced economies may possess the resources to adapt more rapidly, while developing countries remain structurally dependent on affordable hydrocarbons. In the interim, the global system may experience a prolonged period in which dependence on Iranian-linked energy flows coexists with attempts to transcend it—a duality that adds further complexity to the evolving geopolitical landscape.

Beyond material considerations, Iran’s potential re-emergence also signals a deeper transformation of the existing global order. Traditional metrics—military strength, economic size, technological capacity—remain somewhat important, but they are increasingly complemented by the ability to influence critical nodes within global networks. The capacity to disrupt, delay, or redirect flows of energy, goods, and capital can generate strategic effects that rival, or even surpass, those achieved through direct military confrontation. In this sense, Iran exemplifies a broader shift from territorial geopolitics to what might be termed network geopolitics. Control over chokepoints, supply chains, and infrastructural linkages become a central determinant of influence, enabling states with relatively limited ‘conventional’ capabilities to exert outsized impact on the international system.

Iran’s trajectory may be understood as a transition through several distinct phases: from a regional challenger seeking to assert influence within the Middle East, to a strategic disruptor capable of unsettling global markets, and ultimately to a systemic actor whose decisions carry worldwide consequences. This evolution is neither inevitable nor linear; it depends on a complex interplay of domestic resilience, external pressures, and the responses of other global actors. Nevertheless, the possibility itself underscores the unintended consequences of policies that prioritize short-term coercion over long-term strategic foresight.

Transition shaped by paradoxes

In historical perspective, moments of systemic transition are often shaped by such paradoxes. Actions taken to preserve an existing order can, under certain conditions, accelerate its transformation. The current crisis involving Iran may represent one such moment. By elevating the strategic significance of energy chokepoints, exposing the vulnerabilities of interconnected supply chains, and encouraging the development of alternative economic networks, it contributes to a broader reconfiguration of global power. In this emerging context, Iran’s re-emergence as a global actor would not simply reflect its own capabilities or ambitions; it would also embody the structural shifts reshaping the international system itself. What began as an effort to constrain Iran may ultimately facilitate its transformation into a decisive player in the global energy economy and supply chain architecture. The implications of this shift extend far beyond the Middle East, touching upon the stability of markets, the cohesion of international institutions, and the evolving nature of power in the twenty-first century.

The war with Iran is best understood not as a discrete regional conflict, but as a structural moment in the transformation of the international system. It reveals a growing disjuncture between the continued reliance on coercive statecraft and the realities of an interdependent global order in which power increasingly derives from control over critical economic and infrastructural nodes. Rather than achieving strategic containment, the conflict has underscored the capacity of a relatively constrained actor to generate systemic effects through geoeconomic leverage. In doing so, it highlights a broader shift from military-centric conceptions of power toward forms of influence embedded in networks of energy, trade, and supply chains.

This is not merely a redistribution of power, but a redefinition of how power operates. At the systemic level, the war accelerates the erosion of the post-Cold War order, reinforcing tendencies toward fragmentation, parallel economic arrangements, and multipolar competition. Iran’s potential re-emergence as a global actor should therefore be seen less as an isolated outcome than as a manifestation of these deeper structural changes. In this sense, the strategic significance of the war lies in its unintended consequences: it exposes the limits of coercive hegemony while simultaneously amplifying the importance of those actors positioned to exploit the vulnerabilities of an interconnected world.

by Gamini Keerawella ✍️

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The dawn of smart help for little ones

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How Artificial Intelligence is breaking barriers in Autism Diagnosis and Care

For any parent, the early years are a most valuable countdown of “firsts” of his or her precious child: the first step, the first clear word, the first beautiful smile, and quite a few other firsts as well. Yet for all that, for some families, that joy is overshadowed by a growing, quiet, but disturbing intuition that something is even a little bit different. Perhaps a child is not responding to his or her name, or the little one seems to be more interested in the spinning wheels of a toy than a game of peek-a-boo, or even avoids normal social responses.

In many countries, especially in the developing world, the road from that first “gut feeling” that there is something wrong, to a formal diagnosis of Autism Spectrum Disorder (ASD) is often a long and exhausting journey. While doctors can often identify autism in children as young as 12 to 18 months, the average age of diagnosis in our communities still hovers around four years. In these critical years, when a child’s brain is most like a machine ready to learn and adapt, time is of the essence and is the most valuable resource a family has.

Today, a new “algorithmic dawn” is offering a shortcut to really cut that delay. Artificial Intelligence (AI), the very same smart technology that helps us navigate traffic, suggest a new song, or help people with ChatGPT, is moving out of the lab and into the children’s nursery. By acting as a digital “magnifying glass”, specifically designed AI tools can now spot subtle patterns in a child’s gaze, some little quirks in the rhythm of their babbling, or the way they move, often much faster than the human eye can. Then the machine can issue a warning signal and indicate that further action and a proper evaluation are necessary. This is most certainly not about replacing the brain, the heart and the expertise of a paediatrician; it is about providing “Smart Help” that can be accessed from a smartphone in a family living room. For millions of “little ones on the spectrum”, most notably in the developing world, this technology is turning a journey once defined by waiting, uncertainty and even tears, into one of proactive care and even brighter horizons. The time gained is most certainly a very valuable window of opportunity.

What is the “Spectrum,” and Why Does Time Matter?

Autism is described as a “spectrum” because it affects many children somewhat differently and to varying degrees. Some children may have advanced technical skills but struggle to hold a conversation; others may be non-verbal or have intense sensory sensitivities. It can be very mild or very severe, and perhaps everywhere in between as well.

The common thread is that the brain develops differently in these affected children. This is why Early Intervention is the gold-standard goal. During the toddler years, a child’s brain is incredibly “plastic”, meaning that it is a highly adaptable and ready to learn type of organ. Starting therapy and management strategies during this valuable period of opportunity can fundamentally change a child’s future life path.

The problem, to a certain extent, is that traditional diagnosis of ASD is a slow, manual process. It requires intensively trained experts to watch a child play for hours and fill out complex checklists. In many countries, including Sri Lanka, where there is a massive shortage of these highly qualified specialists, the waiting list for a consultation alone can take months or even years. These doyens are rather thin on the ground and even when available, are heavily overworked.

Enter the AI Revolution: Seeing the Unseen

AI certainly does NOT replace doctors, but it acts like a high-powered magnifying glass. By using “Machine Learning”, computers can analyse massive amounts of data to find tiny patterns that the human eye might miss. Here is how it is changing the game:

1. Tracking Gaze and Smiles

One of the earliest signs of autism is how a child looks at the world. AI “Computer Vision” can analyse a simple video of a child playing. It can track exactly where the child is looking. Does the child look at a person’s eyes when they speak, or are they drawn to the spinning wheels of a toy in the corner? AI can quantify these “social attention” patterns in seconds and add them to a cache of things that ring warning bells.

2. The Sound of a Voice

Did you know that the “music” of a child’s speech can hold clues? AI can listen to the pitch and rhythm (called prosody) of a child’s voice. Children on the spectrum sometimes have a “flat” or monotonic way of speaking. AI algorithms can measure these vocal biomarkers with incredible precision, helping to flag concerns long before a child is old enough for a full conversation.

3. Movement and Play

Repetitive behaviour, like hand-flapping or rocking, are core traits of ASD. Sensors in smartphones or simple video analysis can now categorise these movements objectively. Instead of a parent trying to describe how often a behaviour happens, the application or ‘app’ provides a clear, data-driven report for the doctor.

Innovation at Home: India’s Digital Solutions

The most exciting part of this technology is that it does not require a million-dollar lab. In India, where smartphone use is booming, several “homegrown” apps are bringing specialist-level screening to rural and urban homes alike.

Apps like CogniAble, which give parents a step-by-step intervention plan based on the child’s specific needs, or START, a tablet-based tool used by local health workers in areas like Delhi slums to spot risks via simple games, or LEEZA.APP, which offers free AI screening to remove the “money barrier” that keeps many families from seeking help, or AutismBASICS, which provides thousands of activities and a milestone tracker to help parents manage daily therapy at home, are just a few of the programs in use at present. These tools are “democratising” healthcare. A mother in a remote village with a basic smartphone can now access the same level of screening logic that was once only available in a major city hospital.

Beyond the Diagnosis: A Robot Tutor?

The role of AI does not stop once a diagnosis is made. It is also becoming a tireless “co-therapist.”

For many children with autism, the human world can be unpredictable and overwhelming. AI-powered “Social Robots” or interactive apps provide a safe, predictable environment. These “Robo-Therapists” do not get tired, they do not get frustrated, and they can repeat a social lesson even 100 times until the child feels comfortable.

Furthermore, for children who are nonverbal, AI-powered communication apps serve as a “voice”. These apps use smart technology to predict what a child wants to say, allowing and facilitating them to express their needs and feelings to their parents, even for the very first time.

The Human Element: Proceed with Care

As bright as this dawn is, experts warn that we must move forward carefully and most intelligently.

= Privacy: Because these apps collect sensitive videos and data about children, keeping that information secure is a top priority.

= Cultural Differences: An AI trained on children in the US or Europe might not perfectly understand a child in Sri Lanka. We need “diverse local data” to ensure the algorithms understand our local languages, gestures, and social norms. Many of these programs need to be home-grown or baked at home in Sri Lanka.

= The Human Touch: Most importantly, we need to always remember that AI is a tool, not a replacement. A computer can spot a pattern, but it cannot give a hug, provide emotional support to a struggling parent, or celebrate a breakthrough with the same joy as a human therapist.

A Brighter Future

We are moving toward a world where “waiting and seeing” is no longer, and quite definitely, not the only option for parents. By combining the heart of a parent and the expertise of a doctor with the speed of an algorithm, we can ensure that no child is left behind because of where they live or how much money they have.

The “Algorithmic Dawn” is not just about code and data. It is about giving every child the best possible start in life. It is the main principle on which Hippocrates, the Father of Medicine, all those centuries ago, based all his postulations on how physicians should work.

 The “Red Flag” Checklist: 18 to 24 Months

The American Academy of Pediatrics recommends screening all children at 18 and 24 months. If you notice several of these signs, it is time to use an AI screening app or consult your paediatrician.

Communication and Social Cues

= The Name Test: Does your child consistently fail to turn around or look at you when you call his or her name?

= The Pointing Test: By 18 months, most toddlers point at things they want (like a biscuit) or things they find interesting (like a dog). Is your child using your hand as a “tool” to get things instead of pointing?

= The Eye Contact Test: Does your child avoid looking at your face during social interactions or during play or when being fed?

= The Shared Smile: Does your child rarely smile back when you smile at him or her?

Behaviour and Play

= The Toy Test: Does your child play with toys in “unusual” ways? (e.g., instead of rolling a car, they spend 20 minutes just spinning one wheel or lining them up in a perfect, rigid line).

= The Routine Rule: Do they have an extreme “meltdown” over tiny changes, like taking a different route to the park or using a different coloured cup?

= Repetitive Motions: Do you notice frequent hand-flapping, rocking, or spinning in circles, especially when they are excited or upset?

The “Golden Rule” of Regression

Finally, an extremely important rule for concerned parents to follow.

If your little one had words (like “Mama” or “Dada” or “Amma” or “Thaththa” or Thaii/Amma or Appa) or social skills (like waving “Bye-Bye”) and a beautiful social smile etc, and then SUDDENLY STOPS USING THEM, that could be a most significant red flag. In such situations, the standard advice would be: Please consult a doctor immediately.

by Dr B. J. C. Perera

MBBS(Cey), DCH(Cey), DCH(Eng), MD(Paediatrics),
MRCP(UK), FRCP(Edin), FRCP(Lond), FRCPCH(UK),
FSLCPaed, FCCP, Hony. FRCPCH(UK), Hony. FCGP(SL)
Specialist Consultant Paediatrician and Honorary Senior Fellow,
Postgraduate Institute of Medicine, University of Colombo, Sri Lanka.

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Governance, growth and our regional moment:Why Sri Lanka must choose wisely

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The recent disclosure of a substantial internal fraud at National Development Bank has understandably unsettled the financial community. What began as a relatively contained incident has since been revised upwards, revealing a scheme that operated over an extended period within a specific operational area. To their credit, both the bank and the Central Bank of Sri Lanka responded with speed. Staff were suspended, arrests followed, an independent forensic review was commissioned, and clear assurances were given that customer funds remained secure. The institution’s capital and liquidity positions continue to meet regulatory requirements, and day to day operations have not been disrupted.

Yet it would be a mistake to view this as an isolated operational error at a single respected institution. When a fraud of this magnitude, equivalent to more than a year’s profit for the bank, emerges within one of our most established listed companies, the implications extend well beyond the banking sector. It prompts a necessary and uncomfortable question. Are we truly strengthening the foundations of our economy so that every part of our society can operate with the integrity and confidence that sustainable progress demands?

Banking sits at the heart of any modern economy. It channels savings into investment, supports enterprise, and underpins household security. When even a leading institution reveals weaknesses in internal controls, risk oversight or governance culture, the signal to international observers is difficult to ignore. It suggests that the financial system upon which growth depends may not yet possess the resilience we aspire to project. If institutions that have undergone significant reform since 2022 can still experience such failures, what assurance can investors reasonably expect in other sectors of our economy? At a time when Sri Lanka needs to demonstrate strength and reliability, perceptions of fragility carry a heavy cost.

This matters profoundly because a genuine window of opportunity is now opening. Geopolitical shifts in the Middle East and beyond are prompting global investors and entrepreneurs to seek stable, well governed destinations for capital and talent. Sri Lanka possesses distinct advantages. Our geographical position offers natural connectivity. We have invested in critical infrastructure, including two major ports, international airports and strategic energy reserves. In an era where businesses prioritise rule of law, institutional predictability and sound fundamentals, our potential alignment with these criteria is significant. However, high profile governance failures at this precise moment risk undermining that narrative before it can gain meaningful traction.

The stakes are equally significant for initiatives such as the Port City Colombo. With substantial projects now approved, foreign investment commitments secured and early construction underway, this endeavour is moving from concept to delivery. Yet persistent concerns about governance standards in our established companies can act as a drag on investor sentiment. The confidence required to attract high value international tenants and long- term capital depends not only on physical infrastructure but on the perceived strength of our institutions and the consistency of our regulatory environment.

For decades, Sri Lanka has experienced growth averaging around four to five per cent per year. While this is not insignificant, it falls short of our potential, particularly when measured against the progress of our regional neighbours. India, for example, has sustained growth at roughly twice our rate for more than twenty years, driven by consistent policy execution and strengthening institutional credibility. Our own trajectory has been held back not by a lack of ideas or ambition, but by recurring shortcomings in how our major institutions are governed and held to account. The result is a cycle of unrealised potential, where promising openings are not fully converted into lasting advancement.

The current situation, though challenging, can serve as a catalyst for meaningful change. Boards of listed companies must move beyond procedural compliance to foster a genuine culture of ethical leadership, proactive risk management and zero tolerance for control failures. Regulators have an opportunity to undertake a comprehensive review of fraud prevention frameworks, whistle-blower protections and monitoring standards across the financial sector, with lessons applied to other key industries. Greater transparency in reporting material incidents and more timely forensic follow through will help rebuild trust with both domestic and international stakeholders.

Crucially, the government must tread carefully as it responds. Short term fixes or reactive measures may address immediate concerns but will not deliver the enduring stability that investors seek. What is required is a coherent long-term strategy that balances the imperative for rapid economic development with the equally vital need to conserve our natural environment and strengthen regional cooperation. Our neighbours in South Asia and Southeast Asia offer not only markets for trade and investment but also partners in shared challenges such as climate resilience, sustainable infrastructure and digital connectivity. By deepening these relationships through practical collaboration, Sri Lanka can position itself as a reliable and forward-looking partner in a dynamic region.

Sri Lanka stands at a pivotal moment. Global realignments are creating rare opportunities for capital inflows, technology transfer and new economic partnerships. Yet these opportunities will flow most readily to nations that demonstrate they can protect investor interests, uphold the rule of law and operate with predictability and transparency. If we allow governance weaknesses in our flagship institutions to persist, we risk once again watching potential pass us by.

This is a defining moment, and our response must be equally purposeful. We can treat the recent events as an unfortunate but isolated incident and return to established patterns. Or we can seize this moment as a timely reminder to strengthen every pillar of our economy, with particular attention to environmental stewardship and regional collaboration. Only by getting our house in order, with patience, consistency and a clear-eyed commitment to long term goals, can we convert today’s challenges into tomorrow’s competitive advantage. The path to sustained prosperity demands nothing less.

by Professor Chanaka Jayawardhena
Professor of Marketing
University of Surrey
Chanaka.j@gmail.com

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