Midweek Review
Inequality is killing the Middle Class
Diary of a CitiBank Trader:
“I would like to have kids one day… and I’ll have to tell them, I made my money betting on the collapse of society, that’s the truth…”
–– Gary Stevenson
Gary Stevenson is a highly successful financial trader formerly employed at Citibank, in London’s historic central business district (CBD), colloquially called “The City”. A talented mathematics student, he earned a full-scholarship to the London School of Economics (LSE) and recalls noticing immediately that there were not many students at LSE with his background: “poor, working class” and even fewer at Citibank, where Stevenson earned an internship by winning a national mathematics contest. The 38-year old carries a strong East London accent that he admits made him stand-out quite a bit. Early on during his time at Citibank, somebody asked him “where’s that accent from, I love it”, he had to tell them that he was from East London, where they were standing, in Canary Wharf.
Speaking on a UK television interview show from February 2025, Stevenson says: “My YouTube channel, we got 1.2 million views yesterday in one day, ONE DAY… there’s a reason why I used to get paid 2 million pound-a-year to do this, because I’m [very] good at this okay, I shouldn’t be on YouTube, I shouldn’t be here, it doesn’t make no sense, I should be working for a hedge fund making 5 million pound-a-year… I’m here talking to you, talking to your audience because I can see… that the middle class, ordinary people, are going to be driven into desperate poverty…”
At Citibank in 2008, Stevenson earned a basic salary of GBP 36,000 but his first full-year bonus was GBP 400,000; he had amassed more money in 18 months than his father had in his entire lifetime. “Listen … these guys that tell you economics on the news, they get paid one hundred, two hundred grand a year, I got paid millions of pounds a year to do it because I’m the best at it and I still beat them, every year…The best economists in the world are all traders… the best-paid ten thousand economists in the world are all traders …”
By some estimates the Bank of England, the UK’s Central Bank, has injected around One Trillion Pounds (over GBP 1,000,000,000,000) into the UK economy since the 2008 financial crisis, during which period, living standards in the UK have been steadily deteriorating as a stagnant middle class struggles amidst a cost of living crisis.
The Uk are not alone, Governments and Central Banks around the world have injected hundreds of billions of dollars into their economies in the past two decades in response to extreme economic and social crises; eg: 2008’s financial crisis and the Covid19 global pandemic. The broad instruments were (1) quantitative easing (QE) – Central Banks purchasing financial assets such as government bonds and (2) direct fiscal ‘stimulus’ payments to business sectors and even individuals, usually funded by the Treasury.
In early 2011, Stevenson got called into a meeting with one of the Citibank’s top economists who went through the financial situations of a lot of the world’s major governments “so Italy, Spain, Portugal, Greece, Ireland but also the UK, US, Japan and what he said was basically, all of these governments are effectively bankrupt, they spend more than their income every year and they’re going further and further into debt… they’re being forced to sell their assets ….”
Where did all that Money go?
In response to the Covid19 pandemic of 2020, the UK Government engaged in QE using a 2009 program called the ‘Asset Purchase Facility’ (APF) and a fiscal stimulus called the Coronavirus Job Retention Scheme (CJRS) popularly known as the Furlough Scheme. The CJRS subsidised employee wages (up to 80% capped at GBP 2,500 per month), totalling GBP 70 bn from March 2020 to September 2021. The APF totalled GBP 450 Bn of UK Govt Bonds (and a small amount of UK Corporate Bonds) from 2020 onwards; the total portfolio peaked at GBP 895 Bn in late 2020 and was around GBP 680 Bn by end 2024.
Stevenson’s analysis suggests that QE has led to funds flowing into financial markets, inflating asset prices, be they stocks, bonds or property, thus disproportionately benefiting the owners of these asset classes – mostly the wealthy and ultra-wealthy.
Having graduated to a permanent position on the Trading Floor of Citibank in 2007, Stevenson’s job was to analyse and trade on interest rates. In the aftermath of the collapse of Lehmann Brothers, the US Federal Reserve slashed interest rates from 5% to 1% by October 2008 and before the end of the year rates were cut to a target range of 0.00% to 0.25%. In the UK, a similarly dramatic collapse of interest rates: 5% in October 2008 down to 2% in December 2008. Stevenson recollects that “suddenly, we’re all betting on when will the economy recover… bringing rates to zero is like an emergency measure… and the economic theory tells you this should cause a massive economic recovery and we obviously know now, it didn’t happen but at the time, every single year, the economists, the traders, the markets said: ‘next year rates will go up, which means next year the economy will recover’, literally every year 2009, 2010, 2011 all the way until 2020 and it wasn’t until Covid when they finally said, ‘okay rates will stay zero forever’ and then of course, rates immediately went to 5% ….”
This sequence of events suggested to Stevenson that, other than the elite Trading Desks of the world’s largest banks and hedge funds, most economists and market participants were not very good at predicting what would happen in their economies. “The way I became a millionaire is, after the financial crisis, I realised that because of a massive growth in inequality, we would basically never come out of that crisis and I started to put massive bets… that the economy would get worse and worse… and within a year of doing that, I became Citibank’s most profitable trader in the world ….”
The ‘Living Standards Outlook’ for 2023 by UK-based think-tank, Resolution Foundation, stated that “Absolute poverty is set to rise in the short-run, from 17.2 per cent in 2021-22 to 18.3 per cent in 2023-24 (or an additional 800,000 people in poverty). Child poverty in 2027-28 is forecast to be the highest since 1998-99, with 170,000 more children in poverty than in 2021-22”. The Joseph Rowntree Foundation states that “More than 1 in 5 people in the UK (21%) were in poverty in 2022/23 – 14.3 million people. Of these, 8.1 million were working-age adults, 4.3 million were children and 1.9 million were pensioners. A 2024 report by the Office for National Statistics (ONS) highlights that Real Household Disposable Income (RHDI) per person had grown at the slowest pace for the poorest 50% of the population and income inequality is widening, those in the lower 20% of the income distribution have seen stagnant or even falling real incomes over the last two decades.
A 2018 Bank Of England report titled, ‘The Distributional Impact of Monetary Policy Easing in the UK 2008 – 2014’, (Bunn et al) states that while in percentage terms, the gains were evenly spread, there were still major distributional issues such as wealthier households gaining more because they held more assets that appreciated due to QE: “the overall effect of monetary policy on standard relative measures of income and wealth inequality has been small.
Given the pre-existing disparities in income and wealth, we estimate that the impact on each household varied substantially across the income and wealth distributions in cash terms ….”
From Progress to Poverty
In 2014, ThinkTank, Centre for American Progress (CAP) released a report titled ‘The Middle-Class Squeeze’ submits that American “middle-class share of national income has fallen, middle-class wages are stagnant, and the middle class in the United States is no longer the world’s wealthiest… The cost of being in the middle class—and of maintaining a middle-class standard of living—is rising fast too ….”
In his 2019 book, ‘Third Pillar’, former Governor of the Reserve Bank of India, Raghuram Rajan discusses the impact of the middle-class squeeze on communities: “The anxieties of the moderately educated middle-aged white male in the United States are mirrored in other rich developed countries in the West… moderately educated workers are rapidly losing, or are at risk of losing, good ‘middle-class’ employment, and this has grievous effects on them, their families, and the communities they live in… as public anxiety turns to anger, radical politicians see more value in attacking imports and immigrants. They propose to protect manufacturing jobs by overturning the liberal rules-based postwar economic order, the system that has facilitated the flow of goods, capital, and people across borders”.
Stevenson notes that “we increased inequality at the fastest rate in the history of this country during a time when the economy was closed. Only luxury and non-essential spending reduced during covid; they gave money to furloughed workers, who… then had to spend most of it immediately to pay bills”. Furlough was not a gift but a replacement of a portion of wages of working people who transferred that to: landlords through rent, shareholders of Banks through mortgage payments and shareholders of energy companies through higher bills. Stevenson says the wealthiest in society earn massive amounts of passive income from the assets they own; monthly incomes so large it is impossible to spend it all on consumer goods so instead it leads them to hoard wealth by buying assets.
This correlates to rising house prices, which Stevenson analyses as occurring in a context where almost all other asset classes have seen broad and significant appreciation over the last 20 years: major stock indexes such as S&P 500, FTSE 100 and FAANG (tech stocks), Real Estate, Bonds (until the 2022 crash), Gold etc. Stevenson’s basic claim is that the ultra-rich are buying up all the assets with the excess liquidity and driving up the prices of those assets. “If you have the wealth of the rich going up 5% and an economy that’s growing at 1 or 2%, there is nothing they can do, they outgrow the economy. The rich are squeezing the middle class out.”
A Betting Man
Sri Lanka’s own growing wealth and income disparities are well-established. A December 2022 report by the Department of Census and Statistics (Dharmadasa et al) notes that “the highest 10 percent of the population shared 32 percent of total income in 2016 while the lowest 10 percent of the population shared 3 percent in the same year”. The World Inequality Lab states that the “top 10% of Sri Lankans… own 64% of all personal wealth; the top 1% have 15% of all income and 31% of all wealth. The bottom 50% of Sri Lankans have just 17% of all income and only 4% of all personal wealth”.
A report by the Centre for Poverty Analysis (CEPA) from January 2021 prior to the economic crisis and the worst impacts of the pandemic, states that, “more than half the total household income of the country is enjoyed by the richest 20%… while the bottom decile (poorest 20%) gets only 5%, with share of household income being just 1.6% for the poorest 10%.”
Dr. Vagisha Gunasekera, an Economist attached to the United Nations Development Program (UNDP), was quoted in a poverty report from 2023: “The top one percent of Sri Lankans own 31 percent of the total personal wealth, while the bottom 50 percent only own less than 4 percent of the overall wealth in the country. This provides us with a snapshot of how unequal our country is”. The UNDP report called Sri Lanka one of the most unequal societies in the South-East Asian region.
Gary Stevenson is part of a group of UK-based high net-worth individuals called Patriotic Millionaires who are campaigning for a minimum 1% wealth tax on wealth over ten million pounds: “if you were worth 12 million pounds you pay 1% on 2 million pounds, which is 20,000 a year”. This would only impact a very small portion of tax payers and would raise between 10 and 20 billion pounds annually; in a context where the new Labour Government under Prime Minister Starmer has announced plans to cut more than five billion pounds from its welfare budget by 2029/30.
Sri Lanka, almost 3 years after a once-in-a-generation economic collapse and an IMF-backed revenue-based fiscal consolidation program, has barely been able to improve its income tax to GDP, depending instead on VAT and other indirect taxes as well as excise duty on alcohol and cigarettes. Corporate Tax to GDP on average was 1.5% for ten years before increasing to 2% in 2024, woefully below what more successful countries in our development peer-group tend to generate. While the government lost some Rs. 950 Bn in tax revenues from corporates in the last 21 months due to incentives, the working people of Sri Lanka continued to carry the burden of government revenue growth through VAT. Health, education systems are crumbling, more than 50% of households receive cash stipends from the government while demand for luxury vehicles remains, with depreciating assets like luxury SUVs priced at the same level as a luxury condominium unit in central Colombo. The prevalence of these dynamics and what it says about the internal economic distribution systems point to unsustainable economic arrangements and asset bubbles amidst rising income and wealth inequalities.
Stevenson notes that “My dad lived in an era of house price two-times income, I live in house-price 20-times income, my kids will live in 40-times income…” The point is simple: inequality is driving a historic concentration of wealth at the top of income and wealth structures. “Nobody likes paying tax, but the fact of the matter is, the wealth of the middle class and the wealth of the government is being drained by this super-rich group, how do we get it back? Rishi Sunak is worth 700 million pounds, that means he has a passive income every year of 30 million pounds… they use their passive income to buy more assets… tax is the only way that you, a regular working person, can protect yourself from the superrich”.
What makes Stevenson a fascinating and effective messenger is that he is still trading, making bets on the economy: “I don’t get paid to have opinions… I was one of the best paid and most successful traders in the world at one of the biggest banks in the world, I place bets and l’ve been betting for 14 years that the working class in my country and the working class in your country will collapse into desperate worsening poverty year after year and, I’m a multi-millionaire from doing that… I don’t just say this, I don’t just come on here and give my opinions, I’m betting on everything I’ve told you today….”
The writer has 15 years of experience in the Financial and Corporate sectors after completing a Degree in Accounting and Finance at the University of Kent (UK). He also holds a Masters in International Relations from the University of Colombo.
He is a media presenter, political commentator and Foreign Affairs analyst, invited regularly on television broadcasts as a resource-person.
He is also a member of the Working Committee of the Samagi Jana Balawegaya (SJB).
By Kusum Wijetilleke
kusumw@gmail.com
Twitter: @kusumw
Midweek Review
July 09: An inexcusable overall security failure and exceptional contingency plan
Ulugetenne
The Sri Lanka Navy, on 04 June, commissioned SLNS Samudravijaya, formerly United States Coast Guard Cutter Decisive. It is the fourth mothballed US Coast Guard cutter transferred to the SLN through the US Excess Defence Articles Programme. President Anura Kumara Dissanayake attended the ceremony at the Colombo Port. The US Embassy in Colombo, in a statement issued on the same day, quoted Defence Attaché Lieutenant Colonel Matthew House as having said: “Few partners have demonstrated the commitment to maintaining and operating these vessels as successfully as the Sri Lanka Navy. The outstanding condition and operational performance of SLNS Samudura, SLNS Gajabahu, and SLNS Vijayabahu are a testament to the professionalism and technical expertise of Sri Lankan sailors. Their stewardship of these vessels helped build the confidence that made this fourth transfer possible.” The first of the four vessels SLNS Samudura was commissioned on 19 February, 2005, during Chandrika Bandaranaike Kumaratunga’s tenure as the President. Milinda Moragoda, Economic Reforms and Science and Technology Minister of the previous UNP-led UNF government, played a significant role in acquiring that vessel. SLNS Samudura boosted SLN and participated in numerous operations, including the high profile hunt for LTTE floating warehouses, during the Eelam War IV. But, the US refrained from transferring any more big ships during the war though on the then Navy Commander Vice Admiral Wsantha Karannagoda’s request to provide intelligence and Washington obliging, made the successful hunt for LTTE floating arsenals in the last stages of the war possible. The transfer of the second vessel took place 19 years after the end of the war. Ex USCG Sherman was commissioned 06 June, 2019, as SLNS Gajabahu (P626). The third vessel was transferred to the Sri Lanka Navy on October 26, 2021, as the country was heading towards an unprecedented economic crisis. That vessel was commissioned as SLNS Vijayabahu at the Colombo Port with the participation of President Ranil Wickramasinghe and US Ambassador to Sri Lanka Julie Chung on November 20, 2022. Ironically SLNS Gajabahu, one of the ex-US vessels prominently figured in the contingency plan to save President Gotabaya Rajapaksa, but whose downfall was engineered by the US.
By Shamindra Ferdinando
The moment President Gotabaya Rajapaksa decided to take up residence at the President’s House (Janadhipathi Mandiraya), Fort, in the first week of April, 2022, the Navy had no option but to prepare a thorough contingency plan, in case the regime change project posed a realistic threat to the life of the President.
The President, in consultation with senior military officers, made his move within 48 hours after violence erupted outside his private residence at Pangiriwatte, Mirihana, on the night of 31 March, 2022. That decision seemed realistic and sensible at that time.
But, in the wake of the disastrous overall armed forces response to the coordinated violence unleashed by the regime change project on 09 May, 2022, in the aftermath of the Temple Trees ordered attack on Galle Face protesters, the top brass must have recognised the urgent need for total overhauling of security strategy. But, unfortunately, that hadn’t been the case. With violent crowds overwhelming the armed forces, deployed to block them, rapidly approaching the President’s House, those who had been at the makeshift Operations Room there were stunned.
In hindsight, the President’s decision to remain at the President’s House, regardless of the near failure on the part of the armed forces to repulse the raid on Temple Trees, on 09 May, seemed unwise. The rescue operation could have gone wrong and the war-winning President Mahinda Rajapaksa could have ended up in the hands of an angry mob.
Perhaps, the conspirators envisaged the President’s move, from Pangiriwatte to the President’s House, situated walking distance away from the Galle Face protest site, where they could draw additional strength.
The failure on the part of the government to take tangible measures, in the wake of the President’s House becoming the sole target on that fateful day, is a contentious issue that needs to be properly investigated. Don’t forget that the court case filed over the 09 May attacks on the residences and properties belonging to SLPP politicians, and some supporters ,was later withdrawn. The Wickremesinghe-Rajapaksa government never investigated the 09 May incidents.
Exactly two months after the mobs almost succeeded in breaking through defences at Temple Trees, on the night of 09 May/10, where Prime Minister Mahinda Rajapaksa was residing, they mounted the assault on the President’s House.
In the wake of the 09 May mayhem, President Gotabaya Rajapaksa named Lt. Gen. Vikum Liyanage as the Commander of the Army. He succeeded General Shavendra Silva who served as the CDS but was out of the country when all-out mayhem was unleashed by the Aragalaya mobs on 09 July, 2022, to oust the sitting government.
In spite of a direct and growing threat to the President’s House, on 09 July, 2022, the President felt confident in meeting the challenge. The President issued a directive to the Secretary, Ministry of Defence, General (retd.) Kamal Gunaratne, to shift the Operations Room from the Defence Force Headquarters, at Akuregoda, to the President’s House. Having shifted the Operations Room on 08 July, 2022, to the President’s House, as directed by the President, the top brass prepared to face the challenge.
Maj. General K.B. Egodawela, who served as an Additional Secretary (Administration) to the President, from the day the President moved to the President’s House, till he vacated on 09 July, 2022, in his memoirs ‘Aragalaya: Adarayen Prachandathwayata’ (From Love to Violence) revealed that though the top brass opposed the shifting of the Operations Room they carried out the directive. While the President felt that the top brass could collectively work at the President’s House to bring the situation under control, Gen Gunaratne proposed that the President should move to Akuregoda Defence Forces Headquarters, according to Egodawela. In fact, Gunaratne, who had been with Gotabaya Rajapaksa from the very beginning of the sinister campaign, strongly opposed the President’s decision to remain there.
Obviously, the President’s House pathetically failed to ascertain the scale of the protest and the rapidity with which protesters overwhelmed troops deployed outside the President’s House stunned the top brass. Had they swiftly reached consensus on Gen. Gunaratne’s suggestion, perhaps the 09 July regime change operation could have been thwarted. The armed forces could have resorted to tougher measures to prevent a march on Akuregoda Defence Forces Headquarters had the President agreed to move there.
Within two hours after the protest, targeting the President’s House began, video footage provided by drones indicated that troops couldn’t hold the rampaging mobs any longer. According to Egodawela, the top brass had been prepared to remove the President, even without his consent, by landing a helicopter in the Colombo harbor or by ship. Finally, they resorted to the second option. As the President and First Lady Ayoma got into a vehicle and took the rear exit into the adjoining former Navy Headquarters, mobs entered the President’s House. Another vehicle carrying several other persons followed.
The then Navy Commander Vice Admiral Nishantha Ulugetenne who had been with the President at the President’s House got into the vehicle carrying the President. Had they stayed at the President’s House for 10 more minutes, the consequences could have been devastating. https://island.lk/gotabayas-escape-from-aragalaya-mob-in-rti-spotlight/
Egodawela, who had been with the President from the very beginning of the presidential term, alleged that the raiders planned to kill the President and several others and display their bodies. The author quoted an unidentified intelligence officer as having told him that the raiders wanted to display the bodies the way LTTE leader Velupillai Prabhakaran’s body was shown.
Perhaps shifting the Operations Room from Akuregoda Defence Force Headquarters to the President’s House had been a risky move that, in a way, facilitated the regime change operation. The rationale in bringing those who had been tasked with countering the impending threat to one place (President’s House) to be with the target (Gotabaya Rajapaksa) seems unbelievably a dicey move. The President had been influenced by what he described as inordinate and unforgivable delay on the part of the Akuregoda Operations Room to carry out timely evacuation of Prime Minister Mahinda Rajapaksa on the night of 09 May from Temple Trees. Most probably, the President wanted to oversee the 09 July counter operation personally. But, in hindsight, the decision to shift the Operations Room from Akuregoda to the President’s House obviously hadn’t been a clever move.
SLN preparations
When mobs threatened to overwhelm the President’s security at Pangiriwattta, on 31 March, additional police and STF contingents were brought in. They were followed by the Navy and Air Force. The Army arrived at the scene, subsequently.
As pointed out by the President himself, the situation at Temple Trees, on 09 May, had been far worse and the combined police and armed forces response revealed that they hadn’t taken precautionary/counter measures, even after the Pangiriwatta fiasco.
At the time of the incidents, the overall Temple Trees security deployment included about 60 elite Special Boat Squadron (SBS) personnel deployed within the premises and were supplemented by seven SLN platoons. The Army also moved in to strengthen Temple Trees defences but the mobs pressed on till troops fired blank ammunition.
The top brass, directing counter measures from Akuregoda Defence Force Headquarters, had to act swiftly and decisively to evacuate those at the Temple Trees or face the consequences. As there hadn’t been any other alternative place of living proposed, Prime Minister Mahinda Rajapaksa, wife Shiranthi and their eldest son Namal were escorted to nearby former Air Force Headquarters and from there flown to the Trincomalee Navy base. VA Ulugetenne, over the phone, issued instructions to the relevant officer in Trincomalee to make arrangements as two helicopters carrying the group took off from the helipad on the top of the former Air Force Headquarters. The helicopters departed around 04 in the morning.
They had stayed at Trincomalee Navy House for about a week and, as requested by the Navy, paid for their stay because by then Mahinda Rajapaksa had resigned. Perhaps, they could have taken refuge at the Panagoda Army cantonment or at Saliyapura, home to the Gajaba Regiment, but, at the end, sought the protection at the Trincomalee Navy base.
Ironically, President Gotabaya Rajapaksa, too, had to take refuge at the Trincomalee Navy base, exactly two months later. Ever since the President moved into the President’s House, Fort, the Navy had been on their toes to meet any eventuality. The daunting task of arranging evacuation by sea fell on the shoulders of VA Ulugetenne, who, meticulously, planned the operation with his staff.
Having informed the President of the contingency plans, VA Ulugetenne stationed two Advanced Offshore Patrol Vessels (AOPVs), namely SLNS Sindurala and SLNS Gajabahu and four Fast Attack Craft (FACs), at the Colombo Port. It would be pertinent to mention that SLNS Sindurala, built at the Goa shipyard, in terms of an agreement signed at the tail end of the Mahinda Rajapaksa government, was adjudged the best vessel in the SLN fleet in 2022.
Additional SBS personnel and snipers, too, had been brought in to Colombo though none of them knew exactly what their task would be. The OPV and FAC crews most probably felt that they were awaiting orders for a major anti-drug operation in the high seas.
As the decision was made to evacuate the President and the First Lady, the Chief alerted the vessels and quickly deployed tugboats to pull SLNS Sindurala and, shortly thereafter, SLNS Gajabahu, formerly of the US Coast Guard, carrying the President and the First Lady. By the time the two AOPVs moved in different directions, on the instructions of VA Ulugetenne, the hand phones of SLNS Gajabahu crew were collected to prevent them from revealing what was happening. Along with the AOPVs, two pairs of FACs had moved out to sea. (https://island.lk/ranil-reveals-bid-to-get-rid-of-him-while-gr-was-fleeing-to-trinco-on-board-slns-gajabahu/)
Nearly 12-hour journey to Trinco
The SLNS Gajabahu, formerly of the US Coast Guard, had a crew consisting of over 100 officers and men. Someone, most probably a port employee, posted a short clip of some unidentified persons taking large travelling bags into the ship but the President, First Lady and VA Ulugetenne going in were never captured on a camera.
As the vessel began its journey towards Trincomalee, it remained approximately 12 nautical miles from land and the President received many calls, some of which weren’t answered. VA Ulugetenne, too, received quite a number of calls. Those familiar with the developments at that time said that some felt that SLNS Gajabahu should move out of Sri Lankan waters. There had been suggestions that the destination should be the Maldives, India or Singapore. Regardless of such suggestions, SLNS Gajabahu proceeded towards Trincomalee where the Navy made necessary arrangements to host them.
Captain Marlon Perera, who still serves the Navy, had been the Commanding Officer of the vessel. Perera now holds the Commodore rank.
During the journey precautions were taken to ensure the safety and security of the President and the First Lady. Although the crew hadn’t been aware that they would be entrusted with such a sensitive task at a time the country was in crossroads against the backdrop of an economic collapse and sovereign default, there were fears of the crew being affected by propaganda in support of regime change operation.
The attempt made by sailor Wijemuni Vijitha Rohana de Silva to cause harm to Indian Prime Minister Rajiv Gandhi, way back in July, 1987, underscored the necessity to take precautions during the Colombo-Trincomalee journey as the possibility of anti-Gotabaya campaign having an impact on at least some members of the ship crew couldn’t be ruled out.
On July 30, 1987, during a guard of honor in Colombo, the 21-year-old naval rating struck Gandhi on the shoulder and back with the butt of his rifle. Gandhi narrowly avoided the full impact of the blow by evasive ducking.
On the invitation of VA Ulugetenne, Gotabaya Rajapaksa attended all the formalities in respect of a visit undertaken by the President to the Trincomalee Navy base. The President participated in those formalities knowing that he couldn’t attend the commissioning parade that was scheduled to be held on 15 July, 2022. The Navy was not in a position to put off the commissioning parade hence the decision to invite Defence Secretary Gunaratne as the Chief Guest.
Ulugetenne retired from active naval service on 18 December, 2022, following a distinguished career, spanning over 37 years. He received the appointment as the 24th Commander of the Navy in July, 2020, just a couple of months after Gotabaya Rajapaksa’s election as the President.
Wickremesinghe, in his capacity as Gotabaya Rajapaksa’s successor, appointed Ulugetenne as Sri Lanka’s Ambassador to Cuba. The appointment was made in late 2023 and the retired Navy Chief presented his credentials to Cuban President Miguel Díaz-Canel on 13 February, 2024 (https://island.lk/from-fonseka-convictions-to-arrest-of-ulugetenne/)
However, within weeks after the last presidential election held in late November, 2024, the NPP government recalled over a dozen top envoys appointed by the previous administration. Admiral Ulugetenne was among them. The government deprived a decorated officer, who had served the country for nearly four decades, from completing his term in Havana. Within months after his return, he became the target of a murder investigation.
Then out of the blue the retired Navy Chief became the focus of a murder investigation, that, too, post-war. The Criminal Investigation Department (CID) arrested him on 28 July, 2025, over the disappearance of a person reported in July, 2020.
Kurunegala High Court Judge Tikiri Jayatilleke, on 14 October, 2025, granted him bail. Jayatilleke declared that the CID acted in an illegal manner in respect of the former Navy Commander. His counsel Kalinga Indatissa, PC, alleged in court that his client had been apprehended only on the basis of an ex-LTTE cadre’s allegation in the absence of any evidence
The next hearing is scheduled for 08 July, 2026. Ulugetenne was held at the Kegalle Prison for four days and then transferred to the Dumbara (Pallekale) Prison. Altogether, he was in prison for 80 days, like a common criminal, despite him being a former Navy Commander with an unblemished career record.
Wartime Chief of Naval Intelligence, Rear Admiral (retd) Sarath Mohotti, who had been also arrested in connection with the same investigation, was also granted bail, a few weeks later.
Midweek Review
India should convene a regional El Niño preparedness dialogue in Delhi
El Niño events have historically been associated with weaker monsoons in South Asia, erratic rainfall patterns, and increased risks of droughts and floods.
The coming months could bring South Asia and the wider Indian Ocean region a dangerous mix of climate shocks, economic strain, and geopolitical instability. At the centre of this looming challenge is the anticipated El Niño event, which is likely to disrupt monsoon patterns, intensify weather extremes, and place additional pressure on already fragile food, water, and energy systems.
But El Niño will not arrive in isolation. It will intersect with continuing global disruptions—from the war in Ukraine to instability in the Middle East—each of which continues to reverberate through energy markets, food supply chains, and shipping routes. The combined effect is likely to be cumulative, not linear.
This is, therefore, a moment that calls for anticipatory regional coordination rather than fragmented national responses.
A record of regional first response
There is already a clear precedent for such coordination in the region.During the COVID-19 pandemic, India emerged as a key first responder, supplying vaccines, medicines, and logistical support across the neighbourhood under its “Neighbourhood First” policy. This helped establish a practical framework for regional cooperation in times of systemic stress.
More recently, India played a similar role during the economic crisis in Sri Lanka, providing critical financial assistance, fuel, and essential supplies at a moment of acute vulnerability. India has also been among the first responders during major climate-related disasters, including cyclone events such as Cyclone Ditwa, delivering rapid humanitarian assistance.
These are not isolated gestures. They reflect an emerging pattern in which India increasingly functions as a stabilising force in the wider region.
This trajectory is reflected in India’s evolving regional frameworks—from Neighbourhood First, to SAGAR (Security and Growth for All in the Region), and now the broader MAHASAGAR vision, which signals an expanded maritime and regional engagement architecture.
Why El Niño is different this time
El Niño events have historically been associated with weaker monsoons in South Asia, erratic rainfall patterns, and increased risks of droughts and floods. In a region where agriculture remains highly climate-sensitive, even modest deviations can translate into inflation, rural distress, and fiscal pressure.
This year, however, the risks are compounded by global fragilities:
* Persistent food and fertilizer price volatility
* Elevated energy costs linked to geopolitical tensions
* Supply chain disruptions in key commodities
* High debt burdens in several neighbouring economies
Together, these factors reduce the resilience of national systems and increase the risk of cascading shocks across borders.It is also important to recognise that social instability in some fragile countries in the region should be kept in mind, as climate shocks and economic pressures can quickly reinforce each other and create wider humanitarian and political consequences.
The case for a Delhi-based regional initiative
Against this backdrop, there is a strong case for India to convene a regional El Niño preparedness dialogue in Delhi, bringing together neighbouring countries, key development partners, and multilateral institutions.
This should not be limited to South Asia alone. The impacts of El Niño extend across the wider Indo-Pacific and Indian Ocean region. Participation could include:
* Neighbouring states in South and Southeast Asia
* The United Nations system
* The World Bank and Asian Development Bank
* Key bilateral partners such as Japan and others active in regional resilience
Given its geographic position, institutional capacity, and experience as a first responder, it is both natural and appropriate for India to chair such an initiative.
What the initiative should focus on
The objective should be practical coordination rather than declaratory statements. Three areas stand out:
1. Shared forecasting and early warning systems
Strengthening real-time exchange of climate data, monsoon projections, and sectoral risk mapping, particularly for agriculture, water, and fisheries.
2. Contingency planning for essential supplies
Coordinating regional approaches to food reserves, fertilizer availability, and energy supply buffers during climatic disruptions.
3. Disaster response and financing coordination
Improving interoperability among disaster management systems, and exploring rapid-response financing through multilateral development banks for climate-related shocks.
From Neighbourhood First to MAHASAGAR
India’s regional doctrine has steadily evolved—from Neighbourhood First to SAGAR, and now MAHASAGAR—reflecting a broader conception of responsibility in the Indian Ocean region.Each stage has expanded the scope of engagement: from immediate neighbourhood assistance, to maritime cooperation and growth, to a wider vision of regional interconnectedness.
A structured El Niño preparedness initiative would be a natural continuation of this trajectory, embedding climate resilience into the region’s evolving strategic architecture.
Climate as regional security
The distinction between climate events and security outcomes is increasingly blurred. A failed monsoon in one country can trigger food inflation in another; a cyclone can disrupt trade routes; droughts can accelerate migration pressures and fiscal instability.
El Niño should therefore be seen not only as a meteorological phenomenon but as a systemic stress test for regional resilience.
India is already widely seen in the region as a first responder in times of crisis. The experiences of COVID-19, the Sri Lankan economic emergency, and climate-related disasters have reinforced this role in practical terms.
The next step is to move from reactive response to anticipatory coordination.
A Delhi-based regional El Niño preparedness meeting—anchored by India and supported by multilateral institutions and key bilateral partners—would be a timely and pragmatic initiative. In an era of compounding global risks, regional cooperation is no longer optional; it is essential.
(Milinda Moragoda is the Founder of the Pathfinder Foundation. Can be contacted via email@milinda.org, courtesy wionews.com.
by Milinda Moragoda
Midweek Review
Beyond Harsha’s IMF “Revelations”
“A demagogue is one who preaches doctrines he knows to be untrue to men he knows to be idiots.” — H.L. Mencken
Summary
During a recent television appearance (https://www.youtube.com/watch?v=s0QWfenCFlk) , opposition MP and Committee on Public Finance (COPF) Chair Dr. Harsha de Silva dramatically brandished the latest IMF Letter of Intent (LoI, 13 May 2026), pointing to the signatures of President Anura Kumara Dissanayake and Central Bank Governor Dr. Nandalal Weerasinghe as proof of a “secret” alignment with austerity and cost-reflective utility pricing. However, for serious students of Sri Lankan macroeconomics, this “revelation” contained no new information. The legal, structural, and institutional mandate for cost-reflective pricing was codified long before the current administration took office—embedded in the IMF Extended Fund Facility (EFF) of 2023, the 2023 IMF Governance Diagnostic, and the Economic Transformation Act of 2024. This article argues that veteran economists in parliament must move beyond theatrical “gotcha” moments designed for political popularity and instead fulfill their true duty: educating the public on the non-negotiable continuity of structural adjustment programmess.
Anatomy of a Non-Revelation
The recent spectacle of Dr. Harsha de Silva presenting the IMF Letter of Intent on live television was framed as a grand exposure of the current administration’s hidden fiscal policy. With theatrical emphasis, Dr. de Silva pointed to the signatures of President Anura Kumara Dissanayake (AKD) and the Central Bank Governor, declaring that the government had bound the public to the bitter pill of cost-reflective electricity and fuel pricing.
Yet, to anyone who understands the mechanics of central banking and sovereign debt restructuring, this performance revealed nothing that was not already part of (i) the public, (ii) legal, and (iii) institutional reality. A Letter of Intent is a standard operational requirement of the IMF review process; it is not a newly minted policy conceived in secret. By treating a routine administrative continuity as a shocking disclosure, Dr. de Silva engaged in political showmanship rather than economic education.
Legacy of Cost-Reflective Pricing
The narrative that cost-reflective utility pricing is a novel concession by the AKD administration is factually incorrect. The institutional architecture to eliminate non-commercial losses within the Ceylon Electricity Board (CEB) and Ceylon Petroleum Corporation (CPC) was firmly established under the previous administration of Ranil Wickremesinghe.
The structural benchmarks were explicitly laid out in (i) the March 2023 IMF EFF Agreement and (ii) re-emphasized in the September 2023 IMF Governance Diagnostic Report. This framework was further consolidated by the legislature through (i) the Economic Transformation Act of 2024 and (ii) the new Sri Lanka Electricity Act. When the current administration assumed office, the fiscal tracks had already been laid. President AKD is merely operating the machinery of state within the legal and economic boundaries inherited from his predecessor Ranil Wickremesinghe to prevent a secondary default.
The Myth of the Solitary Saviour
There is a troubling tendency among Sri Lanka’s technocratic elite to engage in a saviour complex—positioning themselves on television screens as the singular authorities capable of managing public finance or navigating international waters. Dr. de Silva’s presentation was less about unveiling unknown data and more about projecting an image of unrivaled smartness in public finance.
When veteran economists resort to these manoeuvers, they diminish their own professional standing. Sri Lanka’s economic recovery does not hinge on the brilliant insights of a single individual or party; it depends on (i) institutional discipline, (ii) data-driven planning, and (iii) structural continuity. Pretending that routine compliance documents are exclusive intelligence updates serves only to feed personal political popularity at the expense of public intellectual growth.
Real Politics behind the Screen
Why, then, did Dr. de Silva choose to make a mountain out of an administrative molehill? The answer lies in pure political strategy. The National People’s Power (NPP) platform ascended to governance on strong anti-austerity rhetoric, promising relief from the heavy tax and tariff burdens imposed by the previous regime.
By holding up the signed LoI, Dr. de Silva sought a political checkmate. His objective was to expose the contradiction between the NPP’s populist election promises and its executive actions. While highlighting this policy convergence is fair game in partisan politics, framing it as a “new discovery” misleads the electorate into believing that the IMF programme is an optional, arbitrarily signed document rather than a legally binding national framework that leaves any sitting President with zero alternative manoeuvers.
True Mandate of Parliament’s Financial Oversight
During the broadcast, the fundamental boundary of the Committee on Public Finance (COPF) was brought into question. Dr. de Silva correctly noted that COPF does not formulate state policy—that remains the strict prerogative of the Executive and its chosen advisors. COPF’s true mandate is oversight: ensuring transparency, accountability, and the efficient monitoring of state revenues and expenditures.
If the head of our public finance oversight body wishes to protect the national interest, that energy should be (ii) directed toward evaluating the actual performance scorecards of state institutions, (ii) tracking structural benchmarks, and (iii) monitoring the real-time efficiency of economic programs. Using the platform of technical oversight to score quick points on a talk show blurs the vital line between a state auditor and a political campaigner.
Conclusion: The Need for Institutional Candour
Sri Lanka has paid a catastrophic price for populist rhetoric and the manipulation of economic facts for electoral gain. What the public requires from veteran economists and seasoned politicians today is not more political theater but radical candor.
The truth is simple: Sri Lanka is locked into a long-term, institutional structural adjustment programme that transcends whoever sits in the presidential secretariat. President AKD is executing pre-existing state commitments because the alternative is immediate economic isolation. Rather than trying to convince the public that they alone possess the secret key to salvation, opposition technocrats owe it to the nation to elevate the discourse. It is time to replace television showmanship with (i) honest, (ii) evidence-based planning, (iii) acknowledging that while politicians change, the arithmetic of national survival remains exactly the same.
(The writer, among many, served as the Special Advisor to the Office of the President of Namibia from 2006 to 2012 and was a Senior Consultant with the UNDP for 20 years. He was a Senior Economist with the Central Bank of Sri Lanka (1972-1993). He can be reached via asoka.seneviratne@gmail.com)
By Prof. Asoka S. Seneviratne
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