Monday 18th May, 2026

The government has realised the need for a decisive intervention to curtail the burgeoning import bill, which is a drain on the country’s foreign currency reserves. It has imposed a 50% surcharge on custom duty on vehicle imports for three months. Vehicle prices are bound to increase substantially.

Explaining why the government decided to impose a duty surcharge on imported vehicles, Deputy Minister of Finance and Planning Dr. Anil Jayantha Fernando has said import expenditure has increased sharply to USD 2 billion over the past two months. Letters of Credit for vehicle imports are also being opened rapidly, and therefore instead of banning vehicle imports, the government decided to impose a duty surcharge to manage the situation, he has stated, requesting that the importation of vehicles for personal use be postponed by three months.

It became clear a few months ago that the sheer volume of vehicle imports would pressure foreign currency reserves. The government moved to boost its tax revenue by lifting restrictions on vehicle imports in keeping with IMF conditions, but it apparently did not maintain a balance between higher taxes on imported vehicles and foreign currency reserves. Perhaps, having claimed that it strengthened the economy and built foreign currency reserves, the government did not want to restrict vehicle imports.

Oil accounts for about 20% of Sri Lanka’s import bill, and therefore a strategy to curtail the foreign exchange outflow consists in reducing fuel consumption. The West Asia crisis has driven the global oil prices up and left the developing economies struggling. President Anura Kumara Dissanayake has recently lamented that the national fuel bill increased steeply from USD 98 million in February to USD 368 in April, and the projected bill for May is USD 522 million. He has stressed the need to reduce fuel consumption. This situation has come about due to global oil price hikes caused by the Iran conflict rather than an increase in the fuel consumption by the public. However, there has been a massive increase in fuel imports for power generation.

What the President has left unsaid is that fuel imports have increased because oil-fired power plants have to operate to meet a generation shortfall at Norochcholai, caused by low-quality coal imports. Experts have pointed out that about 800,000 litres of diesel have to be burnt daily to compensate for the Norochcholai generation loss. Strangely, no one has been arrested over the fraudulent procurement of substandard coal, which has not only caused huge losses to the state coffers but also adversely impacted the country’s foreign currency reserves.

If the government hesitates to adopt drastic measures to restrict vehicle imports and shore up foreign currency reserves, it might be left without forex for fuel imports, and queues might return in such an eventuality, with newly imported vehicles waiting near filling stations for days on end, as in 2022. It must stop dilly-dallying and pluck up the courage to grasp the nettle. Most of all, it will have to bring the cost of power generation down.

It is high time the JVP-NPP government adopted austerity measures it promised and curtailed state expenditure while reducing the import bill. India has also experienced a decline in foreign currency reserves due to rising global oil prices, central bank interventions to defend the rupee, foreign investor outflows and global uncertainty arising from the West Asia conflict. Although India’s foreign currency reserves have shown some signs of recovery recently, Prime Minister Narendra Modi has called for austerity measures. They include postponing gold imports, curtailing travel, both foreign and domestic, carpooling, reducing the consumption of imported goods and promoting import substitution. PM Modi has requested the centre and the states to reduce ceremonial expenditure, ensure a reduction in fuel use by ministers, shift more meetings online and reduce the size of official motorcades. Sri Lanka should learn from India.

In 2022, Sri Lanka faced a double whammy—a rupee crisis and an unprecedented depletion of foreign currency reserves. It had to opt for a soft sovereign default and seek IMF assistance because the then SLPP government had played politics with the economy and closed the stable door only after the horse had bolted. Those blunders must not be repeated. The restive horse is snorting, stamping the ground and straining against the halter, again. The time for closing the stable door is now. Otherwise, the current leaders, too, will have to bolt with the horse, the way their immediate predecessors did in 2022, with irate protesters in close pursuit.

There is much more to state visits of world leaders than a mere desire to strengthen bilateral relations. US President Donald Trump had several key items on his agenda when he visited China. So did his host, President Xi Jinping. The so-called summit diplomacy for Trump is an opportunity to strike trade deals, and pursue other commercial interests more than anything else. This time around, there was a difference. He sought to promote a peace plan as well.

Trump is keen to secure Beijing’s cooperation to end the Iran conflict, which has taken a turn neither he nor the Pentagon ever expected. Its fallout has dented Trump’s approval rating and adversely impacted the Republicans’ prospect of winning the upcoming midterm elections. Disruptions to global oil and fertiliser supplies due to the closure of the Hormuz Strait and other economic consequences of the war have not spared the US economy; they have caused inflation to rise in the US, and the Republicans fear that they might lose control of the Congress in November’s midterm elections. So, Trump sought China’s help to manoeuvre out of the Iran imbroglio.

The West Asia conflict became a live-fire laboratory for China, and Beijing would have gained from its prolongation if not for the fact the Chinese economy, which has shown signs of slowing down, is reeling from energy shocks. So, an early end to the conflict will serve China’s interests as much as America’s. However, for strategic reasons, China is not likely to go all out to pressure Iran to strike a peace deal with the US at least in the short run.

Few things apparently worry Trump more than the US trade deficit with China. His “tariff war” did not yield the desired results, and a recent court ruling has stood in the way of his power to increase tariffs whimsically. So, he expected to persuade China to buy more goods and services from the US. He announced, in a press interview, that China had agreed to purchase 200 Boeing jets, but the speculation was that the Chinese order would be much bigger. Trump also wanted to defuse trade tensions with Beijing and work towards a tariff deal favourable to the US. It is too early to say whether his efforts will reach fruition. Another item high on his agenda was securing improved market access for US companies, especially tech giants. He was accompanied by more than a dozen top CEOs, including SpaceX and Tesla’s Elon Musk, Apple’s Tim Cook and Goldman Sachs’s David Solomon. On Wednesday, Trump proudly introduced them to President Jinping as “distinguished representatives from the American business community who respect and value China”. The inclusion of those top business executives in Trump’s entourage prompted comedian and talk-show host, Stephen Colbert, to call Trump’s China visit “a fabulous billionaire boys’ trip”.

Having ruined his image internationally by carrying out unprovoked attacks on Iran, Trump needed some diplomatic success to boost his image amidst economic and geopolitical pressures. On the diplomatic front, Trump sought to use his Beijing visit to work towards stability in US-China relations without further escalation over Taiwan or trade.

Foremost on President Jinping’s mind is arresting an economic slowdown, and he obviously expected Trump’s visit to help soften the US position on tariffs and export restrictions hurting China. Jinping also sought expanded US cooperation on trade, AI and energy security. He is also keen to avoid a direct confrontation with the US and desirous of a continued dialogue. He was not so naïve to expect an assurance from Trump that the US would not resort to provocative actions regarding Taiwan. Hence, his warning to Trump on Thursday that mishandling the two nations’ disagreements over Taiwan could endanger China-U.S. relations. He has been quoted as saying, “If [they are] mishandled, the two nations could collide or even come into conflict, pushing the entire China-US relationship into a highly perilous situation.” Whether this warning would make the US mend its ways is a moot point.

Trump’s visit was a huge diplomatic success for Beijing, for it has demonstrated to the world that China is a very influential global actor, especially during international crises. Referring to his meeting with Jinping, Trump said on Wednesday, “There are those who say this may be the biggest summit ever.”

All in all, the Xi-Trump summit ended well. However, the prospects of positive outcomes from the high-level meeting hinges on how the two rival powers navigate contentious geopolitical and economic issues in a crisis-ridden world.

Saturday 16th May, 2026

A group of undergraduates seized what remains of a mansion that belongs to the State, in Malwana, on Thursday. They represent the new Inter University Students Federation (IUSF), created by the JVP-NPP government as a counter to the original IUSF controlled by the breakaway JVP group, the Frontline Socialist Party (FSP). The protesters’ JVP links became clear from the subservient manner in which the police behaved.

It was alleged after the 2015 regime change that the Malwana Mansion belonged to Basil Rajapaksa, but that allegation could not be proved in court. Nobody claimed ownership of the house, which the court subsequently vested in the state.

The pro-government student union is desperate to outshine the original IUSF, and therefore needs media attention. Thursday’s mansion grab can therefore be considered a publicity stunt aimed at having university students believe that the government-controlled IUSF is doing something for them. The JVP may also have sought to use the incident to distract attention from the ongoing controversy over a palatial house built by a minister who claimed, during the 2024 election campaign, that he was struggling to make ends meet.

It will be interesting to see the government’s reaction to the forcible occupation of the Malwana Mansion. The protesters are demanding that the sprawling house, which was damaged by goons during the violent phase of Aragalaya in 2022 be repaired urgently and handed over to a university. Chances are that their demand will be granted so that both the government and its student wing can score political points.

On Friday, the police, who are notorious for resorting to disproportionate force to crush protests, at the drop of a hat, behaved for once. They pretended to resist the protesters’ efforts to enter the property, and what was described as a scuffle by a section of the media looked more like a friendly Kabaddi match. Unsurprisingly, the police gave in, and the students overran the house. They were there at the time of going to press. They don’t have to worry about legal action or a police crackdown, for the government supporters are above the law. They can grab others’ properties, park buses in undesignated areas on expressways and even carry out scams, causing staggering losses to the state, with total impunity.

If the CID cannot so much as trace the owner of a palatial house abandoned after a regime change, how can it be considered equal to the task of finding out the masterminds behind the Easter Sunday terror attacks? Unlike the herb-bearing mountain Hanuman brought here from the Himalayas, according to Ramayana, the Malwana Mansion was built over a period of time, and it is a shame that the police and other investigators have failed to find out its owner.

Thursday’s incident at Malwana reminds us of how a group of JVP cadres, led by a couple of NPP MPs, seized an FSP office at Yakkala last year, with the police looking the other way. The violent mob assaulted the FSP members and produced what they claimed to be the copy of a judicial order that permitted them to occupy the office. The police accepted their claim unquestioningly and went so far as to put up barricades near the disputed office to protect the JVP cadres. A case was filed, and the Gampaha Magistrate’s Court ruled that the FSP could occupy the party office.

President Anura Kumara Dissanayake never misses an opportunity to claim that his government has restored the rule of law, and nobody is above the law. He repeated this claim the other day in Matale. But his party members are free to violate the law in full view of the police. No action has been taken against the JVP cadres and MPs who committed a serious offence by seizing the property of another political party and furnishing a bogus document to mislead the police. So much for the new political culture that the JVP/NPP promised to usher in.