Midweek Review

Micro Credit (Finance) – Facts and fallacies

Published

5 years ago

2020/09/2

By Chandrasena Maliyadde

Perhaps, microcredit to some and microfinance to others is the term used, misused and abused in many recent discourses on economic recovery, after the COVID 19 pandemic. Policymakers, practitioners, economists, researchers, analysts, think tanks, banks, financial institutions, journalists, chambers, and INGOs are among the discussants. They explain and argue the importance of micro credit in alleviating poverty, uplifting Micro, Small and Medium Enterprises (MSMEs), and empowering women (as if they were not already) for the purpose of enhancing the contribution, employment and social welfare status of the low-income category of the population. MSMEs, indeed play a major role in most economies, both developed and developing, in creating jobs and reducing unemployment. Thus, they contribute to national income, employment, productivity and entrepreneur development.

The agencies and individuals involved in promoting, facilitating and providing “microcredit”, turn around the term in many dimensions to see the vistas of it. Some say it is not microcredit but micro- finance; some are worried about its nature; others discuss types, composition, with or without collateral, which should or can best deliver, the role of the government, the Central Bank, banks and financial institutions, and NGOs, for what purpose, at which interest rate and so on. According to them, the MSMEs and lower-income categories are badly in need of financial assistance and to be more specific, extended credit facilities on concessionary terms.

Several discussants beat the number of potential beneficiaries! The banks and financial institutions have, on the other hand, come out with a series of concessionary credit schemes under names never heard. They claim to be the first, to be the highest, to be providing the best terms, to be the most convenient, to be the easiest access, and to be leading in assisting MSMEs and low-income category. The credit they claim for their contribution in providing financial assistance to this category is much higher than the volume of credit they provided. If one analyses the schemes and statistics provided by banks and financial institutions and the figures published by the Central Bank (CBSL), no more financial need of this category is left unmet. Banks, Financial institutions, CBSL, policymakers and the Government happily talks of their achievements and success in providing credit facilities to low-income categories. But, the intended beneficiaries are not happy. Why?

The answer lies in the following section of an advertisement published by one of the benevolent banks in a daily paper. This depicts how a Micro Finance recipient begins and ends his/her entrepreneurship.

“Whereas Mr./Ms.……………………has made default in payment due ………………………………on the development loan facility extended and the Board of Directors of……………….Bank ………., do hereby resolve that the property and the premises ……………………….mortgaged …………………..be sold by Public Auction ……………………for the recovery of the said sum………………………….”

As students of economics, we learned four factors of production, namely Land, Labour, Capital and Entrepreneurship. An entrepreneur is a person who takes a risk and combines the other three factors of production – land, labour, and capital – to earn a profit. The most successful entrepreneurs are innovators who find new ways to produce goods and services or who develop new types of goods and services to bring to market. Entrepreneurs are a vital engine of economic growth helping to build the largest firms in the world as well as the small businesses in our neighbourhood. The payment to entrepreneurship is profit. Most MSMEs and low-income category enterprises in Sri Lanka are not making profits. The explanation lies in the lack of entrepreneurship. Only a fraction of MSMEs and low-income category are entrepreneurs. To our policymakers, CBSL, banks, donors, project staff, NGOs and many others, each and every individual in the low-income category who starts up a business or a production is an entrepreneur. In their eyes, the only issue faced is the shortage of capital. This is a misconception. The issue is not lack of capital but the absence of entrepreneurship. When the government, a Bank, an NGO or any other financier extends credit facilities and financial packages, MSMEs are mushrooming. But rarely found an entrepreneur among them.

The majority of those in the low-income category have access to land. It is the land inherited, gifted, transferred, titled, leased or encroached. They have their family labour. Two vital factors of production, land and labour are available free. The opportunity cost of these factors is not reflective in their cost calculation. Earnings, minus payment of interest, are profit for them. So, they are in business but do not sustain their venture long. Then they seek concessionary financing. They pay the interest and capital installments during the initial period and then only the interest and then nothing. Then they resort to distress financing. This is the saga of many low-income category entrepreneurs. Banks and financial institutions have no mechanism to assess the project viability and the entrepreneurship of the borrower. They go by the cash flow statement and the collateral. They are worried about the repayment.

The eligibility criteria for microfinance are poverty, being in the low-income category or a small businessman and being a woman. It is true that a poor individual who used to carry a box of ointments on his head and wandering on his foot has built up an empire. It does not mean that every man who carries a box on his head would end up as a business tycoon. Women are indeed honest, do not take alcohol, do not smoke, do not gamble, do not misuse funds and repay the loan promptly. They are all good deeds but do not mean that every woman is a successful entrepreneur. Those in the categories mentioned above deserve a decent livelihood. But it does not mean that they all can become successful entrepreneurs and are eligible for microfinance. But those who promote facilitate and provide microfinance, believe these good deeds as eligible criteria. They have failed to identify potential eligible entrepreneurs and promising projects for microcredit. This is reflected in the frequent failure of many micro small-medium business ventures. They cannot resist and survive the vagaries of climate change; they are not capable of identifying a product, quantity, standards, design, market needs, market size, regularity, and timing; they lack knowledge, information, technology and more the entrepreneurship. This is good breeding grounds for our policymakers and all other microfinance lovers. The lucky guy who manages and has the patience to undergo all the harassment involved in microfinance will get the facility and copy the neighbour. This is why you see many retailers, poultry producers and pumpkin growers around; suppliers/producers surpass the buyers. Competition among producers will end up with crashing of some if not all and with disputes or as the latest trend with a death.

When we travel outstations, we identify some places with particular products such as pottery, lace, silverware, cane, handicrafts, cotton products and coir products. Most of these products are not chosen but inherited by tradition coming over generations. Access to information, technology, design, packaging, market is denied to the low-income categories. They, therefore, go by tradition, what is familiar to them for generations, what is produced by the neighbour, what is promoted by extension workers, etc. They are not competent in identifying the right product for his enterprise. They produce but do not find a market for their products. For them, famous Say’s Law “Supply creates its own demand” is valid. Say’s Law was promulgated by J B Say, the French Economist in the 18th Century but rejected long before. These types of producers are the so-called eligible borrowers for microfinance providers.

From time to time, government on the Central Bank, to a particular ministry’s donor-funded Project or an NGO comes out with a package of financial assistance for the benefit of MSMEs and low-income category. This category includes cultivators (peasants and farmers include), home gardeners, smallholders, self-employed, micro, small-medium entrepreneurs, and beneficiaries covered by poverty alleviation programmes. They all display similar characteristics and face similar issues. They all line up and come out with a project seeking financial assistance. Policymakers and others involved in microcredit provide consultancy, counselling, advice, instructions, guidelines to this category of beneficiaries on wiser use of financial assistance. Financial needs of this category take a multiple nature. It may be individual, family, social or business need or a mixture of several. They seek financial assistance for a project but use to meet any or all of these needs. Their project never existed or existed but not survived. They wait for another project or a scheme to appear to secure financial assistance and they succeed and settle the encumbrances remaining from the previous scheme. Being blessed by reaching middle-income level by statistics rather than by performance, the country has lost access to foreign-funded projects. But, the country is blessed by frequent elections which come with many packages of new schemes to assist MSMEs and low-income category and write off existing burdens.

We, benefactors, preach to this category of beneficiaries on wiser use of financial assistance they receive. We are the people who involve in preparation of national budget or the ministry budget leaving handling of the family budget in good hands of our wives. We are the people who wisely use some financial benefits entitled to us. For instance, we are entitled to obtain a distress loan. We take it to settle the medical bills of our “ailing grandfather” who has left us many years ago. We use the money and buy a good sound system. We are unable to make ends meet with the remainder of the salary after deduction of interest and the loan installment. We go for a second distress loan to meet the funeral expenses of the same grandfather. We don’t offer merits to our late grandfather. We are rolling before the sound system, while the grandfather would be rolling in his grave.

Low-income category entrepreneurs including MSMEs do not have the capacity, access and information to identify a viable product. The product in demand, quantity, quality, standards, volume, price, regularity, timing, access to market, new ideas and technology, knowledge, skills and skills development, designs, packing and packaging (presentation), market needs are essential ingredients to identify the right product. One would say why not? Google provides all such information. Of course, Google provides but our prospective clients do not receive. It is due to non-availability of power, internet facilities, computers, IT knowledge, and language barriers. The use of obsolete or inappropriate technology results in low productivity, low quality, and high rate of rejection, higher costs and a reduction in market competitiveness.

Successive governments since independence have introduced many schemes, institutions, programmes, projects and officers with the mandate to assist, advise, train, disseminate, share, demonstrate, and promote MSMEs and raise the economic status of low-income category. There are armies of advisors, extension officers, technical officers, development officers and field officers. Yes, the personnel are present but the service is absent. There are Departments, Agencies, Boards, projects to provide information and advice on plants, planting materials, planting techniques. But their presence on the ground is absent. We have Research institutions for almost every crop. They are in air-conditioned rooms with IT facilities and access to the latest knowledge. They can claim the credit for having the lowest productivity in respective crops. While the countries started plantation after Sri Lanka enjoy higher productivity in tea, rubber, coconut, field crops, spices we take the pride for our historical achievements. We have failed to improve the cost efficiency, standards, timing to suit the market. Most of the agencies walk with the producer up to the harvest and leave him high and dry. Because marketing is outside their perimeter.

Activists, policymakers, practitioners, academics, donors, NGOs, project managers, including Prof. YUNUS, think that lower-income categories have land and labour but not capital. But what they do not have is entrepreneurship. Every poor man or Each MSME is not an entrepreneur. This is why most of them fail. Professor Muhammad Yunus, who is widely known as “Banker to the Poor” established the Grameen Bank in Bangladesh in 1983, fuelled by the belief that credit is a fundamental human right. Grameen Bank is treated as the model for microcredit. He received the 2006 Nobel Peace Prize for founding Grameen. But critics say that this model has actually created a debt trap for some of the poor it tried to help. There were also isolated reports that lenders had repeatedly harassed borrowers, and that some of those who had defaulted had been forced to sell their organs to pay back the loans.

Low-income categories and MSMEs encounter many issues as described above. This is due to lethargy, and lack of coordination among supporting and facilitating agencies in the field. Each agency is working in isolation. They do not communicate, consult and deliver one single message. They confuse rather than facilitating. MSMEs and low-income category entrepreneurs do not have access to supporting agencies, such as ITI, IDB, and National Design Centre. These agencies have survived for decades; they have been conducting research; presented papers in Conferences; conducted fairs and exhibitions; awarded certificates and cups for the best entrepreneurs; they have built up modern facilities and new buildings for themselves; promoted their officers; have been exposed in a foreign land; Directors have become Directors General. They celebrate their mere existence with Anniversary events at public expenditure. But, the impact made on the ground is nil or little. Intended beneficiaries of their services are not even aware of the very existence of them.

Successive governments have provided employment to graduates as development officers. This move has elevated unemployed graduates to underemployed graduates. But, the livelihoods, earnings and the living standards of the low-income categories have not been elevated.

Officers, researchers, policymakers, bankers, lenders go by poverty line. Those who are below the poverty line are poor and in the low-income category and eligible for microfinance. Economists and policymakers look at the poverty line calculated by Statisticians and boast that poverty has come down to 4% of the population. But they fail to look at the waistline of the people living in the periphery. That will say ratio of the poor is 40%.

Chandrasena Maliyadde has served as a Secretary to three Ministries before his retirement. He is currently a Vice President of Sri Lanka Economic Association and a University Council Member. He can be reached via chandra.maliyadde@gmail.com

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Midweek Review

Fonseka clears Rajapaksas of committing war crimes he himself once accused them of

Published

5 days ago

2026/02/25

Sahan Weerasooriya

With Sri Lanka’s 17th annual war victory over separatist Tamil terrorism just months away, warwinning Army Chief, Field Marshal Sarath Fonseka (Dec. 06, 2005, to July 15, 2009) has significantly changed his war narrative pertaining to the final phase of the offensive that was brought to an end on May 18, 2009.

The armed forces declared the conclusion of ground operations on that day after the entire northern region was brought back under their control. LTTE leader Velupillai Prabhakaran, hiding within the secured area, was killed on the following day. His body was recovered from the banks of the Nanthikadal lagoon.

With the war a foregone conclusion, with nothing to save the increasingly hedged in Tigers taking refuge among hapless Tamil civilians, Fonseka left for Beijing on May 11, and returned to Colombo, around midnight, on May 17, 2009. The LTTE, in its last desperate bid to facilitate Prabhakatan’s escape, breached one flank of the 53 Division, around 2.30 am, on May 18. But they failed to bring the assault to a successful conclusion and by noon the following day those fanatical followers of Tiger Supremo, who had been trapped within the territory, under military control, died in confrontations.

During Fonseka’s absence, the celebrated 58 Division (formerly Task Force 1), commanded by the then Maj. Gen. Shavendra Silva, advanced 31/2 to 4 kms and was appropriately positioned with Maj. Gen. Kamal Gunaratne’s 53 Division. The LTTE never had an opportunity to save its leader by breaching several lines held by frontline troops on the Vanni east front. There couldn’t have been any other option than surrendering to the Army.

The Sinha Regiment veteran, who had repeatedly accused the Rajapaksas of war crimes, and betraying the war effort by providing USD 2 mn, ahead of the 2005 presidential election, to the LTTE, in return for ordering the polls boycott that enabled Mahinda Rajapaksa’s victory, last week made noteworthy changes to his much disputed narrative.

GR’s call to Shavendra What did the former Army Commander say?

* The Rajapaksas wanted to sabotage the war effort, beginning January 2008.

* In January 2008, Mahinda Rajapaksa, Defence Secretary Gotabaya Rajapaksa and Navy Commander VA Wasantha Karannagoda, proposed to the National Security Council that the Army should advance from Vavuniya to Mullithivu, on a straight line, to rapidly bring the war to a successful conclusion. They asserted that Fonseka’s strategy (fighting the enemy on multiple fronts) caused a lot of casualties.

* They tried to discourage the then Lt. Gen. Fonseka

* Fonseka produced purported video evidence to prove decisive intervention made by Defence Secretary Gotabaya Rajapaksa on the afternoon of May 17. The ex-Army Chief’s assertion was based on a telephone call received by Maj. Gen. Shavendra Silva from Gotabaya Rajapaksa. That conversation had been captured on video by Swarnavahini’s Shanaka de Silva who now resides in the US. He had been one of the few persons, from the media, authorised by the Army Headquarters and the Defence Ministry to be with the Army leadership on the battlefield. Fonseka claimed that the videographer fled the country to escape death in the hands of the Rajapaksas. It was somewhat reminiscent of Maithripala Sirisena’s claim that if Rajapaksas win the 2015 Presidential election against him he would be killed by them.

* Shanaka captured Shavendra Silva disclosing three conditions laid down by the LTTE to surrender namely (a) Their casualties should be evacuated to Colombo by road (b) They were ready to exchange six captured Army personnel with those in military custody and (c) and the rest were ready to surrender.

* Then Fonseka received a call from Gotabaya Rajapaksa, on a CDMA phone. The Defence Secretary issued specific instructions to the effect that if the LTTE was to surrender that should be to the military and definitely not to the ICRC or any other third party. Gotabaya Rajapaksa, one-time Commanding Officer of the 1st battalion of the Gajaba Regiment, ordered that irrespective of any new developments and talks with the international community, offensive action shouldn’t be halted. That declaration directly contradicted Fonseka’s claim that the Rajapaksas conspired to throw a lifeline to the LTTE.

Fonseka declared that the Rajapaksa brothers, in consultation with the ICRC, and Amnesty International, offered an opportunity for the LTTE leadership to surrender, whereas his order was to annihilate the LTTE. The overall plan was to eliminate all, Fonseka declared, alleging that the Rajapaksa initiated talks with the LTTE and other parties to save those who had been trapped by ground forces in a 400 m x 400 m area by the night of May 16, among a Tamil civilian human shield held by force.

If the LTTE had agreed to surrender to the Army, Mahinda Rajapaksa would have saved their lives. If that happened Velupillai Prabhakaran would have ended up as the Chief Minister of the Northern Province, he said. Fonseka shocked everyone when he declared that he never accused the 58 Division of executing prisoners of war (white flag killings) but the issue was created by those media people embedded with the military leadership. Fonseka declared that accusations regarding white flag killings never happened. That story, according to Fonseka, had been developed on the basis of the Rajapaksas’ failed bid to save the lives of the LTTE leaders.

Before we discuss the issues at hand, and various assertions, claims and allegations made by Fonseka, it would be pertinent to remind readers of wartime US Defence Advisor in Colombo Lt. Col. Lawrence Smith’s June 2011 denial of white flag killings. The US State Department promptly declared that the officer hadn’t spoken at the inaugural Colombo seminar on behalf of the US. Smith’s declaration, made two years after the end of the war, and within months after the release of the Darusman report, dealt a massive blow to false war crimes allegations.

UN Secretary-General Ban Ki-moon, in 2010, appointed a three-member Panel of Experts, more like a kangaroo court, consisting of Marzuki Darusman, Yasmin Sooka, and Steven Ratner, to investigate war crimes accusations.

Now Fonseka has confirmed what Smith revealed at the defence seminar in response to a query posed by Maj. General (retd.) Ashok Metha of the IPKF to Shavendra Silva, who had been No 02 in our UN mission, in New York, at that time.

White flag allegations

‘White flag’ allegations cannot be discussed in isolation. Fonseka made that claim as the common presidential candidate backed by the UNP-JVP-TNA combine. The shocking declaration was made in an interview with The Sunday Leader Editor Frederica Jansz published on Dec. 13, 2009 under ‘Gota ordered them to be shot – General Sarath Fonseka.’

The ‘white flag’ story had been sensationally figured in a leaked confidential US Embassy cable, during Patricia Butenis tenure as the US Ambassador here. Butenis had authored that cable at 1.50 pm on Dec. 13, 2009, the day after the now defunct The Sunday Leader exclusive. Butenis had lunch with Fonseka in the company of the then UNP Deputy Leader Karu Jayasuriya, according to the cable. But for the writer the most interesting part had been Butenis declaration that Fonseka’s advisors, namely the late Mangala Samaraweera, Anura Kumara Dissanayake (incumbent President) and Vijitha Herath (current Foreign Minister) wanted him to retract part of the story attributed to him.

Frederica Jansz fiercely stood by her explosive story. She reiterated the accuracy of the story, published on Dec. 13, 2009, during the ‘white flag’ hearing when the writer spoke to her. There is absolutely no reason to suspect Frederica Jansz misinterpreted Fonseka’s response to her queries.

Subsequently, Fonseka repeated the ‘white flag’ allegation at a public rally held in support of his candidature. Many an eyebrow was raised at The Sunday Leader’s almost blind support for Fonseka, against the backdrop of persistent allegations directed at the Army over Lasantha Wickrematunga’s killing. Wickrematunga, an Attorney-at-Law by profession and one-time Private Secretary to Opposition Leader Sirimavo Bandaranaike, was killed on the Attidiya Road, Ratmalana in early January 2009.

The Darusman report, too, dealt withthe ‘white flag’ killings and were central to unsubstantiated Western accusations directed at the Sri Lankan military. Regardless of the political environment in which the ‘white flag’ accusations were made, the issue received global attention for obvious reasons. The accuser had been the war-winning Army Commander who defeated the LTTE at its own game. But, Fonseka insisted, during his meeting with Butenis, as well as the recent public statement that the Rajapaksas had worked behind his back with some members of the international community.

Fresh inquiry needed

Fonseka’s latest declaration that the Rajapaksas wanted to save the LTTE leadership came close on the heels of Deputy British Prime Minister David Lammy’s whistle-stop visit here. The UK, as the leader of the Core Group on Sri Lanka at the Geneva-based United Nations Human Rights Council, spearheads the campaign targeting Sri Lanka.

Lammy was on his way to New Delhi for the AI Impact Summit. The Labour campaigner pushed for action against Sri Lanka during the last UK general election. In fact, taking punitive action against the Sri Lankan military had been a key campaign slogan meant to attract Tamil voters of Sri Lankan origin. His campaign contributed to the declaration of sanctions in March 2025 against Admiral of the Fleet Wasantha Karannagoda, General (retd) Shavendra Silva, General (retd) Jagath Jayasuriya and ex-LTTE commander Karuna, who rebelled against Prabhakaran. Defending Shavendra Silva, Fonseka, about a week after the imposition of the UK sanctions, declared that the British action was unfair.

But Fonseka’s declaration last week had cleared the Rajapaksas of war crimes. Instead, they had been portrayed as traitors. That declaration may undermine the continuous post-war propaganda campaign meant to demonise the Rajapaksas and top ground commanders.

Canada, then a part of the Western clique that blindly towed the US line, declared Sri Lanka perpetrated genocide and also sanctioned ex-Presidents Mahinda Rajapaksa and Gotabaya Rajapaksa. Other countries resorted to action, though such measures weren’t formally announced. General (retd) Jagath Dias and Maj. Gen (retd) Chagie Gallage were two of those targeted.

Against the backdrop of Fonseka’s latest claims, in respect of accountability issues, the urgent need to review action taken against Sri Lanka cannot be delayed. Although the US denied visa when Fonseka was to accompany President Maithripala Sirisena to the UN, in Sept. 2016, he hadn’t been formally accused of war crimes by the western powers, obviously because he served their interests.

On the basis of unsubstantiated allegations that hadn’t been subjected to judicial proceedings, Geneva initiated actions. The US, Canada and UK acted on those accusations. The US sanctioned General Shavendra Silva in Feb. 2020 and Admiral Karannagoda in April 2023.

What compelled Fonseka to change his narrative, 18 years after his Army ended the war? Did Fonseka base his latest version solely on Shanaka de Silva video? Fonseka is on record as claiming that he got that video, via a third party, thereby Shanaka de Silva had nothing to do with his actions.

DNA and formation of DP

Having realised that he couldn’t, under any circumstances, reach a consensus with the UNP to pursue a political career with that party, Fonseka teamed up with the JVP, one of the parties in the coalition that backed his presidential bid in 2010. Fonseka’s current efforts to reach an understanding with the JVP/NPP (President Anura Kumara Dissanayake is the leader of both registered political parties) should be examined against the backdrop of their 2010 alliance.

Under Fonseka’s leadership, the JVP, and a couple of other parties/groups, contested, under the symbol of the Democratic National Alliance (DNA) that had been formed on 22 Nov. 2009. but the grouping pathetically failed to live up to their own expectations. The results of the parliamentary polls, conducted in April 2010, had been devastating and utterly demoralising. Fonseka, who polled about 40% of the national vote at the January 2010 presidential election, ended up with just over 5% of the vote, and the DNA only managed to secure seven seats, including two on the National List. The DNA group consisted of Fonseka, ex-national cricket captain Arjuna Ranatunga, businessman Tiran Alles and four JVPers. Anura Kumara Dissanayake was among the four.

Having been arrested on February 8, 2010, soon after the presidential election, Fonseka was in prison. He was court-martialed for committing “military offences”. He was convicted of corrupt military supply deals and sentenced to three years in prison. Fonseka vacated his seat on 7 Oct .2010. Following a failed legal battle to protect his MP status, Fonseka was replaced by DNA member Jayantha Ketagoda on 8 March 2011. But President Mahinda Rajapaksa released Fonseka in May 2012 following heavy US pressure. The US went to the extent of issuing a warning to the then SLFP General Secretary Maithripala Sirisena that unless President Rajapaksa freed Fonseka he would have to face the consequences (The then Health Minister Sirisena disclosed the US intervention when the writer met him at the Jealth Ministry, as advised by President Rajapaksa)

By then, Fonseka and the JVP had drifted apart and both parties were irrelevant. Somawansa Amarasinghe had been the leader at the time the party decided to join the UNP-led alliance that included the TNA, and the SLMC. The controversial 2010 project had the backing of the US as disclosed by leaked secret diplomatic cables during Patricia Butenis tenure as the US Ambassador here.

In spite of arranging the JVP-led coalition to bring an end to the Rajapaksa rule, Butenis, in a cable dated 15 January 2010, explained the crisis situation here. Butenis said: “There are no examples we know of a regime undertaking wholesale investigations of its own troops or senior officials for war crimes while that regime or government remained in power. In Sri Lanka this is further complicated by the fact that responsibility for many of the alleged crimes rests with the country’s senior civilian and military leadership, including President Rajapaksa and his brothers and opposition candidate General Fonseka.”

Then Fonseka scored a major victory when Election Commissioner Mahinda Deshapriya on 1 April, 2013, recognised his Democratic Party (DNA was registered as DP) with ‘burning flame’ as its symbol. There hadn’t been a previous instance of any service commander registering a political party. While Fonseka received the leadership, ex-Army officer Senaka de Silva, husband of Diana Gamage ((later SJB MP who lost her National List seat over citizenship issue) functioned as the Deputy Leader.

Having covered Fonseka’s political journey, beginning with the day he handed over command to Lt. Gen. Jagath Jayasuriya, in July, 2009, at the old Army Headquarters that was later demolished to pave the way for the Shangri-La hotel complex, the writer covered the hastily arranged media briefing at the Solis reception hall, Pitakotte, on 2 April, 2023. Claiming that his DP was the only alternative to what he called corrupt Mahinda Rajapaksa’s government and bankrupt Ranil Wickremesinghe-led Opposition, a jubilant Fonseka declared himself as the only alternative (‘I am the only alternative,’ with strapline ‘SF alleges Opposition is as bad as govt’. The Island, April 3, 2013).

Fonseka had been overconfident to such an extent, he appealed to members of the government parliamentary group, as well as the Opposition (UNP), to switch allegiance to him. As usual Fonseka was cocky and never realised that 40% of the national vote he received, at the presidential election, belonged to the UNP, TNA and the JVP. Fonseka also disregarded the fact that he no longer had the JVP’s support. He was on his own. The DP never bothered to examine the devastating impact his 2010 relationship with the TNA had on the party. The 2015 general election results devastated Fonseka and underscored that there was absolutely no opportunity for a new party. The result also proved that his role in Sri Lanka’s triumph over the LTTE hadn’t been a decisive factor.

RW comes to SF’s rescue

Fonseka’s DP suffered a humiliating defeat at the August 2015 parliamentary polls. The outcome had been so bad that the DP was left without at least a National List slot. Fonseka was back to square one. If not for UNP leader and Prime Minister Ranil Wickremesinghe, Fonseka could have been left in the cold. Wickremesinghe accommodated Fonseka on their National List, in place of SLFPer M.K.D.S. Gunawardene, who played a critical role in an influential section of the party and the electorate shifting support to Maithripala Sirisena. Gunawardena passed away on 19 January, 2016. Wickremesinghe and Fonseka signed an agreement at Temple Trees on 3 February, 2016. Fonseka received appointment as National List MP on 9 February, 2016, and served as Minister of Regional Development and, thereafter, as Minister of Wildlife and Sustainable Development, till Oct. 2018. Fonseka lost his Ministry when President Sirisena treacherously sacked Wickremesinghe’s government to pave the way for a new partnership with the Rajapaksas. The Supreme Court discarded that arrangement and brought back the Yahapalana administration but Sirisena, who appointed Fonseka to the lifetime rank of Field Marshal, in recognition of his contribution to the defeat of terrorism, refused to accommodate him in Wickremesinghe’s Cabinet. The President also left out Wasantha Karannagoda and Roshan Goonetilleke. Sirisena appointed them Admiral of the Fleet and Marshal of Air Force, respectively, on 19, Sept. 2019, in the wake of him failing to secure the required backing to contest the Nov. 2019 presidential election.

Wickremesinghe’s UNP repeatedly appealed on behalf of Fonseka in vain to Sirisena. At the 2020 general election, Fonseka switched his allegiance to Sajith Premadasa and contested under the SJB’s ‘telephone’ symbol and was elected from the Gampaha district. Later, following a damaging row with Sajith Premadasa, he quit the SJB as its Chairman and, at the last presidential election, joined the fray as an independent candidate. Having secured just 22,407 votes, Fonseka was placed in distant 9th position. Obviously, Fonseka never received any benefits from support extended to the 2022 Aragalaya and his defeat at the last presidential election seems to have placed him in an extremely difficult position, politically.

Let’s end this piece by reminding that Fonseka gave up the party leadership in early 2024 ahead of the presidential election. Senaka de Silva succeeded Fonseka as DP leader, whereas Dr. Asosha Fernando received appointment as its Chairman. The DP has aligned itself with the NPP. The rest is history.

By Shamindra Ferdinando

Midweek Review

Strengths and weaknesses of BRICS+: Implications for Global South

Published

5 days ago

2026/02/25

Sahan Weerasooriya

The 16th BRICS Summit, from 22 to 24 October 2024 in Kazan, was attended by 24 heads of state, including the five countries that officially became part of the group on 1 January: Saudi Arabia, the United Arab Emirates, Iran, Egypt and Ethiopia. Argentina finally withdrew from the forum after Javier Milei’s government took office in 2023.

In the end, it changed its strategy and instead of granting full membership made them associated countries adding a large group of 13 countries: two from Latin America (Bolivia and Cuba), three from Africa (Algeria, Nigeria, Uganda) and eight from Asia (Belarus, Indonesia, Kazakhstan, Malaysia, Thailand, Turkey, Uzbekistan and Vietnam). This confirms the expansionary intent of the BRICS, initiated last year and driven above all by China, which seeks to turn the group into a relevant multilateral forum, with focus on political than economic interaction, designed to serve its interests in the geopolitical dispute with the United States. This dispute however is not the making of China but has arisen mainly due to the callous bungling of Donald Trump in his second term in office.

China has emerged as the power that could influence the membership within the larger group more than its rival in the region, India. Obviously, the latter is concerned about these developments but seems powerless to stop the trend as more countries realize the need for the development of capacity to resist Western dominance. India in this regard seems to be reluctant possibly due to its defence obligations to the US with Trump declaring war against countries that try to forge partnerships aiming to de-dollarize the global economic system.

The real weakness in BRICS therefore, is the seemingly intractable rivalry between China and India and the impact of this relationship on the other members who are keen to see the organisation grow its capacity to meet its stated goals. China is committed to developing an alternative to the Western dominated world order, particularly the weaponization of the dollar by the US. India does not want to be seen as anti-west and as a result India is often viewed as a reluctant or cautious member of BRICS. This problem seems to be perpetuated due to the ongoing border tensions with China. India therefore has a desire to maintain a level playing field within the group, rather than allowing it to be dominated by Beijing.

Though India seems to be committed to a multipolar world, it prefers focusing on economic cooperation over geopolitical alignment. India thinks the expansion of BRICS initiated by China may dilute its influence within the bloc to the advantage of China. India fears the bloc is shifting toward an anti-Western tilt driven by China and Russia, complicating its own strong ties with the West. India is wary of the new members who are also beneficiaries of China’s Belt and Road Initiative. While China aims to use BRICS for anti-Western geopolitical agendas, India favors focusing on South-South financial cooperation and reforming international institutions. Yet India seems to be not in favour of creating a new currency to replace the dollar which could obviously strengthen the South-South financial transactions bypassing the dollar.

Moreover, India has explicitly opposed the expansion of the bloc to include certain nations, such as Pakistan, indicating a desire to control the group’s agenda, especially during its presidency.

In this equation an important factor is the role that Russia could play. The opinion expressed by the Russian foreign minister in this regard may be significant. Referring to the new admissions the Russian Foreign Minister Sergey Lavrov has said: “The weight, prominence and importance of the candidates and their international standing were the primary factors for us [BRICS members]. It is our shared view that we must recruit like-minded countries into our ranks that believe in a multipolar world order and the need for more democracy and justice in international relations. We need those who champion a bigger role for the Global South in global governance. The six countries whose accession was announced today fully meet these criteria.”

The admission of three major oil producing countries, Saudi Arabia, Iran and UAE is bound to have a significant impact on the future global economic system and consequently may have positive implications for the Global South. These countries would have the ability to decisively help in creating a new international trading system to replace the 5 centuries old system that the West created to transfer wealth from the South to the North. This is so because the petro-dollar is the pillar of the western banking system and is at the very core of the de-dollarizing process that the BRICS is aiming at. This cannot be done without taking on board Saudi Arabia, a staunch ally of the west. BRICS’ expansion, therefore, is its transformation into the most representative community in the world, whose members interact with each other bypassing Western pressure. Saudi Arabia and Iran are actively mending fences, driven by a 2023 China-brokered deal to restore diplomatic ties, reopen embassies, and de-escalate regional tensions. While this detente has brought high-level meetings and a decrease in direct hostility rapprochement is not complete yet and there is hope which also has implications, positive for the South and may not be so for the North.

Though the US may not like what is going on, Europe, which may not endorse all that the former does if one is to go by the speech delivered by the Canadian PM in Brazil recently, may not be displeased about the rapid growth of BRICS. The Guardian UK highlighted expert opinion that BRICS expansion is rather “a symbol of broad support from the global South for the recalibration of the world order.” A top official at the Konrad Adenauer Foundation, Caroline Kanter has told the daily, “It is obvious that we [Western countries] are no longer able to set our own conditions and standards. Proposals will be expected from us so that in the future we will be perceived as an attractive partner.” At the same time, the bottom line is that BRICS expansion is perceived in the West as a political victory for Russia and China which augurs well for the future of BRICS and the Global South.

Poor countries, relentlessly battered by the neo-liberal global economy, will greatly benefit if BRICS succeeds in forging a new world order and usher in an era of self-sufficiency and economic independence. There is no hope for them in the present system designed to exploit their natural resources and keep them in a perpetual state of dependency and increasing poverty. BRICS is bound to be further strengthened if more countries from the South join it. Poor countries must come together and with the help of BRICS work towards this goal.

by N. A. de S. Amaratunga