Features
Now is the time to rethink trade
by Gomi Senadhira
During the presidential election campaign, the importance of trade, particularly exports, to Sri Lanka’s was emphasised by President Anura Kumara Dissanayake (AKD) and the other two main contenders in the fray, namely Sajith Premadasa (SP) and Ranil Wickremesinghe (RW) in their manifestos. These three candidates together polled more than 90 percent of the votes at the presidential elections. During the parliamentary elections the political parties which based their campaign on these manifestos – Jathika Jana Balawegaya (NPP), Samagi Jana Balawegaya (SJB) and New Democratic Front (NDF) together polled more than 83%. Therefore, the electoral support for these pro-trade policies is undisputed. For the Sri Lankan export community this should be a superb development, as for many years, the trade policy had been, one of the more contentious areas of island’s politics. Our main trading partners and the foreign investors would also welcome this policy convergence.
Pro- trade policies in the policy statements of RW and SJ were not unexpected. But the pro-trade approach in the AKD’s manifesto surprised many, mainly because all other parties had repeatedly warned the people against voting for AKD as he would turn Sri Lanka into another North Korea or Cuba.
For example, during the election campaign, at a conference organised by the National Bankers Association, RW stated, “On September 4th, MP Anura Kumara Dissanayake emphasised the importance of focusing on exports for our country’s businessmen and industrialists. While this principle is commendable, there is a concern. Their policy statement suggests that Sri Lanka plans to cancel its free trade agreements.
This raises a significant question: how can we develop an export industry without these agreements? Such contradictions pose challenges.” Since then, he had repeated these comments at several other meetings. In the same way, SP’s trade policy wonks also had spread similar misinformation on NPP policies. However, the NPP policy statement clearly states its position on Free Trade Agreements, that is “… updating of existing free trade agreements and negotiating new free trade agreements.” The updating of the trade agreements certainly does mean cancelling of these agreements. All FTAs need to be reviewed and updated periodically.
During the election seasons, politicians sometimes manipulate public opinion about the crucial issues by arousing fear. But this is not the time to deliberately mislead the public in general and, more particularly, the business community and our trading partners with false information on trade policy. At this juncture, what we need are facts. Not scare tactics and false information. So, let’s hope our politicians would avoid such scare tactics in the future and join together to strengthen this consensus on export-oriented, outward-looking trade policy.
To those who are familiar with the way the NPP policies evolved in the recent past, their shift towards pro-trade policies is not a surprise. After all, if the NPP and AKD want a socialist model to emulate, they have many examples of socialist governments, other than North Korea and Cuba, to draw lessons from. For example, the success story of the Socialist Republic of Vietnam. While cautiously staying away from the labels AKD’s policy statement refers to Vietnam, Bangladesh, and South Korea (and not North Korea) as export success stories, Sri Lanka can acquire lessons from. More importantly, Vietnam’s success story was also highlighted at the top of RW’s policy statement and by the trade experts in the SJB as a success story to follow. What is needed now is to strengthen this consensus further and develop a pro-export national trade strategy approved by the parliament. That would help to attract much-needed foreign investments and export orders.
If we already have a general consensus on pro-trade and pro-export policies, then why do we need to rethink trade policies now?
From export-oriented economy to import dependent economy
Sri Lanka was the first country in South Asia to liberalise trade policies with the ‘open’ economy introduced in the late 1970s. However, the open economy introduced then was not fully open. It had a strong focus on the expansion of the export of goods while discouraging imports, particularly nonessential imports. A special cess was imposed on the nonessential imports to protect local farmers and manufacturers and to collect funds for export development.
The main thrust of the trade policy was exports. During that period, the government proactively managed to get an adequate level of market access to Sri Lankan exports through multilateral trade rules (GATT/WTO rules) as well as the distortions to those rules (textile quotas). These policies worked well, and during the 1980s and 90s, Sri Lanka’s exports registered almost a fivefold increase, from US$1.35 billion in 1981 to US$6.37 billion by the year 2000. The exports-to-GDP ratio increased from 30.46% in 1981 to 39.02% in 2000. During the period, Sri Lanka was slowly but surely progressing into an export-oriented economy.
Unfortunately, during the next two decades, the export growth slowed down and only increased from US$6.37 billion (in 2000) to US$13.03 billion (in 2020). The exports-to-GDP ratio also declined substantially during this period. At 15.46% in 2020, it was the lowest ever recorded. More alarmingly, the growth of exports during the last decade was almost stagnant, and it increased only from US$ 10 billion in 2013 to US$ 12 billion in 2023. During the same period, Vietnam’s exports increased from US$132 billion in 2013 to US$370 billion in 2023.
Hijacking of trade policy by importers and profiteers
The main reason for this decline was the absence of interest in export development by the successive governments and the influence of the importers, the profiteers and perhaps even hawaladars on trade policy formulations. If one analyses the trade policy formulation in the recent years, it is easy to understand how trade policies and even free trade agreements were directed towards import promotion at the expense of export development. After signing Sri Lanka’s first bilateral FTA with India in December 1998 and second with Pakistan in August 2002, and the enhanced GSP arrangement in the EU, no new tangible initiatives were taken by the government to develop market access for Sri Lankan exports.
During the last decade the situation deteriorated further and even the free trade agreements, which countries normally negotiate at the request and on behalf of their exporters to get better levels of market access for them in other countries, were negotiated at the request of the exporters of other countries to provide them with enhanced market access into Sri Lanka without reciprocal concessions for Sri Lankan exporters. The free trade agreements Sri Lanka signed with Singapore and Thailand are clear examples of this approach.
These agreements were negotiated under RW’s leadership, first as the prime minister and then as the president. Despite his rhetoric about the critical need to swiftly transform Sri Lanka into an export-oriented economy, as stabilising the economy alone would not solve Sri Lanka’s problems due to the country’s heavy dependence on imports, it was under RW’s leadership that the trade policy got blatantly hijacked by the importers mafia and profiteers.
Another adverse development during the last two decades was the relaxation of foreign exchange regulations. Due to this Sri Lanka also does not fully benefit even from the limited amount of exports, as a substantial portion of the export proceeds are not repatriated. In July 2022 the Central Bank revealed that less than 20% of export proceeds are being repatriated by the exporters. Though this may have improved since then, the conversion rate remains below accepted levels. In addition to that, a significant amount of money is transferred out through trade misinvoicing by the exporters and importers.
As the elections are over now it is the time for a new beginning. It is the time to intensify analysis and advocacy regarding the numerous ways that trade agreements and po8licies must be reformed and strengthen the consensus on trade policies and adjust them to undo decades of capture by the importers’ mafia, profiteers, and hawaladars.
(The writer, a retired public servant and diplomat, can be reached at senadhiragomi@gmail.com)
Features
Ranking public services with AI — A roadmap to reviving institutions like SriLankan Airlines
Efficacy measures an organisation’s capacity to achieve its mission and intended outcomes under planned or optimal conditions. It differs from efficiency, which focuses on achieving objectives with minimal resources, and effectiveness, which evaluates results in real-world conditions. Today, modern AI tools, using publicly available data, enable objective assessment of the efficacy of Sri Lanka’s government institutions.
Among key public bodies, the Supreme Court of Sri Lanka emerges as the most efficacious, outperforming the Department of Inland Revenue, Sri Lanka Customs, the Election Commission, and Parliament. In the financial and regulatory sector, the Central Bank of Sri Lanka (CBSL) ranks highest, ahead of the Securities and Exchange Commission, the Public Utilities Commission, the Telecommunications Regulatory Commission, the Insurance Regulatory Commission, and the Sri Lanka Standards Institution.
Among state-owned enterprises, the Sri Lanka Ports Authority (SLPA) leads in efficacy, followed by Bank of Ceylon and People’s Bank. Other institutions assessed included the State Pharmaceuticals Corporation, the National Water Supply and Drainage Board, the Ceylon Electricity Board, the Ceylon Petroleum Corporation, and the Sri Lanka Transport Board. At the lower end of the spectrum were Lanka Sathosa and Sri Lankan Airlines, highlighting a critical challenge for the national economy.
Sri Lankan Airlines, consistently ranked at the bottom, has long been a financial drain. Despite successive governments’ reform attempts, sustainable solutions remain elusive.
Globally, the most profitable airlines operate as highly integrated, technology-enabled ecosystems rather than as fragmented departments. Operations, finance, fleet management, route planning, engineering, marketing, and customer service are closely coordinated, sharing real-time data to maximise efficiency, safety, and profitability.
The challenge for Sri Lankan Airlines is structural. Its operations are fragmented, overly hierarchical, and poorly aligned. Simply replacing the CEO or senior leadership will not address these deep-seated weaknesses. What the airline needs is a cohesive, integrated organisational ecosystem that leverages technology for cross-functional planning and real-time decision-making.
The government must urgently consider restructuring Sri Lankan Airlines to encourage:
=Joint planning across operational divisions
=Data-driven, evidence-based decision-making
=Continuous cross-functional consultation
=Collaborative strategic decisions on route rationalisation, fleet renewal, partnerships, and cost management, rather than exclusive top-down mandates
Sustainable reform requires systemic change. Without modernised organisational structures, stronger accountability, and aligned incentives across divisions, financial recovery will remain out of reach. An integrated, performance-oriented model offers the most realistic path to operational efficiency and long-term viability.
Reforming loss-making institutions like Sri Lankan Airlines is not merely a matter of leadership change — it is a structural overhaul essential to ensuring these entities contribute productively to the national economy rather than remain perpetual burdens.
By Chula Goonasekera – Citizen Analyst
Features
Why Pi Day?
International Day of Mathematics falls tomorrow
The approximate value of Pi (π) is 3.14 in mathematics. Therefore, the day 14 March is celebrated as the Pi Day. In 2019, UNESCO proclaimed 14 March as the International Day of Mathematics.
Ancient Babylonians and Egyptians figured out that the circumference of a circle is slightly more than three times its diameter. But they could not come up with an exact value for this ratio although they knew that it is a constant. This constant was later named as π which is a letter in the Greek alphabet.
It was the Greek mathematician Archimedes (250 BC) who was able to find an upper bound and a lower bound for this constant. He drew a circle of diameter one unit and drew hexagons inside and outside the circle such that the sides of each hexagon touch the sides of the circle. In mathematics the circle passing through all vertices of a polygon is called a ‘circumcircle’ and the largest circle that fits inside a polygon tangent to all its sides is called an ‘incircle’. The total length of the smaller hexagon then becomes the lower bound of π and the length of the hexagon outside the circle is the upper bound. He realised that by increasing the number of sides of the polygon can make the bounds get closer to the value of Pi and increased the number of sides to 12,24,48 and 60. He argued that by increasing the number of sides will ultimately result in obtaining the original circle, thereby laying the foundation for the theory of limits. He ended up with the lower bound as 22/7 and the upper bound 223/71. He could not continue his research as his hometown Syracuse was invaded by Romans and was killed by one of the soldiers. His last words were ‘do not disturb my circles’, perhaps a reference to his continuing efforts to find the value of π to a greater accuracy.
Archimedes can be considered as the father of geometry. His contributions revolutionised geometry and his methods anticipated integral calculus. He invented the pulley and the hydraulic screw for drawing water from a well. He also discovered the law of hydrostatics. He formulated the law of levers which states that a smaller weight placed farther from a pivot can balance a much heavier weight closer to it. He famously said “Give me a lever long enough and a place to stand and I will move the earth”.
Mathematicians have found many expressions for π as a sum of infinite series that converge to its value. One such famous series is the Leibniz Series found in 1674 by the German mathematician Gottfried Leibniz, which is given below.
π = 4 ( 1 – 1/3 + 1/5 – 1/7 + 1/9 – ………….)
The Indian mathematical genius Ramanujan came up with a magnificent formula in 1910. The short form of the formula is as follows.
π = 9801/(1103 √8)
For practical applications an approximation is sufficient. Even NASA uses only the approximation 3.141592653589793 for its interplanetary navigation calculations.
It is not just an interesting and curious number. It is used for calculations in navigation, encryption, space exploration, video game development and even in medicine. As π is fundamental to spherical geometry, it is at the heart of positioning systems in GPS navigations. It also contributes significantly to cybersecurity. As it is an irrational number it is an excellent foundation for generating randomness required in encryption and securing communications. In the medical field, it helps to calculate blood flow rates and pressure differentials. In diagnostic tools such as CT scans and MRI, pi is an important component in mathematical algorithms and signal processing techniques.
This elegant, never-ending number demonstrates how mathematics transforms into practical applications that shape our world. The possibilities of what it can do are infinite as the number itself. It has become a symbol of beauty and complexity in mathematics. “It matters little who first arrives at an idea, rather what is significant is how far that idea can go.” said Sophie Germain.
Mathematics fans are intrigued by this irrational number and attempt to calculate it as far as they can. In March 2022, Emma Haruka Iwao of Japan calculated it to 100 trillion decimal places in Google Cloud. It had taken 157 days. The Guinness World Record for reciting the number from memory is held by Rajveer Meena of India for 70000 decimal places over 10 hours.
Happy Pi Day!
The author is a senior examiner of the International Baccalaureate in the UK and an educational consultant at the Overseas School of Colombo.
by R N A de Silva
Features
Sheer rise of Realpolitik making the world see the brink
The recent humanly costly torpedoing of an Iranian naval vessel in Sri Lanka’s Exclusive Economic Zone by a US submarine has raised a number of issues of great importance to international political discourse and law that call for elucidation. It is best that enlightened commentary is brought to bear in such discussions because at present misleading and uninformed speculation on questions arising from the incident are being aired by particularly jingoistic politicians of Sri Lanka’s South which could prove deleterious.
As matters stand, there seems to be no credible evidence that the Indian state was aware of the impending torpedoing of the Iranian vessel but these acerbic-tongued politicians of Sri Lanka’s South would have the local public believe that the tragedy was triggered with India’s connivance. Likewise, India is accused of ‘embroiling’ Sri Lanka in the incident on account of seemingly having prior knowledge of it and not warning Sri Lanka about the impending disaster.
It is plain that a process is once again afoot to raise anti-India hysteria in Sri Lanka. An obligation is cast on the Sri Lankan government to ensure that incendiary speculation of the above kind is defeated and India-Sri Lanka relations are prevented from being in any way harmed. Proactive measures are needed by the Sri Lankan government and well meaning quarters to ensure that public discourse in such matters have a factual and rational basis. ‘Knowledge gaps’ could prove hazardous.
Meanwhile, there could be no doubt that Sri Lanka’s sovereignty was violated by the US because the sinking of the Iranian vessel took place in Sri Lanka’s Exclusive Economic Zone. While there is no international decrying of the incident, and this is to be regretted, Sri Lanka’s helplessness and small player status would enable the US to ‘get away with it’.
Could anything be done by the international community to hold the US to account over the act of lawlessness in question? None is the answer at present. This is because in the current ‘Global Disorder’ major powers could commit the gravest international irregularities with impunity. As the threadbare cliché declares, ‘Might is Right’….. or so it seems.
Unfortunately, the UN could only merely verbally denounce any violations of International Law by the world’s foremost powers. It cannot use countervailing force against violators of the law, for example, on account of the divided nature of the UN Security Council, whose permanent members have shown incapability of seeing eye-to-eye on grave matters relating to International Law and order over the decades.
The foregoing considerations could force the conclusion on uncritical sections that Political Realism or Realpolitik has won out in the end. A basic premise of the school of thought known as Political Realism is that power or force wielded by states and international actors determine the shape, direction and substance of international relations. This school stands in marked contrast to political idealists who essentially proclaim that moral norms and values determine the nature of local and international politics.
While, British political scientist Thomas Hobbes, for instance, was a proponent of Political Realism, political idealism has its roots in the teachings of Socrates, Plato and latterly Friedrich Hegel of Germany, to name just few such notables.
On the face of it, therefore, there is no getting way from the conclusion that coercive force is the deciding factor in international politics. If this were not so, US President Donald Trump in collaboration with Israeli Rightist Premier Benjamin Natanyahu could not have wielded the ‘big stick’, so to speak, on Iran, killed its Supreme Head of State, terrorized the Iranian public and gone ‘scot-free’. That is, currently, the US’ impunity seems to be limitless.
Moreover, the evidence is that the Western bloc is reuniting in the face of Iran’s threats to stymie the flow of oil from West Asia to the rest of the world. The recent G7 summit witnessed a coming together of the foremost powers of the global North to ensure that the West does not suffer grave negative consequences from any future blocking of western oil supplies.
Meanwhile, Israel is having a ‘free run’ of the Middle East, so to speak, picking out perceived adversarial powers, such as Lebanon, and militarily neutralizing them; once again with impunity. On the other hand, Iran has been bringing under assault, with no questions asked, Gulf states that are seen as allying with the US and Israel. West Asia is facing a compounded crisis and International Law seems to be helplessly silent.
Wittingly or unwittingly, matters at the heart of International Law and peace are being obfuscated by some pro-Trump administration commentators meanwhile. For example, retired US Navy Captain Brent Sadler has cited Article 51 of the UN Charter, which provides for the right to self or collective self-defence of UN member states in the face of armed attacks, as justifying the US sinking of the Iranian vessel (See page 2 of The Island of March 10, 2026). But the Article makes it clear that such measures could be resorted to by UN members only ‘ if an armed attack occurs’ against them and under no other circumstances. But no such thing happened in the incident in question and the US acted under a sheer threat perception.
Clearly, the US has violated the Article through its action and has once again demonstrated its tendency to arbitrarily use military might. The general drift of Sadler’s thinking is that in the face of pressing national priorities, obligations of a state under International Law could be side-stepped. This is a sure recipe for international anarchy because in such a policy environment states could pursue their national interests, irrespective of their merits, disregarding in the process their obligations towards the international community.
Moreover, Article 51 repeatedly reiterates the authority of the UN Security Council and the obligation of those states that act in self-defence to report to the Council and be guided by it. Sadler, therefore, could be said to have cited the Article very selectively, whereas, right along member states’ commitments to the UNSC are stressed.
However, it is beyond doubt that international anarchy has strengthened its grip over the world. While the US set destabilizing precedents after the crumbling of the Cold War that paved the way for the current anarchic situation, Russia further aggravated these degenerative trends through its invasion of Ukraine. Stepping back from anarchy has thus emerged as the prime challenge for the world community.
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