Business
Ranil says Sri Lanka paying the price for not addressing structural issues
“An all- party economic model, if ever, will take 20 years to achieve prosperity’
by Sanath Nanayakkare
People of Sri Lanka have to face the effects of strenuous economic conditions as the country has virtually exhausted its foreign currency reserves that were there when the present government came to office, MP and former prime minister Ranil Wickremasinghe said during an interview with an Indian multinational English language news channel (WION) recently.
“The country was caught unawares in the Covid pandemic at a time the government was pursuing a non-fiscal consolidating budgetary stance providing tax subsidies to the corporate sector depriving the country of its revenue, and dropping several infrastructure investment opportunities with countries such as India, Japan and the USA,” he said.
“The government cancelled most of the agreements we had with other countries to boost investment in critical infrastructure; the Trincomalee Oil Tank farm deal – which they have now restored – two LNG plants with Japan and India, East Container Terminal project with India, the Central Highway Phase 3 and 4 with Japan and India, MCC compact with the United States that would have brought Sri Lanka investments worth about USD 4 billion which would have helped us mitigate the present economic crisis,” he said.
Responding to a question on Sri Lanka’s economic diplomacy and whether Sri Lanka was favouring China than other countries, he said that at the end of the day, Sri Lanka is not really friendly with any country.
“China, Sri Lanka relations were under strain following the fertiliser issue and I am told that there are issues in other projects as well. At least now we are talking to the Chinese government. Then there is the strained relationship with India, Japan, USA and the EU. These countries are donor countries and we need to be mindful of the fact that with the West we have a great trade balance in our favour.”
“Then there was the IMF stand-by facility of USD 400 million which I think we didn’t take. At that time, we were completing an IMF programme and we could have renewed it. I don’t know where the government thought the foreign currency would come from. Seemingly they thought countries would willingly offer foreign currency to Sri Lanka.”
When asked whether the current crisis had been in the making since the time he was prime minister, he said, “No, it was not in the making at that time. We had problems from time to time, but an economic crisis was not in the making. I don’t want to delve too much into the past. In 2015, We did have a problem in terms of debt repayment. But by 2017, we were able to build a surplus in the primary account for the first time after about 60 years. And we were building upon it. Then again, despite problems in 2019, the economy was doing fine. There was a setback, but we picked up in the six months that followed. So, it wasn’t the period of time when the problems began. Problems began when the present government reduced the value added tax (VAT). During our time, the budgetary position improved because we increased the VAT. By reducing the VAT, the government deprived the national coffers of the revenue that was required to maintain a surplus. Secondly, Sri Lanka was quite unprepared for an external shock like Covid-!9 pandemic. Our economy should have been prepared for external shocks. We should have gone to the IMF and spoken with them to put the IMF facility back on track as we were finishing up the one we had been given at the time. We didn’t do that. The government just carried on. If we had spoken with the IMF, we wouldn’t have ended up here.”
When asked why the government was so hesitant or even adamant about not going to the IMF, he said,” I don’t really know. It seems that they have some misconceptions about the IMF; that the IMF would ask the government to reduce employees in the public sector. From the experience I have had with the IMF and the World Bank. I don’t think that they would have asked us to reduce employees in the public sector. Today they have formed a consortium and Sri Lanka is not part of it.”
“Maybe the government is not going to the IMF because the people who formed Viyathmaga and other groups are against economic reforms, restructuring, opening out, dealing with India, obtaining MCC funds etc. It appears that they didn’t want to get something done when it was opportune to do so. And now we are paying the price for it.”
When asked if the government was doing the right thing by taking ‘extreme’ moves such as selling more than half of the Central Bank’s gold holdings, enforcing US dollar conversion rules etc, he said,” No, They are not. There are some fundamental issues in the economy. We have to address them. If you don’t address them, the current moves will not be sufficient. We have the issue of our dwindling foreign exchange reserves and the decline in revenue against expenditure. There is about a trillion rupee gap there. Then there are other issues as we go along. One of them is, by 2035 we may not have money to pay pensions of our government employees. You have to deal with such scenarios starting right now. This is one reason that we have to put the economy back in order so that we will have the capacity to face such challenges in the future. Then what about expenditure needed to tackle issues arising from Climate Change? Now all these have culminated in a crisis which can’t be resolved in a day or two. We have to go deep into these issues and make policies for long term solutions.”
“If all major political parties in Sri Lanka can come to an agreement on the economic fundamentals to be pursued with consistency, the country and its people can achieve growth and prosperity in 20 years. There is no short-term solution to the current economic crisis,” he said.
When asked about reasons for the UNP’s worst-ever defeat in history and its future direction, he said “The UNP wasn’t prepared for the 2019 presidential election.
As far as I was concerned, I wanted to contest the parliamentary polls as a united team because then we would have had a chance to make our presence felt in parliament and prevent the government from getting a two-thirds majority. But there was a different feeling in the party and Sajith Premadasa and others wanted to depart from the UNP and contest. When you look at the election results analytically, both SJB and UNP got some 2 million votes. We came down to some two million votes from about 5.4 million votes. And now, post-Covid, I think that the major parties’ vote bases have disappeared – both of the government as well as ours. The UNP also has to build up a new vote base. We have done a survey and found what the people want. We are re-organising the party in a more professional way. We are making an effort to bring in young professionals to the party. Most of our senior leaders have retired, so we have the opportunity to open our doors to the young people. We will expose them to the right kind of training and there will be new faces in the UNP in the coming few months.”
Asked when he would hand over the reins of the party, he said,”Whenever they are ready. They are just coming in. They can have it when they want it.”
When asked about the government’s wish to restructure its Chinese debt and whether he thought it could be done, he said, “I read that Sri Lanka has raised this concern about restructuring its Chinese debt. In such a context, China could be urged to restructure debt on many countries on the Belt and Road initiative. You can’t restructure debt of one country and not of others. I can’t see that taking place. And I don’t think there was enough time during the Chinese foreign minister’s recent visit to Sri Lanka to discuss matters of that nature.”
Asked about his potential candidacy at the next presidential election, “Earlier you asked when I was going to hand over the reins to young members of the party and now you ask whether I would be contesting the next presidential election,” he quipped.
“Frankly speaking, I have only given my views on how the economy should be handled. I feel that we have to have a common economic plan. All major parties must agree on its fundamentals. The major parties in India despite their differences over the farmers’ issue, won’t move away from their core economic model, no matter whatever their differences. We also have to agree on a common economic model like that and how we are going to come out of this crisis, regain stability and achieve growth. That is what I have always advocated for. If such a common model is pursued for 20 years, we can achieve real growth. The current crisis can’t be sorted out in a day or two.”
Asked what should be the government’s plan at this juncture, the UNP leader said that the government would have to make up their mind to have a plan in the first place and talk to everyone.
Asked if the Opposition would support such a plan, he said, “They should present a plan. If there is a solid plan, I think the Opposition will support it. Today even the cabinet ministers are saying that there is no plan,” he said.
When asked if Sri Lanka should convene the BIMSTEC member states – Bangladesh, Bhutan, India, Myanmar, Nepal and Thailand as its current Chair to discuss the matter of Myanmar’s ousted civilian leader Aung San Suu Kyi jailed for four more years, the UNP leader said,” I raised this matter in parliament and asked if we could discuss it privately and not in public, but I didn’t get a reply. The predominant concern that remains is whether Sri Lanka would go to the IMF let alone BIMSTEC,” he said.
Business
ADB intervention offers an oasis for Delft, but basic infrastructure remains a daily struggle
A tour reveals the widening gap between Delft’s tourism promise and the realities of island life
By Sanath Nanayakkare
Stepping onto Neduntheevu – better known as Delft Island – can feel like slipping off the edge of the map into one of Sri Lanka’s least-explored frontiers.
For the traveller seeking an escape from the urban grid, this remote island off the Jaffna peninsula offers an alluring picture of a forgotten paradise: wild horses, coral and limestone fences, sun-bleached dwellings and a community accustomed to life at the margins.
But beneath that romantic veneer lies a far harsher reality.
For the people who live and work here, survival remains an everyday balancing act shaped by inadequate infrastructure, acute water scarcity, unreliable transport and growing frustration over what they see as years of neglect.
Some crucial lifelines, however, have begun to reach these distant shores, largely through the intervention of international development partners.
The Asian Development Bank (ADB) has played an important role in strengthening water security on Delft, through a Sea Water Reverse Osmosis (SWRO) plant designed to provide a critical source of potable water to the island.
The plant was designed with an initial capacity of about 50 cubic metres – or 50,000 litres – of potable water a day, with the potential to expand production to 100 cubic metres. At present, it supplies roughly 40% of Delft’s population.
For residents and local businesses, the plant has provided much-needed relief. Yet operational constraints mean that it currently runs for only about 20 minutes a day, limiting the volume of water available and forcing households and businesses to find additional sources simply to meet their daily needs.
Few understand that struggle better than Vithushan Arul Ranjan, affectionately known as Tommy, a young Energy and Environmental Technology graduate of the University of Sri Jayewardenepura. In 2021, Vithushan launched Delft Village Stay on family land as a community-based tourism venture. It has since grown into an award-winning eco-retreat accommodating up to 25 guests in eco-huts and traditional rooms.
His enterprise has received recognition at both regional and international levels, including the Northern Province Tourism Award 2025 and a recommendation in the 2025 edition of the Lonely Planet Guide.
His business is built around responsible tourism, with an emphasis on bringing economic benefits to the local community. But operating an eco-retreat on one of Sri Lanka’s most isolated islands comes at a considerable cost.
“It is almost impossible to focus on the business when we are constantly in survival mode,” Vithushan says.
Georgie Unsworth, a UK/Belgium visitor turned team member at Delft Village Stay, highlights the stark contrast between Neduntheevu’s magical appeal and the harsh realities locals face regarding basic infrastructure and rights. While tourists want to support sustainable growth and prioritise resident needs – fearing a repeat of southern Sri Lanka’s over-tourism – they are often distressed by severe plastic pollution and a lack of recycling facilities. Ultimately, Unsworth emphasises that visitors prefer authentic, responsible experiences over luxury amenities like AC boats and swimming pools, urging that fundamental local needs be addressed before expanding tourism.
One of his biggest challenges is something most tourism businesses take for granted: drinking water. Because Delft’s groundwater is severely affected by salinity, Delft Village Stay has to transport drinking water from across the Jaffna peninsula. The business spends around Rs. 35,000 a month just to bring in enough water to meet the basic requirements of its guests.
The problem extends well beyond the tourism sector. Residents say Delft’s fragile connection with the mainland remains heavily dependent on a small fleet of vessels – two government ferries and one private boat – that are vulnerable to breakdowns, overcrowding and unpredictable schedules.
The consequences can be severe.
Recently, a month-long interruption to regular boat services effectively isolated the island, disrupting the supply of essentials including cooking gas and drinking water.
The island’s tourism ambitions have also exposed the gap between policy aspirations and ground realities.
Government plans to develop Delft as an eco-tourism destination have encouraged a growing flow of visitors, but residents and tourism operators argue that visitor numbers cannot be increased sustainably without first strengthening the island’s basic infrastructure.
The dangers became starkly apparent when an unofficial private boat carrying tourists capsized with 10 people on board. A potentially fatal tragedy was reportedly averted only after local fishermen and Navy personnel rushed to the rescue.
The incident offered a sobering reminder that tourism development in remote locations requires more than branding a destination as an ecological paradise.
For policymakers and development planners looking towards Sri Lanka’s north, Delft offers a clear lesson. Ambitions for zero-emission, community-based and environmentally sustainable tourism cannot move faster than the basic needs of the people who live there.
Reliable maritime transport, expanded water and wastewater management, proper waste disposal and functioning public amenities are not optional extras. They are the foundations upon which any sustainable tourism economy must be built.
The ADB-supported water infrastructure offers a glimpse of what targeted investment can achieve. But Delft’s experience also shows that a single intervention, however important, cannot resolve a much wider infrastructure deficit.
The island may have wild horses, coral walls, ancient ruins and a growing reputation among international travellers.
But before Delft can truly become the eco-tourism showcase policymakers envision, it must first become a place where its residents can reliably secure something as fundamental as water.
“That is the real test of whether the island’s tourism promise can translate into sustainable development – or whether the Lonely Planet image of Delft will remain little more than a façade over the daily hardships of its people,” says Vithushan Arul Ranjan.
Business
Systemic questions linger over NDB fraud inquiry
By Sanath Nanayakkare
The unfolding developments surrounding the massive internal financial irregularity at the National Development Bank PLC (NDB), valued at approximately LKR 13.2 billion, continue to demand rigorous public scrutiny.
As months have passed since the initial disclosure of the fraud in early 2026, questions regarding institutional accountability, regulatory oversight, and corporate governance remain central to discussions concerning the stability and transparency of Sri Lanka’s financial sector.
First coming to light through corporate disclosures and subsequent regulatory reviews, the LKR 13.2 billion incident represents one of the largest internal fraud cases recorded within a major commercial institution in recent times. Because NDB is a systemically important institution – with major state-backed shareholding through entities such as the Employees’ Provident Fund (EPF), the Employees’ Trust Fund (ETF), Sri Lanka Insurance Corporation (SLIC), and the Bank of Ceylon (BOC) – the implications extend far beyond normal corporate missteps.
Public interest advocates and financial analysts have repeatedly emphasised that any major lapse in a bank of this magnitude warrants total transparency to maintain public confidence. Although the Central Bank of Sri Lanka (CBSL) and bank management have publicly assured stakeholders that customer deposits remain secure and day-to-day operations unaffected, the broader governance questions regarding how such significant vulnerabilities went undetected remain a subject of intense public debate.
A focal point of concern among financial analysts and governance watchdogs is the framework surrounding the independent forensic audit commissioned to investigate the transactions.
Entrusted to international expertise via Deloitte Touche Tohmatsu India LLP, the audit’s mandate includes examining the circumstances of the fraudulent operations as well as evaluating historical lapses in internal controls, oversight, and compliance.
However, critics, including public interest figures, have raised questions regarding the timeline for the finalisation and release of these findings.
Parliamentary oversight bodies, such as the Committee on Public Finance (CoPF), have previously engaged with regulatory authorities to review the matter.
Observers point out that timely public access to comprehensive audit findings – without compromising ongoing criminal investigations by entities like the Criminal Investigation Department (CID) – is vital to ensuring that systemic gaps are permanently closed.
The NDB case has also cast a sharp spotlight on broader corporate governance norms in Sri Lanka, bringing elements such as board oversight, the role of external auditors, and potential conflict-of-interest perceptions into sharper focus.
Critics argue that maintaining public trust requires strict adherence to ethical standards at every level of corporate leadership, from commercial bank directors to regulatory supervisors.
“As the country seeks to attract sustainable foreign direct investment, establishing an uncompromised standard of accountability is paramount. For the memory of this financial fraud to serve a constructive purpose, institutional watchdogs, lawmakers, and regulators must ensure that investigations are brought to a transparent, logical, and publicly accountable conclusion, ensuring that public resources and systemic financial integrity are robustly safeguarded,” keen observers of this massive brank fraud say.
Business
‘ASEAN must leverage trust and governance alongside cost competitiveness’
Trust and regulatory clarity are fast becoming ASEAN’s next major competitive advantages, according to Dato’ Sri Vijay Eswaran, Executive Chairman of the QI Group of Companies.
Writing in The Business Times Insights: ASEAN Intelligence 2026, Eswaran noted that while cost competitiveness remains central to the region’s economic appeal, geopolitical uncertainty, shifting supply chains, and rapid technological advancements mean cost is no longer the sole deciding factor for investors. Global companies are increasingly prioritizing stability, predictable policies, and reliable institutions.
Eswaran emphasized that sustainable growth depends on pairing the region’s traditional strengths—such as strategic manufacturing, a growing talent pool, and regional connectivity—with strong institutional governance. Pointing to the OECD’s Asia Capital Markets Report 2026, he highlighted that transparency and institutional maturity are key drivers of investor confidence.
Addressing the rapid integration of artificial intelligence, Eswaran argued that clear guardrails are essential to prevent business hesitation. He commended regional initiatives balancing innovation with oversight, including Malaysia’s AI infrastructure developments, Singapore’s AI Verify framework, Indonesia’s formalization of its National Artificial Intelligence Strategy, the Philippines’ National AI Strategy Roadmap 2.0, and Vietnam’s new risk-based legal framework.
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