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SL economy, IMF claims, and reality

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Peter Breuer, Chief of IMF Mission to Sri Lanka has claimed that the Sri Lankan economy is showing signs of progress. The monetary and fiscal measures like tax increases and particularly the debt moratorium may have resulted in giving some breathing space for the country to recover from the period of extreme hardship caused by non-availability of foreign exchange to import essential requirements. Now, there are no fuel and gas queues and shortages are not severe. Economic parameters like GNP, inflation, are improving, tourism, are positive, and foreign remittance is flowing in. All these signs are favourable and could make the economist say the economy is doing well.

However, even in the field of economics as it applies to our country there are looming crises. The foreign debt has to be paid in the future and that will be a severe strain on the country’s foreign reserves. Import/export imbalance has been widening mainly due to the lower demand for our products and also the slow growth of production. Our overall export earnings have been declining in the post-Covid period. The Export Development Board has said that cumulative merchandise exports in 2023 decreased by 9.54 percent compared to 2022 (EDB report 31.1.2024). Unless the situation improves quickly foreign reserves which are satisfactory at present may decrease forcing the country to take more loans.

The following facts would substantiate this reality. Sri Lanka’s earnings from exports was only 23% of the GDP in 2014 and it has been around that figure since 1977. We have not been able to improve this situation. There is no way we could change this equation to any significant degree because to increase exports we have to increase imports too. To overcome these problems, we must attract investors (most of whom are Robber Barons) and prepare an investor friendly environment (often by denying the rights of workers and at the risk of environmental degradation) and be able to compete to capture our share of the market (which is often manipulated). This is well-nigh impossible for Sri Lanka as well as other developing countries.

We are not alone in this predicament. This system often leaves us short of dollars for our essentials, and we are forced to borrow from international lenders. Then, we turn to the IMF, which has been created for the purpose of keeping countries like ours afloat. This remedy is often worse than the malady and consequently the poor suffer more than others. The fact that we will never be able to come out of this mess becomes clear when we consider the following.

The new wealth produced by the world since 2020 has been USD 42 trillion. Two thirds of it have gone into the pockets of 1% of the world population. The whole of the rest of the world population, i. e., 99%, will have to do with one third of this wealth, which was largely produced by them. Further, during the last few decades, the debt burden of poor countries has increased by 12 %. Inequality between the rich and the poor has increased by 8%. These facts and figures show that the poor countries could never come out of poverty by following the economic policies they have followed in the past. They must, jointly if possible, work out new policies and mechanisms to come out of their poverty.

Contrary to the IMF claims, we are already witnessing the ill-effects of their policies on the lower middle class and the poor. Child malnutrition, stunting, and school dropouts are rising by the day. Although the IMF says these issues must be addressed by welfare measures, these don’t seem to be sufficient to mitigate the problem. Far-reaching effects of child malnutrition and inadequate education are well known and our country has been experiencing these ills continuously in the past. Health and education are imperative for economic development. As per the Family Health Bureau’s Nutrition Month 2023 Summary Report, the percentage of children under five years, who are underweight, was reported to be 17.1%, compared to 15.3% in 2022 (16.9.2023).

The ultimate future economic loss due to child malnutrition, which has health and mental development implications, is apparently not in the IMF equation. A World Bank report warns that malnutrition is costing poor countries up to 3 percent of their yearly GDP, while malnourished children are at risk of losing more than 10 percent of their lifetime earnings potential (20.3.2006). According to the report—malnutrition has long been known to undermine economic growth and perpetuate poverty, and yet, over previous decades, the international community and most governments in developing countries have failed to tackle malnutrition, even though well-tested approaches for doing so exist. The report says developing countries that invest in better nutrition for their children get high returns on their spending. A group of the world’s leading development economists, including three Nobel Laureates, concluded in a 2004 study known as the Copenhagen Consensus, that nutrition investments were one of the ‘best buys’ that developing countries could make in reducing poverty and improving economic growth.

There may be some chance of getting out of this vicious cycle by a process of import substitution. It may be easier to save foreign exchange by cutting down on the imports, which could be produced locally. We have been importing a significant quantity of commodities that could be produced locally. If Sri Lanka could produce the essential food items, the import expenditure could be reduced by about 50%. If import of non-essential goods is stopped another 25% could be saved. Then, our export earnings will be adequate for the essential needs of fuel, etc. Moreover, if the goal of 70% of renewable energy could be reached, which should not be difficult for a country blessed with ample sunlight, we could save enough of the export earnings for development work. All developing countries must strive for self-sufficiency and move away from export oriented, debt dependent economies. Indonesia has achieved economic development by increasing its agricultural output, which has risen to 15% of the GDP whereas in Sri Lanka it has remained at 8% for the past several decades.

Joseph Stiglitz, Professor of Economics at Columbia University and former senior vice president of The World Bank and Nobel Memorial Prize winner, wrote in April 2000 in an article for the New Republic “They will say the IMF’s economic ‘remedies’ often make things worse – turning slow-downs into recessions and recessions into depressions.  And they will have a point.  I was chief economist at the World Bank from 1966 until last November, during the gravest global economic crisis in a half century.  I saw how the IMF, in tandem with the US Treasury Department, responded.  And I was appalled”.  He was made to resign from his post in the World Bank. John Maynard Keynes in his book, ‘National Self Sufficiency’ (1933), says: “Ideas, knowledge, science, hospitality, travel, – these are the things which should of their nature be international.  But let goods be homespun whenever it is reasonably and conveniently possible and above all let finance be primarily national. Experience accumulates to prove that most modern processes of mass production can be performed in most countries and climates with almost equal efficiency.”

N. A. de S. Amaratunga



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Opinion

V. Shanmuganyagam (1940-2026): First Clas Engineer, First Class Teacher

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Quiet flows another don. The aging fraternity of Peradeniya Engineering alumni has lost another one of its beloved teachers. V. Shanmuganayagam, an exceptionally affable and popular lecturer for nearly two decades at the Peradeniya Engineering Faculty, passed away on 15 January 2026, in Markham, Toronto, Canada. Shan, as he was universally known, graduated with First Class Honours in Civil Engineering, in 1962, when the Faculty was located in Colombo. He taught at Peradeniya from 1967 to 1984, and later at the Nanyang Technological University in Singapore, before retiring to live in Canada.

V. Shanmuganayagam

In October last year, one of our colleagues, Engineer P. Balasundram, organized a lunch in Toronto to felicitate Shan. It was very well attended and Shan was in good spirits. At 85 he was looking as young as any of us, except for using a wheelchair to facilitate his movement. The gathering was remarkable for the outpouring of warmth and gratitude by nearly 40 or 50 Engineers, who had graduated in the early 1970s and now in their own seventies. One by one every one who was there spoke and thanked Shan for making a difference in their lives as a teacher and a mentor, not only in their professional lives but by extension in their personal lives as well.

As we were leaving the luncheon gathering there were suggestions to have more such events and to have Shan with us for more reminiscing. That was not to be. Within three months, a sudden turn for the worse in his condition proved to be irreversible. He passed away peacefully, far away across the world from the little corner of little Sri Lanka where he was born and raised, and raised in a manner to make a mark in his life and to make a difference in the lives of others who were his family, friends and several hundreds of engineering professionals whom he taught.

V. Shanmuganayagam was born on May 30, 1940, in Point Pedro, to Culanthavel and Sellam Venayagampillai. His family touchingly noted in the obituary that he was raised in humble beginnings, but more consequentially his values were cast in the finest of moulds. He studied at Hartley College, Point Pedro, and was one of the four outstanding Hartleyites to study engineering, get their first class and join the academia. Shan was preceded by Prof. A. Thurairajah, easily Sri Lanka’s most gifted academic engineering mind, and was followed by David Guanaratnam and A.S. Rajendra. All of them did Civil Engineering, and years later Hartley would send a new pair of outstanding students, M. Sritharan and K. Ramathas who would go on to become highly accomplished Electrical Engineers.

Shan graduated in 1962 with First Class Honours and may have been one of a very few if not the only first class that year. Shan worked for a short while at the Ceylon Electricity Board before proceeding to Cambridge for postgraduate studies specializing in Structures. His dissertation on the Ultimate Strength of Encased Beams is listed in the publications of the Cambridge Structures Group. He returned to his job at CEB and then joined the Faculty in 1967. At that time, Shan may have been one of the more senior lecturers in Structures after Milton Amaratunga who too passed away late last year in Southampton, England.

When we were students in the early 1970s, there was an academic debate at the Faculty as to whether a university or specific faculties should give greater priority to teaching or research. Shan was on the side of teaching and he was quite open about it in his classes. He would supplement his lectures with cyclostyled sheets of notes and the students naturally loved it. It was also a time when Shan and many of his colleagues were young bachelors at Peradeniya, and their lives as academic bachelors have been delightfully recounted in a number of online circulations.

The cross-sectional camaraderie at the Faculty in those days is well captured in one of the photographs taken at Shan’s wedding at Point Pedro, in 1974, which too has been doing the rounds and which I have inserted above. Flanking Shan and his bride Kalamathy, from Left to Right are, M. Dhanendran, Nandana Rambukwella, K. Jeyapalan, Wickrama Bahu Karunaratne, A.S. Rajendra, Lal Tennekoon, Tusit Weerasooria, and R. Srikantha. Sadly, Rambukwella, Karunaratne (Bahu), Tennekoon and now Shan himself, are no longer with us.

Like other faculty members, Shan kept contact with his former students turned practising engineers and they would reach out to him to solicit his expertise in their projects. In the early 1980s, when I was working as Resident Project Manager with my Peradeniya contemporaries, JM Samoon and K. Balasundram, at the Hanthana Housing Scheme undertaken by the National Development Housing Authority (NHDA), Shan was one of the project consultants helping us with concrete technology involving mix design and in situ strength testing using the testing facilities at the Faculty.

The Hanthana Team Looking back, the Hanthana housing scheme construction was the engineering externalization of the architectural imaginings of Tanya Iousova and Suren Wickremesinghe, for building houses on hill slopes without flattening the hills. The project involved the construction of hundreds of housing units with supporting infrastructure comprising roads and drainage, water supply and sanitary, and electricity distribution using underground cables. Tanya & Suren Wickremasinghe were the Architects with an Italian construction company as contractors.

To their credit, Tanya and Suren assembled quite a team of Consulting Engineers that was a cross-section of E’Fac alumni, viz., Siripala Kodikkara and Siripala Jayasinghe (Contract Administration); Prof. Thurairajah (Foundations & Soil Mechanics); S.A. Karunaratne (Structures); V. Shanmuganyagam (Concrete Technology); Neville Kottagama and DLO Mendis (Roads & Drainage); K. Suntharalingam (Water Supply & Sanitary); and Chris Ratnayake (Electrical).

As esoteric gossip goes, DLO Mendis had an informal periodization of engineering graduates, identifying them as either Before-Thurai or After-Thurai, centered on 1957 – the year Prof. Thurairajah graduated with supreme distinction and went on to do groundbreaking theoretical research in Soil Mechanics at Cambridge. Of the Hanthana consultant team, Neville Kottagama and DLO Mendis were before Thurai by six years, Shan was five years after, and all the others came later. Sadly though, only Tanya and Chris are with us today from the 1980s group named above.

After Hanthana came 1983 when all hell broke loose and hundreds of professionals and their families were forced to leave Sri Lanka. Shan left Peradeniya and joined Nanyang Technological University in Singapore, encouraged by his Cambridge contemporaries from Singapore. He taught at Nanyang for twelve years (1984-1996) before moving to Canada with his wife and three sons who were by then ready for university education.

All three children have done exceptionally well in their studies and professional careers. The oldest, Dhanansayan, is a Medical Doctor and a Professor at the University of Wisconsin School of Medicine and Public Health, in Madison, United States. That was where India’s Jayaprakash Narayan and Sri Lanka’s Philip Gunawardena had their university education a hundred years ago.

The younger two sons took to Engineering. The second son, Kalaichelvan, is Program Manager at Creation Technologies, an award-winning global electronics manufacturing service provider. And the youngest, Dhaksayan, is the Chief Information Officer (CIO) at the Toronto Transit Commission (TTC), which is North America’s third-largest urban transit system.

All three have done their parents proud and Shan would have been gratified to see them achieve exemplary success in their chosen fields. A first class Engineer and a first class teacher, Shan was also a great father and a loving grandfather. As we remember Professor Shanmuganyagam, we extend our thoughts and sympathies to his beloved wife Kalamathy, his sons and their young families

by Rajan Philips

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Opinion

Cannavarella: Estate once owned by OEG with a heritage since 1880

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Established in 1880, Cannavarella Estate stands among the most historically significant plantations in Sri Lanka, carrying a legacy that intertwines agricultural heritage, colonial transitions and modern development. Its story begins with the cultivation of cinchona, a medicinal bark used to produce quinine, which is a vital treatment for malaria at the time, introduced when coffee estates across the island were failing.

Under the ownership of Messrs Macfarlane, Cannavarella rapidly gained a reputation for producing cinchona at ideal elevations between 4,000 and 5,000 feet above sea level. At that time, the estate spanned around 750 acres and played a pivotal role in the island’s shift from coffee to alternative plantation crops during the late 19th century.

A transformative chapter began when Christopher B. Smith purchased the property and unified several surrounding estates- Moussagolla, Cannavarella, East Gowerakelle, and Naminacooly- into what became known as the Cannavarella Group. This amalgamation created a vast holding of approximately 1,800 acres. By 1915, nearly 1,512 acres of this extent were cultivated in tea, marking the estate’s full transition from cinchona to the crop that would define its identity for generations.

The Group was managed by the Eastern Produce and Estates Company from 1915 until 1964, after which stewardship passed successively to Walker & Sons Company Ltd, and then to George Steuart Company Ltd by 1969.

A defining moment in the estate’s history arrived in 1971 when Sir Oliver Goonetilleke, former Governor General of Ceylon, acquired the estate. Under his ownership, it came under the London-based company Ceyover Ltd., a name derived from “Cey” for Ceylon and “Over” for Oliver.

The estate remained under private ownership until the nationalization wave of 1975, during which Cannavarella was brought under the Janatha Estates Development Board (JEDB). For nearly two decades it was managed under government purview until the plantation sector was re-privatised in 1992.

Sir Oliver Goonetilleke

Thereafter, Cannavarella Estate moved under the management of Namunukula Plantations Limited, first through BC Plantation Services, then under John Keells Holdings’ Keells Plantation Management Services and eventually under the ownership of Richard Pieris & Company PLC, where it continues today as part of the Arpico Plantations portfolio.

Blending heritage, landscape and community

Situated along the northeastern slopes of the scenic Kabralla-Moussagolla range and bordering the Namunukula mountain range, Cannavarella Estate spans a total extent of 800 hectares. Its six divisions rise across elevations from 910 to 1,320 metres above sea level, creating a landscape ideal for cultivating premium high-grown tea. Of the total land area, 351 hectares are dedicated to mature tea, while 54 hectares consist of VP tea, representing 16 % of the estate.

Among its most remarkable features are fields containing seedling tea bushes more than a century old, living symbols of Sri Lanka’s plantation legacy that continue to thrive across the slopes. The estate is also home to the origin of the Menik River, which begins its journey in the Moussagolla Division, adding an ecological richness to Cannavarella’s natural environment.

Cannavarella’s history of leadership reflects broader transformations within the plantation industry. The last English superintendent, Mr. Charles Edwards, oversaw the estate during the final phase of British management. In 1972, he was succeeded by Franklin Jacob, who became the first Sri Lankan superintendent of the Cannavarella Group, marking a shift toward local leadership and expertise in plantation management.

Development within Cannavarella Estate has never been confined to agriculture alone. Over the past decade, the estate has strengthened its emphasis on community care, diversification and improving living conditions for its workers. In 2022, coffee planting was initiated in Fields 7 and 8 of the NKU Division, covering 2.5 hectares as part of a broader effort to introduce alternative revenue streams while complementing tea cultivation.

The estate’s commitment to early childhood development is reflected in the initiation of a morning meal programme across all Child Development Centres from 2025, ensuring that children receive nutritious meals each day. A newly constructed Child Development Centre in the EGK Division, completed in 2020, now offers modern facilities including a play area, study room and kitchen, symbolizing the estate’s dedication to nurturing the next generation. In 2015, a housing scheme consisting of 23 new homes was completed and handed over to workers in the CVE Division, significantly improving quality of life and providing families with safer, more stable living environments.

A future built on stability and renewal

Cannavarella Estate is preparing to undertake one of its most important social development initiatives. A major housing programme has been proposed to relocate 69 families currently residing in landslide-prone areas of the Moussagolla Division. Supported by the Indian Housing Programme, this effort aims to provide secure, sustainable housing in safer terrain, ensuring long-term stability for vulnerable families and reducing disaster risk in the region.

Across its history, Cannavarella Estate has remained a landscape shaped both by the land and the people who call it home. Cannavarella continues to honour its roots while building a modern legacy that uplifts both the estate and its people. (Planters Association news release)

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Opinion

From the Lecture Hall to the Global Market: How Sri Lankan students are mastering the “Gig Economy”

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Image : Courtesy South China Morning Post

Have you ever wondered how a university student, between heavy textbooks and late-night study sessions, manages to earn a professional income in US dollars? It sounds like a dream, but for thousands of Sri Lankans, it’s becoming a daily reality through online freelancing.

A recent study published in the Ianna Journal of Interdisciplinary Studies has pulled back the curtain on this digital revolution. By interviewing 21 successful student freelancers across Sri Lanka, researchers have mapped out exactly what it takes to turn a laptop and an internet connection into a thriving career.

The Rise of the “Earn-as-you-learn” Era

In Sri Lanka, the number of online freelancers has exploded from about 20,000 in 2016 to over 150,000 today. While our traditional education system often focuses on preparing students for 9-to-5 office jobs , these students are diving into the “Gig Economy” a digital marketplace where they sell specific skills, like graphic design or programming, to clients all over the world.

The Secret Sauce for Success

So, what makes some students succeed while others struggle? The research found that it isn’t just about being good at coding or design. Success comes down to six “Core Pillars”:

· A Growth Mindset: The digital world moves fast. Successful students don’t just learn one skill; they are constantly updating themselves to ensure they don’t become “outdated”

· The Balancing Act:

How do they handle exams and clients? They don’t use a magic wand; they use strict time management. Many work late into the night (from 6 p.m. to midnight) to accommodate international time zones.

· The Power of “Hello”:

Since most clients are in the USA or UK, strong English and clear communication are vital. It’s about more than just talking; it’s about negotiating prices and building trust.

· Proactive Problem Solving:

Successful freelancers don’t wait for things to go wrong. They update their clients regularly and fix issues before they become headaches.

Why This Matters for Sri Lanka

Right now, our universities don’t always teach “how to be a freelancer”. This study suggests that if we integrate freelancing modules and mentorship into our degree programs, we could significantly reduce graduate unemployment. It’s a way for students to gain financial independence and bring much-needed foreign currency into our economy while still in school.

You Can Do It Too

If you’re a student (or the parent of one), the message is clear: the global market is open for business. You don’t need to wait for graduation to start your career. With a bit of flexibility, a willingness to keep learning, and a proactive attitude, you can transition from a learner to an earner.

The Research Team Behind the Study

This groundbreaking research was conducted by a dedicated team from the Department of Business Management at the SLIIT Business School (Sri Lanka Institute of Information Technology). The authors of the study include:

· Lihini Niranjana Dasanayaka

· Thuvindu Bimsara Madanayake

· Kalana Gimantha Jayasekara

· Thilina Dinidu Illepperuma

· Ruwanthika Chandrasiri

· Gayan Bandara

by Ruwanthika Chandrasiri

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