News
Sri Lanka back to its high poverty levels
Sri Lanka’s estimated poverty (share of the population living on less than $3.65 a day) remains stubbornly high, affecting as much as a quarter of the population in 2024, and twice as high as in 2021. The reversal in poverty reduction gains during the crisis has taken Sri Lanka back to its high poverty levels of the early 2000s, finds a new study by the Centre for Poverty Analysis(CEPA).
The report, launched on Tuesday in Colombo, says: The economy has stabilised remarkably well since weathering its worst economic crisis since Independence, but there are substantial risks of a relapse. The country now needs to continue with macroeconomic stabilisation and implement a range of growth policies, with a new focus on state capacity.
The report, titled ‘Sustaining Transformative Growth in Sri Lanka 2025–2030’, offers a bold roadmap for Sri Lanka to achieve sustainable and inclusive economic growth over the coming five years. Authored by an Independent Growth Study Group, under the auspices of ODI Global and the CEPA, the report provides critical policy recommendations for navigating the country’s complex economic landscape as it emerges from its worst economic crisis since independence.
Developed by a team of nine leading experts, with extensive experience across public, private, and international sectors, the report highlights the significant progress made in stabilising the Sri Lankan economy, including renewed growth and reduced inflation. However, it stresses that the persistent challenge of high poverty levels requires a focus on economic transformation with structural reforms and targeted sectoral policies to mitigate future risks and unlock the nation’s vast potential.
Dr Ganeshan Wignaraja, Visiting Senior Fellow at ODI Global and Convenor of the Independent Growth Study Group, said: “Sri Lanka has shown remarkable resilience in overcoming recent economic hardship, but the journey towards prosperity requires more than resilience – it demands bold action. This report provides a crucial framework, not just for consolidating the hard-won gains of stabilisation, but for igniting truly transformative growth that uplifts all Sri Lankans. The opportunity is here, and we must act decisively to create a more inclusive and resilient economy.”
The study identifies six key policy areas as crucial for achieving sustainable growth: maintaining macroeconomic stability, integrating into global supply chains, improving factor markets, implementing targeted sectoral policies, reducing poverty and building political consensus. It also highlights key sectors poised for growth, including tourism, the digital economy, niche manufacturing and agriculture, driving the economic transformation of Sri Lanka in the future.
Prof. Sirimal Abeyratne, Executive Director of CEPA and a co-author of the report, emphasised the critical role of trade in this transformation: “Sri Lanka’s historical under-performance in exports is directly linked to a persistent anti-export bias and cumbersome business regulations. Our findings underscore that strategically opening up to global trade and rigorously streamlining business procedures are not just options, but essential accelerators to boost exports, stimulate investment and unleash the full potential of Sri Lankan businesses on the international stage.”
Prof. Dirk Willem te Velde, Director of the International Economic Development Group at ODI Global, said: “In today’s volatile global economy, Sri Lanka’s experience serves as a powerful lesson for recovery from deep economic crisis, setting an example for other emerging economies facing similar challenges. Our study argues how targeted policies for trade and production, innovation and digital economy, and governance can transform the country’s economic landscape and avoid further macro-economic crises. This report is a call to action for all stakeholders – government, business, civil society and citizens alike – to work together towards a shared vision of a prosperous and transformed Sri Lanka.”
The report urges a concerted effort to leverage Sri Lanka’s strategic location and build on existing production capabilities to drive growth and reduce poverty. It emphasises the importance of strategic engagement with global and regional supply chains and the digital economy to boost exports and attract foreign investment.
The Frontline Socialist Party (FSP) yesterday accused the government of seeking to use the proposed Protection of the State from Terrorism Act (PSTA) to suppress popular political activity, claiming that some of its provisions were more repressive than those of the Prevention of Terrorism Act (PTA).
FSP Education Secretary Pubudu Jayagoda told a media briefing, in Nugegoda, that the definition of terrorism in the Bill was so broad that it could be used to label almost any form of popular political activity as terrorism.
He said the Bill’s approach to defining terrorism was based largely on attempts to compel a government, or an international organisation, to do, or refrain from doing something, rather than on internationally recognised criteria, such as killings, causing serious bodily harm, kidnapping or acts intended to spread terror among the public.
Jayagoda also alleged that the Bill transferred substantial powers from the judiciary to the executive, while extending powers of arrest, investigation and detention to the armed forces, in addition to the police.
He claimed that the government had sought to portray the Bill as a replacement for the PTA while retaining or introducing provisions that could facilitate political victimisation and repression.
The FSP also questioned the government’s decision to proceed with the Bill, despite having previously sought public views on an earlier draft.
Jayagoda said a draft had been published earlier this year, with the period for public submissions ending on February 28, but the Bill subsequently gazetted was essentially the same draft with some provisions rearranged.
Jayagoda also referred to a letter reportedly sent by Attorney-at-Law Saliya Peiris, a member of a Committee, chaired by President’s Counsel Rienzie Arsecularatne, that had been appointed to draft the legislation. He said Peiris had stated, in the October 06 letter, that changes had been made to the draft prepared by the Committee.
“This means that even the Committee, appointed to prepare the Bill, was a deception,” Jayagoda alleged.
He said that the PSTA was fundamentally similar to the Anti-Terrorism Bill introduced by the previous government, in 2023, which the National People’s Power (NPP) opposed and challenged in court.
“If the NPP opposed that Bill then and is now bringing the same legislation before Parliament, the government must explain its position,” he said.
Jayagoda called on NPP MPs to oppose the PSTA in Parliament and urged trade unions and other groups to build a broad public movement against the legislation.
He challenged the government to an open debate on the Bill.
Former First Lady Shiranthi Rajapaksa was yesterday remanded until 13 October after being produced before the Colombo Magistrate’s Court following her arrest by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC).
Shiranthi, wife of former President Mahinda Rajapaksa, was arrested at her residence on Poorwarama Road, Kirulapone, after CIABOC officers recorded a statement from her for nearly two hours.
According to the CIABOC, the arrest was made over allegations that Rs. 10 million obtained from the National Savings Bank through the Siriliya Saviya organisation was misappropriated.
The money was allegedly obtained to provide a Computed Tomography (CT) scanner to the children’s hospital. Investigators allege that the scanner was not provided and that the funds were instead unlawfully used.
CIABOC is investigating alleged offences under the Public Property Act and corruption-related provisions in connection with the transaction and other financial activities involving Siriliya Saviya, which was headed by Rajapaksa.
Rajapaksa returned to Sri Lanka on Monday night on a flight from Malaysia after travelling overseas for medical treatment. She left for Singapore on 16 September after being admitted to a private hospital in Colombo on 15 September following an illness.
She had been due to appear before the Financial Crimes Investigation Division (FCID) on 13 October in connection with its investigation into the financial affairs of Siriliya Saviya.
Meanwhile, her lawyers filed an anticipatory bail application before the Maligakanda Magistrate’s Court on Monday, seeking an order preventing her arrest in connection with the FCID investigation.
Former National Savings Bank (NSB) Chairman Pradeep Kariyawasam was yesterday granted bail by the Colombo Magistrate’s Court following his arrest by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC).
Kariyawasam, husband of former Chief Justice Shirani Bandaranayake, was arrested in connection with the Bribery Commission’s investigation into the ‘Siriliya Saviya’ account linked to former First Lady Shiranthi Rajapaksa.
The investigation concerns financial activities involving the Siriliya Saviya initiative, which was headed by Rajapaksa, wife of former President Mahinda Rajapaksa.
CIABOC is continuing investigations into the alleged financial irregularities relating to the account.
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