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Sri Lanka’s development dilemmas

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by Uditha Devapriya

On May 18, the grace period for a USD 78 million coupon payment expired in Sri Lanka. For the first time in its post-independence history, the island nation defaulted on its foreign debt. The Governor of the Central Bank, Dr Nandalal Weerasinghe, then announced that it would take six months for it to start repaying its creditors. An agreement with the IMF is in the pipeline now, but such an agreement will take another month or two.From a global perspective, of course, there is nothing unique about Sri Lanka’s crisis. For the country’s 22 million plus population, however, its scale has been unprecedented. While horror stories of Sri Lanka turning into another Lebanon or Zimbabwe have been recycled relentlessly in the press, since 2020, in recent months such comparisons have been made more frequently. Inflation, which began peaking last year, hit 30 percent in April and 40 percent in May. While nowhere near Lebanon or Zimbabwe, estimates by certain observers and analysts put Sri Lanka at the top of global inflation indices.All this has given rise to certain perceptions about the country’s problems. Western and Indian media, in particular, ascribe the crisis to the convulsions of domestic politics. Very few commentators have noted that these problems have been decades in the making, that the government’s ineptitude is more a symptom than a cause, and that external factors have had a say in such issues. The President’s bungling has contributed to these problems, to be sure, but that only shows how complex they are in the first place.

Neoliberal prescriptions

Just how complex, though? To answer that, it is necessary to address the structural causes that neoliberal economists and commentators note as having led to the crisis. These groups underline four factors: the government’s indulgence of unorthodox economic theories, its drive towards organic agriculture, its refusal to go to the IMF, and its insistence on diverting foreign reserves to defending the currency and repaying bondholders.It must be noted that all these problems are linked to the structural weaknesses of the economy. While there is a consensus on those weaknesses, though, economists and political analysts are divided over what, or who, is to blame for them.

Sri Lanka’s economy has been paraded, even by some radical commentators, as “export-dependent.” Yet it has been running trade deficits for the last 50 years. Its exports include primary commodities like tea, textiles, and tourism. It also earns remittances from migrant workers, many of whom effectively subsidise West Asian economies.These sectors took a hit from the COVID-19 pandemic. While tourism was on its way up in February, most arrivals were from countries like Russia and Ukraine. Russia’s invasion of Ukraine thus, effectively, dealt a blow to hopes of a long-term revival.

Neoliberal economists, especially those linked to Colombo’s well-funded and well-oiled think-tanks, attribute the country’s problems to excessive money printing and government spending. They see the country’s public sector as bloated, politicised.To an extent, the latter view is correct. Sri Lanka’s bureaucracy has long been a preferred destination for unemployed graduates and the politically connected. While Gotabaya Rajapaksa came to power implying he would end such a culture, he reversed course two years later and hired 65,000 graduates to the state sector. Ironically enough, it is their peers who are occupying the frontlines of anti-government protests today.

The heterodox view: Industrialisation and local production

Heterodox economists see things differently. According to them, Sri Lanka’s problems have had to do with its failure to industrialise and shift to manufacture.One of Gotabaya Rajapaksa’s first decisions, after coming to power in 2019, was to appoint Dr W. D. Lakshman, a proponent of industrialisation, as the Governor of the Central Bank. Economic analyst Shiran Illanperuma describes Dr Lakshman’s appointment as having been “poorly received by comprador capitalists and economists.” Lakshman earned the wrath of this crowd heavily after he began enacting policies aimed, ostensibly, at stimulating growth, including a series of tax cuts which have now been reversed.

Another of the country’s biggest advocates of industrialisation is Dr Howard Nicholas. A Senior Lecturer in Economics at the International Institute of Social Studies at the Erasmus University of Rotterdam, the Netherlands, Dr Nicholas helped set up the Institute of Policy Studies (IPS), a think-tank that advocated industrialisation, in the late 1980s.In its first few years, the IPS promoted alternative development strategies. Its advocacy of these strategies was received positively by then president, Ranasinghe Premadasa; based on its recommendations, he spearheaded an ambitious Garment Factory Programme which provided jobs to the rural sector while stimulating growth. This was around the same time Vietnam embarked on export-led industrialisation via its apparel sector.

According to Dr Nicholas, Sri Lanka’s prospects were bright in the 1990s. It even had the potential to surpass Vietnam. Yet with the assassination of Premadasa and the election in 1994 of a regime that modelled itself on Clintonian Third Way Centrist lines, industrialisation was abandoned in favour of outright privatisation and deregulation.The new strategy filled the government coffers – for a while. But with the escalation of the civil war and, paradoxically, the elevation of the country to middle-income status in the 2000s, Sri Lanka found it hard to access traditional aid programmes. It was at that juncture that it started moving into international bond markets.

While Western media and think-tanks propagate Chinese debt trap narratives, it has been Sri Lanka’s reliance on bond markets, which constitute a greater proportion of its external debt than does China, that finally brought its economy to its knees.To be sure, over the years several groups have highlighted these concerns. Yet, they differ as to the strategies and tactics needed to chart a way out of the crisis.

Neoliberal commentators argue that the private sector should take the lead. But Sri Lanka’s private sector is dominated by rentiers. Moreover, the country’s exports are limited to commodities and tourism, along with sectors such as IT. These themselves are dependent heavily on imported raw materials and intermediate capital goods.According to Harvard University’s Atlas of Economic Complexity, Sri Lanka’s largest exports are in “moderate and low complexity products”, like textiles. This contrasts with Vietnam, where textiles are more highly complex. Sri Lanka is also seeing “a static pattern of export growth.” In other words, while in 1990 it could boast of much potential in garments, by the early 2000s the sector’s prospects had considerably reduced.

To resolve the economic crisis, heterodox economists and analysts thus contend that the government must oversee a radical, socialist strategy, centring on import-substitution and local production: a dreary, dismal prospect for Colombo’s neoliberal coterie.

Leaderless protests and lack of alternatives

Sadly, the protests themselves seem little concerned by these imperatives. As has been pointed out by Rathindra Kuruwita in The Diplomat, they remain leaderless and rudderless. This has exposed them considerably to the risk of manipulation.Thus, while the protesters have called for Rajapaksa’s resignation and coupled it with demands for the resignation of all parliamentarians, they have also claimed that the latter demand, which delegitimises the country’s legislature and empowers the Executive, was incorporated into the protests by government supporters. Moreover, many of them fault the government for not going to the IMF earlier, failing to realise that the IMF’s track record in the Global South, during the COVID-19 pandemic, has been questionable.

More seriously, none of the protesters seem aware of what led to the crisis in the first place. To quote Dr Asoka Bandarage of the California Institute of Integral Studies, they “have not been able to put forward an alternative leadership or a viable road map for the future” and seem “unaware of the global dynamics” of the crisis.

Gotagogama, the site of the protests at Galle Face Green, has played host to several radical activists and artists, many of them linked to Marxist, anarchist, and other anti-government parties and alliances. Yet even these groups have failed to call attention to the wider issues. Those that have, like workers’ collectives and leftist commentators, have been marginalised by neoliberal discourses and populist demands for resignations.

The failures of governance and the road ahead

On the other hand, unfortunate as it has been for advocates of alternative development, the government has failed to appreciate the importance of their recommendations. A combination of corruption, ineptitude, and an eagerness to capitulate has thus put alternative development, and industrialisation, on the backburner.Milco is a case in point. Sri Lanka’s state-owned milk manufacturer, Milco recorded profits after a while last year. Yet a year or so after this milestone in the island’s public sector, the government replaced its chairman rather inexplicably. Such actions, multiplied many times over, have only distanced capable individuals from the State.

At one level, all this fits in with South Asia’s legacy of dynastic politics. From India to Bangladesh, the subcontinent is hardly a stranger to family rule. The Rajapaksas are no exception there: despite the recent spurt in anti-government protests, members of the family continue to hold important positions in the country.However, at another level, the Rajapaksa family has gone well beyond the regional model. As the country’s leading political analyst Dr Dayan Jayatilleka has observed, “this is not the Asian phenomenon of familial succession in politics, which is serial and sequential. The contemporary Sri Lankan phenomenon and process is both sequential and simultaneous, vertical and horizontal.” In other words, while family rule in the rest of Asia has served to sustain the political system, in Sri Lanka it has led to its very dismantlement. This includes the Rajapaksas’ deployment of the military, and allegations of militarisation in the north and east of the country: regions which bore the brunt of a 30-year civil war.

Nevertheless, despite all this, it goes without saying that what protesters consider as the government’s failures have been symptoms, rather than causes, of the structural faults underpinning the economy. The government must share the blame for this: in particular, its tendency to surround itself with yes-men and henchmen.Yet beyond this narrative, there is a far more compelling problem: a failure to resolve pressing issues like the island’s dependence on imports and sovereign debt. That in itself is linked to the sprawling global debt crisis, which has extended to other countries. While not all protesters are oblivious to these priorities, many of them are yet to address them fully. So long as debates over the crisis remain dominated by narratives of corruption and political personalities, such problems will go unnoticed and unresolved.

(The writer is an international relations analyst, researcher, and columnist based in Sri Lanka who can be reached at udakdev1@gmail.com. A shorter version of this article appeared in Global South Development Magazine.)



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Opinion

Structural Failures and Economic Consequences in Sri Lanka – Part II

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Research and Development in Crisis:

(Part I of this article appeared in The Island of 07. 12. 2025)

China and India as Unequal Competitors

China and India did not emerge as global economic powers through unrestricted exposure to international competition. Their industrial sectors benefited from decades of state support, protected domestic markets, subsidised inputs, and coordinated innovation policies. Public investment in R&D, infrastructure, and human capital created conditions for large-scale, low-cost production.

Sri Lankan producers, by contrast, operate in a vastly different environment. They face high energy costs, limited access to capital, weak logistics, and minimal state support. Expecting them to compete directly with Chinese or Indian manufacturers without comparable policy backing is economically unrealistic and strategically unsound. Treating global competition as inherently fair ignores structural asymmetries. Without deliberate policy intervention, Sri Lanka will remain a consumption-oriented economy dependent on external production. Recognising unequal competition is the first step toward designing realistic, protective, and development-oriented R&D policies.

University Research Under Structural Threat

University-based research in Sri Lanka is facing a structural crisis that threatens its long-term viability. Universities remain the primary centers of knowledge generation, yet they are constrained by rigid administrative systems, inadequate funding, and limited autonomy. Academic research is often treated as an auxiliary activity rather than a core institutional mandate, resulting in heavy teaching loads that leave minimal time for meaningful research engagement.

A major challenge is that university innovations frequently remain confined to academic outputs with little societal or economic impact. Research success is measured primarily through publications rather than problem-solving or commercialisation. This disconnect discourages applied research and weakens university-industry linkages. Consequently, many promising innovations never progress beyond the proof-of-concept stage, despite strong potential for real-world application.

Publication itself has become a financial burden for researchers. The global shift toward open-access publishing has transferred costs from readers to authors, with publication fees commonly ranging from USD 3,000 to 4,500. For Sri Lankan academics, these costs are prohibitive. The absence of national publication support mechanisms forces researchers to either publish in low-visibility outlets or self-finance at personal financial risk, further marginalising Sri Lankan scholarship globally.

Limited Access to International Conferences

International conferences play a critical role in the research ecosystem by facilitating knowledge exchange, collaboration, and visibility. They provide platforms for researchers to present findings, receive peer feedback, and establish professional networks that often lead to joint projects and external funding. However, Sri Lankan researchers face severe constraints in accessing these opportunities due to limited institutional and national funding.

Conference participation is frequently viewed as discretionary rather than essential. Funding allocations, where they exist, are insufficient to cover registration fees, travel, and accommodation. As a result, researchers often rely on personal funds or forego participation altogether. This disproportionately affects early-career researchers, who most need exposure and mentorship to establish themselves internationally.

The cumulative effect of limited conference participation is scientific isolation. Sri Lankan research becomes less visible, collaborations decline, and awareness of emerging global trends weakens. Over time, this isolation reduces competitiveness in grant applications and limits the country’s ability to integrate into global research networks, further entrenching systemic disadvantage.

International Patents and Missed Global Markets

Given the limitations of the domestic market, international markets offer a vital opportunity for Sri Lankan innovations. However, accessing these markets requires robust intellectual property protection beyond national borders. International patenting is expensive, complex, and legally demanding, placing it beyond the reach of most individual researchers and institutions in Sri Lanka.

Without state-backed support mechanisms, local innovators struggle to file, maintain, and enforce patents in foreign jurisdictions. Costs associated with Patent Cooperation Treaty applications, national phase entries, and legal representation are prohibitive. As a result, many innovations are either not patented internationally or are disclosed prematurely through publication, rendering them vulnerable to appropriation by foreign entities.

This failure to protect intellectual property globally results in lost export opportunities and diminished national returns on research investment. Technologies with potential relevance to global markets particularly in agriculture, veterinary science, and biotechnology remain underexploited. A systematic approach to international patenting is essential if Sri Lanka is to transition from a knowledge generator to a knowledge exporter.

Bureaucratic Barriers to International Collaboration

International research collaboration is increasingly essential in a globalized scientific environment. Partnerships with foreign universities, research institutes, and funding agencies provide access to advanced facilities, diverse expertise, and external funding. However, Sri Lanka’s bureaucratic processes for approving international collaborations remain excessively slow and complex.

Memoranda of Understanding with foreign institutions often require multiple layers of approval across ministries, departments, and governing bodies. These procedures can take months or even years, by which time funding windows or collaborative opportunities have closed. Foreign partners, accustomed to efficient administrative systems, frequently withdraw due to uncertainty and delay.

This bureaucratic inertia undermines Sri Lanka’s credibility as a research partner. In a competitive global environment, countries that cannot respond quickly lose opportunities. Streamlining approval processes through delegated authority and single-window mechanisms is critical to ensuring that Sri Lanka remains an attractive destination for international research collaboration.

Research Procurement and Audit Constraints

Rigid procurement regulations pose one of the most immediate operational challenges to research in Sri Lanka. Scientific research often requires highly specific reagents, equipment, or consumables that are available only from selected suppliers. Standard procurement rules, which mandate multiple quotations and lowest-price selection, are poorly suited to the realities of experimental science.

In biomedical and veterinary research, for example, reproducibility often depends on using antibodies, kits, or reagents from the same manufacturer. Substituting products based solely on price can alter experimental outcomes, compromise data integrity, and invalidate entire studies. Even though procurement officers and auditors frequently lack the scientific background to appreciate these nuances.

Lengthy procurement processes further exacerbate the problem. Delays in acquiring time-sensitive materials disrupt experiments, extend project timelines, and increase costs. For grant-funded research with fixed deadlines, such delays can result in underperformance or loss of funding. Procurement reform tailored to research needs is therefore essential.

Audit Practices Misaligned with Research and Innovation

While financial accountability is essential in publicly funded research, audit practices in Sri Lanka often fail to recognize the distinctive and uncertain nature of scientific and innovation-driven work. Auditors trained primarily in general public finance frequently apply rigid procedural interpretations that are poorly aligned with research timelines, intellectual property development, and iterative experimentation. This disconnect results in frequent audit queries that challenge legitimate scientific, technical, and strategic decisions made by research teams.

There are documented instances where principal investigators and research teams are questioned by auditors regarding the timing of patent applications, perceived delays in filing, or outcomes of the patent review process. In such cases, responsibility is often inappropriately placed on investigators, rather than on structural inefficiencies within patent authorities, institutional IP offices, or prolonged examination timelines beyond researchers’ control. This misallocation of accountability creates an environment where researchers are penalized for systemic failures, discouraging engagement with the patenting process altogether.

Lengthy patent application review periods often extending beyond the duration of time-bound, grant-funded projects can result in incomplete, weakened, or abandoned patents. When reviewer feedback or amendment requests arrive after project closure, research teams typically lack funding to conduct additional validation studies, refine claims, or seek legal assistance. Despite these structural constraints, audit queries may still cite “delays” or “non-compliance” by investigators, further exacerbating institutional risk aversion and undermining innovation incentives.

Beyond patent-related issues, researchers are compelled to spend substantial time responding to audit observations, justifying procurement decisions, or explaining complex methodological choices to non-specialists. This administrative burden diverts time and intellectual energy away from core research activities and contributes to frustration, demoralization, and reduced productivity. In extreme cases, fear of audit repercussions leads researchers to avoid ambitious, interdisciplinary, or translational projects that carry higher uncertainty but greater potential impact.

The absence of structured dialogue between auditors, patent authorities, institutional administrators, and the research community has entrenched mistrust and inefficiency. Developing research-sensitive audit frameworks, training auditors in the fundamentals of scientific research and intellectual property processes, and clearly distinguishing individual responsibility from systemic institutional failures would significantly improve accountability without undermining innovation. Effective accountability mechanisms should enable scientific excellence and economic translation, not constrain them through procedural rigidity and misplaced blame.

Limited Training and Capacity-Building Opportunities

Continuous training and capacity building are essential for maintaining a competitive research workforce in a rapidly evolving global knowledge economy. Advances in methodologies, instrumentation, data analytics, and regulatory standards require researchers to update their skills regularly. However, opportunities for structured training, advanced short courses, and technical skill enhancement remain extremely limited in Sri Lanka.

Funding constraints significantly restrict access to international training programs and specialized workshops. Overseas short courses, laboratory attachments, and industry-linked training are often beyond institutional budgets, while national-level training programs are sporadic and narrow in scope. As a result, many researchers rely on self-learning or informal knowledge transfer, which cannot fully substitute for hands-on exposure to cutting-edge techniques.

The absence of systematic capacity-building initiatives creates a widening skills gap between Sri Lankan researchers and their international counterparts. This gap affects research quality, competitiveness in grant applications, and the ability to absorb advanced foreign technologies. Without sustained investment in human capital development, even increased research funding would yield limited returns.

From Discussion to Implementation

Sri Lanka does not lack policy dialogue on research and innovation. Numerous reports, committee recommendations, and strategic plans have repeatedly identified the same structural weaknesses in funding, commercialization, governance, and market access. What is lacking is decisive implementation backed by political commitment and institutional accountability.

Protecting locally developed R&D products during their infancy, reforming procurement and audit systems, stabilizing fiscal policy, and supporting publication and conference participation are not radical interventions. They are well-established policy instruments used by countries that have successfully transitioned to innovation-led growth. The failure lies not in policy design but in execution and continuity. Implementation requires a shift in mindset from viewing R&D as a cost to recognizing it as a strategic investment. This shift must be reflected in budgetary priorities, administrative reforms, and measurable performance indicators. Without such alignment, discussions will continue to cycle without tangible impact on the ground.

Conclusion: Choosing Between Dependence and Innovation

Sri Lanka stands at a critical crossroads in its development trajectory. Continued neglect of research and development will lock the country into long-term technological dependence, import reliance, and economic vulnerability. In such a scenario, local production capacity will continue to erode, skilled human capital will migrate, and national resilience will weaken. Alternatively, strategic investment in R&D, coupled with protective and enabling policies, can unlock Sri Lanka’s latent innovation potential. Sustained funding, institutional reform, quality enforcement, and market protection for locally developed products can transform research outputs into engines of growth. This path demands patience, policy consistency, and political courage.

As Albert Einstein aptly has aptly us, “The true failure of research lies not in unanswered questions, but in knowledge trapped by institutional, financial, and systemic barriers to dissemination.” The choice before Sri Lanka is therefore not between consumers and producers, nor between openness and protection. It is between short-term convenience and long-term national survival. Without decisive action, Sri Lanka risks outsourcing not only its production and innovation, but also its future.

Prof. M. P. S. Magamage is a senior academic and former Dean of the Faculty of Agricultural Sciences at the Sabaragamuwa University of Sri Lanka. He has also served as Chairman of the National Livestock Development Board of Sri Lanka and is an accomplished scholar with extensive national and international experience. Prof. Magamage is a Fulbright Scholar, Indian Science Research Fellow, and Australian Endeavour Fellow, and has served as a Visiting Professor at the University of Nebraska–Lincoln, USA. He has published both locally and internationally reputed journals and has made significant contributions to research commercialization, with patents registered under his name. His work spans agricultural sciences, livestock development, and innovation-led policy engagement. E-mail: magamage@agri.sab.ac.lk

by Prof. M. P. S. Magamage
Sabaragamuwa University of
Sri Lanka

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Opinion

Why do we have to wait in queues?

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Queues! Not the temporary ones for fuel or rice that appear from time to time, but the permanent queues we encounter at places like the passport office, identity card office, and hospital clinics. People often gather at these institutions well before opening hours, crowding the premises unnecessarily.

Why don’t the officers in charge take steps to reduce these waiting times? In most of these places, the rush subsides within two or three hours after opening. If the public were properly informed of the operating hours, they could arrive at a reasonable time instead of crowding from early morning.

Consider two examples: A couple visited the passport office around 10 a.m. to apply for their first passport (not the one-day service). Only two people were ahead of them. Within 45–50 minutes, all formalities were completed. Yet, prior-advice from friends had been to be there by 7:30 a.m.

• At Apeksha Hospital, a patient arrived at 7 a.m. for his first appointment and joined the crowd. By the time he finished around 10:30 a.m., the premises were almost deserted.

What do these incidents reveal? That much of the crowding is unnecessary, caused by misinformation and habit rather than actual demand. Public awareness campaigns could encourage people to come during staggered times.

Moreover, institutions like the passport office could introduce structured systems to manage attendance—for example:

• Appointments booked in advance

• Allocating days by alphabetical order (e.g., names starting with A–E on Mondays, F–J on Tuesdays, and so on)

Another form of time-wasting occurs at doctor channelling centres, and this is even more inhumane because it involves ailing patients. Doctors, knowing well the time they can realistically arrive, allow centres to advertise a starting time that misleads patients. Worse still, doctors who visit multiple centres fix times for their second or third visits without accounting for delays at the earlier centre.

This lack of coordination results in sick patients waiting for hours unnecessarily. Such practices must be regularised. After all, neither doctors nor channelling centres provide their services free of charge. In fact, this may be the only place where the customer is not treated as king.

Whether at government offices or private medical centres, the common thread is inefficiency and disregard for the public’s time. By introducing appointment systems, staggered schedules, and stricter regulation of medical channelling centres, we can reduce queues, ease patient suffering, and restore dignity to public services.

D R

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Opinion

Retaining retired professionals for Presidential TF

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I write further to the recent public discourse surrounding the Presidential Task Force appointed to oversee rehabilitation, recovery, and reconstruction following the devastation caused by the recent cyclonic event.

At the outset, I wish to place on record my appreciation of the speed, resolve, and sense of urgency demonstrated by President Anura Kumara Dissanayake in establishing a high-powered coordination mechanism at this critical juncture. In a country still emerging from the after-effects of a severe financial crisis, such decisive leadership has provided reassurance and direction to the nation.

A feature article published in a leading newspaper by Dr. C. Narayanasami, a former member of the Ceylon Civil Service and retired senior professional of the Asian Development Bank, makes an observation that merits serious consideration. He rightly notes that the ultimate success of the Task Force will hinge not merely on its mandate, but on the technical competence, experience, and delivery capacity of those entrusted with implementation.

It is an uncomfortable but widely acknowledged reality that the present public service—through no fault of many dedicated officers—has been weakened over time by capacity erosion, skills gaps, and systemic constraints. The magnitude, complexity, and urgency of the post-cyclone reconstruction effort demand expertise that goes beyond routine administrative functions and requires seasoned judgment, sectorial depth, and crisis-tested leadership.

In this context, I urge the government to consider formally engaging retired subject-matter specialists from both the public and private sectors, locally and overseas, on a short-term or task-based basis to support the work of the Task Force and its sub-committees. Sri Lanka possesses a considerable pool of retired engineers, planners, economists, administrators, project managers, and development professionals who have previously led large-scale reconstruction, infrastructure, and emergency-response programs, both nationally and internationally.

Such engagement would:

• strengthen technical decision-making and implementation capacity;

• reduce pressure on an already stretched public service;

• accelerate delivery without significant fiscal burden; and

• send a strong signal of inclusivity and national mobilization in a time of crisis.

Many of these professionals would, I believe, be willing to serve on modest terms—motivated less by remuneration and more by a sense of duty to contribute to national recovery at a critical moment.

The President can harness this reservoir of experience in support of the government’s rebuilding agenda. The judicious blending of existing public-sector structures with retired expertise could significantly enhance delivery outcomes and public confidence.

Having handled large-scale projects funded by the International Funding Agencies and with my experience spanning over five decades as a project consultant, I may also be able to help the Task Force in this difficult hour.

I offer these thoughts in a spirit of constructive engagement and deep respect for the immense responsibilities currently borne by the government.

J .A. A. S. Ranasinghe

Colombo 5.

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