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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

Are we reading the sky wrong?

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Rethinking climate prediction, disasters, and plantation economics in Sri Lanka

For decades, Sri Lanka has interpreted climate through a narrow lens. Rainfall totals, sunshine hours, and surface temperatures dominate forecasts, policy briefings, and disaster warnings. These indicators once served an agrarian island reasonably well. But in an era of intensifying extremes—flash floods, sudden landslides, prolonged dry spells within “normal” monsoons—the question can no longer be avoided: are we measuring the climate correctly, or merely measuring what is easiest to observe?

Across the world, climate science has quietly moved beyond a purely local view of weather. Researchers increasingly recognise that Earth’s climate system is not sealed off from the rest of the universe. Solar activity, upper-atmospheric dynamics, ocean–atmosphere coupling, and geomagnetic disturbances all influence how energy moves through the climate system. These forces do not create rain or drought by themselves, but they shape how weather behaves—its timing, intensity, and spatial concentration.

Sri Lanka’s forecasting framework, however, remains largely grounded in twentieth-century assumptions. It asks how much rain will fall, where it will fall, and over how many days. What it rarely asks is whether the rainfall will arrive as steady saturation or violent cloudbursts; whether soils are already at failure thresholds; or whether larger atmospheric energy patterns are priming the region for extremes. As a result, disasters are repeatedly described as “unexpected,” even when the conditions that produced them were slowly assembling.

This blind spot matters because Sri Lanka is unusually sensitive to climate volatility. The island sits at a crossroads of monsoon systems, bordered by the Indian Ocean and shaped by steep central highlands resting on deeply weathered soils. Its landscapes—especially in plantation regions—have been altered over centuries, reducing natural buffers against hydrological shock. In such a setting, small shifts in atmospheric behaviour can trigger outsized consequences. A few hours of intense rain can undo what months of average rainfall statistics suggest is “normal.”

Nowhere are these consequences more visible than in commercial perennial plantation agriculture. Tea, rubber, coconut, and spice crops are not annual ventures; they are long-term biological investments. A tea bush destroyed by a landslide cannot be replaced in a season. A rubber stand weakened by prolonged waterlogging or drought stress may take years to recover, if it recovers at all. Climate shocks therefore ripple through plantation economics long after floodwaters recede or drought declarations end.

From an investment perspective, this volatility directly undermines key financial metrics. Return on Investment (ROI) becomes unstable as yields fluctuate and recovery costs rise. Benefit–Cost Ratios (BCR) deteriorate when expenditures on drainage, replanting, disease control, and labour increase faster than output. Most critically, Internal Rates of Return (IRR) decline as cash flows become irregular and back-loaded, discouraging long-term capital and raising the cost of financing. Plantation agriculture begins to look less like a stable productive sector and more like a high-risk gamble.

The economic consequences do not stop at balance sheets. Plantation systems are labour-intensive by nature, and when financial margins tighten, wage pressure is the first stress point. Living wage commitments become framed as “unaffordable,” workdays are lost during climate disruptions, and productivity-linked wage models collapse under erratic output. In effect, climate misprediction translates into wage instability, quietly eroding livelihoods without ever appearing in meteorological reports.

This is not an argument for abandoning traditional climate indicators. Rainfall and sunshine still matter. But they are no longer sufficient on their own. Climate today is a system, not a statistic. It is shaped by interactions between the Sun, the atmosphere, the oceans, the land, and the ways humans have modified all three. Ignoring these interactions does not make them disappear; it simply shifts their costs onto farmers, workers, investors, and the public purse.

Sri Lanka’s repeated cycle of surprise disasters, post-event compensation, and stalled reform suggests a deeper problem than bad luck. It points to an outdated model of climate intelligence. Until forecasting frameworks expand beyond local rainfall totals to incorporate broader atmospheric and oceanic drivers—and until those insights are translated into agricultural and economic planning—plantation regions will remain exposed, and wage debates will remain disconnected from their true root causes.

The future of Sri Lanka’s plantations, and the dignity of the workforce that sustains them, depends on a simple shift in perspective: from measuring weather, to understanding systems. Climate is no longer just what falls from the sky. It is what moves through the universe, settles into soils, shapes returns on investment, and ultimately determines whether growth is shared or fragile.

The Way Forward

Sustaining plantation agriculture under today’s climate volatility demands an urgent policy reset. The government must mandate real-world investment appraisals—NPV, IRR, and BCR—through crop research institutes, replacing outdated historical assumptions with current climate, cost, and risk realities. Satellite-based, farm-specific real-time weather stations should be rapidly deployed across plantation regions and integrated with a central server at the Department of Meteorology, enabling precision forecasting, early warnings, and estate-level decision support. Globally proven-to-fail monocropping systems must be phased out through a time-bound transition, replacing them with diversified, mixed-root systems that combine deep-rooted and shallow-rooted species, improving soil structure, water buffering, slope stability, and resilience against prolonged droughts and extreme rainfall.

In parallel, a national plantation insurance framework, linked to green and climate-finance institutions and regulated by the Insurance Regulatory Commission, is essential to protect small and medium perennial growers from systemic climate risk. A Virtual Plantation Bank must be operationalized without delay to finance climate-resilient plantation designs, agroforestry transitions, and productivity gains aligned with national yield targets. The state should set minimum yield and profit benchmarks per hectare, formally recognize 10–50 acre growers as Proprietary Planters, and enable scale through long-term (up to 99-year) leases where state lands are sub-leased to proven operators. Finally, achieving a 4% GDP contribution from plantations requires making modern HRM practices mandatory across the sector, replacing outdated labour systems with people-centric, productivity-linked models that attract, retain, and fairly reward a skilled workforce—because sustainable competitive advantage begins with the right people.

by Dammike Kobbekaduwe

(www.vivonta.lk & www.planters.lk ✍️

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Opinion

Disasters do not destroy nations; the refusal to change does

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Floods caused by Cyclone Ditwah

Sri Lanka has endured both kinds of catastrophe that a nation can face, those caused by nature and those created by human hands. A thirty-year civil war tore apart the social fabric, deepening mistrust between communities and leaving lasting psychological wounds, particularly among those who lived through displacement, loss, and fear. The 2004 tsunami, by contrast, arrived without warning, erasing entire coastal communities within minutes and reminding us of our vulnerability to forces beyond human control.

These two disasters posed the same question in different forms: did we learn, and did we change? After the war ended, did we invest seriously in repairing relationships between Sinhalese and Tamil communities, or did we equate peace with silence and infrastructure alone? Were collective efforts made to heal trauma and restore dignity, or were psychological wounds left to be carried privately, generation after generation? After the tsunami, did we fundamentally rethink how and where we build, how we plan settlements, and how we prepare for future risks, or did we rebuild quickly, gratefully, and then forget?

Years later, as Sri Lanka confronts economic collapse and climate-driven disasters, the uncomfortable truth emerges. we survived these catastrophes, but we did not allow them to transform us. Survival became the goal; change was postponed.

History offers rare moments when societies stand at a crossroads, able either to restore what was lost or to reimagine what could be built on stronger foundations. One such moment occurred in Lisbon in 1755. On 1 November 1755, Lisbon-one of the most prosperous cities in the world, was almost completely erased. A massive earthquake, estimated between magnitude 8.5 and 9.0, was followed by a tsunami and raging fires. Churches collapsed during Mass, tens of thousands died, and the royal court was left stunned. Clergy quickly declared the catastrophe a punishment from God, urging repentance rather than reconstruction.

One man refused to accept paralysis as destiny. Sebastião José de Carvalho e Melo, later known as the Marquês de Pombal, responded with cold clarity. His famous instruction, “Bury the dead and feed the living,” was not heartless; it was revolutionary. While others searched for divine meaning, Pombal focused on human responsibility. Relief efforts were organised immediately, disease was prevented, and plans for rebuilding began almost at once.

Pombal did not seek to restore medieval Lisbon. He saw its narrow streets and crumbling buildings as symbols of an outdated order. Under his leadership, Lisbon was rebuilt with wide avenues, rational urban planning, and some of the world’s earliest earthquake-resistant architecture. Moreover, his vision extended far beyond stone and mortar. He reformed trade, reduced dependence on colonial wealth, encouraged local industries, modernised education, and challenged the long-standing dominance of aristocracy and the Church. Lisbon became a living expression of Enlightenment values, reason, science, and progress.

Back in Sri Lanka, this failure is no longer a matter of opinion. it is documented evidence. An initial assessment by the United Nations Development Programme (UNDP) following Cyclone Ditwah revealed that more than half of those affected by flooding were already living in households facing multiple vulnerabilities before the cyclone struck, including unstable incomes, high debt, and limited capacity to cope with disasters (UNDP, 2025). The disaster did not create poverty; it magnified it. Physical damage was only the visible layer. Beneath it lay deep social and economic fragility, ensuring that for many communities, recovery would be slow, uneven, and uncertain.

The world today offers Sri Lanka another lesson Lisbon understood centuries ago: risk is systemic, and resilience cannot be improvised, it must be planned. Modern climate science shows that weather systems are deeply interconnected; rising ocean temperatures, changing wind patterns, and global emissions influence extreme weather far beyond their points of origin. Floods, landslides, and cyclones affecting Sri Lanka are no longer isolated events, but part of a broader climatic shift. Rebuilding without adapting construction methods, land-use planning, and infrastructure to these realities is not resilience, it is denial. In this context, resilience also depends on Sri Lanka’s willingness to learn from other countries, adopt proven technologies, and collaborate across borders, recognising that effective solutions to global risks cannot be developed in isolation.

A deeper problem is how we respond to disasters: we often explain destruction without seriously asking why it happened or how it could have been prevented. Time and again, devastation is framed through religion, fate, karma, or divine will. While faith can bring comfort in moments of loss, it cannot replace responsibility, foresight, or reform. After major disasters, public attention often focuses on stories of isolated religious statues or buildings that remain undamaged, interpreted as signs of protection or blessing, while far less attention is paid to understanding environmental exposure, construction quality, and settlement planning, the factors that determine survival. Similarly, when a single house survives a landslide, it is often described as a miracle rather than an opportunity to study soil conditions, building practices, and land-use decisions. While such interpretations may provide emotional reassurance, they risk obscuring the scientific understanding needed to reduce future loss.

The lesson from Lisbon is clear: rebuilding a nation requires the courage to question tradition, the discipline to act rationally, and leadership willing to choose long-term progress over short-term comfort. Until Sri Lanka learns to rebuild not only roads and buildings, but relationships, institutions, and ways of thinking, we will remain a country trapped in recovery, never truly reborn.

by Darshika Thejani Bulathwatta
Psychologist and Researcher

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Opinion

A wise Christmas

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Important events in the Christian calendar are to be regurlarly reviewed if they are to impact on the lives of people and communities. This is certainly true of Christmas.

Community integrity

Years ago a modest rural community did exactly this, urging a pre-Christmas probe of the events around Jesus’ birth. From the outset, the wisemen aroused curiosity. Who were these visitors? Were they Jews? No. were they Christians? Of course not. As they probed the text, the representative character of those around the baby, became starkly clear. Apart from family, the local shepherds and the stabled animals, the only others present that first Christmas, were sages from distant religious cultures.

With time, the celebration of Christmas saw a sharp reversal. The church claimed exclusive ownership of an inclusive gift and deftly excluded ‘outsiders’ from full participation.

But the Biblical version of the ‘wise outsiders’ remained. It affirmed that the birth of Jesus inspired the wise to initiate a meeting space for diverse religious cultures, notwithstanding the long and ardous journey such initiatives entail. Far from exclusion, Jesus’ birth narratives, announced the real presence of the ‘outsider’ when the ‘Word became Flesh’.

The wise recognise the gift of life as an invitation to integrate sincere explanations of life; true religion. Religion gone bad, stalls these values and distorts history.

There is more to the visit of these sages.

Empire- When Jesus was born, Palestine was forcefully occcupied by the Roman empire. Then as now, empire did not take kindly to other persons or forces that promised dignity and well being. So, when rumours of a coming Kingdom of truth, justice and peace, associated with the new born baby reached the local empire agent, a self appointed king; he had to deliver. Information on the wherabouts of the baby would be diplomatically gleaned from the visiting sages.

But the sages did not only read the stars. They also read the signs of the times. Unlike the local religious authorities who cultivated dubious relations with a brutal regime hated by the people, the wise outsiders by-pass the waiting king.

The boycott of empire; refusal to co-operate with those who take what it wills, eliminate those it dislikes and dare those bullied to retaliate, is characteristic of the wise.

Gifts of the earth

A largely unanswered question has to do with the gifts offered by the wise. What happened to these gifts of the earth? Silent records allow context and reason to speak.

News of impending threats to the most vulnerable in the family received the urgent attention of his anxious parent-carers. Then as it is now, chances of survival under oppressive regimes, lay beyond borders. As if by anticipation, resources for the journey for asylum in neighbouring Egypt, had been provided by the wise. The parent-carers quietly out smart empire and save the saviour to be.

Wise carers consider the gifts of the earth as resources for life; its protection and nourishment. But, when plundered and hoarded, resources for all, become ‘wealth’ for a few; a condition that attempts to own the seas and the stars.

Wise choices

A wise christmas requires that the sages be brought into the centre of the discourse. This is how it was meant to be. These visitors did not turn up by chance. They were sent by the wisdom of the ages to highlight wise choices.

At the centre, the sages facilitate a preview of the prophetic wisdom of the man the baby becomes.The choice to appropriate this prophetic wisdom has ever since summed up Christmas for those unable to remain neutral when neighbour and nature are violated.

Wise carers

The wisdom of the sages also throws light on the life of our nation, hard pressed by the dual crises of debt repayment and post cyclonic reconstruction. In such unrelenting circumstances, those in civil governance take on an additional role as national carers.

The most humane priority of the national carer is to ensure the protection and dignity of the most vulnerable among us, immersed in crisis before the crises. Better opportunities, monitored and sustained through conversations are to gradually enhance the humanity of these equal citizens.

Nations in economic crises are nevertheless compelled to turn to global organisations like the IMF for direction and reconstruction. Since most who have been there, seldom stand on their own feet, wise national carers may not approach the negotiating table, uncritically. The suspicion, that such organisations eventually ‘grow’ ailing nations into feeder forces for empire economics, is not unfounded.

The recent cyclone gave us a nasty taste of these realities. Repeatedly declared a natural disaster, this is not the whole truth. Empire economics which indiscriminately vandalise our earth, had already set the stage for the ravage of our land and the loss of loved ones and possessions. As always, those affected first and most, were the least among us.

Unless we learn to manouvre our dealings for recovery wisely; mindful of our responsibilities by those relegated to the margins as well as the relentles violence and greed of empire, we are likely to end up drafted collaborators of the relentless havoc against neighbour and nature.

If on the other hand the recent and previous disasters are properly assessed by competent persons, reconstruction will be seen as yet another opportunity for stabilising content and integrated life styles for all Lankans, in some harmony with what is left of our dangerously threatened eco-system. We might then even stand up to empire and its wily agents, present everywhere. Who knows?

With peace and blessings to all!

Bishop Duleep de Chickera

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