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Stop excessive money printing to avert a far worse crisis – SJB

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‘The only way prices can be controlled is not by gazette or emergency rule, but via the market itself’ 

In principle price controls fail, and they create shortages and black markets. The only way prices can be controlled is not by gazette or emergency rule, but via the market itself, says top Samagi Jana Balavegaya spokesman and economist Dr. Harsha de Silva.

Issuing a statement in the wake of the government doing away with price control, Dr. de Silva has said: “To do so, the reason why prices are increasing must be determined. Is it a temporary increase due to a supply shortage, say a drought or flood or is it because aggregate demand has increased due to increased money supply? The answer will depend on what is causing prices to rise.

“In the case of Sri Lanka, the massive expansion of money is the cause for continuous increase in prices or inflation. This is the reason for the rapid depreciation of the currency as well. The only short-term solution to reduce this excessive rate of money growth is to stop excessive money printing. If monetary accommodation is continued inflation could turn into hyperinflation and further depreciation of the currency leading to serious social unrest.

“However, the reality is that much of the population cannot bear the increasing costs. It is not a secret that middle-class families have had to cut down on expenses. The situation among the low-income families is a lot worse. People have had to give up meals. It is the responsibility of the government to ensure people don’t starve due to the total mess up of the economy by the politicized Central Bank that continuously ran its printing press a la modern monetary theory that was bound to fail. It is imperative that an income support mechanism be implemented for the most vulnerable immediately. This can be implemented via the Samurdhi scheme even though it is nowhere near ideal.

“Beyond the short term and in a more stable macroeconomic environment, we need to be more productive. For instance, accurate information on weather, better use of technology, application of right amounts of fertiliser, efficient storage and logistics would help improve the supply of agricultural produce. Similarly, the productivity must increase in manufacturing and services.

“In the meantime, the government must correct market failures by appropriate regulation to foster competition in the market. Take for instance the rice market. While there is more than enough paddy harvested there is a huge shortage of rice. That is because the rice manufacturing market has been captured by a few big millers and competition has been wiped out. The way to correct that market failure is to empower the hundreds of SME rice millers by providing them working capital and get their supply into the market. Instead, the government has now decided to import rice to control the prices. This wrong policy will make the problem worse, from market failure to government failure. When imports are stopped, all the SME millers would be out of business the big players will completely dominate the market.

“The SJB believes in a social market economy where competition will be encouraged with necessary amount of regulation to maintain a stable market. We will ensure that all parties to a transaction, the firm or the investor, the worker or the farmer and the regulator or government would together arrive at sustainable equilibrium so that longer term growth with equity could be maintained. However, given that the economy is in such dire straits, the truth must be told to the public that there is no free lunch and we as a nation will have no option but to work hard to a plan. And that plan will call for significant economic reforms and integrating Sri Lanka with global production networks. The resulting export-led growth, as opposed to the current import-substitution led growth, would significantly elevate living standards of our people while allowing for sufficient funding to provide safety nets for those in need.”



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Navy seizes an Indian fishing trawler poaching in Sri Lankan waters north of Talaimannar

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During an operation conducted in the wee hours of Tuesday (23 Dec 25), the Sri Lanka Navy seized an Indian fishing trawler  and apprehended 12 Indian fishermen, while they were poaching in Sri Lankan waters north of Talaimannar.

Recognizing the detrimental effects of poaching on marine resources and the livelihoods of local fishing communities, the Sri Lanka Navy continues to conduct regular operations as
proactive measures to deter such activities. These efforts underscore the collective robust approach steadfast commitment to safeguarding the nation’s marine ecosystems while ensuring the economic security and wellbeing of its citizens.

The fishing trawler along with the fishermen held in this operation was handed over to the Fisheries Inspector of Mannar for onward legal proceedings.

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India’s External Affairs Minister meets Sri Lanka PM

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India’s External Affairs Minister, Dr. Subramaniam Jaishankar, met with the Prime Minister of Sri Lanka, Dr. Harini Amarasuriya, on 23 December at Temple Trees, during his visit to Sri Lanka as the Special Envoy of Indian Prime Minister Shri Narendra Modi.

The meeting took place as part of the official visit aimed at holding discussions with Sri Lanka’s top leadership, at a time when the nation commenced reconstruction efforts following the devastation caused by Cyclone Ditwah.

During the discussions, the Minister of External Affairs of India reaffirmed readiness to extend support for Sri Lanka, including assistance in rebuilding railways, bridges, and strengthening of the agricultural sector in the country. He also highlighted the importance of having effective systems in place to respond to disaster situations, supported by strong legislative, administrative, and institutional frameworks. Both sides reviewed ongoing relief efforts and explored avenues to further strengthen bilateral cooperation in disaster response and recovery.

The Prime Minister commended the Government of India for the continued support, noting that the recovery process following the devastation caused by Cyclone Ditwah include beyond immediate relief efforts to long-term measures such as resettlement, and reconstruction of habilitation and infrastructure.

The Prime Minister further stated that steps have been taken to reopen schools as part of the process of restoring normalcy, with close monitoring in place. The Prime Minister emphasized the need to ensure stability, reduce vulnerability, and strengthen protection mechanisms highlighting the solidarity of the people, their strong spirit of volunteerism, and collective action demonstrated during the emergency situation.

The event was attended by the High Commissioner of India Santosh Jha, Additional Secretary (IOR), MEA  Puneet Agrawal, Joint Secretary (EAMO), MEA  Sandeep Kumar Bayyapu, Deputy High Commissioner Dr. Satyanjal Pandey, and representing Sri Lankan delegation, Secretary to the Prime Minister  Pradeep Saputhanthri, Additional Secretary to the Prime minister Ms.Sagarika Bogahawatta, Director General (South Asia), Ministry of Foreign Affairs Samantha Pathirana, Deputy Director, South Asia Division, Ministry of Foreign Affairs Ms.Diana Perera.

[Prime minister’s media division]

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Sri Lanka’s coastline faces unfolding catastrophe: Expert

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Sri Lanka is standing on the edge of a coastal catastrophe, with the nation’s lifeline rapidly eroding under the combined assault of climate change, reckless development and weak compliance, Director General of the Department of Coast Conservation and Coastal Resource Management (DCC&CRM) Dr. Terney Pradeep Kumara has warned.

“This is no longer an environmental warning we can afford to ignore. The crisis is already unfolding before our eyes,” Dr. Kumara told The Island, cautioning that the degradation of Sri Lanka’s 1,620-kilometre coastline has reached a point where delayed action could trigger irreversible damage to ecosystems, livelihoods and national security.

He said accelerating coastal erosion, rising sea levels, saltwater intrusion and the collapse of natural barriers, such as coral reefs and mangroves, are placing entire coastal communities at risk. “When mangroves disappear and reefs are destroyed, villages lose their first line of defence. What follows are floods, loss of homes, declining fisheries and forced displacement,” he said.

Dr. Kumara stressed that the coastline is not merely a development frontier but the backbone of Sri Lanka’s economy and cultural identity. “More than half of our tourism assets, fisheries and key infrastructure are concentrated along the coast.

If the coast fails, the economy will feel the shock immediately,” he warned.

Condemning unregulated construction, illegal sand mining and environmentally blind infrastructure projects, he said short-term economic interests are pushing the coastline towards collapse. “We cannot keep fixing one eroding beach while creating three new erosion sites elsewhere. That is not management—it is destruction,” he said, calling for science-driven, ecosystem-based solutions instead of politically convenient quick fixes.

The Director General said the Department is intensifying enforcement and shifting towards integrated coastal zone management, but warned that laws alone will not save the coast. “This is a shared responsibility. Policymakers, developers, local authorities and the public must understand that every illegal structure, every destroyed mangrove, weakens the island’s natural shield,” he added.

With climate change intensifying storms and sea surges, Dr. Kumara warned that Sri Lanka’s vulnerability will only worsen without urgent, coordinated national action. “The sea has shaped this nation’s history and protected it for centuries. If we fail to protect the coast today, we will be remembered as the generation that allowed the island itself to be slowly eaten away,” he went on to say.

By Ifham Nizam

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