January 19, Colombo (LNW): As Sri Lanka moves into 2026, the country must break away from an overly narrow fixation on crisis containment and IMF benchmarks and adopt a broader development-focused economic strategy, according to Verité Research Executive Director Dr Nishan de Mel.

Speaking on a recent television programme, Dr de Mel said the IMF-supported reform package, while helpful in restoring a degree of macroeconomic order, has encouraged a form of economic “short-sightedness” that ignores worsening conditions in the real economy. He argued that the programme was never intended to serve as a long-term blueprint for national progress, but rather as a temporary response to an acute financial emergency.

He pointed to a widening gap between official claims of stability and the lived experience of ordinary citizens. While fiscal metrics such as government revenue and primary balances show improvement, indicators tied to everyday wellbeing remain deeply troubling. Poverty, employment levels and real wages, he noted, are performing among the weakest in the region.

According to Dr de Mel, Sri Lanka’s poverty rate rose by an estimated 13 percentage points during the crisis, marking one of the sharpest increases globally among countries facing debt distress in recent years, second only to Mozambique. He cautioned that celebrating technical fiscal successes risks mistaking the tools of recovery for the actual goal.

“These indicators are only instruments,” he said, adding that the ultimate objective should be a society where people are materially better off. He warned that Sri Lanka could emerge having technically resolved a financial crisis while leaving the underlying economy and social fabric severely damaged.

The economist highlighted long-lasting scars in the labour market, with real wages still between 10 and 20 per cent below previous levels and employment at its lowest point in two decades. He attributed much of this damage to the sharp rise in interest rates, which at one stage reached 30 per cent, triggering widespread business closures. In contrast, individuals with substantial savings or assets benefited from the high-rate environment, creating an uneven recovery in which wealthier groups rebounded quickly while lower-income households continued to struggle.

Dr de Mel also raised concerns over the Central Bank’s inflation targeting framework. Despite a statutory target of 5 per cent under the new Central Bank Act, inflation has remained outside this range for multiple consecutive quarters. While the law requires the Monetary Board to explain such deviations to Parliament, he questioned whether the institutional culture is robust enough to enforce genuine accountability. Drawing on past Supreme Court rulings, he noted that accountability hinges on the absence of sound reasoning in decision-making rather than disagreements over economic theory.

Beyond macroeconomics, Dr de Mel introduced the idea of “professional competency” as a necessary evolution beyond the government’s anti-corruption agenda. While deterrence is important, he argued, it does not automatically lead to effective governance. He called for a more professional, risk-aware public sector, capable of anticipating and absorbing shocks, citing recent responses to Cyclone Ditwah as an example of where such capacity is lacking. He was particularly critical of recent debt decisions taken without clear liquidity pressure, including emergency borrowing linked to disaster relief.

Turning to digital development, Dr de Mel warned that Sri Lanka’s internet penetration rate, at just over half the population, lags behind regional competitors and poses a serious threat to future growth. In an increasingly digital global economy, he said limited access to the internet is fast becoming a key driver of poverty and inequality.

He concluded by urging policymakers to move beyond externally driven crisis management and embrace a domestically grounded development agenda aligned with the Sustainable Development Goals. Without such a shift, he warned, Sri Lanka risks remaining trapped in a cycle of stabilisation without meaningful progress.

January 19, Colombo (LNW): A growing backlog of imported salt has emerged at the Port of Colombo, with more than 1,000 containers reportedly sitting in port warehouses for over six months after missing the officially approved import window.

In a related issue, close to 700 additional containers are said to be under the custody of Sri Lanka Customs after failing quality checks and facing prolonged delays in certification from the Sri Lanka Standards Institution. These consignments cannot be released until regulatory requirements are met.

The imports stem from a temporary decision by the government last year to allow private traders to bring in salt to ease a nationwide shortage. That permission was formalised through a gazette notification, which clearly stated that all imports had to be completed by June 10, 2025.

Despite the deadline, several importers continued to ship consignments beyond the permitted period. As a result, large volumes of salt remain stacked at port facilities, contributing to congestion and administrative complications.

Customs Director and Media Spokesman Chandana Punchihewa confirmed that authorities are enforcing the gazette provisions without exception. He noted that importers had been instructed to re-export the delayed consignments, but many have yet to comply. Adding a legal dimension to the dispute, at least one company involved has reportedly sought judicial intervention.

Sri Lanka Ports Authority Chairman Sirimevan Ranasinghe said discussions are ongoing among relevant stakeholders to find a practical resolution, while balancing regulatory compliance and port efficiency.

Meanwhile, amid a noticeable rise in import, export and re-export cargo volumes, Minister of Ports and Civil Aviation Anura Karunathilake has directed officials to act swiftly to reduce congestion that is affecting routine operations and cargo clearance.

At a recent meeting, authorities agreed to accelerate clearance procedures by diverting low-risk containers to the SLPA-managed Bloemendhal Container Yard, under the full supervision of Sri Lanka Customs.

The Employers’ Federation of Ceylon (EFC) will host the inaugural EFC National Best Employer Awards 2025 tomorrow (20) at the Galle Face Hotel, commencing at 6 p.m. The event, originally scheduled for December 2025, was postponed due to the recent cyclone disaster.

The Awards will celebrate organisational excellence, human-centred leadership, and meaningful national socio-economic contribution, marking a significant milestone in recognising outstanding employer practices in Sri Lanka.

The ceremony will be graced by Indian High Commissioner Santosh Jha as Chief Guest. The program will feature a keynote address by Professor Dave Ulrich, widely regarded as the Father of Modern Human Resources, delivered via video message.

International Labour Organisation (ILO) for Sri Lanka and the Maldives Country Director Joni Simpson will also address the gathering. The Guest of Honour will be ILO India Employers’ Activities for South Asia Senior Specialist Ravi Peiris.

Established in 1929, the EFC is Sri Lanka’s premier employers’ organisation, playing a pivotal role in advancing sustainable employment practices and supporting national economic progress.

The EFC National Best Employer Awards aims to go beyond traditional measures of success by recognising organisations that demonstrate strong leadership, ethical governance, inclusive workplace cultures, and a deep commitment to people-centred practices. The initiative seeks to establish a credible and aspirational national benchmark for employer excellence.

Organisations were evaluated by an eminent panel of judges across five core dimensions: Strategic HR Excellence; Leadership and Culture; National and Socio-Economic Contribution; Ethics and Compliance; and Digital Transformation.

The EFC acknowledges with appreciation the support of its partners: AIA (Platinum Sponsor), EY (Assurance Partner), Deloitte (Strategic Partner), Wijeya Newspapers (Print Media Partner), The Capital Maharaja Group (Electronic Media Partner), FOBKL.LK (Creative Partner), and Kerner Haus, AGXA, and Cornucopia (Bronze Partners). Their collaboration has been instrumental in elevating the Awards to a national platform of credibility and impact.

The EFC National Best Employer Awards 2025 reaffirms the Federation’s commitment to strengthening Sri Lanka’s employer landscape by recognising organisations that lead with purpose, responsibility, and people at the core.

Source: DailyFT

By: Staff Writer

January 18, Colombo (LNW): The State Pharmaceuticals Corporation of Sri Lanka (SPC) recorded one of its strongest financial performances in decades during 2025, offering a rare example of fiscal discipline and operational recovery within a major state-owned enterprise. According to its annual performance review, the Corporation significantly strengthened its contribution to government revenue while expanding access to affordable medicines across the country.

SPC’s payments to the Treasury through income tax and levies surged by an extraordinary 173 percent year-on-year, reaching Rs. 1.1 billion. This growth was accompanied by a 26 percent rise in income generated through its Own Revenue Stream (ORS), alongside a 9 percent increase in earnings from the State Osusala pharmacy network. Together, these indicators point to improved financial governance and tighter cost controls.

One of the most notable achievements in 2025 was SPC’s full utilisation of its annual budget allocation for supplying medicines to the Department of Health Services. For the first time in its 53-year history, the entire allocation was absorbed through formal indent orders, signalling a major improvement in planning, procurement efficiency, and coordination with the public health system.

Operational performance also showed marked gains. ORS production increased by 36 percent compared to the previous year, reflecting better asset utilisation and process optimisation. Meanwhile, the State Osusala network expanded with five new outlets established in Kiribathgoda, Narahenpita, Kegalle, Kalmunai, and Batticaloa. Revenue growth was further supported by internal efficiency measures that enabled several loss-making pharmacies to return to profitability.

Quality assurance remained a key focus area. SPC initiated steps toward ISO 17025 accreditation for its laboratories, a move aimed at strengthening drug testing and regulatory compliance. All medicines distributed through Osusala outlets continue to undergo a four-tier testing process before reaching consumers, reinforcing public trust in the safety and efficacy of state-supplied pharmaceuticals.

Health Minister Dr. Nalinda Jayatissa, following multiple inspections, publicly acknowledged SPC’s progress while highlighting the challenges posed by a global pharmaceutical market driven by aggressive profit-seeking and unethical practices. He reaffirmed government backing for SPC staff and emphasized the importance of protecting institutional integrity.

SPC’s leadership has indicated that the focus in 2026 will be on consolidating these gains, expanding operational reach, and reinforcing its role as a stabilising force in Sri Lanka’s public healthcare supply chain.

By: Staff Writer

January 18, Colombo (LNW): Sri Lanka’s effort to restructure the Ceylon Electricity Board (CEB) and introduce a new National Electricity Policy is facing mounting scrutiny from the country’s private sector, with leading chambers warning that the proposed reforms risk undermining affordability, investment confidence, and long-term energy security.

A joint submission by the Ceylon Chamber of Commerce and six major industry associations acknowledges the urgent need to reform a financially distressed electricity sector. However, it argues that the Draft National Electricity Policy fails to address several core issues that are essential for a sustainable and modern power system.

These include clear commitments to decarbonisation, incentives for renewable energy, competitive market structures, and the long-term financial viability of the sector.

At the heart of the concerns are proposed tariff reforms. The draft policy outlines the gradual removal of cross-subsidies and limits electricity subsidies to households consuming less than 30 kilowatt-hours per month.

Business groups caution that, without comprehensive socio-economic analysis, these changes could restrict access to affordable electricity for low- and middle-income consumers while transferring financial risk back to the State through indirect fiscal pressures.

The restructuring framework also raises red flags for renewable energy development. Provisions allowing uncompensated curtailment of renewable generation, the removal of feed-in tariffs, and mandatory time-of-use tariffs for rooftop solar users are viewed as policy shifts that weaken revenue certainty. Industry representatives warn that such measures could render renewable energy projects un-bankable, especially for international lenders who require predictable cash flows.

Beyond immediate financial impacts, the chambers highlight a deeper structural issue: the draft policy does not adequately reflect the realities of modern electricity systems. There is limited focus on energy storage, grid flexibility, competitive power markets, or the potential for cross-border electricity trading elements increasingly central to energy resilience and cost reduction.

The joint submission calls for a comprehensive revision of the policy, stronger alignment with the Electricity Act, and renewed stakeholder consultation. While supportive of reform in principle, the business community argues that poorly designed restructuring could delay Sri Lanka’s energy transition and weaken investor confidence at a time when the country urgently needs capital, technology, and policy certainty.