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World Bank Urges Sweeping Economic Reforms in Sri Lanka to Sustain Growth and Reduce Poverty

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October 07, Colombo (LNW): In its latest assessment of Sri Lanka’s economic prospects, the World Bank has called for far-reaching structural reforms to secure long-term growth and help lift millions out of poverty.

The institution’s recommendations come as the island nation emerges from a devastating financial collapse that saw it default on its external debt and experience soaring inflation and widespread hardship.

According to the World Bank’s newly released Development Update, Sri Lanka’s economy is on a fragile recovery path, with projected growth of 4.6 per cent in 2025, potentially slowing to 3.5 per cent the following year.

However, sustained progress will depend on how effectively the country implements key reforms in trade, labour, land ownership, and public finance.

One of the central messages of the report is the need for Sri Lanka to liberalise its “factors of production”—namely labour and land—both of which are currently bound by outdated legal frameworks and state control.

Richard Walker, the World Bank’s Senior Country Economist for Sri Lanka, noted that the labour market is governed by legislation dating back several decades, creating layers of bureaucracy and uncertainty for investors. “Employers are often deterred by the complexity of the labour regulations, which in turn hampers job creation. This rigidity also disproportionately affects women’s participation in the workforce,” he said, describing female employment as an underutilised area of potential.

On the issue of land, the World Bank highlighted that approximately 80 per cent of land remains under state control, managed by a maze of overlapping authorities with unclear mandates. This situation stifles agricultural productivity and makes private investment in land development difficult. “Clarifying land ownership and improving access is critical not only for farmers but for long-term sustainable land management and urban development,” Walker added.

Public investment is another area the Bank scrutinised, urging the government to be more selective and strategic. Rather than launching new projects indiscriminately, authorities are advised to complete existing infrastructure works, shift focus to essential maintenance, and employ a more data-driven approach to planning. Shruti Lakhtakia, Country Economist for Sri Lanka, emphasised the need for a more integrated public investment management system that streamlines project selection, appraisal, and execution.

Fiscal discipline remains a major concern. While recent tax increases have led to higher revenues, Sri Lanka’s massive debt burden leaves little room for wasteful spending. The report underlined the importance of redirecting expenditure towards projects with demonstrable value and long-term benefits.

Reforming the public sector was also identified as crucial. Over time, Sri Lanka has built a bloated public service, with frequent hiring sprees—often politically motivated—adding thousands to the payroll without corresponding increases in productivity.

Though average public wages are not exceptionally high, the sheer number of government employees is unsustainable for a country of Sri Lanka’s size. The Bank also criticised the current wage structure, which consists of a confusing mix of allowances and basic pay, calling for simplification and rationalisation.

A key backdrop to these recommendations is Sri Lanka’s recent economic collapse. Years of mismanagement, combined with excessive money printing and ill-timed interest rate cuts, triggered a severe currency devaluation and eventually a sovereign default. The consequences were dramatic: inflation soared, food prices surged, and poverty rates ballooned.

Though the central bank has since introduced stabilisation measures, concerns remain. Analysts warn that inflation could continue to rise at an annual rate of 5–7 per cent if fiscal and monetary discipline wavers again, particularly if currency depreciation is used to meet inflation targets.

Despite these risks, there are signs of gradual recovery. The World Bank projects that poverty levels, which spiked dramatically during the crisis, could fall from 24.9 per cent in 2024 to 22.3 per cent in 2025. Still, a significant portion of the population—estimated at around 10 per cent—remains vulnerable and at risk of slipping back into poverty if economic conditions deteriorate.

The report concludes with a cautious note of optimism. While Sri Lanka has begun laying the groundwork for economic recovery, the real test lies in whether it can push forward with difficult but necessary reforms. By creating a more open, transparent, and investor-friendly environment, the country may yet find a sustainable path to prosperity.

Supreme Court Upholds Death Sentence of ‘Julampitiye Amare’ in 2012 Katuwana Killings

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October 07, Colombo (LNW): The Supreme Court today (07) dismissed without hearing the appeal filed by G. G. Amarasiri, widely known as ‘Julampitiye Amare’, effectively upholding the death sentence imposed on him for a double murder committed in 2012.

With the dismissal of the appeal, the Supreme Court reaffirmed the verdict delivered by the Tangalle High Court in 2019, which found Amarasiri guilty of storming a Janatha Vimukthi Peramuna (JVP) political meeting in Katuwana and opening fire on attendees, resulting in the deaths of two individuals and critically injuring another.

The brutal incident, which drew national attention at the time, was condemned as a politically motivated act of violence. Following a prolonged legal process and detailed examination of evidence, the High Court handed down the death penalty five years ago. Amarasiri later sought to challenge the ruling through the apex court, but his petition has now been dismissed without being admitted for hearing.

Gold Hits Historic High Globally as Local Prices Surge in Sri Lanka

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October 07, Colombo (LNW): Gold prices have reached an all-time high on the global market, crossing USD 3,950 per ounce for the first time in history, according to international trading data.

The milestone has triggered a sharp rise in domestic gold prices, with Sri Lankan markets witnessing significant increases over the weekend.

In Colombo’s Pettah gold market, the price of a 22-carat gold sovereign rose by approximately Rs. 8,000, now trading at Rs. 290,500 as of Monday morning, compared to Rs. 283,000 recorded on Saturday.

Similarly, the price of a 24-carat gold sovereign climbed from Rs. 306,000 to Rs. 314,000 over the same period.

Local traders attribute the spike to the unprecedented surge in global gold rates, driven by a combination of market uncertainty, inflationary pressures, and increased investor demand for safe-haven assets.

Sri Lanka Rejects UNHRC Resolution, Defends National Approach to Human Rights and Reconciliation

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October 07, Colombo (LNW): Sri Lanka has formally rejected a resolution adopted by the United Nations Human Rights Council (UNHRC) during its 60th session in Geneva, voicing strong opposition to what it views as an unwarranted expansion of the Council’s mandate and external interference in domestic matters.

Ambassador Himalee Arunatilaka, Sri Lanka’s Permanent Representative to the United Nations in Geneva, delivered the country’s position, firmly declining support for Resolution 60/L.1/Rev.1. The resolution includes provisions to continue an external evidence-gathering mechanism on Sri Lanka, a move the government describes as both ad hoc and unprecedented.

Speaking to the Council, Ambassador Arunatilaka reaffirmed Sri Lanka’s commitment to open dialogue and acknowledged the constructive nature of discussions held with the resolution’s core group. While appreciating the willingness of some states to consider amendments proposed by Sri Lanka, she expressed regret that consensus could not be reached on several fundamental concerns.

“Our primary objection,” she explained, “relates to the continued reference to Resolution 51/1 of 2022, which authorised the establishment of an evidence-gathering mechanism within the Office of the High Commissioner for Human Rights (OHCHR). We view this as an unjustifiable and unilateral expansion of the Council’s mandate.”

The Ambassador reiterated Sri Lanka’s consistent position against the so-called “Sri Lanka Accountability Project”, stating that it undermines national efforts at fostering reconciliation and rebuilding trust among communities. According to her, Sri Lanka has made clear that it does not accept this mechanism and believes that the continuation of such initiatives only serves the agenda of politically motivated actors seeking to stoke division.

In defending its domestic approach, Sri Lanka highlighted recent reforms and institutional developments as part of its commitment to reconciliation and human rights. These include strengthening the independence and capacity of the Offices on Missing Persons and Reparations, enhancing the role of the Office for National Unity and Reconciliation, and the planned launch of a Truth and Reconciliation Commission along with an independent Public Prosecutor’s Office.

Addressing the Council, Ambassador Arunatilaka cited concerns about the credibility, transparency, and accountability of the OHCHR’s accountability mechanism, questioning its budget, mandate, and relevance. “After four years of operation,” she noted, “there is no evidence that this project has delivered any tangible benefit to the people of Sri Lanka.”

She warned that the continuation of externally imposed mechanisms could be counterproductive and might harm rather than support the government’s domestic reconciliation efforts.

Calling for greater respect for national sovereignty and context-driven processes, the Ambassador said: “Nationally owned solutions are far more effective and sustainable. They allow for local sensitivities, ensure broader community ownership, and ultimately make implementation more viable.”

She also referred to the recent visit by the UN High Commissioner for Human Rights to Sri Lanka, during which he acknowledged the government’s openness and the positive momentum across sectors. That visit, she said, served as further confirmation that meaningful reform is underway and that the international community should give Sri Lanka the space and opportunity to pursue its own path.

In closing, Sri Lanka reiterated its position that long-term reconciliation and justice are best achieved through inclusive national efforts rather than externally driven mandates. The government reaffirmed its willingness to engage constructively with the international community—but strictly on terms that respect its sovereignty, legal system, and democratic processes.

Government Plans Shift from Plastic to Glass Bottles, Offers Incentives for Manufacturers

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October 07, Colombo (LNW): The government is taking steps to reduce reliance on plastic bottles and promote the use of environmentally friendly glass alternatives, Minister of Industries Sunil Handunetti announced in Parliament today.

Highlighting the environmental impact of single-use plastics, the Minister stated that the administration is committed to encouraging a transition toward sustainable packaging solutions.

As part of this push, the government will offer a range of incentives to support both existing and new ventures in glass bottle manufacturing.

Environmental groups have long called for such a move, citing the ecological damage caused by discarded plastic containers.

The government’s announcement is seen as a step towards addressing these concerns while aligning industry practices with global sustainability trends.

UNHRC Adopts Resolution Pressuring Sri Lanka on Human Rights

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By: Staff Writer

October 07, Colombo (LNW): The United Nations Human Rights Council (UNHRC) has adopted a resolution calling on Sri Lanka to strengthen reconciliation, accountability, and human rights protections, despite the country’s outright rejection of the measure. The resolution, titled A/HRC/60/L.1/Rev.1, was passed without a vote during the 41st meeting of the council’s 60th session, signaling strong international concern over ongoing governance and human rights issues in Sri Lanka.

The initiative originated on September 10, 2025, when a core group of countries—including Canada, Malawi, Montenegro, North Macedonia, and the United Kingdom—submitted a resolution urging Sri Lanka to take concrete steps toward national reconciliation. A revised draft, presented on October 1, was backed by a coalition of 30 countries spanning Europe, North America, and Oceania, reflecting widespread global support for addressing Sri Lanka’s human rights challenges.

Central to the resolution is the call for the Sri Lankan government to devolve political authority and ensure the effective functioning of provincial councils, particularly in the Northern and Eastern provinces. The measure stresses that such reforms are crucial for fostering reconciliation and allowing all citizens to fully enjoy their rights under the thirteenth amendment to the Sri Lankan Constitution.

The resolution also emphasizes the urgent need for impartial investigations into human rights violations and breaches of international humanitarian law, advocating for the meaningful participation of victims and their representatives. Where appropriate, it calls for the prosecution of those responsible, underscoring the international community’s insistence on accountability.

In addition, the resolution addresses broader civil society concerns, including the safety of journalists, human rights defenders, and activists, particularly women. It demands the release of lands held by the military or state actors and calls for fair, transparent resolutions of disputes over religious, archaeological, and conservation issues.

The mandate of the UN Office of the High Commissioner for Human Rights in Sri Lanka is proposed to be extended, with reports on progress requested at future sessions. The resolution also welcomes Sri Lanka’s commitment to repeal the controversial Prevention of Terrorism Act, highlighting ongoing concerns over disproportionate detentions of Tamil and Muslim communities. It urges a moratorium on the Act’s use until its repeal and insists that any new anti-terrorism legislation comply with international human rights norms.

Similarly, the draft resolution acknowledges Sri Lanka’s pledge to amend the Online Safety Act, expressing concern over broadly defined offences and insufficient judicial oversight. It encourages swift reforms to safeguard freedom of expression in line with international standards.

Analysts say the UNHRC resolution places Sri Lanka at a critical crossroads. While adoption does not impose binding legal obligations, it strengthens international scrutiny and could influence foreign aid, investment decisions, and bilateral relations. The government faces growing pressure to demonstrate tangible progress in reconciliation and human rights, failure of which may further isolate the country diplomatically and economically.

With the global community watching closely, Sri Lanka’s next steps in implementing these reforms will likely define both its international standing and its domestic social cohesion for years to come.

Education Reform to Tackle School Inequality, Says Prime Minister

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October 07, Colombo (LNW): Prime Minister Dr Harini Amarasuriya, who also serves as Minister of Education, Higher Education, and Vocational Training, has reaffirmed the government’s commitment to overhauling Sri Lanka’s education system, with a strong focus on bridging the deep divides between schools across the country.

Addressing senior education officials during a high-level meeting at the Ministry of Education, Dr Amarasuriya acknowledged the longstanding structural imbalances that have led to unequal learning opportunities for students, while placing undue strain on teachers, principals, and parents.

“Our education system has, for far too long, fostered competition rather than equity. The pressure this has created—on students striving to succeed, on educators struggling to deliver, and on institutions trying to keep pace—is unsustainable,” she said.

Dr Amarasuriya emphasised that reducing these disparities and improving the overall quality of education for every child, regardless of geographic or socio-economic background, lies at the heart of the upcoming reform agenda.

The Prime Minister noted that these reforms would be far-reaching, addressing both infrastructure and curriculum, as well as support systems for educators. She also made it clear that systemic change cannot be achieved by government action alone.

“Policy is just one part of the solution. The active involvement of families, local communities, and civil society will be vital in shaping a fairer, more inclusive education system,” she said.

Describing the reform process as a shared national responsibility, Dr Amarasuriya called on all stakeholders to engage constructively in reimagining an education system that better prepares young people for the future—academically, emotionally, and socially.

Customs Posts Historic Revenue Surge as Trade Deficit Narrows

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October 07, Colombo (LNW): Sri Lanka Customs has recorded its highest-ever monthly revenue, collecting Rs. 253.152 billion in September 2025—a significant 74.6 per cent increase compared to the same month last year.

This figure marks a substantial leap from the Rs. 144.969 billion generated in September 2024, reflecting what officials describe as improved enforcement, policy adjustments, and rising import volumes.

The exceptional revenue performance comes amid broader signs of recovery in the external sector. According to data released by the Central Bank, the country’s trade deficit contracted slightly in August 2025, falling to US$ 414.2 million from US$ 422.3 million in August 2024.

This improvement has been largely credited to a stronger uptick in exports than imports. Export earnings in August rose by 4.1 per cent, supported by increased demand for key commodities, while import expenditure grew by 2.6 per cent during the same period.

Sharp Rise in Dialysis Needle Prices Sparks Concern Amid Hospital Shortages

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October 07, Colombo (LNW): A sharp increase in the cost of dialysis needles has sparked distress among kidney patients and their families, as shortages in public hospitals force them to purchase the items independently at steep prices.

Relatives of those undergoing regular dialysis have voiced frustration, reporting that needles, which were previously available for around Rs. 100 at private pharmacies, are now being sold for as much as Rs. 760.

With hospitals currently unable to provide the necessary supplies, patients are left with no choice but to bear the financial burden themselves—an unsustainable situation for many already struggling with the costs of long-term treatment.

The issue stems from a disruption in the supply chain, following the rejection of a large consignment of substandard dialysis needles. Minister of Health and Mass Media, Dr. Nalinda Jayatissa, confirmed that the supplier responsible had imported 400,000 units that failed to meet required standards. As a result, the Health Ministry refused to distribute them to hospitals.

In response to the urgent need, the government has now allocated funds to procure high-quality needles through private sector channels. Dr. Jayatissa noted that the current shortage was primarily due to lapses on the part of suppliers and assured the public that the situation is being addressed as a priority.

The Minister emphasised that the government expects the next shipment of approved dialysis needles to arrive by the 10th of October, and expressed confidence that the disruption will be resolved soon.

Sri Lankan Government Moves to Curb Misuse of Religion Amid Rise in Distorted Teachings

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October 07, Colombo (LNW): In response to mounting concerns over the misrepresentation of major religions by fringe elements, the Sri Lankan government has announced a series of measures aimed at safeguarding the integrity of religious teachings and preventing social unrest.

Deputy Minister of Buddha Sasana, Religious and Cultural Affairs Gamagedara Dissanayake told Daily Mirror that advisory committees have been established for each of the country’s four principal religions—Buddhism, Hinduism, Islam, and Christianity. These bodies will be tasked with reviewing and addressing the spread of misleading interpretations, while also offering guidance on doctrinal matters.

The move comes amid increasing incidents where self-styled preachers or unregulated groups have disseminated distorted narratives, sometimes fuelling tension within communities. One notable case in 2022 involved a controversial figure whose reinterpretation of Buddhist doctrine drew widespread criticism, leading to a temporary revocation of his licence to preach.

“To address this growing issue, we have now appointed advisory committees under the relevant religious affairs departments,” Dissanayake said. “These panels will monitor questionable teachings and provide expert guidance when interpretations appear to contradict established doctrine.”

Each committee will consist of seven individuals recognised for their expertise and authority within their respective religious traditions. Their responsibilities will include advising the Ministry, scrutinising emerging interpretations, and proposing corrective measures or policy changes where necessary.

The government hopes that these committees will act not only as watchdogs but also as educational bodies capable of promoting accurate religious understanding and preserving harmony in Sri Lanka’s multi-faith society.

The Deputy Minister also revealed that a specialised body, the Buddha Sasana Sabha, has been created to deal exclusively with issues related to Buddhism. This institution will intervene in matters requiring doctrinal clarification or when disputes arise within the Buddhist community.

In parallel, the Ministry has raised red flags over the financial activities of certain groups promoting unauthorised religious messages. According to officials, some of these organisations pose as charitable or religious institutions while engaging in dubious fundraising tactics—collecting money via online platforms, foreign sponsors, and informal donation drives, often without proper oversight.

Authorities are now considering tighter regulatory frameworks to monitor such financial flows and ensure that religious institutions operate transparently and within the law.