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Vehicle imports strain Sri Lanka’s foreign reserves despite stronger inflows

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By:Staff Writer

September 02, Colombo (LNW): Sri Lanka’s ambitious target of surpassing US$7 billion in foreign exchange reserves by end-2025 faces renewed challenges, as import outflows continue to climb faster than anticipated despite healthy inflows from remittances and tourism.

According to official data, personal vehicle imports surged to US$506.1 million up to July 2025, compared with just US$34.8 million a year earlier. In addition, US$162.2 million was spent on commercial vehicles during the same period. Together, vehicles alone accounted for over US$668 million, raising concerns about unsustainable pressure on foreign exchange reserves.

Sri Lanka recorded total inflows of US$2.6 billion in July, exceeding imports by US$729 million. However, sustained high-value imports risk offsetting these gains. Personal vehicles are classified as consumer goods, often financed through credit repaid over several years, while commercial vehicles are treated as investment goods. This distinction underscores a structural issue: consumer-driven imports lock in foreign exchange outflows without corresponding productive returns.

Investment goods imports as a whole grew 22.5 percent to US$2.22 billion up to July, with building materials alone at US$569.2 million. Although this reflects renewed economic activity, parallels to 2021—when loose credit and directed lending drove building material imports to US$1.24 billion by December—raise red flags about repeating past vulnerabilities.

Meanwhile, the oil import bill dropped to US$2.25 billion up to July, compared with US$2.54 billion last year, aided by lower global oil prices and increased renewable energy generation. While this has temporarily eased pressure, analysts warn that other categories of imports—especially vehicles are offsetting these gains.

Private sector credit growth, particularly in June, was partly driven by car financing, following central bank rate cuts. Economists caution that such policy shifts may trigger reserve drawdowns to cover debt repayments and imports, undermining external stability. If inflationary policy resumes, even robust inflows from remittances (expected to cross US$6 billion in 2025) and tourism (forecast above US$4 billion) may not be enough to sustain balance.

To achieve the US$7 billion reserve target, Sri Lanka would need to maintain consistent monthly net inflows of over US$500–600 million in the remaining months of 2025. However, with rising import demand and credit-driven consumption, this looks increasingly difficult.

Analysts stress that unless imports, particularly non-essential ones like personal vehicles—are carefully managed, Sri Lanka risks missing its target. The balance between encouraging growth through investment and preventing consumer-driven outflows will be central to the country’s economic stability in the months ahead.

Delays in Justice: Systemic Causes Beyond Case Backlogs

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By: Staff Writer

September 02, Colombo (LNW): The Judicial Service Commission’s (JSC) recent order directing all courts to clear their case backlogs by December 31 has placed the spotlight on a body that is often little known outside legal circles but plays a decisive role in how justice is administered in Sri Lanka. While the directive has stirred both urgency and debate across the judiciary, it also highlights the broader powers, responsibilities, and constitutional standing of the Commission in safeguarding judicial independence and ensuring efficient administration of justice.

The Current Directive: A Bold Push to End Delays

The JSC’s latest intervention is unprecedented in scale. Judges across District Courts, Magistrates’ Courts, High Courts, and even Additional District Courts have been told to prioritize the disposal of long-pending cases. Monthly progress reports are now mandatory, and the Commission has warned that accountability for success or failure rests squarely with presiding judges. Periodic inspections are to follow, and strict disciplinary action is being promised against staff who fail in their duties.

This move comes amid widespread concern that Sri Lanka’s court system, burdened with decades-old cases, risks eroding public confidence. According to the Commission’s own past reports, civil cases more than 30 years old have lingered in some jurisdictions.The December deadline, therefore, is both an administrative challenge and a symbolic effort to reassure the public that justice delayed will not remain justice denied.

What Exactly is the Judicial Service Commission?

Established under Chapter XV of the Constitution, the Judicial Service Commission is one of the country’s most powerful independent institutions. Its core mandate is to safeguard judicial independence by managing the careers and discipline of judges in the lower courts. The Commission is composed of the Chief Justice (as Chairman) and the two most senior Supreme Court judges, all appointed with the approval of the Constitutional Council.

The Commission’s responsibilities include:

– Appointments, promotions, transfers, and disciplinary control of District Judges, Magistrates, and Presidents of Labour Tribunals
– Appointment and supervision of Quazis, who handle Muslim family law matters.
– Oversight of court staff, including registrars, interpreters, and clerical officers.
– Administration of judicial affairs, ensuring that the machinery of justice operates efficiently across the island.

In practice, this makes the JSC the nerve centre of Sri Lanka’s judicial administration, bridging constitutional independence with operational control.

Guardians of Independence

A crucial aspect of the JSC’s existence is its insulation from political interference. Before the 19th Amendment to the Constitution (2015), the President had sweeping powers over judicial appointments. The amendment introduced checks through the Constitutional Council, ensuring that senior judges and JSC members cannot be appointed or removed without wider parliamentary and civil society approval.

Members of the JSC enjoy constitutional immunity for acts performed in good faith, while interference with its functioning is itself a punishable offence. This framework was deliberately designed to protect judges from executive overreach and guarantee public trust in the system.

The JSC’s Role in Case Management

While the JSC is not a court and does not adjudicate disputes, it exercises supervisory control over how courts are run. Its annual reports reveal a long-standing concern with backlogs. As far back as 2012, the Commission instructed District Courts to identify and conclude cases over three decades old.

The establishment of Civil Appellate High Courts, targeted recruitment of judges, and the introduction of digital systems were part of its strategy to reduce delays.Today’s directive to clear all backlogs by year-end is thus a continuation and intensification of that earlier mission. By using its administrative powers, the Commission seeks to transform structural inefficiency into a nationwide campaign of expedited justice.

Training, Oversight, and Discipline

Beyond appointments and transfers, the JSC also invests in the quality of the judiciary. Through the Judges’ Institute, it organizes training, workshops, and even overseas study programs to strengthen legal capacity.The Commission monitors judicial conduct closely, with established procedures to investigate complaints against judges and impose disciplinary action where necessary. The same scrutiny extends to court staff, ensuring that inefficiency or misconduct at any level is addressed.This dual role,nurturing professional growth while enforcing accountability,positions the JSC as both guardian and regulator of Sri Lanka’s judicial integrity.

Why This Matters to the Public

To many citizens, the judiciary is often perceived as slow, distant, and burdened with bureaucracy. Cases dragging on for years sometimes decades have created frustration and mistrust. The JSC’s current move to demand backlog clearance is a reminder that the judiciary recognizes these concerns.

At the same time, the directive raises questions: Can judges realistically dispose of decades of accumulated cases in just a few months? Will speed come at the cost of thoroughness? And what systemic reforms beyond deadlines are needed to prevent backlogs from re-emerging?

Legal experts argue that while administrative orders are necessary, deeper structural reforms such as digitization, procedural simplification, and alternative dispute resolution are vital for lasting change. Still, the JSC’s action signals a determination to confront the issue head-on, using the powers constitutionally vested in it.

A Balancing Act

The Judicial Service Commission walks a fine line between efficiency and independence. On one hand, it must ensure that the courts deliver timely justice to the people. On the other, it must preserve the autonomy of judges to decide cases free of external pressure. Its current directive, then, is not just an administrative exercise but also a test of whether judicial governance can be both assertive and fair.

Looking Ahead

As the December 31 deadline looms, the nation will be watching whether the JSC’s bold order yields measurable results. Success could reinforce public confidence in the judiciary, proving that a centuries-old backlog can finally be broken. Failure, however, could expose deeper cracks in the justice system, demanding more comprehensive reforms.

What is clear is that the Judicial Service Commission is far more than a bureaucratic body. It is the constitutional guardian of judicial independence, the administrative manager of courts, and now, the architect of a campaign to restore public faith in the rule of law. The coming months will reveal whether it can deliver on this ambitious promise.

CEB Restructuring: Reform, Contradictions, and the Road Ahead”

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By:Staff Writer

September 02, Colombo (LNW): The National People’s Power (NPP) government has moved forward with the restructuring of the Ceylon Electricity Board (CEB), issuing new regulations for a Voluntary Retirement Scheme (VRS) aimed at employees unwilling to transfer to the newly created successor companies.

While the step is presented as part of long-awaited reforms, it has also drawn questions about the government’s changing stance given that some of its leading members once strongly opposed similar plans under the previous administration.

From Protest to Implementation

The restructuring follows the Sri Lanka Electricity Act No. 36 of 2024, which sets out a framework to unbundle the CEB. Earlier drafts under Ranil Wickremesinghe’s government proposed dividing the utility into as many as eight to twelve separate entities. That figure has now been reduced to four successor companies.

The move was one of several reforms linked to International Monetary Fund (IMF) recommendations for improving financial sustainability in the energy sector. Yet, during Wickremesinghe’s tenure, NPP factions particularly its JVP leadership vocally protested against the unbundling, warning it could open the door to privatization and job losses.

Today, with the same policy continuing under their own administration, the shift in position has drawn attention. The government’s justification is that restructuring is now being pursued with greater safeguards for workers and stronger public oversight.

Voluntary Retirement Scheme: Key Features

The newly gazetted VRS, issued on 26 August 2025 by Energy Minister Kumara Jayakody, lays out detailed compensation packages:

Permanent staff with over 10 years of service: Two months’ salary per completed year of service

1.5 months’ salary for each year of future service foregone Payments range from a minimum of Rs. 900,000 to a maximum of Rs. 5 million

Permanent staff with less than 10 years: Five months’ salary per year served, without additional payments for foregone service

Contractual/non-permanent staff: Two months’ salary per year served, with a minimum equal to one year’s salary. Employees under disciplinary action or with unsettled dues are ineligible, while those opting for the scheme cannot seek employment with the successor companies in future.



Pros and Cons of the Reform

Potential Benefits:

Unbundling may improve efficiency, transparency, and accountability in electricity generation, transmission, and distribution.

The VRS provides a structured, relatively generous exit package compared to past schemes in state enterprises, ensuring employees unwilling to adapt have an option.

Restructuring could reduce financial losses at the CEB and align operations with IMF requirements, strengthening investor confidence.

Concerns and Risks:

Critics warn that breaking up the CEB could fragment coordination, complicating service delivery in a sector already under strain.

The exclusion of interim allowances in VRS calculations and the ban on re-employment may discourage some employees from applying.

The political inconsistency opposing the same policy in opposition but implementing it in government—raises doubts about long-term commitment to coherent energy policy.

There is public apprehension that restructuring may pave the way, directly or indirectly, to partial privatization.

The Bigger Picture

For the NPP, the CEB reforms are part of broader institutional changes framed as modernization and anti-corruption. However, the political irony is difficult to ignore: the very leaders who once staged protests against unbundling are now responsible for carrying it out.

The government argues that current conditions—particularly Sri Lanka’s debt situation and IMF obligations leave little alternative but to proceed with reforms. Yet balancing fiscal discipline, worker protection, and reliable electricity services will be the real test.

Pensioners Rally in Colombo Demanding Fair Adjustment of Payments

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September 02, Colombo (LNW): A large group of retired public servants gathered outside the Presidential Secretariat in Colombo today, calling on the government to rectify long-standing disparities in their pension payments.

The demonstrators, many of whom had travelled from various parts of the country, included former members of the armed forces, police, and civil service.

Their core demand centred on the revision of pension disbursements that they claim were unjustly reduced during the period between 2020 and 2024, when Sri Lanka faced overlapping crises, including the COVID-19 pandemic and a severe economic downturn.

Protesters voiced their frustration over what they described as an enduring injustice, alleging that their current pensions do not reflect the rates that have since been adjusted for newly retiring public servants.

They argue that while recent retirees benefit from increased payment scales, many long-serving pensioners remain locked into outdated and lower amounts—despite years of dedicated service to the state.

Placards and banners held aloft during the demonstration conveyed messages of discontent, with many retirees stating they were finding it increasingly difficult to manage rising living costs, especially in the wake of inflation and ongoing financial pressures. For some, the issue was not only economic but deeply personal—a matter of dignity, fairness, and recognition.

Following the protest, a small delegation representing the demonstrators was granted entry to the Presidential Secretariat for a closed-door meeting with officials.

Photo Courtesy: Ajith Senevirathne

Italy’s Deputy Minister for Foreign Affairs and International Cooperation to visit Sri Lanka

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September 02, Colombo (LNW): Italy’s Deputy Minister for Foreign Affairs and International Cooperation, Maria Tripodi, is set to embark on an official visit to Sri Lanka from September 03 to 05, 2025—an engagement hailed as the most senior Italian diplomatic visit to the island nation in nearly ten years.

The visit comes at a time of renewed interest in expanding bilateral cooperation between Sri Lanka and Italy, with both countries seeking to reinvigorate their longstanding diplomatic ties, first established in 1952.

It is expected to lay the foundation for a deeper and more structured dialogue on a range of political, economic, and cultural issues.

One of the key highlights of the Deputy Minister’s visit will be her role as co-chair of the first-ever session of the Sri Lanka–Italy Political Consultations. She will lead discussions alongside Sri Lanka’s Deputy Minister of Foreign Affairs and Foreign Employment, Arun Hemachandra.

The meeting is set to formalise regular diplomatic engagement between the two nations and marks the beginning of what officials describe as a “new institutional chapter” in bilateral relations.

A Memorandum of Understanding is scheduled to be signed during the visit, establishing a formal mechanism for ongoing political consultations. The agreement is expected to serve as a strategic framework for dialogue and cooperation across a range of sectors, including trade, investment, education, and people-to-people exchange.

Deputy Minister Tripodi is also due to pay courtesy calls on senior government figures, including Prime Minister Harini Amarasuriya and Foreign Minister Vijitha Herath. These meetings are anticipated to provide an opportunity for candid exchanges on regional and global developments, whilst also exploring avenues for strengthening collaboration in areas of mutual interest.

ADB Backs Sri Lanka’s Healthcare Overhaul with Major Funding Package

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September 02, Colombo (LNW): In a significant boost to Sri Lanka’s healthcare reform agenda, the Asian Development Bank (ADB) has approved a substantial financial package worth $106.9 million to upgrade and modernise the country’s secondary healthcare services, enhance disease control systems, and strengthen institutional governance within the health sector.

The funding—comprising a $100 million concessional loan and an additional $6.9 million grant from the Pandemic Prevention, Preparedness, and Response Trust Fund—will support a wide-ranging initiative aimed at preparing Sri Lanka’s health system for current demands and future challenges.

The programme, titled Strengthening Integrated Health Care and Governance for Universal Health Coverage, will target both infrastructure development and systemic improvements.

While Sri Lanka has long been recognised for its achievements in providing accessible public healthcare, rising life expectancy, shifts in disease profiles, and growing demand for specialist treatment have placed increasing pressure on secondary care services.

Noncommunicable diseases, ageing populations, and recurring threats from communicable outbreaks have underscored the need for a more integrated and responsive healthcare system.

Through a results-based lending approach, this new programme will focus on upgrading hospital facilities, increasing access to surgical and specialist services, and integrating secondary hospitals more closely with primary care and community-level health infrastructure. This is expected to create a more seamless referral system and ensure patients receive timely and appropriate care.

The initiative also includes targeted investments in pandemic readiness. Plans are underway to establish a national centre for disease control, bolster public health laboratory networks, and introduce a robust cross-sector disease surveillance mechanism to detect and respond to emerging health threats more rapidly.

In a parallel effort to improve governance, the programme will support the digital transformation of government procurement in the health sector, alongside reforms to strengthen transparency, quality assurance, and regulatory oversight in pharmaceutical supply chains. These changes are intended to curb inefficiencies, improve service delivery, and uphold integrity in healthcare procurement practices.

The ADB has also emphasised the programme’s commitment to climate resilience, gender equity, and elderly-focused care. New infrastructure and service models are expected to reflect these priorities, creating a more inclusive and adaptive healthcare system that meets the needs of all segments of the population.

State-of-the-Art Banana Tissue Culture Lab Opens in Maha Illuppallama to Boost Local Cultivation

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September 02, Colombo (LNW): A major step forward for Sri Lanka’s agricultural innovation has taken root in the heart of the island’s dry zone, as a new Banana Tissue Culture Laboratory has officially commenced operations at the In-Service Training Institute in Maha Illuppallama.

Established by the North Central Provincial Department of Agriculture, this cutting-edge facility is poised to transform banana cultivation across the North Central, Northern, and North Western Provinces—regions that have long contended with the challenges of unreliable and costly planting material supply chains.

Developed with expert technical guidance and funding from the Food and Agriculture Organisation (FAO) through its South-South Cooperation initiative with China, the laboratory represents a significant investment in sustainable farming and regional self-sufficiency.

Until now, banana growers in these parts of the country were heavily reliant on tissue-cultured plants transported from the southern provinces. The logistics of moving such delicate materials often led to damage, delays, and additional expenses for smallholder farmers.

The newly launched lab addresses these issues head-on by producing high-quality, disease-free, and fast-growing banana plants locally—offering both convenience and cost-efficiency to cultivators.

Beyond simply supplying plants, the facility is expected to serve as a knowledge hub. Local agricultural officers and lab technicians have received specialised training to operate and manage the lab according to global best practices, ensuring that its output meets rigorous quality standards.

The FAO has also provided a full suite of scientific equipment, culture media, and other critical materials necessary for the laboratory’s operation.

This initiative forms part of a broader national strategy aimed at revitalising Sri Lanka’s fruit sector, with targeted improvements in banana, mango, and pineapple production. By strengthening the entire value chain—from propagation to post-harvest handling—the programme aims to not only improve domestic availability of fresh fruit but also enhance Sri Lanka’s competitiveness in regional export markets.

Officials believe that by empowering farmers with access to improved planting materials and advanced cultivation techniques, the initiative will significantly increase yields, reduce crop losses due to disease, and ultimately raise incomes for rural communities. The lab is also expected to play a role in encouraging youth engagement in agriculture by showcasing the potential of modern, science-based farming.

Sri Lanka Endorses China’s Vision for Inclusive Global Governance at Tianjin Forum

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September 02, Colombo (LNW): Sri Lanka has expressed its support for a series of global policy frameworks put forward by Chinese President Xi Jinping during the recent SCO Plus gathering in Tianjin, underscoring Colombo’s interest in advancing cooperative multilateral engagement.

Foreign Minister Vijitha Herath, representing Sri Lanka at the high-level forum, welcomed the proposals with optimism, stating that the initiatives reflect principles that align closely with Sri Lanka’s foreign policy outlook.

Amongst the frameworks commended were the Global Development Initiative, the Global Security Initiative, the Global Civilization Initiative, and the newly introduced Global Governance Initiative (GGI).

Minister Herath described the proposals as timely, noting their emphasis on sovereign equality, adherence to international law, people-centred development, and genuine multilateralism.

He further stressed that these values resonate with the growing demand amongst developing nations for a more balanced and equitable approach to global cooperation.

The summit, hosted in Tianjin, served as a platform for an expanded dialogue amongst Shanghai Cooperation Organisation (SCO) member states and partner nations, focusing on regional peace, economic integration, and a shared vision for future development. Discussions reflected a collective desire to move beyond zero-sum geopolitical posturing, with participants highlighting the need to build frameworks that serve mutual interests.

In his keynote remarks, President Xi urged the international community to embrace a new model of global governance that prioritises fairness, inclusivity, and pragmatic collaboration. He reaffirmed China’s commitment to supporting countries in the Global South, reducing global disparities, and confronting emerging challenges that transcend national borders.

Whilst acknowledging persistent issues such as unilateralism, protectionism, and geopolitical rivalry, Xi emphasised that long-standing global aspirations for peace and cooperation still hold sway. He called for collective action to address these imbalances and reaffirmed the equal rights of all nations—irrespective of their size, influence, or economic strength—to shape the future of international affairs.

Minister Herath’s remarks echoed this sentiment, reaffirming Sri Lanka’s belief that genuine multilateral partnerships are vital to navigating the complexities of a rapidly shifting global order. He noted that the initiatives championed at the Tianjin summit provide a meaningful foundation for consensus-building in areas ranging from sustainable development to regional security.

Courts urged to eliminate case backlogs by year-end: Commission

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September 02, Colombo (LNW): Sri Lanka’s Judicial Service Commission (JSC) has issued a firm directive to the nation’s judiciary, mandating that all existing case backlogs across the court system be resolved by December 31 this year.

The unprecedented directive is aimed at addressing the mounting delays that have long plagued the justice delivery process.

The directive, which has been formally communicated to District Judges, Magistrates, High Court Judges, and Additional District Judges, follows an assessment of unresolved cases across the country’s legal system in recent weeks.

Judges have now been instructed to prioritise the clearing of pending cases without further delay. Each presiding officer will bear full administrative responsibility for ensuring that their respective courtrooms meet the deadline.

The Commission has clarified that accountability for progress—or the lack thereof—will rest squarely on the shoulders of judicial officers overseeing each jurisdiction.

To support the enforcement of this mandate, the JSC is set to carry out periodic inspections at the regional level, assessing the pace and quality of case disposal. All judges have been instructed to submit monthly progress reports, detailing the status of backlog clearance efforts within their courts.

Sri Lanka Sees Steady Growth in Tourist Arrivals as Sector Eyes Ambitious Year-End Target

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September 02, Colombo (LNW): Sri Lanka’s tourism sector continued its upward momentum in August, recording a notable year-on-year increase in international arrivals, as the island nation strives to reclaim its position as a premier destination in the region.

Preliminary data released by the Sri Lanka Tourism Development Authority indicates that 198,235 tourists entered the country during the month, marking a 20.4 per cent rise compared to August last year.

This latest surge brings the cumulative total for the first eight months of 2025 to approximately 1.57 million visitors, pointing to a gradual but consistent recovery in the wake of years of disruption.

August saw a daily average of just under 6,400 arrivals, with numbers almost matching pre-crisis levels—falling only slightly below the 200,000 figure seen in August 2018, before the combined impacts of economic turbulence, political instability, and the global pandemic upended the country’s tourism outlook.

India maintained its position as the most significant source market, contributing 46,473 travellers in August alone—accounting for nearly one in every four visitors. The United Kingdom and Germany followed, providing 17,764 and 12,500 tourists respectively. Other strong-performing markets included China, France, Italy, Spain, Australia, the Netherlands, and Japan, reflecting Sri Lanka’s growing appeal across both traditional and emerging tourism corridors.

Despite the encouraging figures, industry leaders remain cautious. Deputy Minister of Tourism Ruwan Ranasinghe recently acknowledged the challenges ahead in reaching the government’s ambitious target of three million visitors by the end of the year.

To achieve this, Sri Lanka would need to attract over 1.4 million more tourists in the remaining five months—an average of nearly 360,000 arrivals per month, which would represent an unprecedented post-pandemic performance.

To support this push, the National Procurement Commission has reportedly called for new bids to reinvigorate Sri Lanka’s global tourism marketing efforts. While these campaigns may take several months to fully materialise, interim measures are being pursued, including promotional roadshows and bilateral tourism initiatives.

There is also growing concern within the sector about the underutilisation of agreements made with international marketing agencies last year, with stakeholders calling for a more proactive approach to deploying existing resources and partnerships.

Nevertheless, optimism persists. The steady increase in arrivals, bolstered by renewed interest from high-potential markets and a favourable perception of Sri Lanka as a safe, affordable, and culturally rich destination, provides a strong foundation for further growth in the months ahead.