By Panduka Keerthinanda
Sri Lanka is a nation of paradox: it is endowed with abundant natural resources, including fertile agricultural land and valuable minerals, yet it struggles with widespread poverty and economic instability. This discrepancy arises from a complex interplay of historical policies, governance issues, economic structure, and external factors.
Given here are the reasons behind this paradox, supported by evidence from the search results.
Historical and policy-related constraints
Outdated agricultural policies: The Paddy Lands Act of 1958, still in force, was intended to protect tenants but has instead led to generational land disputes and entrenched poverty among farmers. This policy discourages investment and innovation in agriculture, perpetuating inefficiency and low productivity.
Mismanagement of mineral resources: Sri Lanka possesses high-quality graphite, phosphate, and ilmenite deposits. But these resources are under-exploited due to corruption, mismanagement, and lack of technological expertise. For example, the nationalization of graphite mines in 1971 led to a decline in exports from dominance to just 10,000 metric tons annually, despite reserves of 1.5 mn tonnes. Similarly, phosphate mining suffers from quality issues, leading to returned products and lost revenue .
Lack of political will: Short-term political agendas prioritize votes over long-term economic growth. Policies are often skewed to serve immediate interests rather than sustainable development, resulting in wasted resources and missed opportunities.
Structural economic issues
Over-reliance on low-value agriculture: Agriculture employs about 30% of the workforce but contributes only 7–8% to GDP. Most farmers work in low-productivity subsistence farming, with limited access to modern technology, credit, and markets. This traps rural populations in poverty, as agricultural growth has not translated into higher incomes.
Inequality between urban and rural areas: Wealth is concentrated in urban centres, while rural areas (home to 75% of the population and 85% of the poor) lack infrastructure, education, and opportunities. This spatial inequality hinders inclusive growth.
Vulnerability to external shocks: Sri Lanka’s economy depends on exports of tea, rubber, and apparel, which are susceptible to global price fluctuations and demand shifts. The COVID-19 pandemic, for instance, caused a 25% decline in exports, exacerbating poverty and unemployment.
Governance and institutional failures
Inefficient State-Owned Enterprises (SOEs): SOEs, such as those in mining and energy, are often managed by political appointees rather than professionals. They operate without accountability, incurring massive losses. For example, the national airline lost more money in eight months than the annual budget for poverty alleviation programmes.
Protectionism and lack of competition: Government monopolies in sectors like lotteries and aviation stifle competition and innovation. Profits in these sectors arise from monopolistic practices rather than wealth creation, further hindering economic dynamism .
Erosion of wealth creation capacity:As Bill Gates noted, wealth is not merely having resources but the ability to create and recreate wealth. Sri Lanka has failed to develop this capacity due to poor governance, corruption, and a lack of entrepreneurial culture.
Social and developmental challenges
High malnutrition and poor human capital: 22% of Sri Lankans suffer from malnutrition, which affects cognitive development and productivity. Despite high primary school enrolment, education quality is low, limiting the workforce’s skills and adaptability .
Inadequate social safety nets: While poverty rates have decreased, social protections remain weak. Only a small fraction of the poor benefit from programs like cash transfers, leaving many vulnerable to shocks like health crises or natural disasters.
Impact of climate change: Frequent floods and droughts threaten food security and livelihoods, particularly in rural areas. This exacerbates poverty and strains limited resources.
Global and geopolitical factors
Competition and market access: Sri Lanka faces intense competition from countries like Madagascar (in graphite) and Vietnam (in agriculture). Without competitive advantages or value addition, it struggles to retain market share.
Dependence on foreign investment and aid: While foreign investment is needed for infrastructure and mining, Sri Lanka has often partnered with unqualified companies, leading to sub-optimal outcomes. Additionally, the country relies on loans and aid to sustain basic imports, such as fuel, further eroding economic sovereignty.
Potential solutions and missed opportunities
Value addition in resources: Sri Lanka could process minerals like graphite and phosphate domestically to capture higher value. For example, graphite could be used in batteries and electronics, while phosphate could be refined into fertilizers .
Tourism and services expansion: Tourism, which earned $15 billion in 2024, could be expanded to $100–150 billion by leveraging natural scenery and cultural assets. Similarly, IT and BPO services could grow significantly with targeted investments .
Port and logistics development: Strategically located ports like Colombo and Hambantota could become regional hubs, boosting trade and logistics services .
Agricultural modernization: Investing in high-value crops (e.g., organic tea, spices) and agro-processing could increase farmers’ incomes and export earnings.
The path forward
Sri Lanka’s poverty amidst plenty is not inevitable. It stems from deep-rooted institutional and policy failures rather than a lack of resources. To transform its economy, Sri Lanka must:
1. Reform policies to encourage private investment and competition.
2. Invest in human capital through better education and healthcare.
3. Modernize agriculture and mining to add value and increase productivity.
4. Strengthen governance to curb corruption and improve public sector efficiency.
5. Leverage its geographic location to become a tourism, logistics, and services hub.
With political will and strategic action, Sri Lanka could potentially triple its GDP in a decade, lifting millions out of poverty. As the World Bank emphasizes, growth must be inclusive and coupled with investments in people and resilience to ensure sustainable prosperity .
(The writer is an attorney-at-law)
Why is Sri Lanka resource-rich yet wealth-poor?
Opposition Unites in Condemnation of Ranil Wickremesinghe’s Arrest, Warns Against “Constitutional Dictatorship”
August 24, Colombo (LNW): In an unprecedented show of unity, leaders from across Sri Lanka’s opposition spectrum convened today (24 August) in Colombo to condemn the arrest and remand of former President Ranil Wickremesinghe, warning that the move marks a dangerous slide towards authoritarianism.
Held under the banner “Let’s Defeat the Constitutional Dictatorship”, the joint press conference saw political rivals and former critics of Wickremesinghe come together in defence of democratic principles, asserting that the government’s actions represent an abuse of legal processes to suppress dissent.
The event was attended by a broad range of political figures, including Former President Maithripala Sirisena, SLPP National Organiser Namal Rajapaksa, Wajira Abeywardana, Sagala Rathnayaka, Prof. G. L. Peiris, Patali Champika Ranawaka, Harin Fernando, and several other former ministers and Members of Parliament from across party lines.
In a striking display of political solidarity, many of the attendees had previously been outspoken critics of Wickremesinghe’s leadership, yet now find themselves rallying behind him in the face of what they allege is a politically motivated detention.
Maithripala Sirisena, addressing the media first, pledged full cooperation from all opposition forces to seek the release of the former president. “This is not just about one individual. This is about defending our democracy. All stakeholders will work with commitment and urgency,” he said.
Former Minister Thalatha Athukorala, General Secretary of the UNP, read out a statement from former President Chandrika Bandaranaike Kumaratunga, who had earlier condemned the arrest as a calculated assault on democratic values.
Representing the collective voice of the opposition, Prof. G. L. Peiris provided a legal and constitutional critique of the arrest. He stated that while addressing corruption is vital, the responsibility of determining guilt lies solely with the judiciary — not the executive.
“Ranil Wickremesinghe has not been convicted of any crime. According to the Constitution, he is presumed innocent. He poses no flight risk and has remained actively engaged in political life. With testimony from 33 witnesses already recorded, there is no reasonable concern about witness tampering. So what then is the justification for this arrest?” Peiris asked.
He went on to assert that the arrest does not meaningfully assist the ongoing investigation, and instead, erodes public confidence in the impartiality of legal institutions.
Other prominent voices — including Sagara Kariyawasam (SLPP General Secretary), Mano Ganesan (Leader, Tamil Progressive Alliance), Patali Champika Ranawaka (Leader, United Republican Front), Rauff Hakeem (Sri Lanka Muslim Congress), and former ministers Nimal Siripala de Silva and Dayasiri Jayasekara — echoed similar sentiments.
Many accused the ruling administration of orchestrating a strategic crackdown to intimidate political opposition and consolidate power, all while projecting a façade of legal integrity.
CBK Condemns Arrest of RW, Warns of Democratic Backsliding
August 24, Colombo (LNW): Former President Chandrika Bandaranaike Kumaratunga has released a strongly worded statement expressing deep concern over the arrest and remand of fellow former head of state Ranil Wickremesinghe, warning that the episode signals a broader threat to Sri Lanka’s democratic institutions.
In the statement, Kumaratunga criticised the timing and manner of the arrest, noting that it occurred when the relevant investigation was reportedly nearing completion. She described the move as deeply troubling, suggesting it may reflect more than just a legal process at work.
“What we are witnessing is a calculated onslaught on the very essence of our democratic values,” the former president stated. “The consequences of this go far beyond the fate of an individual or any political grouping, and involve peril for the rights of our society as a whole.”
Kumaratunga, who served as president from 1994 to 2005, warned that undermining democratic norms for political expedience sets a dangerous precedent — one that could ultimately erode civil liberties and institutional credibility across the board.
She called on all political leaders, regardless of affiliation, to stand in firm opposition to such practices. “I wholeheartedly join in expressing my unreserved opposition to these initiatives, which all political leaders are duty-bound to resist,” the statement read.
Indian Congress MP Tharoor Voices Concern Over Former Sri Lankan President RW’s Detention
August 24, Colombo (LNW): Indian Congress MP Shashi Tharoor has raised serious concerns over the arrest and detention of former Sri Lankan President Ranil Wickremesinghe, cautioning against what he described as “the politics of vengeance” taking root in the island nation.
In a statement shared on social media, Tharoor questioned the basis of the charges, suggesting that, on initial examination, they appeared to be of a minor nature. He further revealed that Wickremesinghe’s health had worsened during his time in custody, prompting his transfer from the prison hospital to the National Hospital in Colombo.
Tharoor, who met with the former president earlier this month during a visit to Sri Lanka, urged authorities to ensure that Wickremesinghe is treated with the dignity befitting his long-standing contribution to public service. He called for adherence to due legal process and expressed hope that the situation would be handled with fairness and humanity.
Whilst acknowledging that the matter remains an internal issue for Sri Lanka, Tharoor emphasised that the way it is managed will not go unnoticed beyond the country’s borders. His remarks suggest growing international interest in the political and legal developments unfolding in Colombo, particularly as concerns mount over the potential misuse of state mechanisms for political retribution.
Concerned about the detention of former Sri Lankan President Ranil Wickramasinghe on what, on the face of it, seem trivial charges. His health issues have already seen him taken to the prison hospital. I call on the government of Sri Lanka — while fully respecting that this is… pic.twitter.com/ojuEfEu4FG
— Shashi Tharoor (@ShashiTharoor) August 23, 2025
Western Diplomat Meets Former First Lady Amid Political Unrest
August 24, Colombo (LNW): An ambassador representing a prominent Western nation has reportedly met with Prof. Maithree Wickramasinghe, the wife of former President Ranil Wickremesinghe, in what sources have described as a “cordial and empathetic” encounter held at the couple’s residence, Pulseline reported.
The visit, which has not yet been officially confirmed by either the embassy or the Wickremesinghe family, took place against the backdrop of heightened political tensions following the arrest and remand of the former president, according to report.
Wickremesinghe, who held office from 2022 to 2024, is currently facing legal proceedings related to allegations of misappropriating state funds.
While specific details of the private discussion have not been disclosed, individuals familiar with the matter characterised the ambassador’s demeanour as respectful and compassionate, suggesting that the visit may have been motivated by diplomatic concern rather than political intent, the report detailed.
Prof. Wickramasinghe, who served as First Lady during her husband’s presidency, has remained largely out of the public eye since his departure from office earlier this year. The recent developments mark one of the few times she has been drawn back into the public spotlight.
The meeting comes at a particularly delicate moment, as the government insists the former president’s arrest is the result of independent judicial processes, while opposition figures have accused the ruling administration of orchestrating a political vendetta.
Minister Responds to Speculation Over Former President’s Arrest – Asserts YouTube Predictions Have No Influence
August 24, Colombo (LNW): Health and Mass Media Minister and Cabinet Spokesman Dr Nalinda Jayatissa has reiterated that the government has not interfered in any ongoing legal proceedings, emphasising that all investigative and judicial institutions are operating independently and without political pressure.
Responding to media questions yesterday (23) regarding recent remarks made by a YouTuber — who had notably predicted the arrest of former President Ranil Wickremesinghe — Minister Jayatissa dismissed the notion that such commentary pointed to political orchestration behind the legal action.
“The government’s sole responsibility is to ensure that the relevant institutions are provided with the necessary facilities and resources,” Jayatissa said. “Whether it’s in connection with financial misconduct, criminal activity, or corruption, investigations are progressing freely and independently. This particular case also stands as further evidence that the law is applied equally to all, irrespective of their position or power.”
He went on to clarify that public speculation, even if occasionally accurate, does not indicate any form of manipulation or external influence on legal processes. Drawing a comparison, the Minister referred to past instances where journalists and commentators had made similar predictions about judicial decisions.
“Take journalist Victor Ivan, for example. He once made remarks in advance regarding a court verdict. People speculate all the time — some think bail will be granted, others think it won’t. These are merely guesses. Sometimes they turn out to be right, other times not,” he explained.
However, Minister Jayatissa issued a caution regarding attempts to undermine the integrity of the judiciary through such speculation. “If anyone attempts to suggest that outcomes are being dictated or predicted due to undue influence, that borders on contempt of court. The public must understand the seriousness of making such claims.”
Govt to Hold Urgent Talks with Striking Postal Workers as Services Remain Disrupted
August 24, Colombo (LNW): A crucial meeting is set to take place today (24) between striking postal workers and Health and Mass Media Minister Dr Nalinda Jayatissa, as the nationwide postal strike enters its seventh day.
The discussion, scheduled for 9:00 a.m., will bring together representatives from all trade unions currently participating in the industrial action.
The strike, launched on Sunday (17), has been led by several key unions, including the Postal and Telecommunications Officers’ Union and the United Postal Trade Unions’ Front (UPTUF). Workers are demanding the resolution of 19 longstanding issues, which they claim have been ignored by authorities for far too long.
The ongoing action has brought postal operations across the island to a near halt, severely disrupting services in most areas. Long queues and frustrated citizens have become a common sight outside post offices, as the suspension of mail delivery and other essential postal services continues to affect thousands.
Chinthaka Bandara, co-convener of the UPTUF, confirmed that union representatives are willing to engage in dialogue with Minister Jayatissa. “We are prepared to discuss our demands in good faith,” Bandara said. “The ball is now in the government’s court to offer a serious response.”
In a potentially significant development, Jagath Mahinda, Chairman of the Sri Lanka Postal Services Association, claimed that a considerable number of employees who had joined the strike have since returned to work. He expressed optimism that postal services could return to normal as early as tomorrow, should discussions proceed positively.
Deputy Minister Denies Government Role in RW’s Remand
August 24, Colombo (LNW): Deputy Minister of Housing T. B. Sarath has firmly denied any government involvement in the legal proceedings that led to the remand of former President Ranil Wickremesinghe, stating that the matter lies entirely within the domain of the judiciary and has nothing to do with political retaliation.
Speaking to the media following a public event yesterday (23), Sarath emphasised that the current administration, led by the National People’s Power (NPP), is committed to upholding democratic values and the rule of law — even when it involves high-profile political figures.
“As the NPP, we recognise that every political leader, regardless of party affiliation, possesses a fundamental democratic right to lead and to govern according to their policies,” Sarath said. “That includes Mr Ranil Wickremesinghe — he had that right yesterday, he has it today, and he will have it tomorrow. What we are witnessing now is not government interference. There is no act of revenge at play here.”
He went on to stress that the legal action taken against Wickremesinghe was part of an independent judicial process, free from political influence or directive. According to the Deputy Minister, any attempt to portray the remand as a political manoeuvre is a mischaracterisation of the facts.
Namal Rajapaksa Alleges Political Motive Behind Ex-President’s Arrest
August 24, Colombo (LNW): Addressing supporters at a party event in Beruwala yesterday (23), Sri Lanka Podujana Peramuna (SLPP) MP Namal Rajapaksa accused the current government, led by the National People’s Power (NPP), of orchestrating the arrest of former President Ranil Wickremesinghe as a political smokescreen to divert attention from mounting corruption allegations against its own ranks.
Rajapaksa claimed that the Criminal Investigation Department (CID) had been weaponised by the government in a calculated effort to deflect public scrutiny. According to him, the arrest was less about justice and more about shifting focus away from issues such as suspicious tender procedures and alleged misconduct involving high-ranking government figures.
“We visited the CID yesterday following the arrest of Mr Wickremesinghe. We understand the weight of politically driven vengeance because we have endured it ourselves. My entire family has been a target,” he remarked, referencing what he described as a long history of political persecution. “If we think about who has suffered most from political revenge in this country, Lady Sirimavo Bandaranaike and President Mahinda Rajapaksa come to mind — both victims of United National Party-led governments. But we never responded with retaliation. We faced it and moved forward. That’s not a path we are willing to inflict on others.”
He went further, accusing the NPP of attempting to undermine Sri Lanka’s democratic institutions by using state power to enforce a hidden political agenda. “What could not be achieved through violence in the late ’80s or through decades of separatist war is now being attempted through administrative suppression,” he warned. “The JVP, operating under the NPP umbrella, is steering this country dangerously close to authoritarianism.”
Rajapaksa strongly criticised the government’s treatment of Wickremesinghe, noting that the former president was detained and interrogated over actions taken while in office. “If this is how a head of state ends up — jailed and questioned for doing his duty — what incentive does any future leader have to take bold decisions for the country?” he asked. “It sends a chilling message: lead, and you may be punished for it.”
The MP also listed a series of controversies he claims the government is attempting to bury — including alleged irregularities in coal tenders, the purported influence of a senior minister over the energy sector, and accusations of land grabs involving government figures. He also mentioned the recent abrupt transfer of a judge handling sensitive cases in Parliament, suggesting this too was part of a broader pattern of institutional interference.
“And while they’ve spent months boasting about launching a so-called ‘rocket’, it ends up crashing into the Pelawatte office. Is this the future they’ve promised?” he asked mockingly.
Rajapaksa accused the government of hiding its inefficiencies and policy failures behind a spectacle of law enforcement and spectacle arrests. “Dragging a former leader into this kind of drama doesn’t solve the people’s problems. It’s a deflection, pure and simple.”
Concluding his remarks, he issued a stark warning to the ruling administration: “We are facing a grave challenge to democracy. This government is using the machinery of the state to crush dissent and silence the opposition. But our patience has limits. If you want to lead this country, do so by honouring your promises — not by suppressing those who stand against you.”
He called on the government to stop its alleged campaign of repression and instead deliver on the pledges it made to the people, warning that further escalation would not be tolerated silently.
Ruling Party MP Reaffirms Judicial Independence in Wake of Former Leader’s Legal Troubles
August 24, Colombo (LNW): Speaking at a public event on the 23rd, National People’s Power (NPP) MP Jagath Manuwarna underscored the importance of maintaining judicial independence in the wake of former President Ranil Wickremesinghe being placed in remand custody.
Manuwarna asserted that the legal action was a decision made by the judiciary alone, without any external political interference.
Addressing the media, the MP reflected on the NPP’s core promise made during their campaign — that the rule of law would be upheld equally for all, regardless of their status. He emphasised that the judiciary’s move against the former president was a reflection of that principle, not a politically motivated act.
“This is not a matter of government ability or inability,” Manuwarna stated. “We pledged before coming into office that the law would be enforced fairly, and we meant it. This is a legal matter, not a political vendetta. The judiciary has been empowered to operate independently, and it is fulfilling its role. If anyone is accused of wrongdoing, whether weak or powerful, the appropriate institutions — the police, the Criminal Investigation Department, the Bribery Commission, and the courts — must take action within the law. That is what is happening now.”
The MP did not mince words in his criticism of Wickremesinghe’s legacy, suggesting that the former president ascended to office through undemocratic means following the ousting of Gotabaya Rajapaksa. Manuwarna described Wickremesinghe’s rise as lacking a public mandate and said the country continued to suffer under the consequences of mismanagement during his tenure.
“Let’s be honest. If he had truly rebuilt the nation, we wouldn’t still be facing the kind of economic devastation we are today,” he said. “The public continues to bear the brunt of that failure. Meanwhile, it has been alleged that vast sums of public money were squandered during that period — in a country that was already declared bankrupt. If those responsible are not held accountable, that would be a grave injustice to the people.”
Manuwarna reiterated that the current government, though relatively new in power, is committed to reducing corruption and unnecessary public spending. He cited examples such as cutting back on excessive privileges previously enjoyed by politicians, stating that government leaders are now working with limited resources in an effort to set an example.
“We have begun the difficult task of trimming state excesses — not just symbolically, but meaningfully,” he said. “Everyone, from the President to the Prime Minister, is operating with minimum facilities. This is not about austerity for show, but about a genuine commitment to restoring public trust.”
In closing, Manuwarna reaffirmed that the NPP-led administration is acting within the democratic mandate it received — to guide the country out of crisis, not to misuse power. He noted that the law must be allowed to take its course, and that institutions must be given the space to function without political meddling.
“We were not elected to carry out witch hunts or personal vendettas. We were entrusted with rebuilding a nation. That requires letting legal institutions do their work — and they are now doing exactly that.”
