July 28, Colombo (LNW): Sri Lanka’s inflation management policy is under renewed public discussion following Deputy Economic Development Minister Anil Jayantha Fernando’s recent comments in Parliament. Minister Fernando explained that the 5% inflation target currently adopted by the Central Bank is based on past inflation trends and may be revised in the future if deemed unsuitable.
Responding to a query from opposition MP Ravi Karunanayake, the Minister clarified that the Central Bank had set the inflation target based on its historical performance. “If it is not appropriate in the future, we can change it accordingly,” he said, noting that the current inflation framework agreed with the government is in effect until 2026.
While the Minister’s remarks aimed to present the target as flexible, economists and analysts have noted that using historical inflation data as a benchmark without strong forward-looking anchors could raise questions about long-term monetary credibility.
Critics of the inflation targeting framework argue that since the end of Sri Lanka’s civil war, several currency crises occurred — notably in 2012, 2015/16, 2018, and 2020/21 — resulting in the rupee depreciating from Rs. 113 to as much as Rs. 360 per US dollar. These sharp declines contributed to rising food and commodity prices and significantly reduced real wages, impacting household finances and triggering social unrest.
In Parliament earlier this year, Minister Fernando, highlighted that it was funded entirely through real borrowings, both domestic and foreign, without resorting to inflationary financing. “We have not moved to fill this gap with inflationary ways or money printing,” he stated, adding that Rs. 2,125 billion would be raised locally and $75 million from foreign sources.
Economists note that while Sri Lanka’s monetary policy took a more disciplined turn from late 2022 to 2024 — allowing the rupee to stabilize around Rs. 300 per dollar — the long-term effectiveness of the 5% inflation target remains debated.
Concerns have been raised over the absence of strong tools like quantitative policy tightening (QPC) under the current IMF-supported programme, which could increase the risk of renewed currency pressure if reserve accumulation efforts are not backed by appropriate policy measures.
Historical context adds to the caution. During the 1950s, soon after the establishment of the Central Bank, efforts to sterilize capital flows and support government borrowing contributed to Sri Lanka’s first major currency crisis in 1953.
More recently, global experiences during the 1970s and early 1980s — including the collapse of the Bretton Woods system and resulting inflation — illustrate the importance of credible monetary anchors.
Countries like New Zealand, which adopted a 0–2% inflation target in the 1990s, used such anchors to stabilize their economies successfully. In contrast, some analysts say Sri Lanka’s 5% target — though defensible based on past trends — needs stronger justification grounded in economic fundamentals.
As Sri Lanka works to maintain stability while managing debt and promoting growth, the inflation target and broader monetary strategy are likely to remain central themes in shaping investor confidence and long-term economic resilience.
Perhaps the most corrosive element in Sri Lanka’s political landscape is the deep-seated corruption and self-serving nature of its political class. The observation that “the main aim of politicians are to earn money as much as they can in their tenure rather than developing the country” is a harsh but often undeniable truth
The immediate gratification mindset prevalent among a significant portion of the population is also a major impediment. The observation that “the majority are happy with day to day earnings and don’t want think ahead” points to a short-term orientation that is antithetical to long-term national development
Sri Lanka, an island nation blessed with abundant natural beauty and a strategically vital location, has, for over 77 years since gaining independence, remained entrenched in the category of a developing country. While the global landscape has dramatically transformed, pushing many of its post-colonial peers towards prosperity, Sri Lanka has grappled with persistent economic instability, social fragmentation, and a cycle of dependency.
This enduring struggle is not attributable to a single factor but rather a complex interplay of political misdirection, societal shortcomings, and a collective inability to embrace a progressive vision. This article will delve into the multifaceted reasons behind Sri Lanka’s predicament, drawing upon the observations provided and integrating other relevant factors to paint a comprehensive picture for the benefit of the nation.
LEADERSHIP VACUUM
One of the most critical factors underpinning Sri Lanka’s stagnation is a chronic deficit of visionary and principled leadership. While figures like D.S. Senanayake and J.R. Jayewardene are often cited for their foresight in the immediate post-independence era and the embrace of an open economy respectively, their tenures were unfortunately not the norm. For the better part of its independent history, Sri Lanka has been plagued by leaders who, rather than charting a strategic course for national development, have prioritised personal enrichment, short-term political gains, and the appeasement of narrow electoral bases. This absence of sustained, honest leadership with a long-term strategic vision has resulted in fragmented policies, abandoned projects, and a lack of consistent direction that is essential for a nation’s upward trajectory. Instead of investing in robust institutions, fostering innovation, and building a competitive economy, successive governments have often resorted to populism and patronage, undermining the very foundations of sustainable growth.
Compounding this leadership vacuum is a critical deficiency in the civic understanding of a significant portion of the populace. The assertion that a majority of people are “illiterate in understanding vision, future, the development of the contemporary world, economic and security affairs outside the country” highlights a profound educational and informational gap. This lack of informed civic engagement translates directly into a susceptibility to manipulation during elections. When voters lack the capacity to critically assess political rhetoric, understand complex economic realities, or discern genuine competence from superficial charm, the democratic process becomes vulnerable. “Heavenly stories” and facile promises often triumph over substantive policy debates, allowing “competent liars” to ascend to positions of power. This perpetuates a cycle where leaders are not held accountable for their long-term failures because the electorate is not equipped to demand such accountability.
THE ISLAND MENTALITY
The “island mentality” and inward-bound nature of many Sri Lankans further exacerbate the problem. While a strong sense of national identity is vital, an insular perspective can hinder progress in an increasingly interconnected world. This mindset often fosters a resistance to external ideas, a reluctance to adopt global best practices, and a limited understanding of international economic trends and geopolitical shifts. In an era of rapid globalisation, nations that fail to engage proactively with the world risk being left behind. Sri Lanka’s historical reliance on specific sectors like tourism and remittances, while important, has not been sufficiently diversified or integrated into a broader, forward-looking economic strategy that embraces global competitiveness.
SIDELINING INTELLECTUALS AND R&D
The sidelining of research and development (R&D) and intellectuals over a prolonged period is another detrimental factor. A nation’s progress is intrinsically linked to its capacity for innovation, critical thinking, and knowledge creation. When academia, scientific research, and intellectual discourse are neglected or undervalued, a society loses its ability to generate new solutions, adapt to changing circumstances, and compete effectively on the global stage. This marginalisation often stems from a lack of investment, bureaucratic hurdles, and a prevailing anti-intellectual sentiment that prioritises dogma over evidence-based reasoning. Without a vibrant R&D ecosystem and a strong intellectual class informing policy, a country remains reliant on borrowed ideas and outdated approaches, effectively stagnating its potential.
HAPPY WITH DAY TO DAY EARNING AND LIVING
The immediate gratification mindset prevalent among a significant portion of the population is also a major impediment. The observation that “the majority are happy with day to day earnings and don’t want think ahead” points to a short-term orientation that is antithetical to long-term national development. Sustainable growth requires delayed gratification, investment in future capabilities, and a willingness to endure temporary hardships for greater future rewards. When citizens prioritise immediate consumption and are content with minimal subsistence, there is little societal pressure for leaders to implement ambitious, potentially challenging, but ultimately transformative reforms. This short-term perspective also makes the electorate vulnerable to politicians who offer immediate, often unsustainable, handouts in exchange for votes, further entrenching the cycle of dependency.
THE MAJORITY OF CITIZENS HAVE DEPENDENT MENTALITY
Indeed, the reliance on “aids like free food and allowances” and their instrumentalisation as “election promises” forms a vicious cycle of dependency. While social safety nets are crucial, an overreliance on handouts without a concurrent focus on empowering citizens through education, skills development, and job creation creates a culture of dependency rather than self-reliance. This strategy, often employed by opportunistic politicians, disincentivises productivity and entrenches a sense of entitlement, hindering the development of a robust, self-sufficient workforce. When a significant portion of the population views the state as a perpetual provider rather than an enabler of opportunity, the impetus for individual initiative and entrepreneurial spirit wanes.
The assertion that “the majority citizens are dependents” encapsulates the cumulative effect of the aforementioned factors. This dependency is not merely economic but also intellectual and psychological. It manifests as a lack of agency, a reluctance to take responsibility for one’s own future, and an expectation that problems will be solved by external forces, be it the government or foreign aid. This pervasive dependency undermines the very spirit of innovation, resilience, and self-determination that is critical for a nation’s progress.
SELF-SERVING POLITICAL CULTURE
Perhaps the most corrosive element in Sri Lanka’s political landscape is the deep-seated corruption and self-serving nature of its political class. The observation that “the main aim of politicians are to earn money as much as they can in their tenure rather than developing the country” is a harsh but often undeniable truth. When public office becomes a vehicle for private enrichment, the national interest is invariably sacrificed. Corruption siphons off vital resources, distorts policy decisions, discourages investment, and erodes public trust in institutions. This venality not only hinders economic development but also perpetuates a culture of impunity, further alienating citizens from the political process and reinforcing a sense of helplessness. The devastating consequences of this pervasive corruption are evident in the country’s persistent debt burden, its inability to capitalise on its strategic advantages, and the consistent drain on its national wealth.
The result of this complex interplay of factors is a nation perpetually struggling and “dependent on foreign aid throughout.” This dependency is not merely a financial predicament but a symptom of a deeper malaise – a lack of internal capacity, accountability, and the political will to chart an independent and prosperous course. The tragic irony is that “the people who voted and get elected work against the people of the country,” betraying the very trust placed in them.
IDEOLOGICAL CHANGE IS NEEDED FROM CITIZENS’ SIDE
Sri Lanka’s protracted journey as a developing country is a multifaceted challenge rooted in a systemic breakdown of governance, an underdeveloped civic consciousness, and a prevailing short-sightedness. While external factors and global economic shifts play a role, the primary drivers of this stagnation lie within the nation itself. The urgent need for change is not merely about electing a “good leader” – though that is undeniably crucial. As the observations rightly point out, a fundamental “ideological change is needed from the citizens’ side.” This requires a national awakening, a collective commitment to critical thinking, a rejection of populist demagoguery, and an embrace of long-term vision. It demands a citizenry that values meritocracy over patronage, integrity over personal gain, and national progress over immediate gratification. Only through a profound shift in both leadership and citizen mindset can Sri Lanka truly unlock its potential and finally break free from the shackles of underdevelopment to chart a course towards a prosperous and self-reliant future. The path ahead is arduous, but the future of the nation hinges on its willingness to confront these uncomfortable truths and embark on a genuine journey of self-transformation.
The writer, Major General Dr. Boniface Perera is a battle-hardened Infantry officer who served the Sri Lanka Army for over 36 years, dedicating 20 of those years to active combat.
In addition to his military service, Dr. Perera is a respected international researcher and writer, having authored more than 200 research articles and 16 scientific books. He holds a PhD in economics and is an entrepreneur and international analyst specializing in national security, economics, and politics.
July 28, Colombo (LNW): Former Sri Lankan Test cricketer Kaushal Silva has been appointed as the new head coach of Hong Kong’s national cricket team, according to an announcement from the territory’s cricketing authority. The 39-year-old, who represented Sri Lanka in 39 Test matches between 2011 and 2018, is set to assume his new role once the necessary visa formalities are completed in the coming weeks.
Silva, a gritty wicketkeeper-batsman known for his technical resilience, brings with him both international playing pedigree and coaching experience gained across multiple countries. Following a brief coaching spell in England, he has spent the past several years working in Australia, most recently at the Superkings Cricket Academy, honing young talent and gaining recognition for his strategic approach to player development.
This appointment marks Silva’s first foray into coaching at the associate international level. He succeeds Simon Willis and will take charge of a team in urgent need of reinvigoration following a string of underwhelming performances.
Hong Kong recently endured a disappointing campaign at the Asia Pacific Cricket Champions Trophy in Singapore, culminating in a heavy defeat to Malaysia in a five-over final where their opponents chased down the target in just 14 deliveries.
Silva’s immediate focus will be preparing the squad for the upcoming Asia Cup, a high-profile T20 tournament scheduled to take place in the United Arab Emirates from 9 to 28 September. Hong Kong has been placed in a challenging group alongside Afghanistan, Bangladesh, and Silva’s native Sri Lanka.
Expressing his enthusiasm for the opportunity, Silva noted his eagerness to instil a disciplined and competitive ethos within the team.
“There is tremendous potential in this squad,” he said. “I’m committed to creating a culture of professionalism, resilience, and ambition—both on and off the pitch. We’ll also be looking closely at emerging players and building a pipeline for the future.”
Chairman of Cricket Hong Kong, China, Burji Shroff, welcomed Silva’s appointment, highlighting the depth of his playing and coaching experience. “Kaushal brings a wealth of cricketing insight and a strong understanding of the modern game,” Shroff remarked.
“We believe his leadership will be key in revitalising the team’s performance and promoting greater engagement with cricket across our communities.”
July 28, Colombo (LNW): Sri Lanka’s Association of Primary Dealers (APD) has taken steps to strengthen financial literacy and foster informed dialogue across the financial sector by hosting a high-level forum focused on the implications of recent legislative and operational changes in public debt management.
At the heart of the discussions was the implementation of the Public Debt Management Act No. 33 of 2024, a pivotal reform that formally shifts the authority for issuing debt securities from the Central Bank to the Treasury.
This restructuring is seen as a transformative step towards enhancing the credibility, transparency, and accountability of Sri Lanka’s public debt framework.
Speaking at the forum, Romesh Gomez, President of the Association of Primary Dealers, described the new legislation as a “milestone reform” that lays the groundwork for a more resilient and strategically guided debt management system.
He emphasised the importance of aligning market practices with national objectives for fiscal stability, especially in the context of a more volatile global economic environment.
Legal perspectives were offered by President’s Counsel Harsha Fernando, who provided a comprehensive analysis of the law’s expected impact on government securities markets and the role of financial intermediaries.
Other key speakers included Udeni Udugahapattuwa, Director General of the newly formed Public Debt Management Office, N D Y C Weerasinghe, Superintendent of Public Debt at the Central Bank of Sri Lanka, and Naomal Goonewardena, Precedent Partner at legal firm Nithya Partners.
The forum drew attention to several critical reforms introduced under the Act, including the introduction of a five-year rolling debt strategy, a legally binding requirement for structured borrowing plans, and the mandatory publication of terms and guarantees associated with government debt.
These measures are intended to strengthen governance, improve market confidence, and reduce fiscal risk through greater transparency and long-term planning.
Attendees included representatives from a broad range of financial institutions, including commercial banks, insurance providers, finance companies, and asset managers, along with officials from regulatory bodies such as the Colombo Stock Exchange and the Securities and Exchange Commission.
Gomez reaffirmed the Association’s commitment to promoting knowledge-sharing initiatives, noting that forums such as this serve a vital role in cultivating a more informed, collaborative, and accountable financial ecosystem. He also stressed the importance of industry-wide cooperation in realising the objectives of the reform, particularly in building a more sophisticated and sustainable capital market in Sri Lanka.
July 28, Colombo (LNW): The Attorney General’s Department is in the process of formally requesting the full investigation dossier from the Criminal Investigation Department (CID) concerning former State Intelligence Service Director and ex-Senior Deputy Inspector General of Police, Nilantha Jayawardena.
Officials confirmed that the request will be submitted to the CID in the coming days, with the aim of reviewing the comprehensive findings related to Jayawardena’s conduct.
The decision on any subsequent legal or procedural action will be taken after a detailed assessment of the report’s contents.
Jayawardena, who held the position of acting Director of the State Intelligence Service at the time of the 2019 Easter Sunday attacks, was recently dismissed from the police force following his conviction on multiple charges. His removal was actioned promptly by the National Police Commission after the inquiry concluded.
The case remains one of the most high-profile accountability efforts in the aftermath of the Easter Sunday bombings, which led to a national reckoning over lapses in intelligence-sharing and operational oversight.
July 28, Colombo (LNW): The report compiled by the inquiry committee investigating Inspector General of Police Deshabandhu Tennakoon is set to be formally included in the Parliament’s order book next Friday, in accordance with parliamentary procedure requiring a five-day interval between tabling and listing.
This development follows Speaker Dr Jagath Wickramaratne’s recent explanation of the constitutional framework governing the removal of the country’s top police official.
The Speaker outlined the process during a session addressing concerns raised by MPs and civil society regarding recent controversies surrounding senior law enforcement leadership.
The investigative committee—established to examine allegations of serious misconduct—unanimously concluded that IGP Tennakoon was culpable of the charges referenced in a formal motion backed by 115 Members of Parliament.
Parliament is scheduled to debate the contents of the report on August 05, a session that is expected to attract considerable political and public attention.
The outcome of the debate may determine the future of Tennakoon’s position, amid growing scrutiny over the standards of leadership within Sri Lanka’s police service.
July 28, Colombo (LNW): A crucial round of trade negotiations between Sri Lanka and the United States is set to take place this week, as Colombo seeks to ease a 30 per cent tariff currently levied on its exports to the American market.
The upcoming virtual meeting is expected to bring together senior figures from Sri Lanka’s Ministry of Finance and representatives from the Office of the United States Trade Representative (USTR), marking a significant moment in ongoing efforts to deepen economic ties.
The talks are anticipated to centre on the possibility of reducing the steep tariff rate and laying the groundwork for enhanced trade and investment between the two nations. Sri Lankan officials have voiced cautious optimism ahead of the dialogue, with hopes pinned on achieving measurable progress before the beginning of August.
The scheduled discussions follow a recent high-level virtual engagement between President Anura Kumara Dissanayake and U.S. Trade Representative Ambassador Jameson Greer. According to the President’s Media Division (PMD), the session also included Dr Harshana Suriyapperuma, Secretary to the Ministry of Finance, highlighting the priority Sri Lanka is placing on this trade initiative.
With export-driven industries in Sri Lanka feeling the strain from elevated duties, the government is aiming to secure more favourable terms that could provide much-needed relief to manufacturers and exporters.
The broader objective is to reposition Sri Lanka as a competitive trading partner in the U.S. market while strengthening the country’s foothold in global supply chains.
July 28, Colombo (LNW): President Anura Kumara Dissanayake departed for the Maldives this (28) morning, embarking on a significant official visit that underscores six decades of diplomatic relations between Sri Lanka and its close maritime neighbour.
The visit comes at the invitation of Maldivian President Mohamed Muizzu and is expected to serve as a platform for deepening regional cooperation.
Over the course of his stay, President Dissanayake is scheduled to engage in high-level talks aimed at expanding collaboration in a range of sectors, including trade, tourism, maritime security, and environmental sustainability.
The leaders are also expected to explore new opportunities for economic integration and people-to-people exchange.
A series of bilateral agreements are anticipated to be formalised during the visit, with several Memoranda of Understanding (MoUs) set to be signed, reflecting the growing emphasis on shared regional priorities and development goals.
Accompanying the President is a high-ranking delegation, including Foreign Minister Vijitha Herath and senior officials from various ministries.
The team is slated to remain in the Maldives until July 30, participating in diplomatic engagements and commemorative events tied to the 60th anniversary of Sri Lanka–Maldives relations.
July 28, Colombo (LNW): Sri Lanka has seen a steady rise in international tourist arrivals this year, with more than 1.3 million visitors entering the country so far in 2025, according to figures released by the Sri Lanka Tourism Development Authority (SLTDA).
The influx signals continued recovery and renewed global interest in the island nation as a travel destination.
From January to date, a total of 1,313,232 foreign travellers have arrived, with July alone accounting for 145,188 visitors. The figures highlight a consistent upward trend for the industry, which has been working to rebuild after years of disruption caused by the global pandemic and domestic economic challenges.
India has once again emerged as the largest contributor to Sri Lanka’s tourism market. In July, 27,786 Indian nationals visited the island, making up just over 19 per cent of total arrivals for the month.
Industry analysts say this trend reflects strong regional connectivity, cultural ties, and increased marketing efforts targeting Indian travellers.
Officials note that these encouraging numbers reflect the success of recent visa liberalisation measures and government-led tourism campaigns aimed at both traditional and emerging markets.
July 28, Colombo (LNW): A large-scale security operation spanning the entire island has led to the arrest of 1,182 individuals for drug-related offences, according to Sri Lankan law enforcement authorities.
The coordinated effort, which took place on July 26, involved officers from the Sri Lanka Police, the Special Task Force (STF), and personnel from the Army, Navy, and Air Force.
The multi-agency crackdown targeted both narcotics trafficking and broader criminal networks. During the intensive 24-hour operation, authorities confiscated significant quantities of illicit substances, including over 230 grammes of crystal methamphetamine (commonly known as ‘Ice’) and more than 220 grammes of heroin.
These seizures mark a notable escalation in the fight against the distribution of hard drugs in urban and rural areas alike.
In addition to narcotics arrests, 20 individuals identified as having direct links to organised crime were taken into custody. The operation also led to the apprehension of 410 people with active arrest warrants for various offences, underscoring the breadth of the sweep.
Security forces inspected more than 24,000 individuals during roadside and community checks, while nearly 10,000 vehicles—including over 7,000 motorcycles—were stopped and examined. Four unlicensed firearms were also recovered, adding a new layer of concern about the illegal weapons trade operating in tandem with drug distribution.
More than 7,600 personnel from across the country’s security apparatus were deployed for the operation, which is being described by officials as one of the most extensive single-day enforcement actions in recent years.
Authorities have urged the public to support these initiatives by providing information about suspicious activity, while reaffirming their commitment to dismantling networks that threaten public safety and undermine the rule of law.
