Sri Lanka’s Ambassador to the United States, Mahinda Samarasinghe, met with Democratic Congressman Gregory W. Meeks at the Rayburn House Office Building recently and briefed him on recent developments in Sri Lanka.

Congressman Meeks currently serves as the Ranking Member of the House Foreign Affairs Committee and previously chaired the Committee during the 117th Congress.

The Ambassador was accompanied by Deputy Chief of Mission Madhuka Wickramarachchi and Defence Attaché Commodore Dumindu Abeywickrama.

The long-awaited reconstruction of the Columbuthurai fishing jetty in Jaffna commenced on Thursday (18), offering renewed prospects for fisher families while also contributing to the beautification of the area.

The project, valued at Rs. 140 million, is funded by the Ministry of Fisheries, Aquatic and Ocean Resources. The inauguration ceremony was held at the jetty with the participation of Fisheries Minister Ramalingam Chandrasekar, Transport, Highways, Ports and Civil Aviation Minister Bimal Rathnayake, Northern Province Governor N. Vethanayahan, Members of Parliament, officials, and local residents.

Addressing the gathering, Minister Chandrasekar highlighted that the project was initiated following repeated requests from stakeholders. “I presented this matter at the Cabinet, and the Government immediately approved the project with an allocation of Rs. 140 million,” he said. He further noted that the Government, having steered the country through economic hardship, has now entered a new phase of development, with major undertakings such as framing a new Constitution ahead.

Governor Vethanayahan, speaking at the event, stressed that development must go beyond physical infrastructure to uplift people’s lives. “Even during my time as Jaffna GA, I tried to push this project forward, but it could not be realised then. Today, under the present Government, it has become a reality. Within just one year of assuming office, President Anura Kumara Dissanayake has initiated several major development programmes in the North, and this project is one of them,” he remarked.

Situated just three kilometres from Jaffna town, the Columbuthurai fishing jetty is expected to strengthen the livelihoods of fisher families while transforming the surrounding village into a more vibrant and attractive settlement.

Among those present at the event were MPs K. Ilangkumar, S. Sripavanandarasa and J. Rajeevan, Municipal Councillors, Fisheries Ministry Secretary Golith Kamal Jinadasa, the Jaffna Divisional Secretary, and local residents.

The economic revival of Sri Lanka is tenuous as the country is about to have a balance of payments (BoP) crisis, and as-yet unresolved tariffs issue with the United States, and rising geopolitical alignments based on escalating ties with China.

Even after achieving short-term financial stability after a sovereign debt crisis in 2022, Sri Lanka’s path towards sustainable growth continues to be hampered by structural obstacles and tight fiscal space

 “There are only four methods that can fix the economy, one is to have a high income, second is to limit the expenditure, third is to maintain the budget deficit by managing the income and expenditure and fourth is to have an influx of foreign exchange income and minimise the outflow,”.vetran economist and former minister Bandula Gunawardana claimed. . .  

Sri Lanka is unlikely to fully bridge its projected Rs. 2 trillion budget deficit or resolve its balance of payments (BoP) crisis in 2025 due to major fiscal and monetary constraints, he predicted.  

As per Q1 2025 data, the government recorded a Rs. 498.28 billion deficit, with total revenue at Rs. 1,064.66 billion and expenditure at Rs. 1,562.94 billion. 

Borrowing is restricted by the Public Finance Management Act, and monetary financing is banned under the Central Bank Act (2023).

On the BoP front, foreign reserves remain fragile (USD 3–4 billion), and Sri Lanka continues to face external debt repayments, high import costs, and limited capital inflows. While remittances and tourism are recovering, they are not sufficient to close the external financing gap.

Despite these challenges, partial stability can be realized through continued IMF support, increased tax collections, grants, and structural reforms such as privatization of SOEs and export diversification.

The government must also complete external debt restructuring to ease pressure on reserves and restore investor confidence, he emphasised.

Sri Lanka cannot fully overcome its budget and BoP crises in 2025, but with strong reform implementation, fiscal discipline, and external support, the country can achieve gradual stabilisation and lay the groundwork for sustainable recovery by 2026–2028, he opined. .

Sri Lanka is also faced with critical fiscal constraints as it grapples to achive revenue targets outlined in the 2025 Budget while dealing with its ongoing current account deficit in the Balance of Payments (BoP), economic analysts added.

The government has to collect Rs 4.2 trillion in total revenue this year, of which Rs 3.9 trillion would be raised through taxes – an increase of 46 percent over last year. Dr. Gunawardana warns that weak tax compliance, delay in the refund of VAT, and widespread application of tax exemptions could threaten such estimates

The IMF emphasised that boosting tax compliance and reinstating an efficient VAT refund mechanism are essential to avoiding further tax hikes and preventing fiscal leakages.

 The Fund also warned that new tax exemptions should be avoided to reduce corruption risks and preserve funding for social safety nets.

At the same time, Sri Lanka’s BoP current account remains in deficit, reflecting a wider imbalance between imports and exports. As of 2024, the country recorded a US$ 1.2 billion current account shortfall, fueled by high import bills and modest foreign exchange inflows.

“The country’s dual deficits – the State Budget’s current account deficit and the BoP current account deficit – were central to the 2022 economic crisis,”  Dr Gunawardana said. adding that  addressing both fronts is critical to long-term recovery.”

Failure to meet previous IMF performance benchmarks has delayed financial support and damaged investor confidence, further complicating the economic recovery path.

The government’s four-pronged strategy is for stabilizing the economy includes: enhancing revenue collection, curtailing recurrent and capital spending, increasing foreign exchange inflows, and reducing unnecessary outflows.

Finance Ministry officials are also reviewing public sector efficiency and import restrictions to manage pressure on the rupee and foreign reserves.

As Sri Lanka navigates a fragile post-crisis recovery, fiscal discipline, transparency, and effective implementation of reforms will be key to building economic resilience and regaining international credibility.

Sri Lanka is actively pursuing a bilateral trade agreement with the United States, aiming to bolster. exports while securing tariff relief for Sri Lankan goods in agreement with President Donald Trump’s recent directive to open local market for US exports,  .

The government’s official negotiating team has adopted a targeted strategy in their ongoing talks with the U.S. Trade Representative (USTR) to mitigate the impact of the proposed 30 percent Trump-era tariffs set to take effect on August 1. 

Following the formal notification on July 9, Sri Lankan officials held a first round of talks which reportedly made “progress,” with a second virtual round is now on.

The present administration is to target sector-specific relief, to be pointed specifically towards apparel, rubber-based products, and tea exports, which form the principal affected shipments.

Insiders close to the negotiators say Sri Lanka has been presented as a US trade partner at risk of economic instability, while stressing its economic reforms, geopolitical neutrality, and regional supply chain integration.

Sri Lanka is also leveraging regional allies’ diplomatic assistance and touting U.S. economic interests that benefit from low-cost manufacturing of the country.

Meanwhile, exporters and the Joint Apparel Association Forum have urged for immediate concessions to avoid disruptions to nearly US $2 billion worth of exports.

Sri Lankan officials have also said that the loss of revenues from US imports would not be very big and non-tariff issues could be discussed, but the country generally did not have non-tariff barriers against the US.

“The United States and Sri Lanka have discussed conducting virtual engagements on labor policy reforms and agricultural barriers,”a high official said. .

Economic Development Deputy Minister Anil Jayantha Fernando’s recent claim that the United States has suggested allowing 70–80 percent of Sri Lankan exports to enter the U.S. duty-free has been questioned amid a lack of official confirmation.

Speaking at  a television program, Fernando said America had proposed a list of 1,161 Sri Lankan products—clothing and 42 agricultural items—for potential tariff-free entry, as part of the current bilateral trade negotiations.

Yet trade specialists note that the U.S. has not made any public comment in support of such a wide-ranging offer.

The US Generalised System of Preferences (GSP) of which some duty-free access expired in 2020 and is yet to be renewed by the U.S. Congress. Apparel, Sri Lanka’s most vital export, has never been brought under such concessions because it is sensitive in US trade policy.

Fernando also revealed that the negotiations are in “final phase, “which is not so at the moment. No trade deal has been signed, and U.S. trade deals are typically lengthy, prolonged negotiations, with stakeholder consultations and Congressional approval

The Minister also hinted at a new agreement in importing oil from the U.S., explaining that Sri Lanka could redirect oil payments into higher trade flows. Yet this too remains speculative, with no public or commercial agreements reported.

Observers caution that while enhanced trade with the U.S. is a welcome goal, the figures and outcomes mentioned by the minister should be treated as provisional until confirmed by both governments.

Sri Lanka is on the verge of completing its debt restructuring process, with agreements already secured for the majority of its US$28 billion in outstanding external debt. Following recent breakthroughs including a deal with China Exim Bank and the successful Eurobond exchange the government has narrowed the unresolved portion to just US$0.8 billion, officials confirmed.

The Finance Ministry said that bilateral debt restructuring agreements have already been signed with major lenders India and Japan, while it’s negotiating with the rest of the members of the Official Creditor Committee (OCC). Talks are ongoing with other bilateral creditors like Saudi Arabia, Kuwait, Iran, and Pakistan to seal everything by 2025

A senior Treasury official noted, “We are now well advanced in our engagement with all stakeholders and expect to finalise agreements shortly. This marks a turning point in our economic recovery.”

The International Monetary Fund (IMF) in its latest review acknowledged that Sri Lanka has fulfilled the Enhanced Safeguards under its Lending into Official Arrears (LIOA) policy.

 With major creditors having signed Memoranda of Understanding (MOUs) or extended final restructuring terms, IMF approval for continued disbursement is no longer contingent upon the agreement of all creditors. Despite this progress, risks remain.

 A US$250 million legal dispute with Hamilton Reserve Bank (HRB), stemming from a defaulted sovereign bond, continues to pose a threat to the debt sustainability framework. However, the IMF has both indicated that the overall risk is manageable.

“The impact is limited due to the relatively small bond amount under dispute and the protective design of the ‘most favored creditor’ clauses in the restructured bonds,” a senior official explained. The U.S. court overseeing the HRB litigation recently denied a motion for summary judgment, instead granting Sri Lanka additional time for discovery, a development seen as a temporary relief.

Meanwhile, financial advisors have been appointed to restructure US$175 million in international bonds issued by Sri Lankan Airlines and guaranteed by the government. Smaller commercial obligations, under US$50 million, also remain on the restructuring agenda.

Other reform measures continue in parallel, including updates to governance structures in state-owned banks and tax issues affecting foreign transactions. The Central Bank is also addressing liquidity risks through the Internal Liquidity Adequacy Assessment Process (ILAAP).

As most of the external debt restructuring is nearing its completion, attention now turns to long-term debt sustainability, economic reforms, and the restoration of investor confidence in the path of recovery of Sri Lanka

The Dambulla Waste Management Facility, once hailed as a national model for recycling and wildlife-friendly innovation, has collapsed into disuse, reviving the garbage crisis in central Sri Lanka. The Rs. 650 million project, built with Japanese technology and branded Pivithuru Arana, now lies abandoned, with its infrastructure crumbling and garbage once again dumped in forest reserves.

Launched as an award-winning initiative, the facility once symbolized a breakthrough in modern waste management. It featured an organic fertilizer program, a polythene incinerator, and a dedicated hospital waste disposal system. A bamboo plantation supplied compost material, while electric vehicles ferried tourists around the site to observe elephants in a controlled environment. The project blended environmental protection with eco-tourism, offering an image of how Sri Lanka could manage waste while protecting wildlife.

That image has disintegrated. The iron fence built to keep elephants away from garbage has been dismantled, the bamboo plantation destroyed, and the electric vehicles left to decay. With the site shut down, waste from Dambulla and surrounding districts is again being transported to the Digampathaha reserve, where residents say elephants and other wild animals now scavenge through heaps of plastic and food waste. Environmentalists warn that this practice has already led to deaths among elephants and poses wider threats to forest ecosystems.

Dambulla Mayor Wasantha K. Rajamanthri has acknowledged the failure, attributing it to poor management under the previous administration and the difficulty of operating the facility with serious staff shortages. He said the municipal council lacked the capacity to sustain the project, which has been without proper maintenance for years.

The Dambulla collapse is part of a wider national crisis. Sri Lanka generates more than 8,000 metric tonnes of solid waste daily, with the Western Province accounting for the majority. Yet official data shows that less than 20 percent is recycled, while the rest is either openly dumped, burnt, or left unmanaged. A 2024 National Plastic Waste Inventory estimated that the country generates nearly 249,000 tonnes of plastic waste annually, but only 11 percent is recycled. Nearly 70 percent is mismanaged, with plastics leaking into rivers, oceans, and forests.

The Central Environmental Authority, along with the Department of Wildlife, the Department of Forest Conservation, and the Dambulla Municipal Council, has announced plans to restart the project. But experts caution that without professional management, secure financing, and continuous oversight, any revival will be short-lived.

 The Dambulla case underscores a larger truth: Sri Lanka’s waste crisis is not due to a lack of projects or investment, but to weak operations, poor governance, and political discontinuity. Until those flaws are addressed, ambitious recycling initiatives risk ending where Dambulla has — in ruins, leaving wildlife and communities to pay the price.

A new mechanism to provide fertiliser to tea cultivators will be introduced within the next two weeks, Plantation and Community Infrastructure Minister Samantha Vidyarathna announced.

He made the statement while chairing the Ministerial Consultative Committee on Plantation and Community Infrastructure, which convened in Parliament on September 12.

Deputy Minister Sundaralingam Pradeep also took part in the discussions, which focused on addressing key issues faced by the plantation sector.