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Friday November 13th, 2026

Busting the election myth of state jobs in Sri Lanka

ECONOMYNEXT – Sri Lanka’s rulers have long mis-used taxes collected from the people to give jobs to others in a ‘robbing from peter to pay paul’ exercise of naked politican patronage.

Some critics say the saddest result of this political brainwashing has been the attitude entire generation of youth coming out of tax-payer funded universities who seem to believe that the soceity owes them a living after putting them through university, compared to the educated youth of other countries who work in productive sectors and generate value. 

Pathfinder Foundation, a Colombo-based think tank explains the phenomenon of giving jobs as political patronage in the following ‘Election Myth Buster’.

Should the Government be the ‘employer of first resort’?

Politicising youth employment

In the early years after independence, it was generally accepted that the government’s role was limited to providing defence, national security, revenue collection and a few other basic services. In sectors such as education and health, employment was provided both by the government and the private sector. From the late 1950s a combination of a severe decline in the terms of trade and the inappropriate economic policies of successive governments resulted in low investment and slow growth making it difficult for the economy to absorb the increasing numbers of youth leaving school or graduating from universities. The increasingly statist response to these pressures led to the government becoming more directly involved in employment creation. The 1971 Insurrection also generated political pressures which gave added momentum to the government’s role in this regard.

At the early stages, government owned enterprises, especially the Ports Cargo Corporation, Ceylon Transport Board and the Ceylon Government Railway, were the most notable victims of the short sighted policies of providing employment for political party loyalists. This opened the doors for large-scale political appointments, politically motivated promotions and even politically engineered dismissals of employees.

The process accelerated over the subsequent decades and today most Sri Lankans believe that:

i. It is the responsibility of the government to provide jobs.
ii. Everyone who leaves school, particularly the local graduates, must be ensured employment by the government, especially, if they are unable to enter the job market through a competitive process of competence tests and interviews. .

This political patronage based employment creation has led to the belief among the ordinary citizens and politicians, driven by self-interest and expedience, that the government has to be the ‘main’ source of jobs.

Election Manifestos and Unrealistic Promises

Every election manifesto now carries a distinct pledge to provide employment for the hundreds of thousands of youth in the country who are entering the job market every year. Such promises then have to be implemented through a number of lop-sided programs, such as the graduate training scheme, wholesale recruitment to the public service with no testing of skills or interviews and other backdoor recruitment schemes.

With the upcoming elections and publication of election manifestos, people of this country are once again being exposed to the ‘myth’ that the government has to create employment for thousands of youth. Fortunately, quite contrary to their deceptive and misguided employment generation proposals, all major parties now also express their belief in the market economy in one form or the other. Productive and value creating jobs are primarily generated by individuals or corporates seeking to produce goods and services in a competitive environment.

The Pathfinder Foundation (PF) acknowledges that any nation needs a certain number of government employees to provide the previously mentioned basic services. However, if and when the government goes beyond this fundamental requirement it creates unproductive employment and an inefficient, wasteful and extremely bloated public service. Sri Lanka’s public service (numbering 1.5 million) currently accounts for 15% of the workforce. This number is comparable with crisis-ridden Greece. In addition, it is noteworthy that by next year expenditure on public service salaries and pensions (there are 500,000 pensioners) will amount to Rs. 1 trillion per annum. Public service emoluments alone account for about a third of total government recurrent expenditure.

Is Government job creation destroying other jobs?

We have to question the notion that government job-creation generates an increase in the overall employment level. For this purpose, let us assume that the Sri Lankan government can generate 10,000 jobs by investing Rs. 1 billion in road construction. One can then argue that the non-spending of such an amount by the government will lead to foregoing the 10,000 jobs. Unfortunately, nobody in this country discusses or debates how the government spending in one sector negatively affects employment in the other sectors of the economy i.e. the opportunity cost. As an internationally reputed economist once mentioned, ‘these effects are important but, unfortunately, less visible as they are spread among hundreds if not thousands of employers.’

The government needs to generate revenue or borrow for spending on roads or any other activity for job creation. One way or the other, the government is compelled to increase income and/or corporate taxes resulting in the contraction of consumption and production in all sectors affected by taxation. This, in turn, reduces the overall level of employment in the economy. In addition, if the government keeps borrowing, there will be an increase in the price (interest rate) of lendable funds which reduces investment in the private sector. Consequently, fewer factories, machines and homes will be built. In addition, less and less of other goods and services will be consumed. The ultimate outcome will be lower employment – loss of more productive jobs. Another source of government funds is printing money through the Central Bank. This leads to price increases that will deter investment and consumption as well as erode the purchasing power of the Rupee. All of this result in the loss of higher productivity employment thereby increasing overall unemployment and diminishing the capacity to sustain rises in real incomes.

As one economist said, the bitter truth was that the political appeal of government spending stems from the fact that the jobs created are noticeable to the average voter. However, the handful of jobs lost in every nook and corner of the economy, ultimately amounting to large numbers of productive employment opportunities, are not attributed to the adverse effects of government spending on unnecessary jobs.

Realistic Approach to Job Creation

Promises and commitments given by the political parties regarding job creation should be matched by a clear indication of the ways and means of achieving these. They are not able to do this as the fiscal space does not exist to fund these myths. They should, therefore, be willing to announce publicly that the role of the government is not to play the role of provider of employment rather it should be the creator of a conducive environment for individuals and enterprises to capitalize upon their entrepreneurship, innovation and creativity to implement business plans that will ultimately generate productive job opportunities adding value to the economy. In this regard, election manifestos or promises that do not adopt a pragmatic approach to creating a sustainable business-friendly environment have no value to the people of this country. In the current context, Sri Lanka needs specific policies and programs which will reduce bureaucratic and regulatory constraints that impact negatively on businesses getting off the ground. These specific policy actions include:

i. Attracting prospective local and foreign investors through predictable and consistent policies, including stable macroeconomic fundamentals, particularly a prudent fiscal outcome.
ii. Obtaining construction permits within a few weeks rather than months and years.
iii. Speedy enforceability of contracts and agreements.
iv. Reducing delays in import, export and transhipment of goods.
v. Transparent and efficient tax administration.
vi. Efficient and speedy allocation of state owned land (as 80% of land is owned by the state) for local and foreign enterprises.
vii. Improvement of capital markets.
viii. Digitalization of government service delivery to improve productivity and reduce delays, corruption and malpractices.

Declare Specifics and How to Fund the Programs

The PF strongly recommends that parties, which have already declared their policies, should follow with an addendum detailing specific measures that they will undertake to generate new employment opportunities. Ideally, this should indicate time-frames for implementation. Unless such specific time-bound measures are declared, the average voter in Sri Lanka has no reason to believe in the unending promises of the politicians who have been far from truthful in the past.

Sri Lanka stocks close down 0.60-pct, dragged by HNB and LOLC

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed down on Friday, CSE data showed, with the benchmark All Share Price Index moving down 0.60 percent.

The ASPI was down 133.22 points at 22,024.18, while the more liquid S&P SL20 was down 1.06 percent, or 67.55 points, at 6,298.02.

The ASPI ended the week up 784.53 points from last Friday.

Positive contributors to the ASPI were Dialog Axiata (up 0.40 percent at 50.20 rupees), Distilleries Company of Sri Lanka (up 0.52 percent at 58.30 rupees), Aitken Spence (up 3.60 percent at 151.00 rupees), Ceylon Tobacco Company (up 1.05 percent at 1,828.50 rupees), and LOLC Finance (up 1.96 percent at 5.20 rupees).

Hatton National Bank (down 1.88 percent at 403.75 rupees), Richard Pieris and Company (down 6.21 percent at 27.20 rupees), LOLC Holdings (down 2.17 percent at 405.00 rupees), Sampath Bank (down 1.91 percent at 154.00 rupees), and Singer (Sri Lanka) (down 2.40 percent at 77.30 rupees) were top negative contributors.

Market turnover was 3.23 billion rupees. Capital goods led turnover with 869.21 million rupees. (Colombo/Nov13/2026)

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Sri Lanka MP slams budget speech for omitting Tamil national question

ECONOMYNEXT – A Sri Lanka legislator has voiced strong disappointment that the President’s budget speech failed to make a single mention of the Tamil national question.

“It is very unfortunate that in His Excellency the President’s speech, there has not been a single word mentioned about the Tamil national question. Not a single word,” Shanakiyan Rasamanickam said.

“A budget speech generally, is a policy direction of the government for the next year. The budget speech is not only a statement of the country’s fiscal position or the economy’s position. It is the country’s, the government’s, plan, or what the government plans to do the following year. That’s a policy statement.”

Former presidents would at least mention the Tamil question even if it was not resolved, he said.

Former President Ranil Wickremesinghe in his speech, in his policy statement, he would mention: “The Tamil national question must be resolved,” Rasamanickam said.

Former Presidents Maithripala Sirisena and Gotabaya Rajapaksa also mentioned that the national ethnic question must be resolved, he added.

“Every President, every country’s Head of State, in their policy statements, have acknowledged the fact that there is an unresolved national issue, the Tamil national question, that it needs to be resolved. Various governments have proposed various mechanisms; none of them have succeeded, but at least it was mentioned.”

This year’s budget made allocations for the Office of Missing Persons, and the Office of Reparations.

“But the domestic mechanism is a mechanism that the victim community has rejected. So you all are allocating money to a mechanism where the victim community is not going to be part of.”

Last year’s budget 1 billion was allocated to be spent on the Trincomalee and Jaffna airports.

“Where was that 1 billion for the Trincomalee and Jaffna airports spent last year?”

“The trajectory of this government, Honourable Deputy Speaker, is worrying to me. It’s really worrying to me. Because if the objective is to say that there is no Tamil national question, if the objective is to say that you all have resolved any ethnic issue that this country faced, then Honourable Deputy Speaker, then I think the Tamil people will teach this government a very, very, very harsh lesson in the future.” (Colombo/Nov13/2026)

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Sri Lanka sells extra Rs6.5bn Treasury bills after auction

ECONOMYNEXT – Sri Lanka has sold 6,500 million rupees of treasury bills offered on tap at an average rate of 9.95 percent, the public debt management office said, bringing the total of bills sold in the week to 85.562 billion rupees.

The issue offered 90 billion.

Total market subscription was 6.5 billion rupees.

The debt office sold a 12-month bill at 9.95 percent.

On Wednesday (11) the debt office raised 79 billion rupees of 3, 6 and 12 month bills after offering 90 billion.

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Sri Lanka Treasury bill yields hold broadly steady, less bills sold

The settlement date is November 13. (Colombo/Nov13/2026)

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Access Engineering Sept quarter group net profit surges 200-pct to Rs4.75bn

ECONOMYNEXT — Sri Lanka’s Access Engineering PLC recorded a group net profit attributable to equity holders of Rs. 4.75 billion for the quarter ended September 30, surging 200 percent from Rs. 1.58 billion a year earlier, interim accounts showed.

Basic earnings per share rose to Rs. 4.08 for the September quarter, up from Rs. 1.58 previously.

Quarterly group revenue expanded 36 percent to Rs. 20.39 billion from Rs. 14.94 billion, underpinned by condominium property handovers — reflected in inventories dropping Rs. 7.69 billion since March to Rs. 35.71 billion — alongside strong automobile sales and steady civil engineering execution.

Cost of sales rose at a slower 27 percent to Rs. 14.34 billion, lifting gross profit by 64 percent to Rs. 6.05 billion and expanding gross margins to 29.7 percent from 24.7 percent.

Other income jumped 144 percent to Rs. 259.9 million, while administrative expenses rose 75 percent to Rs. 1.14 billion, leaving operating profit up 64 percent at Rs. 5.16 billion.

However, finance costs more than doubled, rising 107 percent to Rs. 1.18 billion on elevated group borrowings of Rs. 43.74 billion, partly offset by finance income climbing 302 percent to Rs. 42.2 million.

Share of results from equity-accounted investees rose 122 percent to Rs. 26.7 million, pushing pre-tax profit up 56 percent to Rs. 4.05 billion.

Income tax swung to a net reversal of Rs. 186.6 million from an expense of Rs. 804.1 million, boosted by deferred tax assets on unrelieved losses from a 100 percent enhanced capital allowance claimed by 60 percent-owned radiopharmaceutical subsidiary Access Medical Tracers (Private) Limited.

Total period profit rose 136 percent to Rs. 4.24 billion, with non-controlling interest declining 24 percent to Rs. 164.9 million following last year’s buyout of minority shareholders in Harbour Village (Private) Limited.

No separate exchange gain or loss was itemized in quarterly earnings, though foreign currency translation via associates recorded a Rs. 17.4 million loss in other comprehensive income, alongside USD 16.6 million in corporate guarantees.

Notes also flagged an expected Rs. 1.45 billion recovery from the terminated South Asia Commercial and Logistics Hub project, a Rs. 225 million post-quarter legal settlement already provided for, and a Supreme Court appeal over a 2011/12 PAYE tax ruling.

Group assets stood at Rs. 132.4 billion as of September 30, with net asset value per share at Rs. 46.70, as the Employees’ Provident Fund raised its stake to 5.69 percent.

Access Engineering shares closed at 80.00 rupees at the end of September and are currently trading around 85.80 rupees. (Colombo/Nov13/2026)

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Sri Lanka private sector says timely implementation of Budget 2027 key

ECONOMYNEXT – Private sector body, The Ceylon Chamber of Commerce, said it was encouraged by the broad direction of Budget 2027, noting that it reinforces Sri Lanka’s commitment to economic transformation while maintaining policy continuity, macroeconomic stability, and fiscal discipline.

“This continuity is particularly important as the country seeks to transition from economic stabilisation to a more durable, investment-led growth trajectory.”

The chamber also noted several areas where the Budget could have placed greater emphasis to strengthen the country’s growth prospects.

“In particular, there is a need for a stronger focus on attracting Foreign Direct Investment (FDI), accelerating factor market reforms, particularly in land and labour, and fast-tracking public procurement reforms to improve the efficiency and speed of project implementation.

“More targeted and actionable proposals could have been introduced to unlock the potential of sectors with significant growth opportunities, including tourism, agriculture, IT/BPO and logistics.”

The chamber said the budget contains positive measures aimed at enhancing competitiveness, and external sector resilience, while presenting opportunities for focus on sectors that can accelerate growth.

“A number of the key structural reforms identified in last year’s Budget have been carried forward and strengthened, providing greater certainty and predictability to businesses and investors.

“These include the continued implementation of the Trade National Single Window (TNSW), the phased removal of para-tariffs, the rollout of the Digital ID framework, efforts to expand market access through new Free Trade Agreements (FTAs), the strengthening of one-stop-shop investment facilitation mechanisms, progress on Customs reforms, the expansion of Bandaranaike International Airport (BIA), enhanced financing support for SMEs, and reforms relating to the management of State-Owned Enterprises.”

The CCC said that more than 20 proposals submitted by it have been reflected in Budget 2027.

These include measures to strengthen investor facilitation through the establishment of a professionally managed investment promotion agency; continued efforts to improve trade facilitation and export competitiveness; the Government’s consideration of a successor programme with the International Monetary Fund (IMF); accelerated progress on key legislative reforms; the expansion of digital government services; and the promotion of cashless payments and broader digital adoption. The Budget has also captured several priorities relating to energy security, including the accelerated deployment of Battery Energy Storage Systems (BESS) and investments in fuel storage infrastructure, initiatives to optimize underutilized agricultural land, measures to support the expansion of the digital economy and the IT/BPO sector, and tax reforms to support exporters, including the acceptance of newly VAT-registered exporters as eligible exporters.

“The inclusion of these priorities reflects the value of sustained public-private dialogue and demonstrates increasing alignment between national policy objectives and the needs of a competitive, export-oriented economy.

“The priority now must be effective and timely implementation to translate policy commitments into investment, competitiveness, exports and sustainable growth.” (Colombo/Nov13/2026)

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Sri Lanka stocks trend lower day after budget reading

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange was trending lower on Friday, CSE data showed, with the benchmark All Share Price Index moving down 0.66 percent.

The ASPI was down 146.78 points at 22,011, while the more liquid S&P SL20 was down 0.94 percent, or 59.99 points, at 6,306.

Positive contributors to the ASPI were Access Engineering (up 1.30 percent at 85.80 rupees), LAUGFS Gas (up 3.31 percent at 49.90 rupees), Ceylon Tobacco Company (up 1.13 percent at 1,830 rupees), Ceylon Cold Stores (up 0.80 percent at 126 rupees), and Namunukula Plantations (up 1.79 percent at 68.10 rupees).

LOLC Holdings (down 1.03 percent at 409.75 rupees), Hatton National Bank (down 0.61 percent at 409 rupees), Sunshine Holdings (down 3.81 percent at 30.30 rupees), and Sampath Bank (down 1.91 percent at 154 rupees) were top negative contributors.

Market turnover was 1.55 billion rupees. Capital goods led turnover with 459.57 million rupees. (Colombo/Nov13/2026)

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