An Echelon Media Company
Tuesday October 20th, 2026

Afghanistan at the crossroads: Is it ready to move away from its security blackhole?

ECONOMYNEXT – Even as Afghanistan’s Taliban government increases its stranglehold on human rights on the domestic front, the regime is gaining some legitimacy on the world stage, with neighbouring countries quietly extending a hand of friendship, one that has grown purely out of the individual needs of those nations.

Paving the way for more diplomatic and trade engagement between the two, Russia’s Supreme Court delisted the Taliban as a ‘terrorist organisation’ on Thursday, April 17.

Since taking power in August 2021, the Taliban government has not been a welcome guest at most forums.

Yet, as Dr Abbas Farasoo, Afghanistan’s former Deputy Ambassador to Australia, claimed, there is regional and international consensus that Afghanistan is now a ‘security blackhole,’ resulting in neighbouring countries, in particular, seeking to engage with the Islamic Emirate of Afghanistan.

It is a ‘silent diplomacy’ he pointed out, adding that it is more than anything an act of self-preservation by those nations.

In the case of China, which has had ties with Afghanistan for years, it is about ensuring its Belt and Road Initiative, better known as One Belt One Road, is not destabilised by terror attacks, Dr Farasoo pointed out at a recent webinar titled ‘Afghanistan at the Crossroads: Politics, Human Rights and Humanitarian Challenges.’

Such an engagement also allows China to monitor the Taliban government's ties with the USA, Pakistan and India, he added.

Iran, meanwhile, which once worked alongside the Taliban to oppose former Afghan governments and international allied forces, and is alleged to have provided training to various insurgent groups, keeps a watchful eye on the Taliban government’s activities.

But now the focus is more on the water and border disputes, he said.

Long-term ally, Pakistan, meanwhile, has lost its favoured status with the Taliban government, explained Dr Farasoo.

Though Pakistan hoped to establish its intelligence apparatus within Afghanistan, it did not have the resources to sustain such an initiative.

Despite a tense relationship now, Pakistani think tanks advise that establishing at least a working relationship with its northwestern neighbour is preferable to India getting a foot in.

The webinar, moderated by Reza Eshan, a Doctoral student at the South Asian University, was held on April 17 th and was organised by the Friedrich Naumann Foundation for Freedom South Asia (FNF).

Echoing those observations, panellist Khalid Ramizy, CEO, World Anti-Extremism Network, pointed to the importance of preventing a repeat of 9/11, as Afghanistan has now become a safe haven for many terrorist groups.

Alleging that such groups have been allocated land and are being allowed to set up in various regions, Ramzi alleged that over twenty thousand passports had been issued to members of foreign terror groups and 100 Syrian terrorists based in Afghanistan.

Unless Afghanistan experiences complete isolation from the world, the citizenry, even though the government is with their lives, will not act against it, he says. Russia, China and Iran have established some diplomatic relations, and are not concerned about human rights violations, he claims.

China is investing millions of dollars and extracting Afghanistan’s natural resources, Ramizy alleges, adding that Beijing is also investing in civil society organisations and promoting its ideology as opposed to liberal democratic values.

Afghanistan has also been impacted by US President Donald Trump’s decision to stop financial aid for development projects, says Ramizy, adding that soon after the announcement, the Taliban government had claimed the move would result in public servants not receiving a pay cheque for three months.

That, he points out, is an indication that developmental aid has found its way to government coffers.

The international community must wake up to the fact that Afghanistan is the only country where education for women is banned, points out Shikiba Babori, Founder of the Journalist Network KALIMA.

The Taliban, she told the webinar, has, since 2021, ‘rolled back participation in social and civil life and freedom of expression. Gender apartheid is not a social issue but State violence!’ The large number of decrees issued against women has not deterred them, she says, explaining that they continue their education in underground schools.

Ignoring the risks, they hold street protests, refusing to be silenced, Babori revealed, adding that exiled Afghan women too work tirelessly to raise global awareness on the situation.

The Afghan diaspora plays a vital role in drawing attention to the systematic denial of rights in Afghanistan, and their work is all the more important as interest in human rights abuses has waned with the withdrawal of international forces, Babori claims.

The incoming German government, she added, is also planning on terminating the refugee admissions programme for Afghans.

Keeping the spotlight on Afghanistan is, in itself, a challenge, claims Fereshta Abbasi, a Researcher at Human Rights Watch. And the Taliban is using the ‘isolation’ to tighten its grip on women and girls, where they are banned from getting an education beyond Grade 6.

The ban also varies in implementation depending on the regional authority, she explains, adding that since August 2024, women are not allowed to be heard outside their homes.

‘Public policing’ is becoming the norm, where even a taxi driver could report or refuse a ride to a woman if she is not in hijab or without a male relative.

It is an environment where documenting the many atrocities is becoming increasingly difficult, and with the absence of independent media, there is no accountability for extra-judicial killings and forced disappearances.

Though not recognised as a legitimate government, the Taliban is wary of negative reports reaching the international community, and does its utmost to prevent abuses being documented, she explains.

To date, only two perpetrators have been named by the International Criminal Court, points out Abbasi adding that even Syria, Iran and Myanmar allow UN mechanisms to gather evidence.

The country is facing the ‘Worst human rights crisis in the world, ’Abbasi observes.

The Taliban is keen to be formally accepted by world bodies, and that is possible not through the usual ‘war on terror discourse’ but by adopting a modern and pragmatic lens that puts Afghan voices first, points out Dr Farasoo.

Internal and external agencies working together should focus on establishing gender security, transparency, justice, and inclusiveness in Afghanistan.

He also has a word of advice to Afghanistan’s elite, who, he points out, must shed their ethnic and tribal biases if the country is to transform itself.

As for the Taliban government, a constructive foreign policy, internal legitimacy and inclusive governance are key in regaining its place on the world stage, Dr Farasoo opines. (Colombo/Apr21/2025)

Sri Lanka’s Sampath Bank, David Pieris Automobiles launch vehicle financing partnership

ECONOMYNEXT – Sri Lanka’s Sampath Bank and David Pieris Automobiles are partnering to offer customers preferential vehicle financing and ownership benefits.

Under the collaboration, customers purchasing vehicles through David Pieris Automobiles will receive a 0.5 percentage point reduction on published vehicle lease interest rates, subject to terms and conditions.

They will also have access to vehicle insurance premium loans with no interest if settled within two months, along with Sampath Bank credit cards that carry no joining fee and offer 0% interest instalment plans for insurance payments for up to 12 months.

David Pieris Automobiles, the four-wheeler sales arm of the David Pieris Group and distributor of GWM brands including HAVAL, TANK and ORA, as well as BAIC models, will provide additional customer benefits including free vehicle registration and a third labour-free vehicle service.

The two companies said the partnership reflects a shared commitment to meeting evolving mobility needs through accessible financing and automotive solutions. (Colombo/Oct20/2026)

Continue Reading

Sri Lanka’s Access Engineering drops S Asia logistics hub project, expects Rs1.45bn recovery

ECONOMYNEXT — Sri Lanka’s Access Engineering PLC said shareholders have agreed not to proceed with the South Asia Commercial and Logistics Hub project, following an initial corporate disclosure made in April 2023.

The parties have agreed to enter into a settlement agreement for the orderly termination of the project and all related agreements.

Under the planned settlement arrangements, Access Engineering anticipates recovering approximately 1.453 billion rupees from its total investment of roughly 1.762 billion rupees.

“The decision was made in view of changes in external circumstances, including adjustments to the project’s implementation environment and timetable, together with the respective commercial considerations of the parties,” Managing Director Rohana Fernando said in a filing to the Colombo Stock Exchange.

Access Engineering holds a 15 percent shareholding in South Asia Commercial and Logistics Hub Limited.

Under the settlement terms, the company expects to receive 3.286 million US dollars (equivalent to approximately 1.087 billion rupees) as its proportionate share of the settlement refund.

It will also receive approximately 365 million rupees representing its share of available distributable funds, based on an indicative exchange rate of 331 rupees per US dollar.

In its audited consolidated financial statements for the year ended March 31, 2026, the group had already recognized its share of losses amounting to approximately 387 million rupees, leaving the carrying value of the investment at roughly 1.38 billion rupees.

“Based on the anticipated settlement proceeds and the carrying value of the investment, no further material financial loss is presently anticipated in the Group’s consolidated financial statements,” Fernando said.

However, because the investment is carried at cost in the company’s separate financial statements, Access Engineering expects to recognize a company-level loss of approximately 310 million rupees.

The company noted that the final figures remain subject to the exchange rates applicable on actual transaction or payment dates, final settlement arrangements, and applicable accounting adjustments. (Colombo/Oct20/2026)

Continue Reading

Sri Lanka rupee weaker at 331.75/90 to US dollar spot, bond yields higher

ECONOMYNEXT – Sri Lanka’s rupee was quoted at 331.75/90 to the US dollar in the spot market on Tuesday, weaker from 331.60/70 the previous day, while bond yields were quoted higher, dealers said.

A bond maturing on 15.09.2029 was quoted at 11.10/30 percent, up from 11.10/25 percent.

A bond maturing on 01.08.2030 was quoted at 11.65/70 percent, up from 11.50/60 percent.

A bond maturing on 01.12.2031 was quoted at 11.90/12.00 percent.

A bond maturing on 15.01.2033 was quoted at 12.25/35 percent, up from 12.25/30 percent.

A bond maturing on 15.06.2034 was quoted at 12.50/55 percent, up from 12.40/50 percent.

The telegraphic transfer rate for the dollar was 327.10 buying, 336.10 selling; the euro was 364.3987 buying, 378.1795 selling; pound was 434.5676 buying, 448.6760 selling.

On the Colombo Stock Exchange the All Share Price Index was down 0.09 percent, or 18.32 points, at 20,041; while the S&P SL20 was broadly unchanged at 5,701. (Colombo/Oct20/2026)

Continue Reading

Global financial markets face rising risks from AI, bond yields, and cyberattacks: IMF

Financial markets have remained resilient amid solid economic growth and strong corporate earnings, while financial conditions have been relatively accommodative. However, there is no room for complacency.

Three key risks have been increasing, each with the potential for broader implications: an artificial intelligence-driven market correction, a sharper rise in sovereign bond yields, and cyberattacks.

Vulnerabilities beneath the surface could determine how damaging the manifestation of these risks would be, as we detail in the latest Global Financial Stability Report. An AI market correction could trigger broad deleveraging across asset classes. A bond yield shock could reprice assets and reduce the collateral value of bonds in financial transactions. A cyberattack could disrupt critical operations and weaken confidence. High borrowing, scarce liquidity, and tighter links across markets could amplify the impact into broader financial stress.

Heavy reliance on AI

AI has become an important support for the global economy and financial markets, as discussed in the World Economic Outlook. Investment in data centers, semiconductors, and related infrastructure has spurred economic activity, while companies driving the AI boom have delivered exceptional earnings growth. But faltering AI investment and profitability could challenge optimistic expectations and trigger a correction in asset prices linked to the AI industry.

Growing leverage could be a catalyst for such a correction. Hyperscalers, as the largest data center operators are known, are borrowing more and more, while investors have been leveraging to invest in AI stocks. Circular financing arrangements in the AI sector, involving equity and debt flows between AI firms, suggest that stress at key companies receiving investment could lower revenue forecasts and investment valuations, which in turn would weaken the value of the accumulated debt in those deals. Our review of 14 such transactions since 2023 found about $300 billion in equity investments and $650 billion in debt, in exchange for $1.4 trillion in future revenue commitments.

Government debt risks

Sovereign bond yields have risen amid renewed inflation pressures from higher energy prices, fiscal concerns, and, in some cases, stronger-than-expected economic growth. It may be the case that bond yields are moving back toward the levels seen before the global financial crisis, when growth and inflation were higher than in the 2010s. At the same time, risks of adverse feedback loops related to higher fiscal imbalances and leveraged trades in bond markets are increasing. In addition, as central banks have been reducing their balance sheets, greater reliance on price-sensitive investors could contribute to further yield volatility.

As government bonds underpin the global financial system, the consequences of higher sovereign yields could extend well beyond public debt. Higher yields could further raise discount rates and depress valuations across other assets, including those that are AI-related, while reducing the value of bonds used as collateral.

Cyberattacks

As finance becomes more digital and interconnected, cyber disruptions have emerged as a growing source of systemic risk. A major incident could disrupt payments, trading, access to deposits, or other critical financial services. The danger is particularly acute if an attack affects a major financial institution, payment system, cloud provider, or software platform, allowing disruption to spread through an increasingly interconnected financial system.

Importantly, cyber threats can be hard to contain. In more than 70 percent of reported cases so far this year, software providers had almost no time to patch vulnerabilities before attackers exploited them. That’s more than double the share in 2021, when providers typically had close to 300 days to fix vulnerabilities. Frontier AI models could accelerate both attacks and defenses, increasing the importance of cyber resilience, incident reporting, crisis preparedness, and oversight of critical third-party providers.

Financial fault lines

Underlying vulnerabilities could amplify the impact of these three risks into systemic events.

Although global banks, the core of the financial system, remain resilient overall under our adverse stress scenario, there could be weak links. Banks with 22 percent of global banking assets would emerge with post-stress capital ratios below regulatory limits, an increase from 18 percent a year ago. Moreover, the links of such banks with nonbank financial intermediaries are deepening, creating additional channels for transmitting stress.

Beyond banking, pension funds and insurers have steadily increased allocations to illiquid assets and derivatives, while relying more heavily on the same asset managers. This increases the risk that at a time of stress, they could face sudden liquidity needs through margin calls and could react in similar ways—for example by selling the same assets—amplifying market moves. Some of these institutions also hold illiquid private credit, another potential amplification channel.

At the same time, as borrowers have become more leveraged, some direct-lending funds have committed to provide funding on demand. If financial conditions tighten, borrowers could draw on those facilities just as the funds that provide them could be facing their own liquidity pressures. Such dynamics could further reduce credit to companies that need it most, with consequences for the broader economy.

In emerging and developing economies, bond yields have also risen, although their spreads compared with their advanced economy peers remain fairly compressed. However, recent global shocks have diminished buffers, thereby increasing external vulnerabilities and reducing their ability to absorb stress.

Policies to safeguard

With government debt high, inflation pressures re-emerging, and higher borrowing costs, policymakers have much less room to support the economy following shocks than in the past.

We see three priorities for action:

-Debt needs to be put on a sustainable path.
– Leverage and liquidity mismatches in AI, private credit, and other nonbank financial sectors should be limited, including through sectoral capital and concentration requirements on banks’ exposures to these sectors.
– Cyber defense capabilities need to be strengthened, for example through better incident reporting and resilience testing among financial institutions.
Emerging and developing economies should also rebuild buffers while financial conditions remain accommodative. Proactive policies are the best way to prepare as risks are rising.

Continue Reading

Sri Lanka rupee closes weaker at 331.60/70 to US dollar spot, bond yields higher

ECONOMYNEXT – Sri Lanka’s rupee closed at 331.60/770 to the US dollar in the spot market on Monday, weaker from 331.25/35 the previous day, while bond yields closed higher, dealers said.

A bond maturing on 15.09.2029 closed at 11.10/25 percent, up from 11.05/15 percent.

A bond maturing on 01.08.2030 closed at 11.50/60 percent, up from 11.40/50 percent.

A bond maturing on 15.10.2030 closed at 11.65/75 percent, up from 11.50/55 percent.

A bond maturing on 01.02.2031 closed at 11.75/80 percent, up from 11.55/65 percent.

A bond maturing on 15.12.2032 closed at 11.90/12.10 percent, up from 11.80/90 percent.

A bond maturing on 15.01.2033 closed at 12.25/30 percent, up from 11.95/12.05 percent.

A bond maturing on 15.06.2034 closed at 12.40/50 percent, up from 12.20/25 percent. (Colombo/Oct19/2026)

Continue Reading

Sri Lanka shares close down on Monday; ASPI falls 0.62-pct

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed down on Monday, CSE data showed, with the benchmark All Share Price Index falling 0.62 percent.

The ASPI was down 125.63 points at 20,059.42, while the more liquid S&P SL20 was down 0.51 percent, or 29.36 points, at 5,709.47.

Raynal Wickremeratne, Head of Research and Strategy at NDB Securities, noted that market turnover remained low, with local sentiment reflecting the recent volatility and declines across regional Asian markets.

Positive contributors to the ASPI were Watawala Plantations (up 2.43 percent at 46.40 rupees), Richard Pieris and Company (up 1.54 percent at 26.40 rupees), Ceylon Cold Stores (up 0.62 percent at 122.00 rupees), and Commercial Bank of Ceylon (up 0.13 percent at 198.25 rupees).

Dialog Axiata (down 2.27 percent at 43.00 rupees), Overseas Realty (Ceylon) (down 2.00 percent at 49.00 rupees), John Keells Holdings (down 1.67 percent at 17.70 rupees), Hemas Holdings (down 1.29 percent at 30.50 rupees), and Hatton National Bank (down 0.79 percent at 375.00 rupees) were top negative contributors.

Market turnover was 680.32 million rupees. The banking sector led turnover with 188.71 million rupees, followed by capital goods with 177.78 million rupees.

Crossings were recorded in Seylan Bank for 98 million rupees and John Keells Holdings for 26 million rupees. (Colombo/Oct19/2026)

Continue Reading