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Tuesday October 13th, 2026

Government decision “disastrous for forests and biodiversity” – Environmentalists

Sinharaja forest/Rainforest Protectors Trust

ECONOMYNEXT – Environmentalists, Conservationists and the political opposition are strenuously objecting to the decision by the government to hand over the management of “Other State Forests (OSF)” to Divisional/Districts Secretaries alleging the move would be disastrous for the forest cover and biodiversity in the country.

It was in July this year that the Cabinet first mooted the idea of handing the management of these lands earlier referred to as “State Residual Forests” by abolishing circular 05/2001 which had transferred the management of these lands from the Divisional/District Secretaries to the Forest Department.

The July Cabinet decision was forwarded to the then Minister of Environment to study the matter and present a mechanism that could vest such lands back with the Divisional/District Secretaries, so they could be released for “economically productive purposes.”

Fears were raised at that time that Divisional/District Secretaries would come under undue pressure to release these forest lands for purposes that would harm the environment.

In a letter dated July 3, the Janatha Vimukthi Peramuna wrote to President Gotabaya Rajapaksa urging him to revoke the planned abolition of circular 05/2001.

The letter said that the management of the forests had been given to the Forest Department owing to “gross mismanagement and abuse of these forest reserves by giving portions of these lands to their friends as well as politicians who intervened and used their influence to grab large areas of land which led to deforestation and destruction.”

The letter also said that it is the opinion of “Senior Environmentalists that this decision could cause extensive damage to the environment, largely reduce the extent of forest cover and potentially destroy the endemic fauna and flora specific to different regions of the country.”

Nevertheless, on November 4, the Ministry of Wildlife & Forest Conservation by virtue of a cabinet circular MWFC/1/2020 assigned District Secretaries and Divisional Secretaries the power to utilise these lands ‘for economic and other productive uses.’

The new circular does mention, however, that any such activity should be carried out ‘without harming the environment, wildlife resources and forests other than the Conservation Forests managed by the Department of Forest Conservation, Reserve Forests, Proposed Forest Reserves and National Reserves managed by the Department of Wildlife Conservation, Sanctuaries, Wild Elephant Management Reserves and Other Forests not belong to a government department, an agency or Ministry dealing with the environment through a certain law, regulation or any other circumstance.’

Signed by the Secretary to the Ministry of Wildlife and Forest Conservation, M K Bandula Harischandra, the circular lists ten categories, amongst which are land areas with rivers and streams, catchment areas, higher gradients, elephant corridors, places of historical, archaeological and cultural value, enhancing forest cover, biodiversity and earmarked for future development activities etc. that should not be released.

Circular MWFC/1/2020 effectively cancels all other circulars such as 05/2001, 02/2006. While circular 05/2001 placed the management of all state-owned forests with the Forest Conservator, 02/2006 moved non-forest lands from amongst the OFS back to the Divisional Secretaries.

Explaining the government’s position, Environmental Engineer Arjuna Perera states that the move would help implement President Rajapaksa’s plan to eradicate poverty amongst the rural population.

For decades rural farmers have been tenancy farmers, he points out, adding that the Forest Department has been mandated to grow and manage forests to support the Timber Corporation. With 05/2001 and 02/2006 the Forest Department took over any land it assumed fell under its mandate. Though Sri Lanka’s farmers have had no titular claim to the property, they have continued to farm the lands, first through slash and burn (chena) methods and in later years as stationary farmers, he points out.

Perera says farmers who have cultivated the lands for generations accuse the Forest Department of having stolen their land.

Though the OSF land will now be under the Divisional and District Secretaries, they will not have the freedom to parcel out the plots as they please, he says. “Anyone who wants to utilise such land will have to obtain approval from both the Regional and the District Land Use Committees, which will have representatives from various bodies such as environment, water, archaeology etc.’ While acknowledging that despite all of these safeguards there could be corruption, he believes that even so, the negative impact on the environment would be negligible.

Perera claims that 2 million acres of land need to be re-forested and that the Forest Department does not have the finances to do so. With the new circular in effect, the State will continue to own the land, while private individuals or entities will plough in the cash to grow a mixture of hardwood, softwood and underbrush. Rural farmers, he explains could work on these lands. “A farmer family could very well earn at least Rs. 50, 00 per month, and could channel that income towards improving their homes or educational opportunities for their children.’

Perera added that Gyrinops walla (Walla Patta) which has a high commercial value is one such tree that could be grown on these lands.

 

But environmentalists are not convinced. “The first policy document put out by the Ministry of Wildlife and Forest Conservation in 2020 is not about policy and conservation, but handing over State forests to Divisional Secretaries,’ charged Convenor of Rainforests Protectors of Sri Lanka, Jayantha Wijesinghe. It involves nearly 700,000 hectares, (approximately 1.3 to 1.7mn acres) and contravenes Presidents Rajapaksa’s recent speech to the UN and his election manifesto to increase the country’s forest cover to 30pct. (Various reports show the country’s forest cover to be less than 27pct.) The country is also violating the commitments made to the 2015 Paris Summit, land use policy and sustainable development goals, he points out.

This move is also a threat to the wild animals that inhabit the forests adds Wijesinghe, pointing to the destruction of the Nilgala catchment area, where alleged illegal felling of trees has negatively impacted animal habitats. These forests, he says, are an integral part of the country’s eco-system.

Almost 70pct of the Elephant population and 60pct of the Leopards, for instance, live outside the National Parks and protected reserves, he explains, adding that destruction of these forests will effectively cut –off even the elephant corridors.

But, argues Perera, there are no elephant or animal corridors in Sri Lanka. Elephant corridors, he states are found in Africa where these animals trek for long hours in search of water, while local pachyderms generally remain within their habitat if there is enough water. As well, he explains, Sri Lanka does not have large herds of other animal groups that use animal corridors. “There is only bird migration.’

Wijesinghe also states that while most Divisional and District Secretaries are not conservation focussed or have the technical know-how regarding such matters, they would also find it difficult to refuse to do the bidding of politicians, who could persuade them to release land for various activities, even if they fall within the criteria identified by the latest circular.

Circular 02/2006 was introduced to put in the checks and balances and resolve disputes over which lands could be released. The new circular will only pave the way for private parties and friends of politicians to grab land, “Farmers are only being used as a ruse,’ Wijesinghe said.

He also states that it’s a myth that there are no agricultural lands, as only around 12pct of such lands of a total of 62pct are productively used for cultivation.

The Executive Director of the Centre for Environmental Justice, (CEJ) Hemantha Withanage meanwhile explains that it is illegal to amend any ordinances without approval from parliament.

Withanage too believes that while poor farmers are being used as the excuse, the exercise itself smells more like land-grabbing. ‘This move places another huge responsibility with Divisional and District Secretaries. As well government officials such as Grama Niladaris will be powerless in the hands of politicians who want to bend the rules.’

Civil society must be more pro-active he says. Being literate is not enough. The public must make it their business to be aware of available policies and understand the implications of the exploitation of resources.

It is not, he says, the sole responsibility of environmentalists, adding that all of these moves are being conducted under cover of the COVID pandemic.

Addressing a media conference recently, environmentalist Rukshan Jayawardena claimed that OSFs, protected by circular 05/2001 contributed to connecting forest reserves managed by the Forest Department on the one hand and the National Parks that fall under the Wildlife Department. These are elephant and animal corridors, and cancelling that circular means further fragmentation of forests. “Even if no one cuts down a tree in a national park or forest reserve, the bio-diversity in protected lands will drop and forest lands will be isolated.’

Indeed, Wayamba University Lecturer and one of the Editors of the Sixth National Report to the Convention on Biological Diversity, Dr Sewwandi Jayakody explained, that the study had revealed that most of Sri Lanka’s biodiversity occurs in the OSFs.

While the most protected areas are gazetted under the Wildlife Department or the Forest Department, the study found that greater ecological connectivity is in areas that fall outside such protected sections. Jayakody explains that a substantial area that requires landscape conservations is found amongst the OSFs. The study calls for those habitats that do not fall within protected areas to be treated as ‘conservation priorities for a landscape conservation strategy.’

What is important in this country, says Jayakody is to understand what is exactly meant by a forest. Abolishing the circular is not the way to go. Instead, she advocates a coalition with the Ministries of Land and Environment and other stakeholders to identify what can be released, what can be utilised and for what purposes.

Certainly, economic development is important especially if the majority of the rural poor are to benefit. But should that be at the cost of Sri Lanka’s biodiversity? Could more of the unused agricultural land be harnessed for economic development plans?

After all, it seems that farmers will have no titular claim, but continue to only work the lands.

(Colombo, November 14, 2020)

Reported by Kshama Ranawana

Sri Lanka President explains measures to speed up capital investment spending

ECONOMYNEXT – Sri Lanka has planned reforms in the public procurement system and alignment of budget and procurement timelines among key measures to speed up the spending under planned projects with capital expenditure allocated in annual budget, President Anura Kumara Dissanayake said.

Dissanayake, also the island nation’s Finance Minister said the current procurement guidelines have become a barrier for public investment projects implemented through budget-allocated capital expenditure.

Sri Lanka has spent less than 30 percent or only around Rs.385 billion of this year’s capital spending of Rs. 1,380 billion through the first nine months of this year, two government sources have told EconomyNext.

Sri Lanka’s chronic failure to utilize its full budgetary allocations for capital investment reflects deep-rooted structural inefficiencies in public financial management and project execution, analysts and economists say.

“Our upcoming budget plans for public capital expenditure of around 2 trillion rupees (Rs.2,000 billion).  Compared to when we took office, this represents a massive increase,” President Dissanayake told the gathering at the launch of the Sri Lanka Economic and Investment Summit 2026 on Monday (12).

He said his administration utilized 76 percent of the allocated capital expenditure last year. However, critics have said that this included some past loan repayments for the central highway project as well.

“Our procurement system was fundamentally built on the mindset that the state apparatus is susceptible to corruption. We created layer upon layer of regulations, and the ultimate result is that the rules have become so restrictive that nothing can get done. It reached a point where the rigidity paralyzed execution.”

“We are actively focusing on redesigning procurement mechanisms tailored for these distinct sectors,” he said, citing the current procurement system was designed merely for purchasing physical goods and there were difficulties in formulating criteria when procuring services like  global promotional campaign or repairs of defence equipments.

“Our objective is to identify these specialized domains and formulate modern procurement systems. How do we procure complex software systems? We need new procurement protocols,” he said.

“Additionally, we must operate competitively in commercial markets. SriLankan Airlines, for example, how does it procure its operational requirements while staying competitive in the market? It requires flexible, modern procurement mechanisms.”

“Defense procurement is another area. We have a fleet of helicopters that cannot undergo timely repairs because the procurement cannot be awarded within the financial year. Funds get allocated, but if the procurement isn’t finalized within that year, the allocation lapses.”

Analysts warn of lower economic growth in the future if the government fails to implement its planned capital investment projects.

The government has repeatedly said most of the spending occurs in the last quarter of the year.

Year after year, bureaucratic delays, protracted procurement disputes, politicized project selection, and a lack of technical expertise within line ministries leave a significant portion of capital expenditure unspent on the Treasury books.

This capital under-utilization carries severe long-term repercussions for the island’s economic trajectory.

By failing to deploy allocated funds into critical infrastructure such as transport networks, modernized power grids, and digital public systems, Sri Lanka suffers from lower productivity growth and worsening structural bottlenecks as well as a decline in overall gross domestic product (GDP) potential.

Procurement Timing

“Previously, the practice was that only after the budget was presented and formally passed, and after the Treasury allocated the funds to the respective Ministry Secretaries, would the procurement process commence,” President Dissanayake explained.

“Consequently, procurements routinely dragged on until August or September before reaching finalization.”

“We have changed that. For major procurements, the Treasury Secretary guarantees funding ahead of time within 2026. For instance, take the Kurunegala–Galewela expressway. Funds will officially be allocated in the 2027 budget, but we have provided Treasury assurance to the Road Development Authority that the funds will be granted in 2027.”

“This allows them to call for tenders, evaluate bids, and select contractors right now. Once the budget is passed in December, we can award the contract directly in January. Work can commence immediately at the start of 2027.”

The President also said Sri Lanka is exploring e-procurement to accelerate the process while addressing professional capacity in the public sector.

“Our public service is currently not attractive enough to recruit and retain high-caliber technical professionals. We face significant deficits in recruiting IT specialists, engineers, and executive management within the standard state salary framework,” he said.

“To attract specialized talent, we must institute specialized, competitive compensation packages. Otherwise, we cannot attract this talent.”

“We are managing a 2-trillion-rupee capital portfolio, running vast services across education and healthcare, yet the state is constrained by rigid salary scales that deter top professionals.”

“When we established GovTech, we were able to bring in leading IT experts by offering specialized salary scales. We must extend this approach to other critical domains. Can we attract a top-tier civil engineer under standard civil service pay? No, because the private sector creates more lucrative opportunities and pays substantially better.”

In a fragile post-default macroeconomic climate, the persistent shortfall of public investment sends a negative signal to international development partners and private investors, analysts say. (Colombo/October 13/2026)

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Sri Lanka rupee closes at 331.00/10 to US dollar spot, bond yields steady

ECONOMYNEXT – Sri Lanka’s rupee closed at 331.00/10 to the US dollar in the spot market on Tuesday, weaker from 330.90/331.00 the previous day, while bond yields were broadly steady, dealers said.

A bond maturing on 01.08.2030 closed at 11.30/35 percent, down from 11.30/37 percent.

A bond maturing on 15.10.2030 closed at 11.35/40 percent, down from 11.37/40 percent.

A bond maturing on 01.02.2031 closed flat at 11.42/47 percent.

A bond maturing on 15.12.2032 closed flat at 11.75/85 percent.

A bond maturing on 15.10.2034 closed at 12.12/18 percent, down from 12.15/20 percent.

An auction of 90,000 million rupees Treasury bills is scheduled on October 14. (Colombo/Oct13/2026)

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Sri Lanka sells Rs100bn in 2029, 2031 and 2036 bonds

ECONOMYNEXT – Sri Lanka has sold 100 billion rupees in 2029, 2031 and 2036 bonds, data from the public debt management office showed.

All offered 20 billion rupees of 15 September 2029 (LKB00629I154) bonds were sold at an average yield of 11.00 percent.

All offered 30 billion rupees of 1 December 2031 (LKB01031L016) bonds were sold at an average yield of 11.67 percent.

30.69 billion rupees of an offered 50 billion rupees of 15 August 2036 (LKB01136H151) bonds were sold at an average yield of 12.33 percent.

The 2029 and 2031 bonds are available on tap. (Colombo/Oct13/2026)

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Sri Lanka’s 2027 budget to “heavily” focus on rural economic empowerment: President

ECONOMYNEXT – Sri Lanka’s 2027 budget has heavily focused on rural economic empowerment with high-speed communication and modern road infrastructure with an aim to address rural poverty in rural area across the island nation, President Anura Kumara Dissanayake said.

Rural poverty in Sri Lanka remains disproportionately higher and more entrenched than in urban centers, accounting for roughly 80 percent of the island nation’s poor.

While urban areas benefit from diversified service economies, concentrated foreign direct investment, and higher-paying industrial employment, rural communities remain heavily tied to smallholder agriculture, seasonal labor, and informal enterprises.

Eradicating rural poverty has proven uniquely difficult due to structural constraints, including low agricultural productivity, land fragmentation, and poor market integration.

“This is why, through the 2026 budget, we have focused heavily on empowering rural citizens within their native regions,” President Dissanayake told the gathering at the launch of the Sri Lanka Economic and Investment Summit 2026 on Monday (12).

“This entails high-speed communication infrastructure and robust road networks connecting rural and urban centers. Through these multifaceted programs, we can address rural poverty.”

“It cannot be solved overnight with a quick-fix solution. It requires a long-term, sustained, structured, and targeted plan, and I believe we have laid the foundation for that.”

“Eradicating rural poverty is not something that can be achieved in a year or two simply by building a road or a bridge. It demands a sustained, targeted program.”

Limited Opportunities

He acknowledged that the segment needing a social safety net has grown excessively and the government has been forced to support groups that should not necessarily require state welfare.

“This is because of our failure to create new economic opportunities for the rural population. What economic avenues do they currently have? The rural populace has access to only a very limited scope of economic activities like agriculture, marine and inland fisheries, and running small, marginal village boutiques/shops,” he said.

“These are essentially their only economic opportunities. Therefore, if we are to eliminate rural poverty, our primary challenge is: how do we create new economic avenues for them?”

He said rural agriculture is restricted to small plots of land and has historically been a subsistence economy.

“It was never a commercial economy for a large portion of the population; it was subsistence-based. Consequently, looking at the extent of land and resources available to us, we cannot develop a large-scale commercial agricultural sector solely by targeting individual smallholders. That remains a poverty-alleviation and food-security mechanism; it must be viewed in that light,” he said.

Small-scale farmers frequently lack access to modern technology, cold-storage facilities, affordable credit, and efficient supply chains, leaving them exposed to volatile crop prices, middleman exploitation, and recurring climate shocks like severe droughts and floods.

Furthermore, long-standing fiscal deficits have constrained state investment in rural infrastructure, education, and non-farm employment creation, while administrative inefficiencies in targeted welfare programs such as Aswesuma have often left vulnerable agrarian households without adequate social safety nets during broader macroeconomic downturns.

Dissanayake said the focus is on enabling the rural poor to generate their own economic opportunities amid obstacles such as lack of capital, lack of technology, weak management capacity, and lack of market access.

“The responsibility of the state is to step in and fulfill these requirements,” he said.

“We have already launched a collateral-free loan scheme. They lack financial assets to pledge to banks, so we introduced collateral-free lending. That program has proven successful, channeling nearly 18 billion rupees so far. Next, we are integrating new technology.”

He said the government is relying two approaches to channel the wealth mobilized by the state toward the rural population, spending the revenue collected the Treasury for rural infrastructure development including for the rehabilitation of minor tanks and irrigation canals and community empowerment to directly link rural communities

He also said rapid communication networks between villages and cities to ensure the flow of rapid information and access opportunities and an advanced transport and road network connecting rural production to urban markets could help in creating more economic opportunities for the rural poor.  (Colombo/October 13/2026)

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Sri Lanka to set up Rs5.4-bn center for disease control

ECONOMYNEXT — Sri Lanka’s cabinet has approved a 5,431 million rupee project to establish a dedicated Center for Disease Control and Prevention (CDC) and upgrade national laboratory facilities, minister Nalinda Jayatissa said.

The proposal covers 35 identified activities under the Integrated One Health Pandemic Preparedness and Response Strengthening Project.

The work is funded through a 4,785 million rupee grant received from the Pandemic Fund alongside a 646 million rupee contribution from the Sri Lanka government, with the Asian Development Bank expected to fund the CDC’s establishment.

“Sri Lanka’s response to the COVID-19 pandemic and other zoonotic health threats has revealed shortcomings and gaps in national response mechanisms across both the human and animal health sectors,” Jayatissa said.

Although Sri Lanka maintains a routine vaccination coverage rate exceeding 95 percent, an action plan running from 2026 to 2028 was prepared with international partners to address gaps, with all project work scheduled to conclude by March 31, 2028.

“Activities to address these gaps are proposed for implementation through the Pandemic Fund, and an action plan covering the 2026–2028 period has been formulated in collaboration with funding organizations.”

Responding to questions from journalists on whether the facility would be an entirely new institution, Jayatissa confirmed plans for a standalone centre.

“On land belonging to the Ministry of Health in Mulleriyawa, we intend to construct a building of approximately 7,200 square meters as this CDC,” he said.

Jayatissa added that the project will also modernize five existing pharmaceutical warehouses, upgrade the National Medicines Regulatory Authority (NMRA) laboratory, and improve physical infrastructure at the Medical Research Institute’s National Public Health Reference Laboratory. (Colombo/Oct13/2026)

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Sri Lanka Cabinet approves public-private partnership for state printer

ECONOMYNEXT — Sri Lanka’s Cabinet of Ministers has approved a proposal to implement a diversification program for the State Printing Corporation (SPC) through a public-private partnership, minister Nalinda Jayatissa said.

Established in 1968, the SPC is the primary state body tasked with printing school textbooks, official government publications, and state institutional documents.

Jayatissa said that while the state printer has remained profitable, outdated machinery has created operational hurdles.

“Although the Corporation has consistently recorded financial profits in recent years, challenges regarding production efficiency and cost competitiveness have arisen due to the deterioration of existing machinery and the obsolescence of its printing technology.”

Restructuring the corporation’s business model and technical capabilities is essential to ensure its long-term sustainability, Jayatissa said.

Jayatissa dismissed both concerns on the partnership compromising national security or signals privatization.

He said printing syllabus-based schoolbooks involves no confidentiality issues and that old equipment must be modernized and since the corporation alone cannot bear the cost, the government plans to cover part of the expense with private sector assistance.

“We are moving towards a mechanism where this work can be carried out quickly, efficiently, and securely, while placing the minimum possible burden on the Treasury,” Jayatissa said.

He added that non-confidential government printing is already handled through open tenders, and proposals will be obtained to finalize the exact structure. (Colombo/Oct13/2026)

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