Bellwether

Sri Lanka’s Nationalism and hate is an illiberal European Import : Bellwether

Bellwether

Friday February 5, 2016 7:28 am

By Bellwether

Friday February 5, 2016 7:28 am

ECONOMYNEXT – A Hungarian camerawoman trips a desperate Syrian refugee running into the country across the border with his little kid in his arms. In Sri Lanka, a ‘Sinha Le’ campaign targeting minorities is taking off again as the country celebrates independence from British rule.

What is the connection?

Although Sri Lankans call it Independence Day or nidahas dinaya (Freedom Day), marking the peaceful breakaway from British rule, what people in the island received in 1948 was not freedom, but self-determination.

Many believe that Sri Lanka’s nationalism is homegrown or that our economic and political problems are related to imperialism. Nothing could be further from the truth.

While it is true that nationalism emerged when empires broke down, empires had ended in earlier ages with no such results.

Self-determination

Under self-determination, freedoms can be taken away or expanded by the new rulers once an empire breaks down or monarchic rule ends. Freedom comes from how that self-determination is used to make laws, constitutions or other interventions that either expand the freedom or sovereignty of the individual or takes it way.

In the past, what is now called Sri Lanka (or sections of it) had been part of Dutch and Portuguese empires that fanned out of what is now called Europe, and before that, several empires that expanded out of what is now called India, including Kalinga and Chola empires.

Sri Lanka itself was most likely colonized by North East Indian empires including what is loosely called Kalinga, as symbolized by the legend of Vijaya, after they drove out or swamped the then-resident population signified by figures like Kuveni. This was a recurring theme in South East Asia, where also Hindu-Buddhist kingdoms displaced the native Austronesian or tribal population.

Bloody wars were associated with many of the changes in rule, at least from the history that we think we know after the Mahavamsa was translated during British rule and its contents known widely. There were wars with foreign powers and domestic wars among regional rulers in the island. In 2009, a 30-year internal war ended.

From the history that we now think we know, most of the wars in Sri Lanka’s past did not last that long. The 30-year war was also different from civil wars fought in the past.

Wars that kings fought

In the feudal era, wars were rarely if ever fought on linguistic nationalist lines, although some were fought on religious lines after mischief-making by priests. Many of the wars were fought between the ruling aristocrats, and ordinary people were not very involved in the politics of feudal wars and in fact resented them.

Many wars were also fought between professional soldiers or mercenaries. Indian mercenaries (Damila kuli hewayo) figured in many of the civil wars between our kings even according to the Mahavamsa. In fact, for some people – the so-called martial races in India – war was their livelihood, and even the British recruited them. In the same way European professional soldiers fought for and even commanded the forces of Sinhala kings against their brethren from Europe. A mercenary or professional soldier who pledges allegiance to one king will fight for him until his contract ends.

The grounds for enthno-religious nationalist wars proliferated mainly in Europe with the breakdown of feudal rule and the emergence of the European (unitary) nation-state.

Why War?

Before freehold land emerged in Britain, and serfs and peasants started to own land, all over the world including in Sri Lanka kings owned the land. Even regional leaders or ministers did not actually own the land, but had control over them at the pleasure of the king. Countries or empires were identified by the sovereign. In Sri Lanka, property rights for ordinary citizens started to emerge during Dutch rule.

In Europe and elsewhere, property rights changed hands by war. Very rarely did kings sell land (Napoleon sold Louisiana to the US). Land was also be given away by marriage. Although wars were fought to settle disputes, kings generally fought wars to acquire land, along with the people to work it and increase their tax take and the realm. There was no nationalist hate.

After a new territory was annexed, the country’s border expanded. The country was identified with the sovereign. Once the war was lost, local lords who accepted the new king would go on as before. Peasants and serfs could not care less.

The war was a game played by certain accepted rules. The least costly option to decide the outcome of the game was by single combat (dvanda sataner) saving many lives and resources.

The rulers did not hate the people for being different. The rulers were an aristocratic minority. They were clearly separate from the ordinary people. They usually spoke a different language. Their religion could also be different. The term ‘pagan’ in Europe denotes that those living outside the city walls followed a different religion. In Europe, for a long time, the ruling classes spoke French. They married among each other. Indeed, it was the practice to marry into the ruling families of any new countries that were conquered.

But trouble brewed if the new king or their heirs were unjust or taxed too much (to fight new wars usually).

The principle of a just king was very important throughout the world, especially including in South Asia and Sri Lanka. That is why King Dutugamunu had to fight very hard from outside to dislodge King Elara, a just king with whom the people and local leaders were happy. After his victory, Dutugamunu was careful to have proper funeral rites and build a monument for him so that the people would not be upset.

Empire Building

Successful, long-running empires ruled over a diverse people with many languages and religions as each new country was annexed and the religious pantheon grew; the process of religious assimilation could work both ways.

Religious syncretism was widespread.

A case in point relevant to Sri Lanka are the empires and kingdoms built by the Greeks. Among the results of Alexander’s conquest of South Asia were Bactrian (present day Afghanistan, Pakistan and India) and Indo-Greek kingdoms. Under the likes of King Demetrius, it is now believed that Greek artists first gave human form (anthropomorphic representation) to Lord Buddha, ending the earlier aniconic tradition of symbolic representation.

The statues started depicting Lord Buddha in a himation (a toga like garment) and curly hair in the likeness of Apollo Belvedere. Some of the earliest surviving examples include the Bimaran casket and the standing Buddha from Ghandara (present day Pakistan), although there is some uncertainty in dating them. The process continued under Kushan rulers.

Although priests made mischief from time to time, even during the multi-god period, the problem became more acute with monotheism. Monotheism gained popularity with Zoroastrian, Jewish, Christian and later Muslim religions.

However, at first, kings tended to be more accommodative, as seen in the early Persian Sassanid empires and even Muslim empires, for example.

Monotheism set a stronger ideological ground to persecute ‘non-believers’, and discourage syncretism, although for kings and emperors there was no real incentive to eliminate people, as they could be valuable for various skills.

Usually kings tended to be suspicious of people who followed religions of their rivals for political reasons thinking they may collaborate with the enemy.

Nationalist Hate

The modern nationalism that we are familiar with in Sri Lanka started with the breakdown of feudal rule in Europe and the popular vote. With liberals breaking down monarchic rule, parliaments were springing up. With printing and education becoming more widespread, ordinary people – not just the aristocracy – started to engage politically and spread ideas. In Europe, the Austro-Hungarian Empire where all kinds of people – Germans, Hungarians, Romanian, Serbs and Czechs to name a few – had lived started to break down.

In Europe, as elsewhere, borders changed constantly. A country that was identified as such only a few years earlier was radically changed later. In a lifetime people switched the language that they spoke. With no visas or citizenship, it was common for people to migrate and spill across borders.

When modern nation-states emerged, those involved in political machinery tried to create countries along linguistic lines. There was no nationalist hate. Early liberals in Eastern and Central Europe had tried to create nations along existing linguistic lines instead of going back to older borders.

"Thus the right of self-determination and of government by the people, as expounded by western liberalism, becomes transformed into the principle of nationality as soon as liberalism becomes a political factor in Central Europe," notes Ludwig von Mises, a political philosopher and economist who observed closely how Nazism evolved in Europe.

"The political terminology begins to differentiate between state and nation (people). The people (the nation) are all men speaking the same idiom; nationality means community of language."

Redrawing Borders

The desire to confine a nation of people speaking one language itself did not involve nationalist hate. The liberal idea for a linguistic nation-state was a ‘natural state’ that a prince or king could not change by war, because they could not expand the natural state whose borders were already defined by language. They hoped therefore that peace would prevail and war could no longer be justified, say Mises.

The key problem with the idea was that neither populations nor languages were static across time.

In areas inhabited by Poles and Magyars (Hungary) the intention was different, notes Mises. They wanted to create a Poland and Hungary within a boundary of a bygone past, not the borders of an area where a group of people spoke one language at the time of independence.

"They did not look forward to a new liberal Europe, but backward to the glorious past of their victorious kings and conquerors, as depicted by their historians and writers," says Mises.

"The principle of nationality was derived from the liberal principle of self-determination.

But the Poles, the Czechs and the Magyars substituted for this democratic principle an aggressive nationalism aiming at the domination of people speaking other languages. Very soon, German and Italian nationalists and many other linguistic groups adopted the same attitude."

Hitler’s Third Reich was an attempt to re-create the glorious historical past of the First Reich – The Holy Roman Empire.

Political Chauvinism

With political power coming through popular vote, non-feudal leaders now had the incentive to stoke nationalism to get votes, unlike feudal rulers who had no incentive to do so. Chauvinist ideas prevalent among some people could now be given political effect through parliaments, in effect, nationalism. This allowed legalized discrimination of minorities though such rule were against the basic principles of a ‘law’.

"He who lives as a member of a linguistic minority, within a community where another linguistic group forms the majority, is deprived of the means of influencing the country’s politics," notes Mises. "In this struggle of ideas, linguistic minorities cannot take part. They are voiceless spectators of the political debates out of which the deciding vote emerges.

"For them, democracy does not mean self-determination; other people control them. They are second class citizens.

"This is the reason why men in a democratic world consider it a disadvantage to be members of a linguistic minority. It explains, at the same time, why there were no linguistic conflicts in earlier ages, where there was no democracy."

‘State languages’ could now be decreed by law. In the West the practice of a state religion were ending with religious emancipation and the secular state. But parliaments in the East could now recreate state religions or designated other religious to second-class status. That Christianity was imported to Europe from elsewhere did not matter.

State interventions in business and other spheres gave post-feudal rulers tools that no feudal ruler ever had to intervene and oppress minorities. State education was also a tool of nationalism.

A centralized syllabus could be used to brainwash any child. History could be revised and taught along with language. There was no opportunity to learn anything else.

Says Mises: "Western Europe developed the system of obligatory public education. It came to Eastern Europe as an achievement of western civilization. But in the linguistically mixed territories, it turned into a dreadful weapon in the hands of governments determined to change the linguistic allegiance of their subjects."

Triangular Nationalism

The linguistic minority in another country across the border now became the irredenta or the unredeemed people who the main linguistic majority in the next country said they should help.

Rogers Brubaker, a US academic, calls this a triad or ‘triangular’ nationalism.

In one country the ethnic majority claims the country as their own homeland, putting people speaking other languages into second class. The minority insists that their area is also a homeland and tries to prove it by showing how long their ancestors have lived there or spoken the language.

Across the border in the next country, the large majority who claim it as their homeland tries to help their ethnic, linguistic or ethno-religious brethren.

Brubaker finds the following characteristics in this triangular nationalism.

There is a ‘core nation’ or nationality defined in ethno cultural terms that is different from the current resident population.

The core nation legitimately ‘owns’ the polity. That the core nation is not flourishing or is in decline, and specific action is needed to promote language or other aspects.

During socialist rule, nationalist ideas took a back seat, but after the breakup of the Soviet Union, nationalists raised their head again in Europe.

In Hungary, even now, neo-Nazis and nationalism is a problem. Under rural nationalist ideology – like in Sri Lanka – laws make it difficult for foreigners to own land and, as a result, is finding it difficult to fully integrate with the EU.

Nazism

In both the US and South America, such ideas were not prevalent as in Eastern and Western Europe, Mises points out. In Germany, Marxists and nationalists defeated liberal ideas. In the linguistic nation-states of Italy, Spain and Germany, Fascism and Nazism came and the Germans tried to create a larger Germany.

The nationalists were fundamentally different from earlier empire builders. They did not want land with the people to work it, but living space (lebensraum) for the people who spoke the language (volksgenossen). They try to eliminate existing residents. Or they use colonization schemes to expand the living space of the majority to other areas.

The Nazis started to eliminate the Jews, despite the fact that they were German and spoke German. Nazism was a Christian (Catholic and Lutheran) linked phenomenon, although the Vatican opposed Nazism later when mass killings started.

Roman Catholicism, said Mussolini in his Doctrine of Fascism, was "the special, positive religion of Italians."

"The Fascist state sees in religion one of the deepest spiritual manifestations and for this reason it not only respects religion but defends and protects it."

A liberal state on the other hand is secular and leaves religion to the people. Mussolini followed up with his own version of Nuremburg laws to discriminate against Jews; Jesus, however, was a Jew.

Aryanism

Humans were degenerating to tribalism, but on a much grander scale than in earlier ages, as nationalism, fascist totalitarianism and Nazism used the tools of the European post-feudal state – the standing army and legislating powers of intervention – to achieve its ends.

Other concepts such as Aryanism and racial superiority came into the mix, and pure Germans also wanted to eliminate the Slavs, who were second class.

Among those who propagated the idea of a superior or fourth race was Helena Blavatsky (who had German origins), one time Secretary of the Theophysical Society.

Other secret or occult societies were also active in Germany including Thule Society, whose membership had some connections to what became the Nazi Party. Nazis seized ideas such as the Aryan language group, turning it into a race issue and using ‘science’ to prove nationalism.

In the US and South America East European-style nationalist ideas were largely absent as more liberal ideas were able to remain on top, like in Western Europe. Only in French-speaking Quebec are there calls for self-determination even now.

Slavery, although bad enough, was not the same as nationalism coming with the popular vote. Slave owners do not desire to eliminate slaves; they were valuable property.

Like in most countries , even Sri Lanka had slaves until the British abolished it through a series of legislative acts and compensation. Under pressure from abolitionists in London, the British Empire had mostly ended slavery through a series of legal and other actions by 1835. In Ceylon, it was in 1840. The abolition of slavery fully all areas was delayed in the US because it was no longer part of the British Empire.

But several decades after Abraham Lincoln abolished slavery in the remaining states through an act of war, nationalism and white superiority also infected the US in the form of Jim Crow laws, which segregated ‘whites’ from those with black and Indian blood. No such problems were found in South America. Jim Crow laws were later repealed but the effects linger.

European nationalist ideas also spread to the British Empire, mingled with anti-imperial efforts as self-determination, setting the stage to recreate the conditions of Eastern and Central Europe.

As Nehru was a left-leaning atheist and Mahatma Ghani was a true nation builder, India escaped. But in countries like Malaysia and Sri Lanka, nationalism took root. In India it is coming up now.

Decadent West

Although societies were degenerating to tribalism and worse under nationalism, the proponents of such ideas thought they were doing the opposite.

The cry of ‘western decadence’ (decline) was taken up. The idea of western decadence was a criticism taken up in Eastern Europeans (Germany for example was not really considered a ‘Western’ country at that time) by fascist-nationalists who thought that liberal ideas such as emancipation of black slaves, religious freedom and liberal attitude towards sex (ending double standards against women) spelled the end of the glorious European civilization. It had nothing to do with Asia.

Although Marxists also thought western liberalism was decadent, fascists held that socialism was also contributing to decadence as did free-masonry and democracy in general.

"The organism of the west has been weakened, debilitated by these ideologies," wrote Oswald Spengler in Decline of the West. "Well, there is in existence only one movement at the present time, which has the courage and possesses the power of a great nation to be fundamentally, openly, ferociously anti-liberal, anti-democratic, anti-Freemason: Fascism."

In Sri Lanka, Fascism is glorified just as it was glorified in Italy in the 1920s. Although real liberalism is largely absent in Sri Lanka, even neo-liberalism which is a shadow of classical liberalism and borders on mercantilism is derided here.

Economic Nationalism

Nationalism and Marxism started to pick up in the second half of the 19th century in Europe, shortly after liberals ended slavery and brought freedom to many people, and gave universal franchise. It also seems to have filtered into Sri Lanka around the same time.

In Sri Lanka, activists like Anagarika Dharmapala preached exclusively to the Sinhalese, unlike Mahatma Ghandi in India, who wanted self-determination for all linguistic and religious groups.

Ethnic and religious nationalism was intrinsically tied up in economic nationalism in terms of self-sufficiency and state intervention in Europe.

In Sri Lanka, activists including Anagarika Dharmapala preached the message of self-sufficiency and against minorities in the same breath, helping spread similar dangerous ideas.

"The broom which is used to sweep roads built with earth and stones from the Sinhala land is imported from abroad," he said Anagarika Dharmapala in one of his writings. "The bullock cart built with material born in the Sinhala land has a number plate made with a steel plate imported from England.”

In the next paragraph, he relates a conversation he had with a Muslim (hambayek) who had said the blood of the Sinhalese was not clean because they drank alcohol and Sinhalese women were not chaste enough.

"Hamba, marakkala kadawalata yaner sthreenter honder wenter ider nather (No good will come to Sinhalese women who go to the shop of a Moor). Para hambayagen kemer kaner Sinhalaya rodiyeki (The Sinhalese who eats from Para Hambaya – a pejorative term referring to foreign or Muslim outsiders – is a very low caste person).”

These ideas were dangerous to building a free peaceful country, and laid the foundation for war and oppression.

Around the same time, Buddhist devotees in Sri Lanka set up a missionary effort, taking the philosophy of Lord Buddha to many lands; especially and among the beneficiaries were people in Britain itself.

Spreading a religion peacefully and spreading linguistic or religious superiority ideas and targeting minorities are completely different. Full religious emancipation came to Britain in the early 19th century, ending centuries of discrimination against Catholics and others. Similar laws were already in place in Sri Lanka under the Dutch, which ended shortly after the British came.

Interlinked

In a capitalist system with free trade and private property, it is difficult to discriminate against minorities. For a nationalist there is little or no difference between a foreigner and a domestic minority. A minority has a ‘foreign’ origin. Of course the majority also probably has a ‘foreign origin’. But that is conveniently forgotten.

This was also the case in Europe.

"In a world in which people have grasped the meaning of a market society, and therefore advocate a consumer’s policy, there is no legal discrimination against Jews,” explains Mises.

"Whoever dislikes the Jews may in such a world avoid patronizing Jewish shopkeepers, doctors and lawyers. On the other hand, in a world of interventionism only a miracle can in the long run hinder legal discrimination against Jews.

"The policy of protecting the less-efficient domestic producer against the more efficient foreign producer, the artisan against the manufacturer, and the small shop against the department and chain stores would be incomplete if it did not protect the ‘Aryan’ against the Jew."

The good news of course is that people are not naturally nationalist.

That is why Sri Lankans buy from Muslim shops, just like Germans bought goods from Jewish shops or married Jewish girls

People have to be forced to not buy from Muslim shops — the BBS ran pickets, just like the brown shirts did in Germany.

Sri Lankan buy Indian goods despite nationalists trying to stop free trade. Capitalist businesses employ foreigners, even illegal immigrants.

The end of feudal rule brought forth several political philosophies. Liberal ideas competed with Marxism and nationalism. Some ideologies such as anarchy have since disappeared.

The happiness of people and whether there is peace or prosperity lies in which idea and philosophy dominates. Socialism lead to economic problems as markets are suppressed. Nationalism leads to conflict and war.

Nationalism and trade controls lead to bad relations between neighboring countries which can also lead to conflict and war.

In Germany liberalism lost to nationalism and was restored only after World War II.

When there is self-determination, whether a country descends to nationalism and division like in former Yugoslavia or where a journalist trips a refugee, or people live in freedom and togetherness is up to the residents and their willingness to believe in equality and liberty.

Feedback and queries: bellwetherECN@gmail.com

This column is based on ‘The Price Signal by Bellwether‘ published in the November 2015 issue of the Echelon Magazine. To read Bellwether columns as soon as they are published, subscribe to Echelon Magazine at this link. The i-tunes app can be downloaded from here.

Economy

Sri Lanka Central Bank stubbornly defends 5% inflation target

Friday October 9, 2026 7:38 pm

ECONOMYNEXT – Sri Lanka Central Bank stubbornly defended the 5% inflation target it recommended and signed with the government for the next three years citing that it was the only “optimal solution” and rubbished claims that the target is high and erodes the purchasing power of the general public.

Economists and monetary policy critics have strongly advocated that the Central Bank lower its official inflation target from 5% to 2%, emphasizing that a lower target is essential to break the country’s historical cycle of currency instability.

Proponents of the 2% target argue that a 5% baseline implicitly embeds a continuous, compounding erosion of domestic purchasing power, increasing price levels by over 15% across a three-year window.

In a country recovering from hyperinflation, critics contend that a targeted 5% annual inflation creates an environment where nominal prices and living costs permanently outpace real wage growth, continually straining lower- and middle-income households.

However, the Central Bank recommended to the government and signed a three-year agreement to maintain the 5% inflation target for the three years through October 2029.

Central Bank Governor Nandalal Weerasinghe explained at a panel discussion with his junior officers that countries choose inflation targets depending on their growth potential and ability to grow.

“So, this is where one can argue, why 2% inflation, is it better? Looking at the purchase power, it looks better, but it’s not better,” he told the gathering in response to a question.

“It is worse, because it will create a country that can grow, much lower below its potential…. It’s not welfare optimization. It will make a lot of people worse off than it will make a lot of people better off.”

A primary structural argument for adopting a 2% inflation target centers on external stability and protecting the Sri Lankan rupee.

When Sri Lanka maintains a 5% inflation target while its key international trading partners such as the United States, Eurozone, and major Asian economies aim for 2%, a structural inflation differential of around 3% is built directly into the economy.

According to economic theory and historical precedent, this persistent inflation gap exerts steady downward pressure on the domestic currency, forcing nominal exchange rate depreciation.

Advocates argue that lowering the target to 2% would align Sri Lanka with global standards, anchor long-term exchange rate expectations, and prevent recurring balance-of-payments vulnerabilities.

Only 5%

However, Weerasinghe said the 5% target has the “right balance” and the Central Bank had conducted extensive research before arriving at the decision.

“I think, we don’t see any other counterfactual to say, it’s not 5%, it’s 4%, or 2%, or 3%, or 6%, or 7%,” he said.

“A lower inflation target can make the solution worse than what we think…. It won’t be better because everyone can be benefited out of higher growth.”

“If you are coming to a solution, where inflation can drag down the growth below potential, that won’t be the optimal solution.”

“We are all convinced and that’s why we have made the recommendation, government also agreed.”

He said the central bank will reassess and come up with the right level that could be lower in the future and that decision will be data-driven and evidence-based.

Analysts have stressed that a 2% inflation target is critical for lowering long-term interest rates and encouraging capital investment.

Under a 5% target, which carries an allowed accountability band of 2 percentage points, permitting inflation to fluctuate between 3% and 7%, lenders and foreign bondholders demand a higher inflation risk premium to compensate for potential price volatility.

This inflates domestic borrowing costs for both private enterprises and the government. By committing to a tighter 2% anchor, the central bank would provide greater policy credibility, reduce nominal interest rates across the yield curve, and foster a far more predictable environment for long-term private sector investment and debt sustainability.

The data showed, the Central Bank missed the inflation targets for most quarters in the three-year period through end September 2026.

The Bank has blamed lower energy prices for disinflation and missing the target below the lower band of 3% and higher energy prices for breaching the target above upper limit of 7%. (Colombo/October 09/2026)

Markets

Sri Lanka stocks close up, ASPI gains 0.41-pct

Friday October 9, 2026 4:06 pm

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed higher on Friday, CSE data showed, with the benchmark All Share Price Index moving up 0.41 percent.

The ASPI was up 82.57 points at 20,316.91, while the more liquid S&P SL20 was up 0.45 percent, or 26.19 points, at 5,788.75.

The ASPI ended the week down 496 points from last Friday, amidst a mixed week of trading.

Positive contributors to the ASPI were Dialog Axiata (up 0.91 percent at 44.50 rupees), Hatton National Bank (up 0.93 percent at 379.00 rupees), Commercial Bank of Ceylon (up 0.38 percent at 200.00 rupees), Richard Pieris and Company (up 4.30 percent at 26.70 rupees), and Laugfs Gas (up 7.35 percent at 40.90 rupees).

SMB Finance (down 9.09 percent at 1.00 rupee), LOLC Holdings (down 1.25 percent at 415.25 rupees), Haycarb (down 1.37 percent at 198.50 rupees), and Industrial Asphalts (Ceylon) (down 16.67 percent at 0.50 rupees) were top negative contributors.

Market turnover was 1.05 billion rupees. Diversified financials led turnover with 233.69 million rupees, followed by capital goods with 200.09 million rupees.

During the session, crossings in Lanka Milk Foods (LMF) in the first half of the trading day drew market interest, Raynal Wickremeratne, Head of Research and Strategy at NDB Securities, said.

“Usually 20,000 is also a psychological limit,” Wickremeratne said. “When it comes back closer to that, people also might feel like it’s worth buying, so that’s why sometimes coming close to that you might have a bit of a move.” (Colombo/Oct09/2026)

Fiscal

Sri Lanka Customs’ September revenue exceeds target by 32-pct

Friday October 9, 2026 2:05 pm

ECONOMYNEXT – Sri Lanka Customs exceeded its September target by 32.1 percent, while the revenue in the first nine months of 2026 jumped around 22 percent compared to the same period last year, official data showed.

Customs’ September revenue target was set at 195.6 billion rupees. However, the revenue-collecting body collected 258.3 billion rupees that month, exceeding the target by nearly a third, according to official data.

It also exceeded the cumulative target for the first nine months by 29.2%, achieving 2,117 billion rupees.

Last year, Customs collected a record 2,551 billion rupees in revenue, exceeding a revised target of 2,241 billion rupees for the year and achieving 64.2% higher revenue than the previous year’s revenue of 1,553 million rupees.

Customs has set a revenue target of 2,207 billion rupees for this year, 13.5% less than last year as it expects a significant decline in car imports. Data showed it achieved 95.9% of this year’s target in the first nine months.

Analysts expect the revenue collecting body to achieve its 2026 full year target by mid-October,

Sri Lanka Customs’ revenue jump is largely due to stronger enforcement, improved valuation practices, and a rebound in import volumes after years of contraction.

Following the 2022 economic crisis, imports fell sharply as the country imposed restrictions to conserve foreign exchange.

However, with the stabilization of reserves, the relaxation of certain import controls, and a steady recovery in consumer demand, customs collections from import duties, excise, and other levies have risen.

Officials note that tighter monitoring of under-invoicing and misdeclaration of goods has also contributed to boosting state revenue.

The combined effect of increased import activity, currency movements, and stricter enforcement has positioned Customs as one of the top revenue sources for the Treasury in 2025, providing a vital cushion as the state works to meet fiscal targets under the IMF-supported program. (Colombo/October 09/2026)

ICT

IESL, Dialog open Sri Lanka entrepreneurs challenge

Friday October 9, 2026 1:35 pm

ECONOMYNEXT – The Institution of Engineers, Sri Lanka (IESL) and Dialog Axiata have launched the IESL National Startup Challenge, for aspiring entrepreneurs to transform innovative ideas into commercially viable, investment-ready startups.

The competition invites Engineering undergraduates, practitioners and participants in an Open Category for Non-Engineers to submit ideas across 12 innovation verticals.

“The IESL National Startup Challenge is designed to turn innovative ideas into viable businesses by connecting aspiring entrepreneurs with industry expertise, mentorship and continuous practical support,” Eng Jasmine Nanayakkara, Chairperson of the Entrepreneurship Forum at the Institution of Engineers, Sri Lanka, said.

“By encouraging our engineers and aspiring founders to create, commercialise and scale solutions, we aim to contribute to new ventures, new opportunities and meaningful job creation for Sri Lanka’s skilled and educated next generation.”

Participants will progress through idea development, pitching, incubation, prototyping, validation, minimum viable product development and business scaling, supported by industry experts, mentors and ecosystem partners.

The programme will culminate in a Top 10 selection, with the first-place winner receiving an award of 1 million rupees.

Each of the Top 10 teams will receive a Dialog Digital Startup Support Package valued at 250,000 rupees, comprising selected Dialog digital products and services.

Dialog is providing technical expertise, mentors and digital resources to help participating teams develop, validate and scale their solutions.

“Dialog is extending its digital capabilities, mentorship and ecosystem support to help promising teams progress from concept to validation and investment readiness,” Dialog Axiata said.

The National Startup Challenge also brings together a network of partners, including The Ceylon Chamber of Commerce as Ecosystem and Mentoring Partner, Helago as Official Mobility Partner, Helakuru as Official Digital News Partner, and Real Life as Official Climate Action Partner.

Applications are now open via www.iesl.lk/announcements, giving aspiring entrepreneurs an opportunity to access the resources and funding they need to succeed. Applications close on 16th November 2026. For more information, contact mgr.pub@iesl.lk / 071 109 4393. (Colombo/Oct9/2026)

Markets

Sri Lanka stocks trend higher, ASPI up 0.86-pct

Friday October 9, 2026 12:01 pm

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange opened higher on Friday, CSE data showed, with the benchmark All Share Price Index moving up 0.86 percent.

The ASPI was up 174.62 points at 20,408.96, while the more liquid S&P SL20 was up 0.86 percent, or 49.77 points, at 5,812.33.

Positive contributors to the ASPI were Commercial Bank (up 0.88 percent at 201.00 rupees), Dialog Axiata (up 1.59 percent at 44.80 rupees), Distilleries Company of Sri Lanka (up 1.76 percent at 52.00 rupees), and Hatton National Bank (up 1.20 percent at 380.00 rupees).

SMB Finance (down 9.09 percent at 1.00 rupee), Haycarb (down 0.75 percent at 199.75 rupees), Malwatte Valley Plantations (down 1.79 percent at 55.00 rupees), and Odel (down 4.04 percent at 9.50 rupees) were top negative contributors.

Market turnover was 343.62 million rupees. Capital goods led turnover with 77.51 million rupees.

E.B. Creasy & Company PLC announced that it has executed a corporate guarantee of 50 million rupees with effect from September 30, 2026, on behalf of its subsidiary, E. B. Creasy Logistics Ltd, guaranteeing banking facilities obtained by the company. The company stated that the delay in making the disclosure was due to a delay in receiving official notification from the bank on the execution of the guarantee. (Colombo/Oct09/2026)

Corruption

Sri Lanka passes controversial Anti-Corruption amendment amid IMF, Opposition warnings

Friday October 9, 2026 11:06 am

ECONOMYNEXT — Sri Lanka’s Parliament on Thursday passed the Anti-Corruption (Amendment) Bill with amendments and without a vote, despite concerns raised by the opposition, civil society, and the International Monetary Fund (IMF).

The legislation amends the Anti-Corruption Act, No. 9 of 2023, a landmark piece of legislation which was adopted to align Sri Lanka’s domestic laws with international standards, particularly the United Nations Convention Against Corruption (UNCAC).

The legislative changes had also drawn caution from the International Monetary Fund.

IMF Mission Chief for Sri Lanka Evan Papageorgiou previously warned that proposed amendments risked weakening key transparency safeguards, particularly around the asset declaration framework and public ownership registers, which form part of governance benchmarks under the country’s economic reform program.

Opposition warns of weakened oversight

The main opposition Samagi Jana Balawegaya (SJB) argued that the amendments create loopholes that shield public officials from scrutiny.

SJB Parliamentarian Mujibur Rahman pointed out that under the new provisions, public access to asset declarations of public officials is limited solely to filing formal complaints, rather than allowing scrutiny by researchers or journalists, backed by penalties of up to a one-year prison sentence and a 100,000-rupee fine.

“Because of this harsh penalty, no one will come forward to look into these matters. Knowing that this amendment could subject them to a 100,000-rupee fine and prison time, everyone will be discouraged from probing further,” Rahman said.

Rahman criticized raising the threshold for state-owned enterprises requiring asset declarations from a 25-percent government shareholding to over 50 percent, which excludes partially state-owned entities.

He raised concerns over the removal of declaration requirements for household cohabitants and the exclusion of bodies such as the National Olympic Committee.

There were several issues with the new legislation, he pointed out, including restricting the manner in which publicised asset declarations can be used by the public, failing to provide a clear definition regarding the redaction or removal of information disclosed in asset declarations, and removing the requirement to declare the assets and liabilities of persons cohabiting in the same household.

“Why are you now bringing these amendments to that Act? The primary objective you initially proposed in bringing amendments to this Act was specifically to shield ministers, MPs, and public servants by concealing their assets and liabilities.”

“You have compromised the very public mandate you received. These amendments turn their back on that mandate. You have discarded the transparency and accountability demanded by that mandate. That is why the assets and liabilities of your ministers and MPs became a subject of debate in recent times.”

Allegations were raised against National People’s Power ministers and MPs when they the law first required them to make asset declarations.

“How was so much wealth acquired? It was precisely because of those allegations that you sought a shield to ensure that the assets and liabilities of ministers, MPs, and public officials would not be openly discussed.”

Following public outcry and opposition from civil society organisations, the government was forced to remove ministers and MPs from that shield and restrict that protection solely to public officials, the legislator said.

A redacted copy of a public official’s assets and liabilities can be obtained under the amended Act; but according to Section 11(2) under the new amendment, it can only be obtained strictly for the purpose of lodging a complaint.

“You cannot obtain copies to conduct investigative journalism or carry out research. And if someone is deemed to have “misused” it, it becomes an offence punishable not merely by a fine of 100,000 rupees, but by imprisonment of up to one year!”

“Defamation lawsuits can already be filed to claim damages. While such laws already exist, why introduce this new provision?”

“Because of this harsh penalty, no one will come forward to look into these matters. People will be intimidated. If someone tries to investigate whether a public official has illicitly acquired wealth, knowing that this amendment could subject them to a 100,000-rupee fine and prison time, everyone will be discouraged from probing further.

The new law does not conform to international benchmarks, Rahman said.

“We can define this amendment as nothing less than an incentive for corruption. That is why this clause has been identified as failing international standards. Why reverse this progress?”

“By reversing this, you are indirectly providing a protective cover for public officials to engage in corruption.

“Amid the perks and privileges granted to public officials, those cannot be traced; investigating them comes to a halt. Is there a hidden scheme beneath this to utilize those perks and privileges granted to public officials to target and hunt down opposition political leaders in this country? Because they can be weaponized. Because no one can investigate them! What they receive remains concealed.”

Dismantling the requirement that a public official must declare not only their own assets, but also the assets of individuals cohabiting in the same household facilitates corruption Rahman said.

“Typically, corrupt individuals register stolen wealth in the names of those closest to them. That is a classic tactic of corruption. It is being done even now, as you well know! When tracing the assets of certain individuals today, they are not registered under their own names, but under the names of third parties. You are removing that clause!”

“This is not what the people who voted for you expected. The people granted you a mandate for transparency, accountability, and the eradication of corruption. Yet, having secured that mandate, instead of strengthening the Act, diluting it and providing cover to the corrupt is deeply regrettable.”

Under the amended Act, officials appointed to state institutions where the government holds a 50 percent shareholding must submit their asset declarations. The threshold was previously 25 percent.

“What is the logic behind excluding entities holding between 25% and 50%? How can you guarantee that corruption will not occur through appointed officials in those entities? A multitude of serious doubts and suspicions have been created by your actions.”

Court rulings

The approval of the amendments to the Act follow a determination by the Supreme Court last month on petitions filed by Transparency International Sri Lanka (TISL).

Speaker Jagath Wickramaratne had announced that the court found Clause 17 unconstitutional without a two-thirds parliamentary majority and a national referendum.

The court also determined that repealing Section 80(1)(e) — which requires declarations from household cohabitants — was inconsistent with equal protection rights under Article 12(1) unless passed by a special majority.

Government defends practical fixes

Defending the bill during the parliamentary debate, Prime Minister Harini Amarasuriya rejected allegations that the government was weakening the anti-graft framework.

She claimed the amendments were introduced to resolve operational and human resource constraints, while introducing provisions to recover stolen public funds, which were missing in the original 2023 law.

“This is, in fact, an attempt to resolve the practical challenges, institutional challenges, and human resource issues encountered in implementing the anti-corruption process for the first time in Sri Lanka’s history, rather than diluting it,” Amarasuriya said. (Colombo/Oct09/2026)