From Debt to Dignity: Why Sri Lanka must declare war on corruption
In April 2022, Sri Lanka made headlines for all the wrong reasons: fuel queues snaked across cities, power cuts darkened homes, and the country officially defaulted on its debt—something once unimaginable. Some blamed COVID-19. Others pointed fingers at international lenders or global oil prices. But beneath these surface shocks lies a deeper truth the IMF laid bare in it’s first-ever Governance Diagnostic for Sri Lanka: corruption—not crisis—broke the nation.
Sri Lanka isn’t alone. Lebanon, Nigeria, Zambia, and Argentina have all walked a similar path—resource-rich, debt-burdened, and paralysed by public mistrust. In each case, corruption didn’t arrive like a tsunami. It crept in like termites, quietly hollowing out institutions, budgets, and hopes.
Corruption: The Hidden Tax on Progress
Each year, over US$1 trillion is lost globally to bribery and embezzlement—enough to fund universal education four times over. In Sri Lanka alone, the Auditor-General flagged Rs.100 billion in irregularities in 2021—more than the entire Samurdhi welfare budget.
What does that mean for the average citizen? It means overpriced medicines. Underfunded schools. Roads to nowhere. And businesses burdened with “facilitation” fees just to navigate bureaucracy. Surveys show honest companies in corrupt environments lose up to 20 per cent of revenue to these hidden costs. When corruption decides who gets contracts, competence takes a back seat—and the nation pays the price.
One global study by Cambridge University found that a 10-point improvement in the Corruption Perceptions Index (CPI) boosts annual growth in “genuine wealth” per person by 0.6 per cent. That’s not just GDP—it’s long-term prosperity measured by education, natural resources, and well-being. In short: cleaner countries grow stronger.
How Corruption Becomes a Debt Trap
Here’s how the cycle works: Corrupt officials greenlight mega-projects not because they’re needed, but because they’re lucrative—for themselves. These white elephants are often funded by opaque, high-interest commercial loans like International Sovereign Bonds (ISBs), which bypass the safeguards of multilateral lenders such as the World Bank. By 2021, 36 per cent of Sri Lanka’s external debt was in ISBs, which swallowed 70 per cent of interest payments. We borrowed more to cover old loans, until there was nothing left but default.
Mattala Airport, built at a cost of US$200 million, now sees fewer passengers than a rural bus station. Flood-control projects, meanwhile, languish for lack of funds. This isn’t just mismanagement—it’s theft with receipts.
Transparency International’s 2024 study found that 97 countries at risk of debt distress had one thing in common: corruption disguised through shady loans. It’s not that the money didn’t exist, it just didn’t reach the people.
The Cost We Don’t See
Corruption is not just about kickbacks or padded invoices. It erodes the very soul of a nation. It widens inequality—elite school spots go to the highest bribes, not the brightest child. It destroys trust—citizens stop believing in the ballot or the law. And it saps the will to reform—why fight a system rigged to protect the powerful?
In 2022, Sri Lankans took to the streets in the “Aragalaya” protest movement, driven not by ideology but by exhaustion. Their rallying cry wasn’t “left” or “right”—it was simple: “Stop the corruption.” The real cost of graft is measured in nine-hour power cuts, empty pharmacy shelves, and shattered public trust.
The Lee Kuan Yew Illusion
When former President Gotabaya Rajapaksa took office in 2019, loyalists touted him as “Sri Lanka’s Lee Kuan Yew”—the man who would bring Singapore-style discipline to governance. But charisma is no substitute for systems. Singapore’s success wasn’t built on slogans; it was forged through fearless institutions.
In Singapore, ministers and their relatives can be arrested—and are. Public servants are paid well and promoted on merit. Asset declarations are published, lifestyle audits are real, and corruption trials conclude in months, not decades.
In Sri Lanka, by contrast, bribery investigations stretch over years. Conviction rates hover below 4 per cent. Asset registers exist, but no one sees them. And public contracts often come with secret riders and whispered deals. As the IMF bluntly observed, the problem is not the lack of laws—it’s the absence of political will to enforce them.
So, What Does Work?
Countries like Denmark, Singapore, and Estonia offer blueprints. Denmark leads global rankings for clean governance not by chance, but by design: Independent courts that prosecute without fear or favour.Transparent procurement, with all public contracts over $7,000 listed online.Coalition politics that require compromise, preventing any one group from capturing the state.Professional civil services where appointments are based on merit, not loyalty.High social trust, built over generations by showing that public money serves the public good.
This integrity dividend pays off: Denmark has universal healthcare, free universities, and national debt below 35 per cent of GDP. In other words, clean governance is the cheapest infrastructure a nation can build.
What Can Sri Lanka Do? The solutions aren’t abstract or impossible, they’re practical, proven, and already working elsewhere. First, Sri Lanka urgently needs a strong Public Procurement Act to close loopholes and bring all major government spending under transparent rules. Customs and tax processes must be digitised to reduce the human discretion that enables bribery. Citizens should be able to track how every rupee is spent through real-time budget dashboards. Political campaign financing must be audited, with clear donation limits to curb undue influence. State-Owned Enterprises (SOEs) should publish their performance goals and progress quarterly. Specialised anti-corruption courts, like the fast-track model used in the Philippines, can ensure swift justice. Whistle-blowers deserve rewards and protection, as seen in India’s tax system. Integrity agreements to uphold ethical standards in public tenders—can prevent collusion in major contracts. Gender-responsive budgeting and more women in financial leadership have shown to reduce misuse of funds. Finally, investing in civic tech tools—like apps that let citizens report corruption anonymously—can unleash the power of public oversight. Even adopting half of these reforms could improve Sri Lanka’s corruption ranking significantly and lower borrowing costs—freeing up critical funds for schools, hospitals, and climate resilience.
A Matter of Mindset
Sri Lanka’s hope doesn’t lie in a messiah figure, but in a mind shift. Corruption survives because too many believe “everyone does it” or that “nothing will change.” But “Aragalaya” showed otherwise. When citizens speak with one voice, systems begin to move.
As Singapore’s founding leader once said: “If you want to fight corruption, be ready to send your friends and family to jail.” Sri Lanka’s leaders still shy from that Rubicon.
But we can no longer afford the cost of silence. Each day we delay reform, we pay in wasted talent, lost investment, and broken dreams. Corruption steals twice: first the Treasury, then the future.
The Road Ahead
Clean governance is not the icing on the cake of development—it is the oven that bakes it. Without it, debt explodes, infrastructure rusts, and citizens lose hope. With it, every rupee borrowed builds a bridge—not to a Swiss bank, but to a better tomorrow.
So, to those still searching for “our Lee Kuan Yew,” know this: his true legacy isn’t a statue. It’s a system. And it’s ours to build.
(Pulasthi Weerasinghe brings 24 years of government and corporate leadership to the page, spanning strategic HR, governance reform, and international trade in the fisheries industry. He is a lecturer, trainer, and consultant who holds an MBA from the University of Colombo, has credentials from CIPD-UK and CMI-UK, and is currently pursuing a DBA focused on Sri Lanka’s fisheries-industry competitiveness. He can be reached at: pulasthi99@gmail.com)
Hitad.lk has you covered with quality used or brand new cars for sale that are budget friendly yet reliable! Now is the time to sell your old ride for something more attractive to today's modern automotive market demands. Browse through our selection of affordable options now on Hitad.lk before deciding on what will work best for you!