Columns

•  President rushes to Kandy to assure Mahanayakes SL Tourism stance is not Govt. policy;
  says “for other things, there are other places”
•  Controversy rages over Bribery Commissioner’s links with NPP as Nandana stands by his remarks;
  Govt. says allegations connected to crackdown on corruption
• IMF hails economic progress, but US State Dept.’s report on investment prospects paints a cautious picture

President Dissanayake being led to the Sri Lanka segment of the Expo held in Osaka

By our Political Desk

The saying ‘uneasy lies the head that wears the crown’ is not without merit, as President Anura Kumara Dissanayake is learning fast. After his return on Thursday from a weeklong overseas visit that took him to the United Nations General Assembly (UNGA) in New York and then Japan, the President had to rush to Kandy on Friday to appease the Maha Nayakas of the Asgiriya and Malwatte chapters to clarify the government position with regard to a Sri Lanka Tourism Promotion Bureau statement on the promotion of LGBTQI tourism in the country and planned amendments to the Penal Code to end corporal punishment.

Hours before, a letter signed jointly by the four Mahanayake Theras (Chief Incumbents) of the three Nikayas (Sects) had been sent to the President. They expressed deep concern over Sri Lanka Tourism’s support for the promotion of homosexual tourism, stating this could lead to a serious moral degradation and breakdown of social norms. The Mahanayakes also expressed concern over the proposed amendment to the Penal Code by the government to make corporal punishment an offence, saying that the right of parents and teachers to discipline children would become a punishable criminal offence if the law is enacted.

The letter was signed by the Most Venerable Thibbatuwawe Sri Siddhartha Sumangalabidhana Mahanayake Thera of the Malwatta chapter of Siam Nikaya, the Most Venerable Warakagoda Dhammasiddhi Sri Pagghananda Gnanarathanabidhana Mahanayake Thera of the Asgiriya Chapter of the Siam Nikaya, the Most Venerable Karagoda Uyangoda Maithree Moorthi Mahanayaka Thera of the Amarapura Maha Nikaya and the Most Venerable Makulewe Wimala Mahanayake Thera of the Sri Lanka Ramanna Maha Nikaya.

President Dissanayake being welcomed by Japanese Emperor Naruhito at the Imperial Palace

The uproar stemmed from a letter sent by Sri Lanka Tourism Chairman Buddhika Hewawasam endorsing a project initiated by the EQUAL GROUND organisation to promote and develop LGBTQI tourism in the country. The letter became public as President Dissanayake and Foreign Minister Vijitha Herath, who is also the Minister of Tourism, were taking wing to the USA. At that point there was no indication that the matter would spiral into a politically sensitive matter, with the Mahanayakes of the three main sects and Colombo’s Archbishop Malcolm Cardinal Ranjith strongly criticising the move by SL Tourism.

A statement from the President’s Office said on Friday that he has called on the Malwatte Chapter Mahanayake, the Most Venerable Thibbatuwe Sri Sumanagala Thera, and the Asgiriya Chapter Mahanayake, the Most Venerable Warakagoda Sri Gnanarathna Thera, for a ‘brief discussion and to receive blessings’, but the main objective behind the meeting was to reassure the Mahanayakes that he had taken cognisance of the letter sent to him by the prelates and that the position taken by Sri Lanka Tourism was not government policy.

Soon after meeting the two Mahanayake Theras, the President addressed a gathering of senior Buddhist clergy at the historic Magul Maduwa (Audience Hall) in Kandy and presented the Scroll of Appointment (Sannas Pathra) to the Most Venerable Naranpanawe Ananda Nayake Thera, the newly appointed Anunayake (deputy chief monk) of the Asgiri Chapter of the Siyam Maha Nikaya. Here, he made it clear that the government’s tourism promotion would focus on the country’s rich cultural heritage and its natural beauty, saying that “for other things, there are other places.”

“Regarding the developments surrounding the tourism sector, we are aware of the frame within which we will develop the sector. We have an ancient heritage we can showcase from Polonnaruwa to Aukana. We have natural beauty with varied ecosystems, wildlife and beaches. We have many things which are exclusive to our country, including the hospitality of our people. There are other places for other things,” the President said.

Following the attempts at damage control with the senior members of the Buddhist clergy, the President is slated to meet Cardinal Malcolm Ranjith over the same matter. At a church service this week, the Cardinal strongly criticised what he claimed were attempts at normalising homosexuality as a lifestyle. These developments unfolded while both the President and the Tourism Minister were away. Upon his arrival in Colombo, one of the first to call Foreign Minister Vijitha Herath, who accompanied the President on his overseas visit, was a representative of the Cardinal seeking clarification on the SL Tourism letter. That Mr Herath, who is also the minister in charge of the subject of tourism, was unaware that such a letter was sent did little to help the government’s cause.

A senior government source said that neither the minister nor ministry officials were aware such a letter had been sent in response to the letter by the EQUAL GROUND organisation to promote and develop LGBTQI tourism in the country. They became aware of the contents of the letter only once it was published in the media.

In the letter, Sri Lanka Tourism welcomed ‘EQUAL GROUND’s willingness to present its programme to President Anura Kumara Dissanayake and Tourism Minister Vijitha Herath. This begs the question if pledges of such meetings were made without first keeping the President’s Office or the Ministry informed.

The signatory to the letter has admitted he overstepped his authority in sending a reply bypassing the ministry, but he will remain in the position of SL Tourism chairman while seniors in government are left to handle the fallout.

This also brings up the issue of how prudent it is for one minister holding multiple portfolios with one secretary to oversee three different ministries and, in this case, three important subjects—Foreign Affairs, Foreign Employment and Tourism. As Foreign Minister Herath has to undertake regular overseas tours and meet with diplomats and foreign delegates, it’s understandable he may not have the time to oversee other ministries, and hence heads of institutions under him would bypass the minister/ministries, which could lead to uncomfortable situations like the current one.

Allegations over politicisation of state institutions

While this may seem like a storm in a teacup, in a sense, the government is facing growing criticism over the politicisation of state institutions. The allegation that the Director General of the Commission to Investigate Allegations of Bribery or Corruption (CIABOC), Ranga Dissanayake, was affiliated to the Janatha Vimukthi Peramuna (JVP) at one time is one that is gaining traction.

The first shot in this regard was fired by the onetime leader of the JVP and its candidate in the 1999 presidential election, Nandana Gunatilleke, who told a television talk show that Mr Dissanayake and Deputy Minister Sunil Watagala were once members of the JVP legal committee.

Both men have denied any such affiliations and put the ball back into Mr Gunatilleke’s court, asking him to prove his claims. Mr Gunatilleke has said in response that he stands by his claims, and hence the controversy is likely to drag on for some time.

There is little doubt that the speed and zest with which the CIABOC under Director General Dissanayake is pressing ahead with the arrest of those in previous administrations over allegations of bribery and corruption and his very public warnings that more arrests are on the way have gained him many enemies.

High-profile investigations into acts of corruption surrounding those connected to previous governments are continuing. One such case was that of Neville Wanniarachchi, the Chief Security Officer of former President Mahinda Rajapaksa. Mr Wanniarachchi was arrested this week on charges of failing to disclose how he acquired assets valued at more than Rs. 28 million. He was remanded until October 17 after being produced in the Colombo Magistrate’s Court.

The crackdown on graft is commendable, but the perception that the law is being applied selectively will not help win public confidence in the systems, particularly when investigations involving those in government are slow.

There are allegations of bribery and corruption levelled at some in government, including Energy Minister Kumara Jayakody. The CIABOC DG, who was asked about the matter at a press briefing this week, said the decision to prosecute or not under the Bribery Act rests with the three-member Commission, not the Director General.

However, he was concerned about how information on the investigation against the minister was leaked to the media before things were finalised. “It is unlawful to share information with the media in this manner. That is also a matter now to be investigated. It will trigger a problem if journalists are asked to divulge how they got information.”

Later the DG issued a statement warning against attempts to undermine the Commission and thereby create mistrust among the public.

The statement said such actions damage the reputation of the Commission, divert public attention away from ongoing major investigations, and create a distorted perception regarding the lawful and independent operations of the Commission and warned that the Commission would not hesitate to take legal action under the Anti-Corruption Act and other relevant laws against individuals or organisations that disseminate false propaganda or attempt to insult or discredit the Commission and its operations.

The reference to ‘other relevant laws ‘is worrying given that three problematic laws in the statute books, namely the Prevention of Terrorism Act (PTA), the Online Safety Act and the International Covenant on Civil and Political Rights (ICCPR) Act, have been used by this government, like its predecessors, to stifle freedom of expression. People have been detained over frivolous charges such as social media posts. A record number of government ministers have lodged complaints with the CID as well, also over social media posts or through public comments. With the CIABOC also resorting to using such laws when questions are raised over individuals attached to it or its work, particularly by the media, it would be setting a dangerous precedent.

While those in government have not publicly commented on the growing public discourse over DG Dissanayake’s appointment, a senior government source, who wished to remain anonymous, pointed to Nandana Gunathilaka’s links to the UNP and claimed that he and Wimal Weerawansa, another high-profile former JVP member, were being used by the opposition to attack the JVP. He claimed the fact that both Mr Gunatillake and Mr Weerawansa had started attacking the CIABOC and attempting to link it to the JVP shows just how successful probes by the Commission and other law enforcement agencies had been in their investigations in recent times. “If you look at it, all this came to pass when some 40 opposition political parties came together recently,” he said, referring to the arrest in August of former President Ranil Wickremesinghe.

The source claimed the arrest had panicked those in the opposition, as it showed investigators were going after those previously deemed untouchable by law. “So now they are sending out Nandana and Wimal as their Kasakarayo (Whip Crackers)” – persons who go ahead of the elephant processions announcing what is coming, he claimed.

The JVP will soon answer allegations against the party, he said, noting that Mr Gunatillake had not been with the JVP for the past 15 years. “He knows nothing of the party structure now and how it has changed.”

The source also revealed that Mr Weerawansa was facing criminal probes into several complaints made against him during his time as a former government minister and claimed this might be why he is now attacking the CIABOC and other law enforcement agencies. “I won’t be surprised if the opposition goes after the Attorney General next because they know indictments against high-profile opposition figures charged with corruption are coming. The attacks will be aimed at intimidating the AG’s Department to refrain from filing these indictments, the source said.

The government, by its actions, calls into question how serious it is about depoliticising state institutions.

The appointment of two retired senior police officers who were part of the NPP election campaign, namely Ravi Seneviratne, who was appointed Secretary to the Ministry of Public Security under the NPP government, and Shani Abeysekera, now CID Director, makes it evident that party supporters are being strategically placed in certain institutions.

Similarly, there have been rumblings over the appointment of Seevali Arukgoda as the new Director General of Sri Lanka Customs, while the naming of a new Auditor General too has been delayed for six months after attempts to bring in a person from outside the Audit Service were thwarted when the Constitutional Council rejected the President’s nominee.

Government receives international praise for economic management

As President Dissanayake, in his capacity as Minister of Finance, prepares to present his government’s second budget to Parliament on November 7, he would no doubt have been heartened by several positive developments on the economic front at the start of this month.

On Thursday, his government received praise from the International Monetary Fund (IMF) over the progress the country has achieved in its economic reform programme. During a media briefing, Julie Kozack, the organisation’s Director of Communications, said Sri Lanka’s reform programme has continued to achieve impressive progress. “Inflation remains low, revenue collection from the government side is improving, and international reserves continue to be accumulated. There has been a post-crisis rebound in growth to 5 per cent in 2024, which is a remarkable achievement. The revenue-to-GDP ratio in the budget improved to 13.5 per cent of GDP from 8.2 per cent in 2022, which is also a significant increase, although there is still work to be done. The debt restructuring process is nearly complete. Programme performance overall is generally very strong, and the government remains committed to the programme’s objectives,” she told journalists.

The IMF’s Executive Board completed the fourth review under the agency’s four-year Extended Fund Facility (EFF) for Sri Lanka on July 1, paving the way for the release of a further USD 350 million for the country. This brought total financial support from the IMF to USD 1.74 billion in a programme which will eventually pump in USD 3 billion to support Sri Lanka’s economic policies and reforms.

Ms Kozack also noted that an IMF team is currently on the ground in Sri Lanka to conduct the Fifth Review of the EFF. Given that the team is now currently in discussions with Sri Lankan authorities, she declined to elaborate further, pointing out that the mission will release its own communication at the end of its visit.

That “remarkable” post-crisis rebound the IMF referred to also saw global credit rating agency Fitch Ratings affirming Sri Lanka’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at ‘CCC+’ this week. In doing so, however, the agency did state that Sri Lanka’s ‘CCC+’ sovereign rating “remains constrained by elevated general government indebtedness and a high interest-revenue ratio despite completion of the sovereign’s debt restructuring in 2024″. Nevertheless, sustained adherence to a path of reforms is facilitating a solid economic recovery, low inflation, a substantial fiscal adjustment, and improvements in the external finance position, it added.

Substantial progress has been made under the 48-month IMF programme, the agency noted. “Momentum includes passage of the 2025 budget in March in line with programme targets and restoration of cost-recovery pricing for electricity. Additional measures include greater tax compliance and revenue administration and reforms to the Ceylon Electricity Board and state-owned enterprises. The investment climate, particularly FDI, is likely to remain a priority—to bolster medium-term growth, albeit with incremental progress.”

President’s Japan visit

President Dissanayake is also fresh from an official visit to Japan, where he was received with the usual courtesies. The President held talks with Japanese Prime Minister Shigeru Ishiba, though unfortunately, the Japanese PM is on his way out, and a new PM is expected to be appointed very soon.

A joint statement issued at the conclusion of the visit said Prime Minister Ishiba “commended the trajectory of recovery of the Sri Lankan economy through the steady implementation of the IMF programme and debt restructuring, and reiterated Japan’s continued support for Sri Lanka’s reform efforts.”

President Dissanayake, meanwhile, expressed appreciation for Japan’s leadership as one of the co-chairs of the Official Creditor Committee (OCC), enabling early signing of Sri Lanka’s debt restructuring, including Japan being the first OCC member to conclude a bilateral agreement on debt restructuring between a member country of the OCC and Sri Lanka in March this year. “Both sides recognised that the steady implementation of various reforms under the IMF programme and the early completion of the debt restructuring process will further restore investors’ confidence in the Sri Lankan economy. Both sides affirmed the importance of the provision of foreign loans that takes into account debt sustainability and transparency,” the statement added.

President Dissanayake expressed appreciation for Japan’s continued support, including the resumption of 11 previously signed yen loan projects in 2024, ahead of other creditor countries. He added that both sides welcomed the recommencement of the bidding of the Bandaranaike International Airport Development Project (Phase 2), which will contribute to strengthening connectivity and promoting tourism in Sri Lanka, and confirmed commitment to expediting the related process for early completion. “Both sides also confirmed the importance of steadily implementing already existing yen loan projects, including the development and improvement of transmission lines and the digitalisation of terrestrial television broadcasting.”

Meanwhile, President Dissanayake also made a courtesy call on Emperor Naruhito at the Imperial Palace.

Prior to leaving for Japan, the President concluded his visit to the 80th Session of the UNGA in New York, where he addressed the UN General Assembly.

He also held several meetings on the sidelines of the Assembly where he highlighted Sri Lanka’s progress, including steps taken to strengthen democracy, implement anti-corruption measures, uphold the rule of law, and overall economic recovery. He also emphasised the country’s commitment to enhancing foreign investment, deepening partnerships with the international community, and advancing cooperation for mutual development and sustainable growth.

While in New York, the President attended a meeting with the Sri Lankan community living in the United States. The meeting was held at the Centre for the Arts, College of Staten Island, in New York and was organised by Sri Lanka’s Permanent Mission to the United Nations in New York. Sri Lanka’s Permanent Representative to the UN, former Chief Justice Jayantha Jayasuriya PC, was also in attendance at the event.

In his speech, the President said his sole expectations are to fulfil the aspirations of the people of the country, and in doing so, he is not prepared to bow down to anyone’s influence.

He said that within a year, the government has marked a decisive turnaround in securing economic stability, upholding the rule of law, establishing an efficient public service, eradicating fraud and corruption, curbing drug trafficking and organised crime and fostering a healthy political culture.

“We are moving forward with stability and reform. We have been able to meet many of the expectations of the people’s mandate, though progress is not yet sufficient and more time is needed,” the President said before replying to questions raised by members of the audience.

He also held discussions with the UN Secretary-General António Guterres. The Secretary General warmly recalled his visit to Sri Lanka as a parliamentarian. Mr Guterres also expressed his solidarity with developing countries and asserted his continued support to further their interests. The President also met United Nations Human Rights High Commissioner Volker Türk to discuss ongoing engagement relating to human rights and reconciliation.

During the visit, Foreign Minister Herath addressed several fora, including the High-Level Meeting of the Global Development Initiative (GDI), the 49th Annual Meeting of the Ministers of Foreign Affairs of the G77 and China and the CICA Council of the Ministers of Foreign Affairs.

US State Department report says hurdles remain for foreign investors

Not all the news was completely positive, however. A US Department of State report issued earlier in the week warned that regulatory unpredictability, bureaucratic hurdles, and selective transparency continue to limit broader participation by US firms in Sri Lanka despite their interest in sectors such as ICT, energy, aviation, and defence.

The US Department of State’s 2025 Investment Climate Statements cover more than 170 countries and serve as a guide for US companies on investment opportunities across the world.

In its entry on Sri Lanka, the report also noted that the government’s institutional capacity to encourage an open investment environment remains limited despite positive rhetoric. “Overall, investors report that doing business remains difficult, frequently citing concerns about project reversals, regulatory shifts, slow decision-making, and inadequate support for established businesses. The IMF and local business chambers stress the need for comprehensive structural reforms, including trade facilitation, digitalisation, and stronger governance mechanisms.”

Sri Lanka’s implementation of foreign investment policies is inconsistent, it further observed. While the Board of Investment (BOI) is the principal investment promotion agency, it struggles to function as a “one-stop shop” due to fragmented authority across multiple government departments, creating lengthy approval processes that frustrate potential investors. The report added that investors report challenges in having a consistent and open dialogue with the BOI.

Other key impediments identified in the report include unnecessary regulations, legal uncertainty, and poor bureaucratic responsiveness. The stalled privatisation of deficit-ridden state-owned enterprises, notably the Ceylon Electricity Board, hinders the development of cost-effective energy supplies crucial for industrial operations, the report claimed. Foreign investors consistently report high transaction costs, unpredictable policies, and opaque procurement procedures, it added.

“The NPP government also ceased the planned privatisation of many SOEs, choosing to implement turnaround reforms instead. Many potential investors remain reluctant to invest given these ongoing mixed messages. Some senior government officials regularly castigate private sector-led economic growth and publicly promote state-owned collectivism as the country’s preferred investment model.”

On the corruption front, the report acknowledged that the President has publicly committed to eradicating corruption and enhancing governmental transparency. While high-level political bribery solicitation appears to have diminished under the new administration, institutional corruption persists, particularly within sectors protected by entrenched vested interests, it said. Provisions addressing conflicts of interest remain vague, and enforcement mechanisms are ineffective, the report further added.

Opposition parties mull joint public rally

While the government is moving forward with its pledge to bring all those guilty of corruption under former governments to justice, the opposition is also trying to build on the momentum generated last month following the United National Party’s 79th anniversary celebration, to which many parties in the opposition sent their senior representatives.

The possibility of this ‘joint opposition’ organising a public rally in Colombo to show its strength was discussed when opposition party leaders held a meeting followed by a dinner at a leading hotel in Colombo on Thursday night. Leaders of more than 25 political parties were in attendance, and they included former President and United National Party (UNP) Leader Ranil Wickremesinghe, party Chairman Vajira Abeywardena, Sri Lanka Podujana Peramuna (SLPP) National Organiser Namal Rajapaksa and former Minister G.L. Peiris.

Aside from the planned public rally, party leaders also discussed several areas where they could collaborate going forward, sources said.