Category: Daily Financial Times

National Integrity Week, themed ‘A Culture of Integrity – A Cleaner Sri Lanka’, commenced on Monday (27) at the Presidential Secretariat under the patronage of Secretary to the President.

Dialog Axiata PLC said it has expanded its digital payments ecosystem through a new collaboration with PickMe, enabling users to pay securely for rides and deliveries using LankaQR via Dialog Pay.

The collaboration extends digital payment convenience to one of Sri Lanka’s leading mobility and delivery technology platforms, serving more than 1.9 million consumers through a network of over 5,000 merchant earners and more than 165,000 driver and delivery earners monthly, while rewarding users with complimentary Dialog data on eligible LankaQR transactions.

Users can now use Dialog Pay for PickMe Rides, Flash Delivery and Trucks services on the PickMe platform, while QR payments for Food and Market are available on orders of up to Rs. 2,500.

The collaboration provides users with a secure and convenient way to pay across a range of everyday services through a single digital payment solution.

PickMe Founder/CEO Jiffry Zulfer said: ‘The

future of digital platforms lies in connected ecosystems rather than standalone services. This partnership with Dialog Pay is about creating greater convenience for customers while strengthening Sri Lanka’s digital commerce infrastructure. By combining PickMe’s marketplace with Dialog’s digital payments ecosystem, we are making everyday transactions more seamless and supporting the continued growth of a more inclusive digital economy.’

Dialog Pay, available through the Dialog Pay App and the MyDialog App, brings together connectivity, digital payments and financial services within a single ecosystem, supporting Dialog’s vision of making digital payments simpler, more accessible and more rewarding for every Sri Lankan.

Customers can conveniently activate Dialog Pay using their eZ Cash account or by linking their preferred bank account, enabling them to make secure LankaQR payments, transfer funds, access their digital wallet, open savings accounts and fixed deposits, and apply for loans powered by Dialog Finance.

Accepted across more than 100,000 retail outlets nationwide, Dialog Pay rewards eligible QR payments with complimentary Dialog data, encouraging greater everyday adoption while supporting Sri Lanka’s continued transition towards a more digitally connected and cash-light economy.

The secondary Bond market yesterday kicked off the new trading week on a slow note ahead of an action-packed shortened trading week. The week will see a Rs. 140 billion Treasury Bill auction today (28), followed by a Rs. 250 billion Treasury Bond auction on Thursday. In addition, the CCPI inflation figure for July is due to be released on Friday.

Market participants predominantly adopted a wait-and-see stance. As such, activity remained subdued.

Yields edged higher on selected maturities on market positioning ahead of the upcoming Bond auction. Transaction volumes were supported by several block trades, as the elevated yield levels attracted renewed buying interest.

The 15.12.26 maturity traded at the rate of 10% and the 15.09.29 maturity at the rate of 11.23%. The 01.07.30, 01.08.30 and 15.10.30 maturities traded at the rates of 11.60%, 11.62%-11.66% and 11.64%-11.68% respectively. The 15.01.33 maturity traded at the rate of 12.25%.

The Treasury Bill auction scheduled for today (28), will have a total amount of Rs. 140 billion on offer. This will comprise of Rs. 60 billion offered on the 91-day maturity, Rs 50 billion on the 182-day maturity and Rs. 30 billion on the 364-day maturity. This is below the maturity corresponding to the scheduled auction, which is estimated to be approximately Rs. 164.11 billion.

To recap: At the weekly Treasury Bill auction held last Wednesday, the weighted average yields on the three-months and six-months tenors dropped for the second consecutive week. Accordingly, the yield on the 91-day tenor declined by 18 basis points to 9.95% and the 182-day maturity dropped by 3 basis points to 10.24%. However, the 364-day maturity held steady at 10.20%. Incidentally the 91-Day Weighted Average Yield fell below 10% for the first time in seven weeks.

The auction successfully raised the full Rs. 140 billion offered at the first phase of competitive bidding. A further Rs. 14 billion was raised at phase II, out of the total market subscription of Rs. 84.81 billion. Accordingly, the aggregate accepted amount of the issuance was Rs. 154,000 million.

Meanwhile, the details of the next upcoming Treasury Bond auctions due to be held on Thursday, (30) were announced. The round of auctions will have a total offered amount of Rs. 250 billion across three available maturities.

The auction will be comprised of; Rs. 90 billion from a 1 February 2031 Maturity bearing a coupon rate of 11.60%, Rs. 80 billion from a 15 October 2034 Maturity bearing a coupon rate of 11.70%, Rs. 30 billion from a 15 August 2036 Maturity bearing a coupon rate of 10.85% and Rs. 30 billion from a 1 July 2037 Maturity bearing a coupon rate of 10.75% The settlement for which will be held on 3 August 2026.

In the money market, the net liquidity surplus stood at Rs. 153.80 billion yesterday. Of this, Rs. 93.80 billion was absorbed via the Central Bank’s Standing Deposit Facility (SDF) at 8.25%, while a further Rs. 60 billion was mopped up through an overnight repo auction conducted by the Domestic Operations Department (DOD) at a weighted average rate of 8.73%.

The weighted average rates on overnight call money and Repos were recorded at 9.00% and 9.03% respectively.

Forex market

The USD/LKR rate on spot contracts was seen closing at the day at Rs. 336.20/336.30, broadly steady against its previous day’s close of Rs. 336.25/336.35.

The total USD/LKR traded volume for 24 July was $ 48.05 million.

Dialog Axiata PLC has successfully completed its first fully integrated ISO certification audit, marking a significant milestone in its journey towards operational excellence and strengthened governance. The initiative brings multiple internationally recognised standards under a unified audit approach, reinforcing Dialog’s commitment to quality, security, privacy and sustainable value creation.

Conducted by Quality Austria Central Asia Private Limited, an independent certification body, the integrated audit reflects a consolidated model that enhances consistency, reduces duplication and simplifies certification auditing process across the organisation.

As the only telecommunications operators in Sri Lanka to maintain a comprehensive portfolio of ISO standards and to have these certifications assessed under a single coordinated audit, Dialog has further strengthened its ability to deliver secure, reliable and high-quality services.

The audit covered ten internationally recognised standards across key domains including quality management, environmental management, information security, privacy, business continuity and risk management. These include ISO 9001, ISO 14001, ISO 37001, ISO 27001, ISO 27701, ISO 27017, ISO 27018, ISO 22301, ISO 14064 and ISO 31000. As part of this exercise, Dialog also upgraded its ISO 27701 certification to the 2026 version and expanded the scope of ISO 27017, ISO 27018 and ISO 22301 certifications to additional locations.

Dialog Axiata PLC Group Chief Executive Supun Weerasinghe said: ‘This milestone reflects Dialog’s continued commitment to embedding excellence, accountability and resilience across our operations. By adopting a unified approach to multiple ISO standards, we have strengthened governance, improved operational efficiency and enhanced our ability to deliver secure and reliable services. This achievement reinforces our focus on building a future-ready organisation grounded in trust, responsible business practices and long-term value creation.’

The integrated certification approach strengthens risk visibility, regulatory compliance and operational consistency across the organisation, while enhancing stakeholder confidence through improved governance and reduced operational complexity.

Total vehicle registrations moderated in June as lower registrations of two- and three-wheelers outweighed continued strength in the sports utility vehicle (SUV) segment, while several commercial vehicle categories recorded modest improvements, JB Securities said.

The brokerage said total vehicle registrations declined to 58,151 units in June from 62,776 in May. Despite the overall slowdown, it said passenger vehicle registrations remained resilient. Motor car registrations fell to 3,929 units in June from 4,738 in May, with both brand-new and pre-owned registrations easing during the month.

Brand-new car registrations declined to 998 units from 1,199 in May. BYD remained the leading brand with 519 registrations, led by the ATTO 1 (373) and Dolphin Dynamic (131). Perodua ranked second with 160 registrations, comprising the Bezza (82) and Axia (78), while BAW recorded 108 registrations of its E7 model and Kaiyi increased registrations to 56 units. Small cars accounted for 96.6% of all brand-new motor car registrations.

JB Securities said financing accounted for around 43% of vehicle purchases, adding that this may reflect dealers registering vehicles before they are sold to avoid the 90-day deadline, after which a penalty of 3% of a vehicle’s Cost, Insurance, and Freight (CIF) value is levied for each month of delay. It said the policy was introduced to discourage the accumulation of excessive inventories that could place additional pressure on the current account.

Pre-owned car registrations declined to 2,931 units in June from 3,539 in May. Suzuki remained the market leader with 987 registrations, driven by the Wagon R (764), Spacia (90), and Alto (76). Toyota followed with 767 registrations, led by the Roomy (382) and Yaris (315), while Nissan recorded 525 registrations, mainly the Dayz (385), and Daihatsu registered 433 units, dominated by the Mira (342). Small cars accounted for 96.4% of pre-owned registrations, while the financing share eased to 44% from 49.2% in May.

Premium passenger vehicle registrations edged down to 147 units in June from 152 in May. Brand-new premium registrations increased to 26 units, while pre-owned registrations moderated to 121 units. Mercedes-Benz remained the leading premium marque with 59 registrations across new and pre-owned vehicles, followed by Audi with 43, BMW with 27, and Lexus with 12.

JB Securities said registrations during the month included a Rolls-Royce Phantom EWB, a Bentley Bentayga, and a Ferrari 296 GTB. It said purchases of high-end vehicles continue to generate substantial Government revenue, with tax rates on many of these vehicles exceeding 200% of their import value.

SUV and crossover registrations increased to 5,933 units in June from 5,511 in May, making the segment the strongest-performing passenger vehicle category during the month. Growth was driven by brand-new registrations, which rose to 2,580 units from 1,929 in May, while pre-owned registrations eased to 3,353 units from 3,582.

Construction of a new observation platform at Dunhinda Falls in Badulla commenced on Monday (27) with an investment of Rs. 20 million.

In the year 2026, the Government officially presented its landmark framework titled Prioritisation of Research for Sri Lanka – 2026 to the Presidential Secretariat. While this document represents a historic, well-intentioned baseline effort to coordinate national scientific investments across fifteen ministries, its structural layout inadvertently exposes the deep-seated legacy defects of the country’s governance model. Spearheaded by the National Science and Technology Commission (NASTEC), the framework brought together over a hundred domain experts across various ministries to define broad priority research areas.

The report is explicitly partitioned into isolated, ministry-specific subcommittees, ensuring that the research pipeline mirrors the exact bureaucratic fragmentation it aims to fix.

This structural fragmentation ensures that the research and data pipelines mirror the exact bureaucratic divisions they are meant to cure. In an era where global markets and development agendas are governed by automated algorithms, predictive data science, and secure distributed ledgers, Sri Lanka continues to rely on static, descriptive statistics. The Government remains functionally blind, attempting to navigate a hyper-competitive global economy using corrupted data generated by ineffective institutional arrangements and data collection methods.

Ineffective institutional arrangements and sectoral tribalism

The primary barrier to rigorous scientific governance in Sri Lanka is institutional tribalism. When public research organisations and data collection arms operate directly under line ministries-such as the isolated frameworks governing Tea, Rubber, Coconut, and general food crops-the data they harvest ceases to be an objective economic indicator. Instead, it transforms into an instrument of advocacy for that specific sector’s political and economic survival.

Under the status quo, data collection is decentralised and heavily guarded. For example, an agricultural research institute functions to validate its own institutional existence and secure continuous Government subventions. Consequently, their data streams are inherently biased toward self-preservation. If a particular crop ecosystem is failing or completely inefficient compared to global markets, the parent institution is structurally disincentivised to report the raw macroeconomic truth. They will never recommend uprooting their target crop to make way for a high-return industrial zone or an alternative agricultural practice, because doing so is a declaration of their own obsolescence.

The Macroeconomic Axiom: The Government must view the entire country’s land and Government assets as a single, integrated production unit. A rational governance framework must continuously calculate the highest Return on Investment (ROI) per square meter of national territory, completely divorced from historical sentimentality or sectoral biases. Whether a plot of land should support an export crop, localised food synthesis, tech incubation infrastructure, or renewable energy grids must be determined purely by data-driven global trade variables and domestic equilibrium formulas, not by which line ministry holds the legacy title deed.

The flawed data paradigm: The sanitised hierarchy

The unscientific nature of Sri Lanka’s national database stems directly from how data is gathered within the civil service. Former Government employees and field specialists consistently document a phenomenon known as the “Sanitised Data Pipeline.”

Data collection at the grassroots level is frequently executed by underpaid, non-specialised village officers or department representatives. Because this data collection is treated as a zero-accountability, bureaucratic checking exercise-leveraging unverified secondary data or unscientific verbal estimates- the raw input is fundamentally corrupted. As this data moves upward through the administrative strata, it undergoes successive layers of filtering, smoothing, and intentional sanitisation. Each level of the hierarchy modifies the data to please the leadership immediately above them, ensuring that final reports match political/official mandates rather than empirical realities.

The real-world consequences of this flawed data loop are catastrophic:

Welfare and Subsidy Manipulations: National safety nets, such as the Aswesuma program, suffer from massive target errors, elite capture, and fraudulent exclusion/inclusion loops because the Government relies on static, unverified registries prone to localised political manipulation.

Agricultural Price Collapses: Farmers suffer cyclical financial ruins because the Government cannot accurately forecast domestic crop yields. Handing out fertiliser or subsidies blindly based on historical registrations rather than real-time soil chemistry and volumetric tracking leads to severe supply gluts or unexpected deficits.

Reactive Fiscal Policy: The Treasury is routinely forced to implement panic-driven import bans or sudden tariff reductions because they are blindsided by acute domestic shortfalls that their legacy data channels failed to predict. The best example is the battle of controlling the price of rice.

The tech frontier: Algorithmic Governance (AI, ML, and Blockchain)

The global marketplace has transitioned from descriptive analytics to prescriptive, algorithmic execution. Historical data has zero economic value unless it can be used to construct high-fidelity predictive models for future shocks, resource allocation, and market trends. Sri Lanka’s structural delay in adopting Artificial Intelligence (AI), Machine Learning (ML), and Blockchain (BC) tools permanently handicaps its global competitiveness.

By embedding ML algorithms into national databases (should not take garbage in), the Government can bypass bureaucratic guesswork entirely. Predictive neural networks can synthesise multi-spectral satellite imagery, real-time climate telemetry, and micro-economic transaction velocities to forecast agricultural outputs with a high degree of mathematical certainty months before harvest. This eliminates the price volatility that routinely exploits both rural producers and urban consumers.

Furthermore, the implementation of Blockchain technology is no longer an optional innovation-it is a regulatory prerequisite for international trade. For instance, the European Union Deforestation Regulations (EUDR) require verifiable, immutable supply chain traceability down to the exact geolocated plot of land for commodities like tea and rubber. A fragmented, paper-based, or siloed ministerial database cannot comply with these standards, placing billions in export revenue at immediate risk. Utilising a decentralised, cryptographic ledger ensures tamper-proof compliance, automated data validation, and absolute international trust.

Institutional transformation: The NIRADA blueprint

To dismantle this legacy of failure, Sri Lanka requires a total structural mutation of its data infrastructure. We propose the establishment of a National Intelligence, Research and Data Agency (NIRADA). NIRADA must be built as a supreme constitutional body, completely decoupled from the executive cabinet and line ministries, matching the independence of the Central Bank of Sri Lanka (CBSL) on monetary governance and the Auditor General on financial oversight.

Legislative framework and apoliticisation

NIRADA must be established via a constitutional amendment to prevent political interference. All leadership and scientific positions must bypass executive appointment completely, relying instead on blind, ultra-competitive recruitment processes managed strictly on pure merit, documented scientific publication, and explicit quantitative Key Performance Indicators (KPIs). The tenure of top management must be legally insulated from changing political regimes; a director or chief data scientist can only be removed mid-term if they fail to meet objective institutional KPIs, subject to a supermajority vote in Parliament.

The 70/30 independent peer cross-examination core

To permanently eradicate sectoral tribalism, NIRADA’s core research units must operate under a strict anti-silo configuration. For any national project for research data or sectoral study, the analytical team must follow a rigid 70/30 human resource rule:

70% Neutral Core: Data scientists, macroeconomists, system engineers and a few selected public representatives completely independent of the sector under review.

30% Cross-Sector Peer Representation: i.e. If a study focuses on the tea sector, the remaining 30% of the team must comprise representatives from alternative food crops, coconut, or industrial manufacturing.

This structural arrangement legally prevents self-serving, siloed conclusions. For example, a tea industry representative is blocked from producing a biased recommendation because the neutral core and the alternative sector representatives will ruthlessly cross-examine the data through a national macroeconomic lens, prioritising raw, unvarnished ROI over institutional sentimentality.

Paid, randomised micro-data architecture

Free data lacks accountability. NIRADA will completely abandon reliance on unverified secondary statistics compiled by line departments. Instead, it will implement an autonomous primary data collection network leveraging randomised statistical blocks.

Every year, NIRADA will systematically select thousands of ordinary citizens, farmers, and small-scale entrepreneurs across changing statistical grids to act as paid micro-data contractors. These selectees will receive direct financial compensation from the Government to provide precise, verifiable primary data loops regarding input costs, actual consumption, soil dynamics, and trade velocities. Because they are explicitly paid, their data submission carries legal accountability; any submission of falsified or sanitized data results in the immediate termination of the financial incentive. Rotating these cohorts annually or biannually prevents the formation of localised administrative corruption pockets and provides a continuous stream of pure, neutral data points directly into NIRADA’s forecasting algorithms.

Fiscal viability: The self-funding data loop

The traditional bureaucratic counter-argument to the deployment of high-end data agencies is fiscal constraint. In a resource-constrained economy, the allocation of Government funds to pay thousands of randomised citizen data suppliers and maintain elite data engineering infrastructure is often viewed as a luxury. This argument is fundamentally short-sighted. NIRADA is not a fiscal liability; it is an immediate self-funding mechanism.

The financial resources required to power NIRADA represent a tiny fraction of the billions of rupees currently lost through unscientific capital leakages. By cleaning up national data channels, NIRADA plugs these leakages instantly at the source:

Exposing subsidy fraud: Blanket agricultural subsidies are routinely exploited by ghost entities, corrupt suppliers, and inaccurate regional estimations. NIRADA’s audited, geolocated data blocks these leakages, ensuring that input subsidies match exact micro-soil requirements and legitimate producers.

Eliminating social welfare theft: Programs like Aswesuma bleed massive amounts of cash due to political manipulation and outdated beneficiary lists. Algorithmic verification via randomised cohort cross-checks automatically purges fraudulent entries from national systems. It is commendable that the Government has already given thoughts on this through Welfare Benefits Board (https://wbb.gov.lk/)

Proactive market stabilisation: Instead of executing delayed, macro-scale financial bailouts after a market crash occurs, NIRADA’s predictive alerts allow the Government to deploy micro-targeted incentives strictly for short-term shock absorption during verified climatic or international trade updates.

The verdict

Has Sri Lanka failed because of flawed data? Or ineffective institutional arrangements? The diagnostic conclusion of this paper is that it has failed because of both, as they exist in a symbiotic loop of inefficiency. Ineffective institutional arrangements deliberately produce flawed, sanitised data to protect their bureaucratic silos, and this flawed data, in turn, makes any rational restructuring of these institutions impossible.

The Prioritisation of Research for Sri Lanka – 2026 report proves that while the Government’s intellectual capital recognises the desperate need for coordination, it remains imprisoned within legacy administrative boundaries. Paper-based policies and ad-hoc ministerial committees are utterly defenceless against an automated global economy governed by predictive analytics and competitive algorithms.

If Sri Lanka is to secure structural resilience, protect its citizen base, and survive international market competitions, it must execute a radical administrative mutation. The line ministries must be stripped of their data monopoly. The Government must legislate the creation of NIRADA as an independent, constitutional, algorithmic engine. Only when national data is collected scientifically, audited absolute, and modeled predictively can Sri Lanka transform from a blind, reactive Government into a thriving, advanced digital economy.

Fintrex Finance PLC has appointed Udesh Gunawardena to its Board as an Independent Non-Executive Director.

Gunawardena is a seasoned finance professional with over 25 years of extensive experience in the financial services sector, both locally and internationally, possessing demonstrated expertise in financial services, operations, corporate governance, risk management, treasury and financial management, auditing, process re-engineering, and company secretarial practices.

Gunawardena has held several senior leadership positions, including serving as Chief Operating Officer and Acting Chief Executive Officer of a leading financial institution in Sri Lanka. He also possesses international exposure, having served as Chief Financial Officer and Company Secretary of an overseas operation in Bangladesh.

He is an Associate Member of the Institute of Chartered Accountants of Sri Lanka and brings a wealth of strategic, operational, and governance expertise gained through an accomplished professional career.

Foreign Direct Investment (FDI) is one of the strongest indicators of investor confidence in an economy. While many Asian economies continue to attract billions of dollars annually, Sri Lanka’s FDI inflows remain modest despite its enviable location at the centre of the Indian Ocean. Geography has undoubtedly blessed Sri Lanka with strategic importance, but geography alone is no longer sufficient to attract global capital. Investors today choose efficiency over promises, predictability over potential and speed over bureaucracy.

As Sri Lanka continues its economic recovery, attracting high-quality FDI should become a national priority. Foreign investment is not merely about bringing capital into the country. It creates employment, transfers technology, enhances management expertise, strengthens exports and integrates local businesses into global value chains. Every successful investment generates multiplier effects across the economy. Yet, despite possessing world-class ports, an educated workforce and strategic connectivity, Sri Lanka continues to lose investment opportunities to regional competitors. The question policymakers should ask is simple: Why are investors choosing South India, Vietnam and Indonesia instead of Sri Lanka? The answer lies not in geography but in governance.

Investors seek certainty, not complexity

Today’s investors evaluate countries through a very different lens than they did twenty years ago. Tax incentives remain important, but they are rarely the deciding factor. Investors place greater value on policy consistency, transparent regulations, reliable infrastructure and efficient public institutions. Above all, they value time.

Every month spent waiting for approvals increases costs and uncertainty. Every additional institution involved in the approval process creates another layer of complexity. In a highly competitive global investment environment, delays can easily result in projects being relocated elsewhere.

Many foreign investors privately acknowledge Sri Lanka’s enormous potential. They appreciate the country’s strategic location, modern maritime infrastructure and talented workforce. However, they also express frustration over lengthy approval processes, overlapping institutional responsibilities and inconsistent policy implementation.

One concern is repeatedly voiced by investors: it is often difficult to navigate government institutions and obtain timely decisions. Access to senior policymakers can be limited, coordination between agencies is often weak and approvals may require engagement with multiple ministries and regulatory bodies.

For an investor comparing Sri Lanka with competing destinations, these administrative challenges become a significant disadvantage.

Learning from South India

Perhaps Sri Lanka’s greatest competitor is not another island nation but the states of South India. Tamil Nadu has emerged as one of Asia’s leading automobile manufacturing hubs. Global companies such as Hyundai, Renault-Nissan, BMW, Daimler and Yamaha have established major operations there. Karnataka has become a global technology powerhouse, while Andhra Pradesh and Gujarat continue to attract large-scale industrial investments.

These states did not succeed simply because of their size or labour force. They succeeded because they created investor-friendly ecosystems. Approval processes are streamlined, infrastructure is continuously improved, governments actively engage investors and dedicated agencies facilitate projects from concept to implementation. Investors are treated as long-term development partners rather than applicants navigating bureaucracy. Sri Lanka possesses advantages that many Indian states cannot replicate. It has a strategic maritime location, deep-water ports, shorter logistics chains and strong connectivity to major international shipping routes. Yet these advantages remain underutilised because they are not complemented by equally efficient institutions.

The BOI must become a global investment promoter

The Board of Investment (BOI) has made significant contributions to Sri Lanka’s investment landscape over several decades. However, the rapidly evolving global economy demands a more proactive and competitive institution. The BOI should no longer be viewed merely as an approval authority. It should become Sri Lanka’s premier investment promotion agency, actively competing for international investment rather than waiting for investors to arrive.

Success should no longer be measured only by the number of projects approved. It should be measured by the value of investments realised, employment generated, exports created and the speed with which projects commence commercial operations. Every major investor should be assigned a dedicated relationship manager empowered to coordinate approvals across all government agencies. Investors should experience a genuine single-window service rather than being redirected between institutions.

Digital transformation must also become a priority. Online application systems, transparent approval tracking and clearly defined timelines would significantly improve investor confidence while reducing administrative delays. More importantly, Sri Lanka needs to project itself internationally as a country that welcomes investment with professionalism, efficiency and consistency.

Contd. on Page 20

(The author is the Secretary General of the Ceylon Chamber of Shipping, former Director General of the Institute of National Security Studies (INSS), and former Spokesman of the Ministry of Defence. He is also a Non-Resident Fellow at the London Dialogue. His areas of expertise include international relations, geopolitics, maritime affairs, national security, economic policy, and strategic governance).

Hambantota: From transit hub to manufacturing hub

One of Sri Lanka’s greatest untapped opportunities lies in Hambantota. Today, Hambantota Port has become an important regional hub for the transshipment of vehicles manufactured in India and destined for African markets and other international destinations. Thousands of vehicles pass through the port every year. This demonstrates that global automobile manufacturers already recognise Hambantota’s strategic value. However, Sri Lanka currently captures only a small portion of the economic value generated by this activity. The obvious question is: Why should Sri Lanka remain merely a transit point?

Instead of simply handling imported vehicles, Sri Lanka should actively encourage global manufacturers to establish vehicle assembly facilities within the Hambantota Industrial Zone. Companies could import Completely Knocked Down (CKD) or Semi Knocked Down (SKD) kits, assemble vehicles locally and export finished products to Africa, the Middle East and South Asia. This would generate far greater economic value than simple transshipment.

Vehicle assembly plants would create thousands of direct and indirect jobs while stimulating supporting industries including component manufacturing, packaging, engineering services, warehousing, transport and technical training. Over time, local companies could integrate into regional automotive supply chains, increasing domestic value addition and strengthening Sri Lanka’s export sector.

Countries such as Thailand, Morocco and Vietnam have successfully transformed themselves into regional automotive manufacturing hubs through consistent industrial policies and investor-friendly environments. Sri Lanka already has the strategic location. What it now needs is the policy environment that encourages manufacturers to invest.

Policy consistency builds investor confidence

Investment decisions often involve planning horizons extending twenty or even thirty years. No multinational corporation will commit hundreds of millions of dollars if regulations, taxation policies or investment agreements are likely to change with every political transition. Policy consistency is therefore one of Sri Lanka’s greatest competitive challenges. Governments may change, but national economic priorities should remain stable.

A bipartisan National Investment Strategy, supported across political parties, would provide investors with the confidence required for long-term commitments. Such a strategy should clearly identify priority sectors, infrastructure plans, investment incentives and regulatory reforms. Confidence grows when investors believe that commitments made today will still be honoured tomorrow.

Introduce accountability into approvals

Sri Lanka should also introduce legally mandated timelines for investment approvals. Government agencies responsible for approvals should be required to respond within specified timeframes. If no valid objections are raised within that period, applications should automatically proceed to the next stage. Such reforms have significantly improved investor confidence in several Asian economies. Equally important is accountability. Public institutions should measure performance based on the speed and quality of investor services. Delays should become exceptions rather than accepted practice. Government agencies should function as facilitators of investment, not gatekeepers.

Economic diplomacy must support investment

Sri Lanka’s diplomatic missions should play a much greater role in attracting FDI. Embassies should actively identify investment opportunities, engage multinational corporations and connect potential investors with relevant domestic institutions. Economic diplomacy should become a core function of Sri Lanka’s foreign policy, complementing traditional political engagement. Similarly, regular dialogue between government, chambers of commerce, industry associations and foreign investors would help identify obstacles before they discourage future investment. Listening to investors is often the first step towards improving the investment climate.

From potential to performance

Sri Lanka has spent decades highlighting its strategic location. That message is already well understood internationally. What global investors now want to see is evidence that Sri Lanka can provide predictable policies, efficient institutions and a business environment where projects can move quickly from concept to implementation. Infrastructure alone does not attract investment. Ports, airports, highways and industrial zones become valuable only when supported by efficient governance and investor-friendly regulations.

Foreign investors compare countries every day. They examine approval timelines, regulatory certainty, labour productivity, logistics costs and ease of doing business. The countries that remove obstacles are the countries that receive investment. Sri Lanka has every opportunity to become a regional hub for manufacturing, logistics, maritime services, renewable energy, technology and value-added exports. However, opportunities alone do not create prosperity. Execution does.

A call to action

The race for global investment has never been more competitive. Capital is mobile, investors are selective and countries are aggressively competing to attract high-quality industries. Sri Lanka cannot rely solely on its strategic location to remain competitive. The country must complement geography with governance, infrastructure with efficiency and ambition with decisive action. Hambantota should become more than a transshipment port. It should evolve into a regional manufacturing and export hub. The BOI should become more than an approval authority. It should become one of Asia’s most proactive investment promotion agencies. Government institutions should become partners in economic development rather than administrative hurdles.

The world’s investors already know where Sri Lanka is. The real question is whether Sri Lanka is ready for them. If the answer is yes, then the time for reform is now, not tomorrow. By removing unnecessary red tape, strengthening policy consistency and embracing a genuine investor-first mindset, Sri Lanka can finally convert its strategic location into sustained economic prosperity.

In today’s global economy, geography may open the door, but good governance is what ultimately persuades investors to walk through it. Sri Lanka does not need to compete with the world’s largest economies. It needs to compete with the countries that investors are choosing today. Every investment lost to Chennai, Ho Chi Minh City or Batam is not simply a missed business opportunity, it is a missed opportunity for jobs, exports, technology transfer and national prosperity. The global race for investment will not wait for Sri Lanka to reform at its own pace. The time to act is now.

Parliament’s Committee on Public Finance (CoPF) has raised concerns over whether the Finance Ministry’s Public Debt Management Office (PDMO) has the institutional capacity, governance framework, and specialist expertise required to manage Sri Lanka’s Rs. 31.1 trillion Government debt portfolio, while calling for a significant strengthening of the Office’s technical capabilities.

Reviewing the PDMO’s 2025 Annual Debt Management Report, CoPF members repeatedly questioned whether the Office, established under the Public Debt Management Act, No. 33 of 2024 and fully operational from December 2025, possesses the specialist skills needed to undertake sovereign debt management following the transfer of responsibilities from the Central Bank of Sri Lanka (CBSL).

Committee Chair MP Dr. Harsha de Silva opened proceedings by referring to the CoPF’s recently concluded investigation into the debt payment incident, telling officials the Committee had identified governance failures across multiple institutions and urging the office to strengthen its systems, governance structures, operational procedures, and technical controls.

He said Parliament had completed its work on the investigation and expected the Finance Ministry to report back on improvements to debt management processes.

During the review, MPs questioned the Office’s staffing structure, training programs, and operational readiness, arguing that debt management requires expertise comparable to that of professional treasury operations in international financial markets.

Committee members said even a 10-basis-point error in borrowing decisions could have significant financial implications for the Government while exposing officials to allegations over borrowing decisions, underscoring the need for specialised skills and stronger institutional safeguards.

The PDMO said it had undertaken training with International Monetary Fund (IMF) technical assistance and had identified capacity-building requirements, but acknowledged it did not possess a comprehensive Training Needs Assessment document.

The Committee said such an assessment was essential to guide recruitment, professional development, and future resource allocation, requesting the Office to submit the document within two weeks. The CoPF also indicated it would support increased Budgetary allocations for specialised training after reviewing the assessment.

Officials told the Committee the Office has an approved cadre of 80 staff, with around 60 positions currently filled, while one Assistant Director-General position remains vacant pending disciplinary proceedings involving the previous office holder. They said most executive-level positions had been filled, although additional recruitment remained necessary.

The Committee also questioned whether the Finance Ministry’s allocation of Rs. 2 million for training was sufficient for an institution responsible for managing billions of dollars in Government borrowing, with members arguing that investment in specialist training would yield significant savings by improving borrowing decisions. Officials said much of the training currently depended on grant assistance from international development partners.

The review also highlighted broader policy challenges facing the debt office.

PDMO officials said their medium-term strategy is to gradually reduce reliance on Treasury Bills, increase issuance of longer-term Treasury Bonds, and reduce external borrowing. However, Committee members questioned whether those objectives could be achieved while domestic interest rates remain elevated.

Officials acknowledged that successful implementation of the strategy would require closer coordination between fiscal and monetary authorities, although MPs argued the CBSL’s inflation-targeting mandate means the debt office cannot rely on monetary policy to reduce borrowing costs.

The Committee urged the PDMO to strengthen its own market expertise and institutional capacity to operate effectively under changing market conditions rather than depend on lower interest rates.