Category: Daily Financial Times

Total exports reached a record $ 10.48 billion in the first seven months of 2026, up 5.48% year-on-year (YoY), putting the country just past the halfway mark of its ambitious $ 20 billion full-year export target despite mounting global and geopolitical headwinds.

The latest performance, disclosed by the Sri Lanka Export Development Board (EDB), surpassed the previous January-July record of $ 9.94 billion set last year, with the expansion increasingly being driven by services as merchandise exports come under pressure.

Merchandise export earnings rose 5.05% to over $ 8.18 billion, while services exports were estimated to have increased 7.02% to $ 2.29 billion.

At the current pace, Sri Lanka has achieved around 52% of its $ 20 billion 2026 export target in seven months. The Government is targeting merchandise exports of more than $ 15.7 billion and services exports of $ 4.3 billion for the full year.

The headline performance, however, conceals a widening divergence between the two components.

Merchandise exports fell 1.3% YoY in July to just over $ 1.28 billion, while services exports surged 20.07% to $ 351.95 million. Total exports for the month nevertheless rose 2.63% YoY to over $ 1.63 billion, although this represented a 1.28% decline from June 2026.

Addressing the media yesterday, EDB Chairman and CEO Mangala Wijesinghe described the July and seven-month performance as a demonstration of the resilience of Sri Lanka’s export sector, but stressed that the record should be viewed as a foundation rather than an endpoint.

‘The EDB’s immediate priorities, are to increase export earnings, diversify markets, strengthen emerging sectors, support SMEs, attract investment and improve the global competitiveness of Sri Lankan products and services,’ he said.

He said several non-traditional and higher-value merchandise categories posted strong gains during the first seven months. Coconut-based products increased 10% to $ 726.64 million, rubber-based products rose 4.92% to $ 579.55 million, processed food and beverages jumped 19.23% to $ 405.23 million, spices and concentrates increased 14.32% to $ 280.49 million, while electrical and electronic components surged 57.69% to $ 377.91 million

However, he acknowledged that the country’s two major traditional export pillars; apparel and tea continued to face significant headwinds.

Apparel remained the largest contributor to merchandise exports during the first seven months, but earnings fell 6.5% YoY to over $ 2.87 billion.

‘This is primarily due to weaker global demand for apparel. However, this is not a challenge faced by Sri Lanka alone; apparel-producing countries across the world are experiencing a similar situation,’ he said, adding that EDB expects conditions to improve over the remaining five months and is still targeting $ 5 billion in apparel export revenue for the year.

Tea exports were hit more directly by the geopolitical disruption in the Middle East. Earnings declined 7.53% YoY to $ 817.53 million, with bulk tea exports falling 9.89% and tea packets declining 7.01%.

‘Around 35% of Sri Lanka’s tea exports are destined for Middle Eastern markets, making the sector particularly vulnerable to disruptions in shipping routes, higher freight and insurance costs and logistical constraints. Those pressures also spilled into spices, processed food and beverages, seafood, vegetables and fruits and nuts in July,’ he said responding to queries.

On the services side, meanwhile, the performance was considerably stronger during the first seven months. ICT/BPM exports rose 14.54% YoY to $ 1.02 billion, financial services increased by 8.12% YoY to $ 29.94 million and transport and logistics registered a 3.37% YoY increase to $ 1.18 billion. However, construction sector reflected a decline of 25.81% YoY to $ 57.72 million.

The geographical performance was similarly mixed, but showed signs of diversification. The US remained Sri Lanka’s largest merchandise export market, accounting for about 22% of total merchandise exports. Exports to the US fell marginally by 0.58% to $ 250.87 million in July, while cumulative exports declined 1.10% YoY to $ 1.7 billion.

India, however, strengthened its position as the second-largest destination, overtaking the UK. Exports to India jumped 36.16% YoY to $ 688.47 million during January-July, with July exports also rising 9.12% to $ 129.51 million.

This contrasted sharply with the UK, where exports fell 11.34% to $ 72.14 million in July and declined 10.23% YoY cumulatively to $ 434.44 million.

The European Union, which absorbs around 25.5% of Sri Lanka’s merchandise exports, also remained under pressure. Exports to the bloc fell 14.59% in July, although the cumulative decline was limited to 0.50% YoY, with earnings at around $ 1.76 billion.

Among the top 15 export destinations, India, Trkiye, Japan and Mexico recorded YoY growth both in July and cumulatively during the first seven months.

The record seven-month result therefore provides a stronger base for the Government’s $ 20 billion ambition, but the remaining challenge is substantial.

Sri Lanka needs roughly $ 9.52 billion in additional export earnings during August-December to reach the target, an average of about $ 1.90 billion a month, compared with the $ 1.50 billion monthly average achieved during the first seven months.

This indicates the country will need to accelerate export growth significantly in the final five months, particularly if weakness in apparel and tea persists and geopolitical disruptions continue to affect merchandise trade.

‘Our objective is to create a stronger, competitive, and more diversified export economy for Sri Lanka. With the continued commitment of our exporters and the strong support of the Government and all relevant institutions, I am confident that we can achieve our national export ambitions,’ Wijesinghe said. (CdeS)

Standard Chartered Sri Lanka CEO Bingumal Thewarathanthri has made the case for Sri Lanka to consider an International Monetary Fund (IMF) Stand-By Arrangement (SBA) after completing its current Extended Fund Facility (EFF) in 2027, arguing that continued engagement could support investor confidence and external market access while allowing greater policy flexibility.

Speaking at a recent Global Research Briefing hosted by Standard Chartered, Thewarathanthri said the approaching end of the EFF raises a broader question over whether Sri Lanka is ready to maintain the fiscal discipline and reforms achieved under the program without an IMF framework.

‘Are we ready to run on our own? What kind of fiscal discipline that we had? Can we continue? There are mixed views around it,’ he said.

He noted that Sri Lanka has entered 17 IMF programs but has a poor record of completing them, particularly EFF arrangements. The current program, he said, offered the prospect of breaking that pattern.

‘When we went into the program, of course, we’ve done 17 programs. We all know that. I don’t think we completed any. Definitely not EFF programs. This is the first time I think we are seeing a light at the end of the tunnel, and completing an EFF program,’ he said.

Thewarathanthri pointed to fiscal consolidation as one of the gains under the EFF, noting that Sri Lanka had moved beyond its primary surplus target and recorded a Budget surplus during the first half.

He also cited cost-reflective energy pricing, the digitalisation of cash transfers, and Central Bank of Sri Lanka (CBSL) independence among measures implemented during the program.

However, he said the progress had left several economic questions unresolved, including poverty, support for small and medium enterprises (SMEs), and the pace of foreign direct investment (FDI).

‘But there are some unanswered questions. Like, for example, the poverty line has gone up. Poverty is still hovering around 25%. There’s still not enough support for the SMEs,’ Thewarathanthri said.

He also questioned whether Sri Lanka’s investment proposition was strong enough to attract large-scale foreign investors, noting that FDI had remained sluggish despite signs of a pickup.

‘We are the most attractive country to bring some of the FDIs in. Are we giving enough as a package to a large investor coming into the country? So FDIs have been a bit of a sluggish one, but slowly picking up. So these are questions to be answered,’ he said.

Thewarathanthri said remaining under an IMF arrangement would have advantages from the perspective of rating agencies, investors, and other stakeholders. IMF engagement could also matter when Sri Lanka eventually returns to international capital markets, particularly in determining the cost at which the country can borrow.

‘I think from a rating agency perspective or a stakeholder or any investor point of view, being in a program will definitely help. And especially from a pricing perspective, when we access the market, will definitely help being in a program,’ he said.

At the same time, he argued that Sri Lanka would require greater room to determine economic policy once the present EFF ends, making another arrangement with the same degree of policy prescription less attractive.

‘But I think we will need greater flexibility in terms of how we run the country post the EFF program. So looking at all those scenarios, I would say being in a standby agreement, SBA would be the ideal scenario,’ Thewarathanthri said.

He said an SBA represented, in his assessment, the most appropriate option for Sri Lanka, although the eventual course would depend on policymakers and negotiations with the IMF.

‘I would think that that’s the most appropriate option for the country. How the policymakers will look at it, how they will negotiate, we’ll have to wait and see,’ he said.

Sri Lanka have not given up hopes of staging the inaugural ICC Women’s Champions Trophy tournament in February despite the fact that the ICC has intimated to them that they are considering alternate venues.

Sri Lanka Cricket (SLC) Transformation Committee Secretary Prakash Schaffter detailing what has so far taken place said, ‘The ICC had originally indicated to us that they want us to host it and we have commenced making the arrangements. Thereafter they wrote to us some 2½ months ago telling us that they are considering alternate venues which indicates that they are moving it out of Sri Lanka. But they have not categorically told us that they are in fact moving it.’

‘We have spoken to the ICC and we will continue talking to them whether they can hold the Champions Trophy here for it would certainly bring us a lot of pride and prestige, in addition to the tourism income that would follow. The decision to move it away I believe is linked to the governance issues that prevail in Sri Lanka Cricket.’

‘The ICC has been very supportive of us from the moment we took office. We have been in constant dialogue with them, communicating with them the steps that are being taken to return to a normal body. I am hopeful that we would be able to demonstrate to them over the next month or two the steps that are being taken and that they may even be persuaded to play the Champions Trophy here as of now I believe that no other venue has been agreed upon as yet.’

The next board meeting of the ICC is in October where a decision is to be taken on the host country.

SLC Transformation Committee Chairman Eran Wickramaratne said that ‘some of the things that will happen and decisions that are taken have nothing to do with the present Transformation Committee and therefore we are very committed to really correcting it from the foundation itself.’

‘There can be certain disruptions in the process because the ICC also has its rules and it is governing cricket in 112 countries with full members and associate members. They have a constitution and therefore they also have things that they need to fulfil. At the same time there are things that we have to do to put it right. There can be problems like this occurring while we move ahead with our agenda but I must confess that we will not take a single step backwards. The ICC is fully aware of all the steps that we are taking.’

Wickramaratne said that the Transformation Committee had done their part of the job by drawing up a new constitution and it is left to the government to proceed with it and that it is out of their control when it will become law. He said hopefully by November.

For the first time since the Transformation Committee was appointed, one of its members Kumar Sangakkara appeared on the forum for the first time and on the subject of Sri Lanka playing less Test matches in comparison to the two white ball formats said, that it was a question that is troubling all of world cricket not only Sri Lanka.

‘How do we encourage Test cricket? It’s a forum that is being talked about. They came up with the WTC but then again the FTP doesn’t support an equal number of Test matches or a minimum number of Test matches. The bottom line is, in the current context of world cricket except for the top 3 or 4 countries the revenue generated by Test cricket is very low. Hosting a lot of Test cricket sometimes brings cricket down to bankruptcy,’ said Sangakkara.

‘From a Test players point of view we have a lot of work to do to give him as many matches as possible for him to make a career out of it. It starts with dialogue and how do we use the other formats to actually supplement Test cricket to keep it strong and to keep it as a format for as long as the public and the spectators really want it. If you watch Test cricket in other countries, only a few of them have full grounds.’

Speaking further Sangakkara said, ‘We have to market Test cricket and Test players and build stories around them. Have to make sure the Test series is marketed well in advance so that people are made to feel proud to play this game. A Test cricketer has to be held up higher than a T20 or One-day performer. We, as an administration have been very keen to play Test cricket but it’s not an easy problem to solve. You have to ensure you play good enough Test cricket. If you play good enough Test cricket you can play any format.’

‘In the modern world and in generations to come, how do we keep Test cricket relevant and viable? That’s a long term solution. Right now if we can influence the FTP to be a lot fairer and negotiate with countries for us to play a lot more Test cricket I think Sri Lanka cricket will get stronger. We have to be a strong Test side to be a strong T20 and ODI side as well.’

Beyond its refreshed spaces and stunning beachfront setting, Citrus Hikkaduwa is embracing a new identity as one of the South Coast’s most exciting entertainment hubs. At the heart of this transformation is Summer Salt, the hotel’s signature social and entertainment venue, positioned as the new address to be seen in Hikkaduwa.

Designed to capture the energy of modern beach culture, Summer Salt brings together everything that defines today’s lifestyle trends, from live music and DJ experiences to themed evenings, vibrant social gatherings, curated events and unforgettable beachfront moments. As guests increasingly look for destinations that offer more than just accommodation, Summer Salt responds with a vibrant, contemporary experience where the vibe extends far beyond the guest room.

Whether you’re a local looking for the next great night out or an international traveller seeking the pulse of Hikkaduwa after sunset, this is where good music, great company and beachfront energy come together seamlessly. For those chasing the latest trends, searching for the best vibes, or simply looking for the next place to gather, celebrate and connect, the answer is clear: Summer Salt, the new address at Citrus Hikkaduwa.

Guests are increasingly seeking the next destination with a distinctive vibe, energy and a sense of what’s trending. We see the need for experiences that go beyond the traditional guest room, creating spaces where the atmosphere, entertainment and social energy become an integral part of the stay. Summer Salt responds to this shift with a vibrant, contemporary social and entertainment experience closely connected to the unique character, culture, and energy of Hikkaduwa itself.

As one of Sri Lanka’s homegrown hospitality brands and part of the George Steuart Group, Citrus Hikkaduwa combines a proud heritage with a contemporary approach to hospitality. With Summer Salt leading this exciting new chapter, Citrus Hikkaduwa is ready to welcome those looking to experience the very best of Hikkaduwa by day, and especially by night.

The secondary Bond market kicked off the new trading week on a positive note yesterday, with yields edging lower across selected tenors while the rest of the yield curve largely consolidated. The long end of the yield curve saw rates decline while the short to the belly end held broadly steady. Activity and transaction volumes remained robust, supported by the execution of several sizeable block transactions.

The 15.12.28 maturity traded at the rate of 10.10% and the 15.12.29 at 10.30%. The 01.08.30 and 15.10.30 traded within the ranges of 10.50%-10.46% and 10.55%-10.50% respectively. The 01.02.31 traded at 10.60%. The 15.01.33 and 01.11.33 traded at the rates of 11.20% and 11.30%-11.35% respectively. The 15.10.34 traded down the range of 11.50%-11.45%, the 15.08.36 traded lower at 11.78% and the 01.07.37 at 11.82%.

On the inflation front headline inflation, as measured by the Colombo Consumer Price Index (CCPI), accelerated to 8% year-on-year in August 2026, up from 7.3% in July, according to the Department of Census and Statistics.

In the money market, the net liquidity surplus was recorded at Rs. 132.33 billion. Rs. 82.77 billion was deposited at the Central Bank’s SDFR (Standing Deposit Facility Rate) of 8.25% as against an amount of Rs. 0.44 billion drawn from the Central Bank’s SLFR (Standing Lending Facility Rate) of 9.25%

In addition, the Domestic Operations Department (DOD) of the Central Bank of Sri Lanka absorbed Rs. 70 billion in liquidity through a series of Repo auctions. This comprised Rs. 40 billion via an overnight Repo auction and Rs. 10 billion through a 2-day term Repo auction, both at a weighted average yield of 8.75%, together with Rs. 20 billion through a 30-day term Repo auction at a weighted average yield of 9.19%.

The weighted average yields on overnight call money and repos were recorded at 8.85% and 8.91% respectively.

Forex market

The USD/LKR rate on spot contracts was seen closing at Rs. 328.10/328.30 yesterday, with the rupee depreciating marginally from Rs. 327.98/328.04 recorded on the previous day.

The total USD/LKR traded volume for 28 August amounted to $ 170.25 million.

Sri Lanka’s national official poverty line rose to Rs. 17,679 per person per month in July 2026, up 0.5% from the previous month, according to the latest Department of Census and Statistics (DCS) data.

The minimum monthly expenditure required per person to meet defined basic needs increased by Rs. 87 from Rs. 17,592 in June.

The threshold was 7.2% higher year-on-year (YoY), rising by Rs. 1,195 from Rs. 16,484 in July 2025.

The July figure was also the highest national poverty line in the monthly series since January 2025. It has increased by Rs. 949, or 5.7%, from Rs. 16,730 in January this year.

Colombo recorded the highest district poverty line in July at Rs. 19,067 per person per month, followed by Gampaha at Rs. 18,969 and Nuwara Eliya at Rs. 18,592.

At the other end, Monaragala recorded the lowest threshold at Rs. 16,904, followed by Kilinochchi at Rs. 17,080 and Hambantota at Rs. 17,177. The difference between the highest and lowest district thresholds was Rs. 2,163 per person per month.

The increase in the poverty line comes alongside a rise in consumer prices. The National Consumer Price Index (NCPI) increased to 223.4 in July, with YoY inflation accelerating to 7.2%, according to the DCS.

The official poverty line is a statistical threshold representing the minimum expenditure required to meet defined basic needs. It is not an estimate of average monthly household spending or a measure of the income required to maintain a normal standard of living.

The distinction has become relevant amid debate over whether a person can meet basic needs on less than Rs. 18,000 a month. A household being above the official poverty line does not necessarily mean it is free from financial pressure.

Attention is also turning to the data underpinning poverty measurement and the need for current information on household spending patterns. The DCS says the Household Income and Expenditure Survey (HIES), which provides the basis for poverty indicators, is generally conducted once every three years.

The DCS release calendar shows that a final bulletin from the 2025 HIES is scheduled for release between 31 August and 30 October, while the Poverty Indicators 2025 bulletin is scheduled between 30 October and 30 December.

The prospect of updated household expenditure data is significant given that the poverty benchmark has been based on older consumption patterns adjusted for subsequent price movements. It also comes as debate continues over inflation targeting and whether headline price indices adequately capture changes in household costs.

Updated HIES and poverty data should therefore provide a more current basis for assessing minimum household needs, changes in consumption patterns, and the extent to which movements in measured inflation reflect the cost pressures faced by households.

Agriculture in Sri Lanka, and in many other countries, is sitting on a ticking time bomb. The burning signs are no longer hidden. We see it in erratic monsoons, prolonged dry spells, flash floods, landslides, heat stress, damaged irrigation systems and repeated crop losses. Now another warning light is flashing. On 13 August 2026, NOAA reported that El Niño was strengthening, with a greater than 90% chance of becoming a very strong event. The Department of Meteorology of Sri Lanka had warned of substantial rainfall changes, while the Cabinet of Ministers has appointed special committees for possible water, electricity and food crises.

The question is whether we will act before the crisis, or once again display our well-practiced national experience of becoming surprised by something we were warned about months earlier. In Sri Lanka, an early warning sometimes seems to be heard by the relevant authorities only after the event has occurred.

From cyclone to El Niño: climate whiplash

Cyclone Ditwah in November 2025 showed the other face of climate vulnerability. The Food and Agriculture Organisation of the United Nations (FAO) reported that about 106,000 hectares of paddy, roughly one-fifth of the cultivated area in the Maha season sown at that stage, were partially damaged or lost. More than 227,000 farmers were affected, together with livestock, fisheries, irrigation infrastructure and household food stocks. FAO subsequently estimated that more than 1.1 million people required urgent food-security, agricultural and nutrition assistance.

The warning is not confined to Sri Lanka. The catastrophic disaster in Nepal in August 2026, triggered by a glacier collapse and cascading landslide and flash flooding near the Nepal-China border, killed hundreds, affected more than 90,000 people and destroyed roads, bridges and other infrastructure. It is true that the precise contribution of climate change to any such single event requires scientific attribution, but rapidly warming high-mountain environments are creating new and cascading risks. Nepal is a grim reminder that climate hazards do not read development plans before arriving.

Sri Lanka therefore faces not one climatic threat but climate whiplash, with too much water, too little water, excessive heat and increasingly unreliable timing for farming.

Sri Lanka cannot prevent El Niño, cyclones, droughts or extreme rainfall. But, hazards become disasters when they meet vulnerability. The climate may create the hazard, but the policy determines how exposed we remain. Food security must become the organising principle of agricultural climate policy

The food-security problem

Climate vulnerability is sometimes discussed as though it were mainly a farmer-welfare issue. It is much bigger. Food security has four dimensions, namely, availability, access, utilisation and stability. Climate extremes can damage all four.

A drought or flood reduces availability by lowering food production including paddy, maize, vegetable, fruit, plantation crops, livestock, poultry and fish. Reduced supply can raise prices, undermining access for low-income consumers. Loss of diverse foods can worsen nutrition. Repeated shocks destroy stability by making both household income and national food supply unpredictable.

Sri Lanka has little room for complacency. The World Food Program (WFP) and FAO estimated that 28% of the population was moderately acutely food insecure during the 2022 economic crisis. Conditions subsequently improved, but vulnerability did not disappear. Climate shocks arrive on top of economic vulnerability. A failed harvest is not simply fewer tons in an agricultural statistics table. It can become higher food prices, lower farmer profits, increased imports, pressure on foreign exchange, poorer diets and greater fiscal expenditure. We may import food after a crisis, but unfortunately, we cannot import lost livelihoods of farmers so easily.

We have policies: implementation remains the issue

Sri Lanka is certainly not short of policies, strategies, plans, committees and elegantly bound reports. If agricultural resilience could be achieved through documentation alone, we would probably be exporting it by now. The Nationally Determined Contributions (NDC) 3.0 for 2026-2035 for reducing greenhouse gas emissions (GHGs) and minimising the rate at which climate change is happening, has already identified sensible priorities including climate-resilient agriculture, improved water management, climate information, diversified production and reduced post-harvest losses.

The Government has recognised the El Niño threat and established a high-level coordination mechanism. The Climate Caucus of the Parliament of Sri Lanka provides a cross-party parliamentary space to inform and mobilise Members of Parliament on the climate emergency. In August it specifically called for moving beyond reactive crisis management towards ‘Anticipatory Crisis Governance’, with discussions covering El Niño, agriculture, water, disaster management and environmental management. That role should be strengthened: Parliament can demand cross-ministerial preparedness, scrutinise budgets for resilience, track implementation, promote science-based legislation and keep climate risk above the electoral cycle.

The real question is whether these arrangements change decisions impact fully and timely, before the next shock. Too often we respond to drought with relief, floods with compensation, shortages with imports and surpluses with emergency discussions on storage. It is an impressive system for treating symptoms while preserving the disease.

The vulnerability extends beyond the farm

A crisis can disrupt food systems far beyond farm boundaries, affecting the supply chains. A surviving vegetable crop still becomes a loss if electricity, cold storage or transport fails. Milk production is meaningless if chilling and collection collapse. Paddy recovery is constrained when irrigation canals are damaged or reservoirs are poorly managed. Food security must be planned from watershed to consumer.

The upper watersheds of Sri Lanka deserve particular attention. Degraded slopes, inappropriate land use, erosion and inadequate drainage amplify downstream flooding, sedimentation and dry-season water scarcity. Watershed restoration is not an environmental ornament; it is food-security infrastructure. Irrigation can no longer mean only delivering water. In a climate of extremes, systems must manage scarcity and excess through drainage, storage, groundwater recharge, tank-cascade restoration and catchment management.

The ticking time bomb is not climate change alone. It is climate change combined with degraded landscapes, fragile supply chains, fragmented institutions and delayed decisions. Sri Lanka now has an El Niño warning before us. From Ditwah to Nepal, we have ample evidence of what cascading climate disasters can do

Seven actions before the fuse of the time bomb burns shorter

(1) Make climate-risk information operational. This has to be done immediately, as seasonal and sub-seasonal forecasts, reservoir levels, soil moisture and short-term weather information will directly influence cultivation calendars, crop choices, fertiliser timing and irrigation decisions. A forecast that changes a decision of the farmer is adaptation.

(2) Prepare agricultural contingency plans before each high-risk season. Urgent attention should be on identifying exposed districts, crops and irrigation schemes, establishing water-allocation priorities, securing seed and planting material, preparing alternative crop recommendations, protecting livestock feed and drinking water; and pre-position recovery of resources. Planning after reservoirs are empty would be admirably precise, but late.

(3) Establish an integrated national agricultural climate-risk platform linking Departments of Meteorology, Irrigation, Agriculture, Animal Production and Health, and Agrarian Development, Mahaweli Authority of Sri Lanka, Disaster Management Center, Research Institutions, Universities and Markets. Data scattered among institutions cannot protect a national food system. Climate is already integrated; our institutions should consider trying the same.

(4) Diversify food-production risk through crop diversification, mixed farming, homegardens and locally adapted production systems rather than overdependence on a few crops, narrow planting windows and concentrated supply chains.

(5) Protect what is produced. Drying, storage, cold chains, milk chilling, processing and decentralised logistics can prevent a production shock from becoming a consumer-price shock. Agricultural insurance, contingency finance and rapid recovery mechanisms must complement these investments.

(6) Accelerate development and deployment of varieties tolerant to drought, heat, flooding, salinity and emerging pests and diseases. ‘Climate resilient’ should be a measurable breeding objective, not decorative vocabulary in project proposals.

(7) Redesign water management from catchment to field. Restore tanks and cascades, protect watersheds, improve soil-water retention, modernise irrigation scheduling and invest in drainage.

Stop rewarding vulnerability

Every public agricultural investment should face a simple question: does it reduce future climate risk, or merely reconstruct yesterday’s vulnerability? Rebuilding repeatedly damaged infrastructure to the same standard is not adaptation; it is an expensive subscription to the next disaster. Encouraging production in chronically unsuitable locations and compensating predictable losses is not farmer protection. Subsidising inputs without linking support to better water, soil and risk management may lower today’s cost while quietly increasing tomorrow’s bill.

Agricultural productivity and adaptation cannot be separated. Higher and more stable yields reduce production cost per kilogram. Better nutrient management lowers costs and emissions. Better weather information prevents wasted inputs. Better storage protects farmer income and consumer supply. The objective should be more food per unit of water, land, input, and climate risk.

Parliament can demand cross-ministerial preparedness, scrutinise budgets for resilience, track implementation, promote science-based legislation and keep climate risk above the electoral cycle. The real question is whether these arrangements change decisions impact fully and timely, before the next shock. Too often we respond to drought with relief, floods with compensation, shortages with imports and surpluses with emergency discussions on storage. It is an impressive system for treating symptoms while preserving the disease

Defusing the bomb

Sri Lanka cannot prevent El Niño, cyclones, droughts or extreme rainfall. But, hazards become disasters when they meet vulnerability. The climate may create the hazard, but the policy determines how exposed we remain.

Food security must become the organising principle of agricultural climate policy. It should not merely be the amount of rice produced in a normal year, but the capacity of the entire food system to continue supplying adequate, nutritious and affordable food when the year is anything but normal.

The ticking time bomb is not climate change alone. It is climate change combined with degraded landscapes, fragile supply chains, fragmented institutions and delayed decisions. Sri Lanka now has an El Niño warning before us. From Ditwah to Nepal, we have ample evidence of what cascading climate disasters can do.

We can finance preparedness today, or finance crop losses, food imports, compensation and recovery tomorrow. We have become rather efficient at budgeting for the consequences of vulnerability, but it is time to become equally efficient at preventing them.

One of those options is considerably cheaper. The clock is already ticking.

Sri Lanka is to receive a $ 1 million World Bank grant to prepare an 18-month project aimed at upgrading nature-based tourism destinations, as the Government seeks to address the weak growth in tourism revenue despite steadily rising visitor arrivals.

The Cabinet of Ministers last week approved accepting the grant, under the World Bank’s Grant Facility for Project Preparation (GFPP), to finance groundwork for the proposed Tourism for Heritage Resilience Inclusion and Value-driven Employment (THRIVE) – Nature project.

The proposed project is expected to focus on habitat improvement and tourism infrastructure development in nature-based destinations, while also strengthening programs developed under the World Bank-funded Ecosystem Conservation and Management Project.

The move comes against a broader concern that Sri Lanka’s tourism recovery has not yet translated into a commensurate increase in earnings. Although tourist arrivals have been gradually increasing, the Government has identified the low rate of tourism revenue growth as a particular concern in relation to the country’s substantial potential for nature-based tourism.

The preparation funding could therefore pave the way for a larger investment program focused on improving the quality and economic value of nature-based tourism, rather than relying primarily on increasing visitor volumes.

The proposed intervention is particularly significant given Sri Lanka’s extensive portfolio of national parks, forests, wetlands and other biodiversity-rich destinations, which remain central to the country’s positioning as a nature and adventure tourism destination.

By combining habitat conservation with infrastructure development, the THRIVE-Nature concept also seeks to address the longstanding challenge of balancing increased tourism activity with environmental sustainability.

The proposal to this effect was submitted by Environment Minister Dr. Dammika Patabendi.

Researcher from Kaspersky’s Global Research and Analysis Team (GReAT) recently gave the lowdown on how SilverFox – one of the most active Advanced Persistent Threat (APT) groups – piggybacks on the rising Artificial Intelligence (AI) use in industries in Asia Pacific (APT).

Kaspersky GReAT lead security researcher Ye Jin (Seth) warned that fast-evolving Artificial Intelligence (AI) capabilities are ushering in an era where cyberattacks turn from ‘specialised team operations’ to ‘low-cost solo raids’.

During Kaspersky’s Cyber Security Weekend in Guangzhou, China, researcher from the global cybersecurity and digital privacy company detailed the latest tactics being used by SilverFox, a major threat group active across the APAC region.

The threat actor, detected by Kaspersky Global Research and Analysis Team (GReAT) researchers back in December 2025, is known for employing a multi-stage approach to payload delivery and utilises a segmented infrastructure, using different addresses and domains for various stages of the attack. These techniques are designed to minimise the risk of detection and prevent the blocking of the entire attack chain.

Its most recent campaign targeted companies in India, Indonesia, South Africa and Russia across industrial, consulting, trade and transportation sectors, where it used phishing emails appearing as official tax audit notifications or to prompt recipients to download an archive purportedly containing a ‘list of tax violations.’ By leveraging the perceived authority and urgency of communications from tax agencies, the threat actor aimed to persuade victims to download the file and trigger the attack chain. Kaspersky’s research recorded more than 1,600 malicious emails between January and February 2026.

Now, recent findings from Kaspersky GReAT showed SilverFox is using fake Claude apps to infiltrate on their target organisations. Claude is an advanced conversational assistant, large language model (LLM), and chatbot developed by Anthropic. It helps users write, code, analyse long documents, and solve complex problems through natural dialogue.

‘SilverFox is one of the most active threat groups in the whole APAC region. They get into targets through three simple routes: fake websites, phishing emails, and harmful files spread via social messaging apps. They inject malware used for long-term cyberespionage and sensitive data gathering. Our recent analysis showed they are now distributing fake Claude for Windows, macOS, and Linux, leveraging AI use in companies to crack into their targets’ security defences,’ explained Ye Jin.

In terms of attack distribution, the APAC region is the hardest hit by SilverFox’s malicious activities, with a volume far exceeding the sum of all other regions. This indicates that current SilverFox threats are mainly concentrated in Asia, particularly in East and Southeast Asia.

‘Based on our current threat data, Greater China is SilverFox’s main target with over 90% of all its attacks targeting the region. Mainland China alone makes up 71%. Myanmar, Cambodia and Singapore also see lots of attacks. These are the next hotspots we need to watch,’ added Ye Jin.

When it comes to industry, manufacturing makes up more than one third of all attacks, making it the top target industry for SilverFox. IT and services are closely behind as Kaspersky GReAT researchers see a lot of phishing aimed at tech workers. Healthcare and finance also face big risks from the group known to go after high-value targets.

AI attacks: speed, stealth, and accessibility

Ye Jin also talked about JADEPUFFER, the world’s first fully LLM-driven ransomware, which marked a significant turning point in cyber threats. Unlike previous attacks where AI merely augmented human operators, it demonstrated AI acting as both the decision-maker and executor.

As the first agentic ransomware, JADEPUFFER redefined both the speed and sophistication of how cyberattacks happen using AI capabilities. Unlike conventional attacks that still rely on human operators to make decisions or adjust tactics, this attack showed a real-life example of how AI-powered threats can analyse, adapt, and execute attacks in real time.

‘In this particular case, disclosed by our Sysdig, the malicious AI agent completed the entire cycle of diagnosing a failed attempt, correcting its approach, and launching a new attack in just 31 seconds, far outpacing the response capabilities of most human defenders. Beyond speed, JADEPUFFER also demonstrates an unprecedented level of autonomy. It shows that AI agents are now capable of making independent decisions throughout the attack process, effectively replicating the reasoning of an experienced human attacker without direct oversight,’ he explained.

Aside from speed and autonomy, the rise of agentic AI use in cyberattacks is also writing new rules in terms of stealth and accessibility.

Ye Jin detailed the case of ChatGPhish, an indirect prompt injection technique that transforms trusted AI web-summarisation features (like ChatGPT). In these attacks, cybercriminals hide malicious instructions inside webpages and trick users into asking an AI assistant to summarise the content. The AI then unknowingly relays the embedded malicious instructions or links, making it an unintended part of the attack.

Because the malicious content is presented through a trusted AI interface, users are more likely to believe it is safe and click on harmful links or follow dangerous instructions. At the same time, these attacks are difficult for traditional security tools to detect, as they appear to be legitimate interactions between users and AI services rather than conventional cyberattacks.

Malicious AI agents also eliminate the need for technical knowledge to wage a cyberattack. This was proven during the discovery of the AI and cloud-native malware framework VoidLink in January 2026.

Unlike traditional malware that is largely written by human developers, VoidLink was reportedly developed almost entirely with the help of AI, demonstrating how generative AI is transforming the way sophisticated malware can be created and can be democratised.

The need for AI-native defences

You fight fire with fire. And in this case, Kaspersky expert explains defenders can also utilise AI capabilities to protect enterprise and critical networks against AI-powered cyberattacks.

The four ways companies can counter sophisticated AI-driven threats include:

Proactive defense – move beyond passive response and use AI-driven threat hunting to proactively find unknown threats

Zero Trust architecture – implement a Zero Trust architecture, verifying every access request strictly to eliminate internal network trust risks

Systematic Defense – build a comprehensive defense system covering endpoints, networks, applications, and data.

AI vs AI – use large models and dual-use AI technologies to enhance detection and response capabilities, and iterate in real-time with attackers.

‘When attackers can leverage AI to automate decision-making and accelerate every stage of an attack, defenders must respond with the same level of intelligence. Cybersecurity solutions enriched with continuously updated threat intelligence are no longer a competitive advantage, but a critical requirement for staying ahead of rapidly evolving threats,’ added Ye Jin.

Toyota Lanka Ltd., marked another important milestone in its island-wide expansion with the opening of a new body and paint centre in Kurunegala and the groundbreaking of a new general service facility on 13 August 2026.

With over 30 years of presence in Sri Lanka, Toyota Lanka continues to strengthen its footprint across the country by bringing trusted customer care, professional after-sales support, and dependable mobility solutions closer to communities. Kurunegala has remained an important part of this journey since Toyota Lanka established its presence in the heart of Athugalpura in 2008.

The newly opened body and paint centre brings professional body repair and paint services closer to customers in Kurunegala and surrounding areas, supported by Toyota’s trusted standards of quality, durability, reliability, and safety. The upcoming general service facility will further enhance access to professional vehicle maintenance and after-sales support, creating a more comprehensive service experience for customers in the region.

The ceremonies were graced by Toyota Lanka Chairman Masaaki Kawabata and Managing Director/CEO Manohara Atukorala, together with the Mayor and Deputy Mayor of Kurunegala, distinguished guests, customers, banking and insurance partners, and other invited stakeholders. Religious observances and blessings were also held as part of the occasion.

Addressing the gathering, Kawabata highlighted Toyota Chairman Akio Toyoda’s concept of being ‘Best in Town.’ He noted that wherever Toyota establishes its presence, the aim is to become a meaningful part of the community and contribute to its progress. He further stated that Toyota Lanka considers it a privilege to strengthen its relationship with the Kurunegala community and continue serving customers in the region.

Atukorala highlighted that Toyota Lanka’s ongoing network expansion is focused on making professional service and customer care more convenient and accessible across the country. He noted that each new and upgraded facility brings Toyota Lanka closer to the communities it serves and supports the company’s goal of developing 30 facilities across Sri Lanka by the end of 2026.

The occasion also reflected Toyota Lanka’s LIFE philosophy: Loyalty, Integrity, Fairness and Ethics, which guides the company in building trusted and long-term relationships with customers, employees, partners, and communities.

Toyota Lanka’s contribution to Sri Lanka also extends beyond mobility, with the company continuing to support national skills development in collaboration with the Education Ministry, focusing on developing technical knowledge and future-ready skills among young Sri Lankans.

Toyota Lanka’s after-sales strength is reflected in the value it continues to deliver to customers throughout their ownership journey.

With over 3 million services completed, the company continues to provide dependable maintenance and professional care, helping customers keep their vehicles performing at their best. Through Rs. 200 billion in spare parts distribution, Toyota Lanka has also strengthened the availability of Toyota genuine parts across the country, helping customers gain convenient access to trusted parts and support through its wider network.

Toyota Lanka has further completed over 300,000 body and paint repairs, reinforcing its commitment to stand by customers when they need support the most. Whether following an accident or when restoring a vehicle to its proper condition, Toyota Lanka’s body and paint services are focused on delivering trusted workmanship, reassurance, and care.

The company’s commitment to excellence was further recognised in 2025 with the Customer Delight Excellence Award (CDEA) – Gold, Toyota Warranty Kaizen Award, and Toyota Sales and Marketing Award.

The opening of the body and paint centre and the groundbreaking of the general service facility further reinforce Toyota Lanka’s commitment to Kurunegala and form part of its broader effort to strengthen the service network across Sri Lanka, bringing trusted customer care and mobility solutions closer to customers.