Category: Daily Financial Times

The National Chamber of Exporters of Sri Lanka (NCE) yesterday raised concerns over the lack of industry consultation prior to the recently introduced regulations that significantly shorten the period available for exporters to retain foreign currency earnings.

The concern follows the issuance of a Gazette Extraordinary by the Central Bank of Sri Lanka, which requires exporters to convert foreign currency proceeds held in designated accounts by the tenth day of the following month, a considerably shorter timeframe.

While exporters remain committed to complying with existing requirements to repatriate export proceeds to Sri Lanka, NCE members have questioned why a policy with direct implications for the export sector was introduced without prior consultation with exporter representative bodies and industry stakeholders.

Feedback received from NCE sectoral heads and council members indicates concern over the operational, financial and competitiveness-related impact of the new requirement.

A key issue highlighted by members is the absence of consultation with organisations representing exporters, including the NCE. Members have also questioned whether institutions responsible for export development and promotion were consulted and whether a comprehensive assessment of the impact on exporters was undertaken before the measure was introduced.

The concerns arise at a time when Sri Lanka’s export sector continues to record growth. Total exports from January to April 2026 are estimated at $ 5,784.38 million, representing a 4.3% increase compared to the corresponding period of 2025. Merchandise export earnings during the same period amounted to $ 4,524.62 million, recording a year-on-year increase of 4.8%.

Members noted that many exporters retain foreign currency balances for legitimate business purposes connected to export operations. These include the importation of raw materials and intermediate goods, purchases of machinery, equipment and spare parts, overseas marketing activities, and the settlement of foreign currency-denominated obligations.

Sri Lanka’s total import expenditure increased by 25.2% year-on-year to $ 8.23 billion during the first four months of 2026. Imports of intermediate goods, which include many of the raw materials and production inputs used by export industries, rose by 24.1% to $ 4.7 billion during January-April 2026, with fuel making up a substantial portion of it ($ 2.17 billion). Textile and textile article imports amounted to $ 899.4 million, remaining one of the largest categories, followed by other imports such as $ 205.6 million on plastics and articles, and $ 95 million on rubber and articles. Expenditure on investment goods reached $ 1.52 billion during the same period, including $934.2 million spent on machinery and equipment. These highlight some of the foreign currency requirements associated with production and export-related activities.

Moreover, many export industries operate on seasonal production and procurement cycles. As a result, export proceeds received at one point may only be required several months later to finance future export orders. Members therefore believe that compulsory conversion within a significantly shorter timeframe could disrupt business planning and cash flow management.

Another concern relates to the additional costs exporters may incur as a result of the new requirement. Members pointed out that exporters may be compelled to convert foreign currency earnings into Sri Lankan rupees and subsequently repurchase foreign currency when payments become due. Such transactions could expose businesses to exchange rate fluctuations, bank buying and selling spreads, and additional transaction costs, increasing operating expenses.

Exporters with foreign currency-denominated loans have also highlighted possible challenges stemming from the regulation. Some businesses retain a portion of their export earnings in foreign currency accounts to meet future loan repayments. Mandatory conversion could require such businesses to repurchase foreign currency at a later stage, exposing them to exchange rate risks and creating cash flow pressures.

In light of these concerns, members have proposed that a degree of flexibility be considered within the regulatory framework. One suggestion is to allow exporters to retain foreign currency balances where future foreign currency requirements can be demonstrated, including for raw material imports, machinery purchases, foreign currency loan repayments and other operational commitments. Under such a mechanism, exporters could submit projected foreign currency requirements through their banks and obtain approval to retain the necessary funds in foreign currency accounts.

Several members further noted that foreign exchange conservation efforts should be addressed through a broader policy approach.

Official data indicate that Sri Lanka’s merchandise trade deficit widened to $ 3.7 billion during the first four months of 2026, compared to $ 2.3 billion during the corresponding period of 2025, reflecting stronger growth in imports relative to exports.

In this light, suggestions included reviewing imports of non-essential goods and addressing areas where foreign exchange outflows could be reduced without affecting productive sectors of the economy.

There is broad agreement among the NCE members on the need to continue repatriating export proceeds in accordance with existing regulations and on the importance of supporting national economic objectives. While acknowledging the importance of strengthening the country’s foreign exchange position, many expressed the view that such initiatives should not place a disproportionate burden on exporters, who remain among the country’s primary generators of foreign exchange.

Members maintain that foreign exchange management measures can be more effective when developed in consultation with the sectors directly affected by them. The Chamber therefore emphasised the importance of engaging exporter representative bodies and other relevant stakeholders when formulating policies that have a direct impact on the country’s export sector and foreign exchange earnings.

The Central Bank of Sri Lanka (CBSL) has directed Singhe Capital Investment Ltd. and two of its directors to cease accepting deposits from the public after determining that the company had engaged in unauthorised deposit-taking activities in contravention of the Finance Business Act.

In a public notice issued under Section 42(10) of the Finance Business Act, No. 42 of 2011, the CBSL said an investigation conducted under the Act had found that Singhe Capital Investment Ltd. had accepted deposits by issuing promissory notes and/or commercial papers between February 2023 and October 2024 without the required authorisation.

The regulator said the company, which has its registered office at No. 150, Hirimbura Road, Galle, had violated provisions of the Finance Business Act governing the acceptance of public deposits.

Following the investigation, the CBSL determined that a number of individuals who served as Directors of the company during the relevant period were responsible for the contravention.

The Central Bank has specifically directed Singhe Capital Investment Ltd., K.G. Sugath Wasantha Kumara Rathnawardana and Chandika Yasnath Bandara Weerakoon to refrain from accepting deposits from the public.

According to the notice, Rathnawardana served as a director of the company from December 2023 to October 2024, while Weerakoon served as a director from September to October 2024.

The CBSL said the determination was made on 9 April 2026 following the conclusion of its investigation.

For decades, the narrative of Sri Lanka’s economic identity has been written in the ink of ‘potential.’ We speak of our strategic geography, our high literacy rates, and our resilient spirit. But in the hyper-fluid modern global marketplace, potential is no longer the currency of success; execution is. To transition from a participant to a power to be reckoned with, Sri Lanka must ignite a radical internal alchemy. We must, in keeping with two components of Porter’s Diamond (Ref: The Competitive Advantage of Nations), raise a new generation of Demanding Home Consumers and World-Class Local Suppliers who not only follow global standards but set them up.

Economic history teaches us that the world’s most dominant industries were rarely born in a vacuum. They were forged in the fires of a relentless domestic market. Think of the Japanese consumer’s obsession with ‘reliability’ that birthed Toyota, or the German demand for engineering perfection that gave life to the Mittelstand.

The rise of Toyota from a regional loom maker to a global automotive hegemon is a masterclass in the power of a demanding home market. Post-war Japanese consumers were not merely buyers; they were rigorous critics operating within a resource-scarce economy. Faced with high fuel costs and cramped urban spaces, they demanded vehicles that were exceptionally fuel-efficient, compact, and reliable. This domestic pressure forced Toyota to abandon the wasteful ‘mass production’ models of the West in favour of the Toyota Production System (TPS). Local consumers’ zero tolerance for defects pushed the company to adopt ‘Just-in-Time’ manufacturing and Kaizen i.e., continuous improvement. By the time Toyota introduced the Corolla to the global stage, the car had already survived the world’s most demanding ‘beta test.’ Because it was built to satisfy the relentless scrutiny of the Japanese public, it possessed a competitive DNA that the complacent American and European manufacturers could not match.

The German Mittelstand, the diverse group of small and medium-sized enterprises that form the backbone of the German economy, did not achieve global dominance through sheer size, but through a unique synergy with a sophisticated local industrial base. These companies, often referred to as the ‘Hidden Champions,’ thrived, and thrive, in a domestic ecosystem where German lead manufacturers such as Siemens, Volkswagen, BASF, et cetera, demand nothing short of perfection. In Germany, the relationship between the local suppliers and industrial consumers is one of absolute rigour. Local buyers do not just look for the lowest price; they demand extreme specialisation, precision engineering, and long-term reliability. This ‘unforgiving’ domestic environment compelled Mittelstand firms to focus on and dominate narrow niches. Because their local clients required components that could integrate into the world’s most complex machinery, these suppliers were pushed to innovate at the frontier of physics and material science. By the time a Mittelstand company considers exporting, it has already been ‘stress-tested’ by the world’s most demanding engineers. This creates a formidable competitive advantage. They do not just sell a product. They sell a standard of excellence that has been refined in the highest-pressure industrial market on earth.

Demanding local consumer

Let us apply the concept of the ‘Demanding Local Consumer’ to two of Sri Lanka’s leading foreign exchange earners, i.e., Garments and Hotels. For both, the ‘local’ market has historically been treated as a secondary outlet for surplus or ‘B-grade’ products. Reversing this mindset is the key to global consolidation.

Currently, Sri Lanka’s apparel sector is a world leader in ethical manufacturing (Garments without Guilt). However, it remains largely buyer-driven, responding to the demands of Western giants such as Victoria’s Secret and Nike. Because the local fashion market is often flooded with cheap imports or ‘factory rejects,’ there is little pressure on local manufacturers to innovate original designs for the domestic consumer. However, if Sri Lankan consumers began demanding high-performance technical wear such as moisture-wicking fabrics for our tropical humidity or high-end ethnic fashion for their own wardrobes, local suppliers would be forced to develop, design, and build research and development capabilities independent of foreign buyers. A manufacturer that masters the complexity of ‘tropical-climate performance wear’ for a demanding local base can then export that specialised intellectual property (IP) globally, moving from being a subcontractor to a brand owner. Without doubt, our leading garment exporters are world-class in process excellence. It is time they are pressured to leverage that excellence in producing for a home base with the long-term vision of being a brand owner in a global stage.

As for Hotels, Sri Lanka has a wealth of ‘comparative advantages’ such as beaches, hills, and history to name a few, but its ‘competitive advantage’ is often diluted by inconsistent service standards. Many local hotels practice ‘dual standards’. Superior service for foreigners and ‘good enough’ service for locals, preventing the industry from developing a uniform, world-class service culture. This servile duality is the ‘silent killer’ of Sri Lankan excellence. For too long, our hospitality and service sectors have operated under a neo-colonial delusion: that a passport or skin tone dictates the caliber of a smile. When we reserve our finest vintage, our promptest service, and our deepest bows for the ‘foreign’ traveller while offering the local guest a lukewarm shrug, we are not just being discriminatory; we are being operationally mediocre. This ‘apartheid of service’ creates a brittle industry. If our standards fluctuate based on the ethnicity of the customer, we do not have a standard; we promote discrimination. Global tourism powerhouses like France, Italy, the United Kingdom, China, Japan, Switzerland et cetera do not calibrate quality based on the guest’s origin. They deliver excellence because their own dignity depends on it. To win globally, Sri Lanka must slaughter this sacred cow of perceived inferiority. Consumers must demand world-class rigour from our service providers and refuse to be ‘second class’ in our own home. Until we respect ourselves enough to demand the best, the world will never truly respect the brand ‘Made in Sri Lanka.’

When Sri Lanka’s domestic travellers become ‘unforgiving’, demanding seamless digital check-ins, authentic farm-to-table culinary precision, and uncompromising hygiene, they will create a non-seasonal pressure cooker for excellence. If the local hotel can satisfy a local guest who knows the culture intimately and refuses to accept ‘inauthentic’ or ‘shabby’ service, that hotel will be prepared for the most discerning traveller from London, Tokyo, Delhi, or New York. The domestic market becomes the ‘training ground’ that ensures the staff’s service DNA is world-class 365 days a year, not just during the ‘tourist season.’

When local consumers refuse to settle for ‘good enough,’ they force local industries to innovate or perish. A demanding domestic market acts as a high-pressure laboratory. By expecting the same or better quality, sustainability, and digital integration from a Sri Lankan brand as they would from a European or East Asian counterpart, our citizens become the ultimate catalysts for industrial evolution. This is not just about patriotism. It is about a ‘tough love’ ecosystem that prepares our businesses for the brutal scrutiny of the global stage.

Dominating the global stage

If we are to dominate the global stage, the local consumers must do away with the notion of ‘good enough.’ The revolution must begin in our own shops, our own hotels, and our own boardrooms. We must reject the crumbs of global supply chains and the indignity of second-class service. We must have zero tolerance for the ‘export-quality’ myth and refuse to accept that our best products should leave our shores while we settle for ‘B-grade’ leftovers. If it is not good enough for us, it is not good enough for the world! We must stop patronising establishments that calibrate their hospitality by the colour of a passport. We must demand excellence because we are customers, not because of our origin. We must stop rewarding mediocrity with our silence. We must complain, we must critique, and we must walk away from brands that fail to innovate. Our lofty expectations must be perceived as a gift by local suppliers. It is the friction that operationalises ‘Porter’s Diamond.’ Lastly, we must reward the local suppliers who show the courage to match the world’s best. We do not want ‘local’ as a charity; we want ‘local’ as a gold standard.

On the other side of the coin lie the Local Suppliers. The ambition of the consumers must be matched by the capability of the producers. For Sri Lanka to consolidate its competitive advantage, our local ‘giants’ and Small and Medium Enterprises (SMEs) must undergo a ‘capability revolution.’ They are no longer competing with the shop next door. They are competing with automated factories in Vietnam and artificial intelligence (AI)-driven logistics hubs in Singapore.

Breeding suppliers with the capacity to match the world’s best means, *Technological Sophistication: Moving beyond assembly to high-value research and development (R and D) and proprietary IP, *Agility: Mastering the ‘just-in-time’ capabilities of global supply chains, and *Quality Obsession: Ensuring that ‘Made in Sri Lanka’ becomes a global shorthand for excellence. When a demanding local public meets a hyper-capable local supply chain, a virtuous cycle begins. Domestic rivalry intensifies, innovation accelerates, and the definition of ‘normal’ is recalibrated. This healthy, internal friction generates the heat to propel Sri Lankan exports into the most sophisticated markets on earth.

To move from a ‘protected’ economy to a ‘competitive’ one, the Government must stop acting as a safety net for mediocrity and be the enabling architect of excellence. The NPP Government has stated that other than in a few selected instances, it will not run businesses but will sharpen the environment in which they operate. The Government must shift the mindsets of the current corporate ‘giants’ from domestic dominance to global relevance. The implementation of the four-band tariff structure that would remove the ‘comfort blankets’ of high protective taxes that have allowed ‘giants’ to be inefficient and lazy, is a welcome move. Further, lowering tariffs on high-tech inputs will enable these ‘giants’ and SMEs to modernise and compete with the world’s best right here in Sri Lanka. The state must heighten its commercial diplomacy by pivoting its foreign missions from political posts to commercial hubs. By setting hard export targets for ambassadors and integrating the Export Development Board (EDB) into every embassy, the Government can create global pressure that demands ‘home players’ match international standards to survive. It is also vital that the state funds accredited world-class labs. If a local enterprise can get an internationally recognised ‘green’ or ‘digital’ certification at home, their path to the EU or US markets is paved.

SMEs

The Government must also help SMEs to build capability. The Government’s role should be to provide them with the tools of trade, not just hand-outs. The Government has promised to eliminate the ‘bureaucracy tax’ by creating a ‘Digital Single Window’ for investments and exports, thereby enabling an SME in Matara to access the same global markets as a ‘giant’ in Colombo without experiencing the friction of twenty different Government departments. The Budget 2026 announced the departure from generic ‘relief,’ to enhanced capital allowances, where, if an SME invests in AI, automation, or sustainable tech, the Government will offset the cost. As per the proposals, this is as much as 200% in certain regions. This is not a handout. It is a subsidy for upgradation. The Government also plans to develop auxiliary industrial zones where SMEs are literally ‘plugged in’ as suppliers to larger enterprises or renowned international manufacturers. The eligibility to stay in the zone is contingent on SME meeting the clients’ world-class standards. This is very similar to Germany’s Mittelstand.

Budget 2026 has a ‘carrot and stick’ approach to enhancing industrial capability. The most significant ‘carrot’ is the radical reduction of the Enhanced Capital Allowance (ECA) threshold from USD 3 million to just USD 250,000, allowing SMEs to claim 100% to 200% of their investment in machinery and technology against their tax liabilities. This is essentially subsidising the ‘re-tooling’ of small factories to meet global standards. Coupled with the Rs. 35.6 billion allocations for digital transformation, including a national e-invoicing system and a single National Trade Window, the Government announced plans to upgrade the ‘plumbing’ of the SME sector. The ‘stick’, though, is concerning. To broaden the tax base, the Government slashed the VAT/SSCL registration threshold from an annual Rs. 60 million to Rs. 36 million. This brings a ‘compliance tsunami’ to smaller players who lack the accounting infrastructure to manage VAT. The most notable failure, however, is the absence of the promised ‘relief bank’ (Sahana Bank) for struggling enterprises, leaving many SMEs trapped in unmanageable debt cycles. Only a meagre Rs. 8 billion has been allocated for new loan schemes for a sector comprising 1.5 million firms. Furthermore, while the budget talks of ‘global value chains,’ it remains silent on productivity linkages. There are no specific incentives for ‘Giant-SME’ mentorship or technology transfer, leaving smaller suppliers to modernise in isolation rather than as part of a cohesive industrial engine.

Role of Government

In protecting the ‘reliability’ of Sri Lanka’s big exporters from ‘black swan’ events like Cyclone Ditwah, which dealt a $4.1 billion blow to the economy, the Government must pivot from reactive relief to pre-emptive resilience. Reliability is the only currency that keeps global buyers from switching to competitors like Vietnam, Indonesia and India. There are a couple of things the Government can do. It can hard-code climate resilience by immediately enforcing ‘climate-ready’ building codes for industrial zones. As was seen in the Kandy and Central provinces, the flooding of factories was not just due to weather; there was a failure of drainage and location planning. The Government can also establish a digital export vault by subsidising decentralised cloud infrastructure and satellite-linked backup hubs, like Starlink, to ensure that even if the national grid or fiber optics fail, our global codebases and service desks remain online. In being prepared for ‘chance’ events like the X-Press Pearl incident, the Government must immediately join the Hazardous and Noxious Substances (HNS) Convention. This allows for immediate, high-quantum international compensation, protecting our Tourism and Fisheries sectors from the multi-year legal delays currently stalling recovery. The Government will also do well with the agriculture sector by moving beyond ad-hoc handouts to a National Parametric Insurance Scheme, which ensures that the moment a weather event, such as Ditwah, hits a specific ‘intensity threshold’, funds are released to exporters within a specified time to secure alternative supply or repair irrigation. Reliability is not the absence of disaster; it is the speed of recovery. The State must stop managing ‘the event’ and must preempt ‘the downtime.’

Today, we must make decisions. We can continue to be a nation that exports raw materials and basic services, or we can become a nation that exports intelligence, quality, and innovation. The journey to global dominance does not start at the Port of Colombo. It starts with demanding home consumers and world-class local suppliers. It is time to stop being a ‘promising’ economy and start being a ‘demanding’ one.

HighVoltagePR, a premier boutique public relations and reputation management agency in Sri Lanka, celebrates its 10th anniversary, marking a decade of excellence in strategic communications, responsible media engagement, and impactful storytelling.

Established in 2016 by veteran journalist and corporate communications specialist Supun Dias, HighVoltagePR was built on a foundation of absolute credibility, strong media relationships, and transparent results.

Over the past ten years, the agency has evolved into a trusted communications partner, steering the public positioning and corporate reputations of leading brands across FMCG, healthcare, construction, automotive, financial services, logistics, retail, IT and non-governmental sectors.

HighVoltagePR Founder Supun Dias said: ‘When we established this agency a decade ago, our vision was simple yet uncompromising: To bring authentic, responsible, and journalist-friendly storytelling to the forefront of corporate communications in Sri Lanka. Our longevity is a direct reflection of the trust our clients place in us and the respect-driven relationships we maintain with the media fraternity. As we look ahead, we remain focused on evolving alongside the changing media landscape while preserving the high standards of clarity and integrity that define us.’

Marking its forward-looking growth trajectory, HighVoltagePR has entered into a strategic partnership with Ncatalysts, one of Sri Lanka’s emerging growth and performance marketing agencies. Founded in 2022, Ncatalysts combines creative strategy, video production, performance marketing, and digital infrastructure development – including web, app, and AR/VR experiences – to help brands grow with bold creativity and relentless execution. Its portfolio includes some of the country’s most prominent names: Dialog, LOLC Group, Exide, TVS, Prima Flour and AIA.

This collaboration creates an integrated model where HighVoltagePR’s unmatched traditional media relations and reputation management expertise seamlessly align with Ncatalysts’ strengths in digital execution, performance marketing, and online discoverability.

Ncatalysts Founder Namal Fernando said: ‘This partnership brings together two critical pillars that brands in Sri Lanka need right now: Credibility in the public space and performance in the digital space. Sri Lankan businesses are competing in a highly crowded, digital-first environment. By partnering with HighVoltagePR, we are creating a unified model where PR, digital marketing, and customer experience work together under one strategy and one accountable team, ensuring clients move faster and achieve stronger business outcomes.’

The decade-long journey of HighVoltagePR has been characterised by a lean, highly strategic operational model ensuring senior-level counsel. With a solid ten-year legacy as its foundation and a fortified multi-channel communication capability through Ncatalysts, the agency is uniquely positioned to guide modern brands through the next decade of reputation management, ensuring client messages resonate seamlessly across print, broadcast, and emerging digital channels.

C.W. Mackie PLC has promoted Mangala Perera as its Chief Executive Officer/Executive Director from its previous position as Group Chief Operating Officer/Executive Director.

A graduate of the University of Sri Jayewardenepura, he holds a B.Sc. (Hons.) degree in Marketing Management (Special) and a postgraduate diploma in Business and Financial Administration. He also holds fellowship status with the Australian Sales and Marketing Association.

Perera brings extensive experience in branding, marketing and general management. He previously served as Asia Pacific Regional Business Development Manager for an Australian company, where he worked with multinational corporations including Kimberly-Clark, Sanitarium Health Foods, Golden Circle, Arnott’s Biscuits and Eveready, engaging directly with a range of global brands.

An active contributor to the marketing profession in Sri Lanka, Perera has served on several national-level project committees and has been involved in initiatives aimed at advancing the country’s marketing sector.

In addition to his new role, he serves as Managing Director of Sunquick Lanka Ltd., and as a Director of Kelani Valley Canneries Ltd., Sunquick Lanka Properties Ltd., and Phoenix Industries Ltd.

Vidyartha College have secured promotion to the Dialog Schools Rugby 1A Division for the 2027 season following an outstanding campaign in the Division 1B tournament. The Kandy school remained unbeaten in its matches and will face Rajans in its final outing on 20 June.

The side was guided by Head Coach Anurudha Wilvara, whose leadership played a key role in the team’s success. He was well supported by Forward Coach Radeesha Senevirathne, Trainer Oshada Kodagoda and Kicking Coach Chamara Kumara. Veteran Team Manager Upul Bandara Weerasinghe, who has served the college for more than a decade, also played a vital role behind the scenes in the successful campaign.

Captain Sadew Dilshara led the side with confidence and determination, while Vice-Captain Pamudotha Narayana provided valuable support both on and off the field.

The Kandy outfit recorded impressive victories over St. Sylvester’s College (41-17), St. Aloysius’ College (68-8), Sri Piyarathana College (103-0), St. Benedict’s College (42-17) and Maliyadeva College (22-14) to confirm promotion before its final league fixture.

A school with a proud rugby tradition, Vidyartha has produced several outstanding players who have represented leading club sides and Sri Lanka. With promotion now secured, the Kandy school will aim to re-establish itself among the country’s elite when it returns to the highly competitive 1A Division in 2027. (SJ)

Last week in Frankfurt, my granddaughter asked: ‘Seeya, why are the streets so clean here without police?’ I had no good answer for Sri Lanka. We have the same laws and the same potential, but the result is different. The answer is not more Government programs or more CSR initiatives by companies.

Corporate Social Responsibility (CSR), which was once a buzzword among large corporates and professional circles, has now become a popular tool for fulfilling organisational social obligations even among medium-sized and small companies. This shows that the importance of the concept is being acknowledged today more than ever before, which is a positive sign. However, I tend to feel that the concept is not properly understood by certain sections of our society. Therefore, I wish to explain it in simple terms so that this write-up can be easily understood.

CSR can be commonly defined as a business model in which companies integrate social and environmental concerns into their business operations and interactions for the wellbeing of society and the environment. Put differently, it is the recognition that companies must contribute part of the profits they earn from providing services back to society for its development.

During my visit to Frankfurt, two things struck me: the streets were clean, drivers were more than careful and immensely patient, and people took their turn for any service without being told. In most other countries, such as Australia, where the largest Sri Lankan community outside Sri Lanka lives, the situation was the same. Nobody is watching, yet everyone follows basic social norms and obeys the rules. Back home in Sri Lanka, we have the same rules and laws and the same potential, yet the result is different. I strongly feel that the answer is not more Government programs or more CSR projects by large companies.

Researchers call it ‘Individual Social Responsibility’ (ISR): the duty of every citizen to act ethically, protect the environment, and contribute to community wellbeing in daily life (Lin, 2010; Paine, 2014). Companies call it CSR, publish extensive reports, and try to improve their image. But CSR only works when employees and citizens practise ISR first (Aguilera et al., 2007; Carroll, 1991). A country needs both. CSR is for companies and ISR is for individuals.

If I were to put this idea in one sentence, it would be: ‘CSR is the roof, but ISR is the foundation. Without a strong foundation, the roof collapses.’

A company can have the best CSR policy, but if its employees do not care, nothing changes. ISR encompasses four dimensions: ethical, environmental, civic, and community responsibility.

It is noteworthy that some global and local companies have made ISR a reality on the ground. To cite just two examples, Patagonia and Sri Lanka’s own MAS are companies that have facilitated and motivated their employees to engage in ISR. Needless to say, there are many other companies, banks, and institutions globally and locally that have done the same. These successful organisations contribute meaningfully to national development.

The relationship between ISR, CSR and national development

Current situation

Now that you have some understanding of ISR, let us conduct a frank examination of ourselves. Are we fulfilling our obligations and duties as citizens? Do we understand the social cost of not being individually socially responsible?

Let me offer a few examples. First, consider our road discipline. As drivers, are we following traffic rules and regulations? Speeding, drunk driving, improper parking, impatience, and the violation of pedestrian rights, among many other offences, contribute to an ever-increasing number of deaths each year. Our discipline in public transport is among the worst in the world.

Next is garbage disposal. What a mess. Some garbage ends up in the neighbour’s yard, some is burnt along with plastics and polythene, and this even happens in some schools. Some garbage bags are thrown from luxury vehicles through the windows while in motion. Needless to say, food wrappers and toffee wrappers are discarded everywhere. I will leave it to you to think of other similar activities. Then think of Government officers, including the police, who are supposed to enforce law and order, and other public officials who manage public sector institutions responsible for providing services to citizens, yet fail to perform their duties properly. This includes heads and chairpersons of organisations. These are blatant violations of ISR.

Some of the most serious ISR violations involve environmental destruction, such as cutting trees, permitting coastal erosion, removing soil and sand, damaging riverbanks, and many other harmful activities. All of these retard national development, particularly sustainable development.

Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

These are some of the reasons why ISR matters in 2026. ISR is the missing link between corporate policies and real impact. Unless there is a culture of ISR among companies, their employees, and ordinary citizens, CSR initiatives will fail on the ground.

The current drivers of ISR in 2026 stem largely from Generation Z, employee demands for purpose, hybrid work requirements, self-regulation, and ESG reporting, which increasingly tracks employee behaviour.

The fastest way to develop Sri Lanka requires no budget. It is called responsibility.

How to face the challenge: The solution

If every Sri Lankan decided, ‘I will respect others because everyone has the right to their own viewpoint,’ took their turn, behaved politely, drove according to traffic regulations, exercised patience, and followed basic social ethics, we would not need ten separate projects to solve these problems.

ISR is not about politics. It is a personal strategy. It may be the fastest strategy available to develop Sri Lanka.

First and foremost, every Sri Lankan needs to understand and accept that we have a problem. Without recognising a problem, solutions never emerge.

Next, we need to change our mindset and begin practising good habits step by step, similar to the Japanese concept of Kaizen. I believe we can learn a great deal from our Japanese friends and the way they have steadily developed Japan through concepts such as 5S and other continuous improvement practices. They call it small habits producing big results.

Simple things we can do in Sri Lanka

The media and schools must promote and popularise the ideas expressed in this article because they are important stakeholders in building a responsible society.

You do not need a ministry or a million rupees to change Sri Lanka. You only need five promises to yourself, starting tomorrow morning:

1. Promise to the street: ‘I will not drop garbage.’

Hold your bottle, wrapper, or betel spit until you find a bin. If there is no bin, keep it in your bag. Frankfurt is clean because millions of people make this one promise. Colombo can too.

Clean streets = less dengue + more tourists + greater pride.

2. Promise to the country: ‘I will pay my full tax.’

Whether it is income tax, VAT, or even a bus fare, do not ask for a discount through evasion. Every rupee hidden is a rupee taken from a school, a hospital, or a road.

Proper taxation and efficient management by Government authorities = a stronger Sri Lanka.

3. Promise to others: ‘I will respect the queue.’

At the bus stop, bank, supermarket, or shop-no pushing and no saying, ‘Ayya, I am in a hurry.’

A queue is democracy in action. If a child in Frankfurt can wait, so can we.

A proper queue = trust.

4. Promise to the future: ‘I will save water and electricity.’

Switch off the light when you leave a room. Do not let the tap run while brushing your teeth.

The CEB cannot solve power shortages if we all waste resources.

Conservation = fewer blackouts for your own family.

5. Promise to one person: ‘I will teach or help one person this week.’

Teach your neighbour’s child a maths problem. Show an office assistant how to recycle. Help an elderly person cross the road.

ISR means: ‘I am responsible for someone other than myself.’

None of these actions requires a law, but all of them require you.

CSR is what companies do with money. ISR is what you do with character.

Some may think that comparing a developed country with a developing country like Sri Lanka is neither logical nor practical. However, this article has shown how we can begin a process of change, even if it takes time.

I would also like to emphasise that this article contains important messages for every citizen, every organisation, and the Government.

Let us come together and transform Sri Lanka into a prosperous nation. Only you can do it.

Remember the five promises YOU made.

The Cabinet of Ministers has approved steps to secure an additional $100 million in financing from the Asian Development Bank (ADB), doubling the allocation under a key trade, investment and industrial development programme to $ 200 million.

On 16 March, the Cabinet approved obtaining $ 380 million through policy-based loan facilities from the ADB during 2026. Of this amount, $100 million was earmarked for the Trade, Investment and Industries Development Program-Sub Program.

The ADB recently announced that it has agreed to provide a supplementary financing package of $ 100 million in response to economic uncertainties arising from the ongoing crisis in the Middle East and the impact of climate-related disasters.

‘The additional funding will increase the allocation for the trade, investment and industrial development program from $ 100 million to $ 200 million,’ Cabinet Spokesman and Minister Dr. Nalinda Jayatissa said at the weekly post-Cabinet meeting yesterday.

When asked about expanding the debt portfolio, he said the Government was taking loans for development and will repay them on time.

Sri Lanka’s tourism development strategy is moving towards a more structured, investment-focused model, with the Presidential Task Force for the implementation of the Tourism Development Programme reviewing a series of large-scale initiatives ranging from special tourism zones and maritime transport links to film tourism and eco-tourism development.

Meeting at the Presidential Secretariat yesterday under the chairmanship of Foreign Affairs, Foreign Employment and Tourism Minister Vijitha Herath, the task force discussed measures aimed at addressing structural constraints in the sector while positioning Sri Lanka as a sustainable tourism destination.

A key proposal under consideration is the establishment of the ‘Southern Mist Corridor’, a dedicated tourism zone spanning the districts of Galle, Matara and Ratnapura. The initiative would encompass tourism development activities across the Southern and Sabaragamuwa Provinces, including areas surrounding the Sinharaja forest reserve, the Kanneliya-Dediyagala-Nakiyadeniya forest complex and the Hiniduma mountain range.

Officials said the proposed framework is intended to address concerns over unauthorised hotel developments and environmental degradation in ecologically sensitive areas while creating a regulatory structure to facilitate sustainable investment. The corridor is also expected to promote tea tourism and eco-tourism, with an Integrated Operations Committee to be established to coordinate implementation.

The task force also reviewed plans for a proposed Maritime Tourism Corridor, a 10-year project to be implemented in three phases by Capital Marine and Civil Construction. The first phase envisages the launch of ferry services from Jaffna, with future expansion towards Colombo and Galle, potentially creating new tourism circuits and improving connectivity between key destinations.

Discussions further focused on improving Sri Lanka’s competitiveness in film tourism. Officials reviewed progress on establishing a single-window approval mechanism for foreign productions and measures to simplify the temporary importation of filming equipment, longstanding issues cited by international film crews.

The task force also examined plans to promote adventure tourism through a joint initiative involving the Sri Lanka Air Force, the Civil Aviation Authority of Sri Lanka and the Sri Lanka Tourism Promotion Bureau to develop skydiving activities centred on Koggala Airport.

Among other initiatives reviewed were new regulatory guidelines for whale and dolphin watching, including the introduction of an online registration system, and efforts to expand Colombo’s night-time economy through the proposed ‘Marine Night’ weekend programme along Marine Drive.

The meeting also reviewed visa facilitation measures and tourist security issues, both considered critical factors in sustaining visitor growth and attracting higher-spending travellers.

The discussions were attended by senior Government officials, tourism stakeholders and private sector representatives, including Krishan Balendra. Senior Economic Adviser to the President Duminda Hulangamuwa and Secretary to the President Nandika Sanath Kumanayake were also present.

Improving the efficiency and profitability of State-Owned Enterprises (SOE) by ending systemic shortcomings as well as endemic corruption was one of the core pillars of the NPP’s election manifesto in 2024. The stance of the administration towards reforming the SOEs has remained largely unclear with divergent views expressed at different times by the Government’s influential decision makers. The left-leaning coalition which promised systemic change convinced the masses they had the best credentials to revive loss-making state entities given their strong anti-corruption stance.

In this backdrop, the revelation by the Finance Ministry’s Final Budget Position Report – 2025 that the main 51 SOEs recorded a combined profit of Rs. 444.4 billion in 2025, down 17.6% from last year would not have pleased pro-reformist groups who expected better performance from SOEs under an NPP Government. Nevertheless, excluding the CEB, the remaining 50 SOEs generated profits of Rs. 483.2 billion, a 21.5% rise from 2024. Compared to the net profit of Rs. 141.6 billion in 2024, the state-owned electricity utility incurred a net loss of Rs. 38.7 billion in 2025. Apart from the deterioration in the financial performance, the CEB experienced significant administrative as well as leadership volatility at the top during last year. In May 2025, the first CEB Chairman under the NPP Government Dr. Tilak Siyambalapitiya resigned from his post, just under eight months after being appointed. His appointment itself was severely criticised given the obvious conflict of interest as RMA Energy – a firm which is co-owned by the former CEB Chief and his wife – is a registered service provider to the CEB and continued to engage in state energy contracts while Siymbalapitiya held the top executive seat at the utility.

Meanwhile, efficiency and effectiveness of SOEs cannot be determined by profits alone. The profit is a subjective figure which can be manipulated by various accounting policies and not objective. Moreover, certain state entities like banks have inherent competitive advantages as they are under state ownership. State banks enjoy a natural captive market courtesy of their parent shareholder- the Government. By default, the entirety of state corporations and statutory boards maintain their accounts with the state banks, hence, both the BOC and People’s Bank can secure a large pool of low-cost deposits. Questions have also been raised whether the two banks require the high number of employees they currently possess given the rise in digital and online banking services. The two state banks are often called upon to bail out perennial loss-making entities like SriLankan Airlines which has affected both banks and the overall economic growth of the country.

The fundamental shortcoming of SOEs is their lack of sense of ownership. The empirical evidence suggests that SOEs in Sri Lanka have functioned primarily to enrich employees and their political masters at the expense of taxpayers. Compared to private enterprises, the agency conflict is quite acute among SOEs and even under the NPP Government several top executive leaders of some corporations have devoted their time and energy towards initiatives that benefit their own interests instead of making systemic improvements to the institutions they are heading. For instance, Sri Lanka Export Credit Insurance Corporation (SLECIC) Chairman Prof. Aruna Shanthaarchchi, an academic of Sabaragamuwa University who has been temporarily released from service, has prioritised assisting his primary place of employment using the financial resources of the Corporation instead of addressing the shortcomings of the institution which he is heading. SLECIC has sponsored various research symposiums of Sabaragamuwa University although such activities do not accrue any meaningful benefit to the Corporation.

The Government needs to fundamentally rethink its stance on SOEs and ideally should consider divesting state commercial entities to private ownership. In the Sri Lankan cultural context, where individuals often misuse their power and influence to achieve their personal agendas, state ownership of commercial enterprises is not in the best interest of taxpayers.