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In the first part of this article, I showed that Sri Lanka’s universities sit far below those of countries with similar or even lower incomes, and that the gap widened again in the QS Asia University Rankings 2027, released on 4 November. The University of Colombo, our best, is now 364th in Asia, down from 275th two years ago. Indonesia and Vietnam, at almost exactly our income level, have universities at 53rd and 159th. India, Bangladesh and Pakistan, with half or less of our per capita income, have theirs at 66th, 136th and 76th.

This second part asks the more useful question: why? The QS dataset – 1,722 universities from 26 countries and territories – breaks each university’s score into eleven indicators, showing exactly where we lose our marks.

Where the gap really lies

Comparing Sri Lanka’s top three universities with the top three of each peer country tells us exactly where we fall short. Table III summarises the scores (out of 100).

Four patterns jump out.

nPattern 1: Sri Lanka is closed to the world. This is the single biggest gap. The average score of our top three universities on international faculty is 1.6 out of 100 and on international students 3.8. Inbound and outbound student exchange are similarly close to zero. Indonesia’s flagships score close to 100 on international faculty and on both kinds of exchange; Malaysia’s score 95 or more on all four. Even Bangladesh and Pakistan, hardly magnets for foreign academics, score ten to fifteen times higher than we do on international faculty. Across all 1,722 universities in Asia, the average international faculty score is 33.3. Ours is 1.8.

Pattern 2: Too many students per teacher, and getting worse. On the faculty-student ratio, every single Sri Lankan university fell in rank this year. At Colombo, according to QS, student numbers rose by about 6% while academic staff numbers fell by about 3%. That is roughly 9% more students for each lecturer in a single year. Our top three average 15.9 on this indicator, compared with 88-91 for Malaysia and Indonesia.

Pattern 3: Thin research output and too few PhDs. On papers per faculty, our top three average 12.8 against 99.8 for India and 66.3 for Malaysia. On staff with a PhD, the averages are 41.5 for Sri Lanka against 100 for India and 99.7 for Malaysia. Every Sri Lankan university with data fell in rank on the PhD indicator this year, even where its own score improved slightly. Five Sri Lankan universities – Rajarata, Sabaragamuwa, South Eastern, Ruhuna and Wayamba – reported no PhD data at all, which itself costs points.

Pattern 4: Reputation is our relative strength – but it is fading. Sri Lanka still does respectably on academic reputation compared with the Asian average, and Sri Lankan research that is published is reasonably well cited. Sri Jayewardenepura is 194th in Asia for citations per paper, and Peradeniya is 274th for its international research network. Academic reputation was the only indicator where Sri Lanka gained ground this year. Yet the gap with peers’ flagships remains wide: India’s and Indonesia’s top three average 98 on academic reputation, ours 41. And on employer reputation, both Colombo and Sri Jayewardenepura lost points this year while most of Asia gained.

Put simply, Sri Lankan academics who do research are producing work that is cited. The problem is that there are too few of them, they are overloaded with teaching, they rarely work with foreign colleagues on campus, and they teach almost no foreign students. These are system problems, not individual failings.

The peer scorecard

Table IV compares Sri Lanka’s overall presence in the 2027 Asia rankings with that of its peers. Two numbers stand out. First, Sri Lanka has no university in Asia’s top 200; Vietnam and the Philippines have two each, Bangladesh three, Pakistan five and Indonesia twelve. Second, within South Asia alone – a subregion that QS ranks separately – the University of Colombo is only 83rd. In other words, 82 universities in India, Pakistan, Bangladesh and Iran are ahead of our best.

Again, honesty requires a caveat. This year was a difficult one for most of South Asia. About 71% of India’s returning universities, 66% of Pakistan’s and 59% of Bangladesh’s fell in rank, compared with 67% of Sri Lanka’s. IIT Delhi fell from 59th to 66th. The difference is the starting point: a slide from 59th to 66th still leaves IIT Delhi among Asia’s elite; ours moves us further from relevance.

What about research?

The picture is a little better when we look at individual researchers rather than institutions. In the AD Scientific Index, which ranks academics by their Google Scholar citations and h-index, the University of Colombo’s world position improved from 1,655 in early 2025 to 1,315 in mid-2026, and the number of its academics in the global top 10% rose from 21 to 22. Sri Lanka has capable researchers. What it lacks is a system that multiplies their impact: research time, funding, PhD students and international collaboration.

Why is this happening?

Rankings are a symptom. The causes are well known to anyone who has worked with our universities.

The first is money, and what happened to it after 2022. The economic crisis eroded academic salaries in real terms, cut research budgets and accelerated the departure of experienced lecturers abroad. The faculty-student and PhD numbers in the QS data are the statistical footprint of that exodus.

The second is insularity, and it is largely a policy choice. State universities have few incentives to recruit foreign staff or students, and the rules make it hard even when they try. As I pointed out in 2025, visa procedures for foreign academics and students are cumbersome and unpredictable.

The third is weak incentives for research. The research allowance paid to state university academics is largely automatic rather than linked to measurable output. Recruitment and promotion still give limited weight to publication impact. It should not surprise us that output per academic is low.

The fourth is that nobody owns the rankings. Most leading Asian universities have dedicated offices that manage data submissions to ranking agencies, track indicators, build relationships with employers and promote the institution abroad. Few Sri Lankan universities do. The absence of PhD data for five of our ranked universities is a small but telling example: points are being lost simply because data are not submitted.

What our peers did differently

The countries that have overtaken us did not do so by accident. Malaysia made internationalisation a national strategy, opened its doors to foreign branch campuses and set explicit targets for foreign students; its universities now score close to the maximum on every international indicator. Pakistan, through its Higher Education Commission set up in 2002, invested heavily in sending academics abroad for PhDs and in rewarding publications, which is why its flagships score well on research output and staff qualifications despite the country’s economic difficulties. Vietnam allowed ambitious private universities to grow; Duy Tan University, a private institution, is now Vietnam’s highest-ranked university in the QS world table. Indonesia broadened its base, and its top three universities now rank in Asia’s top 60.

The common thread is deliberate policy sustained over a decade or more, not money: none of these countries was richer per head than Sri Lanka when it started. What they had was a decision, made at the top that their universities would compete internationally.

What should be done?

None of this is beyond repair. Countries with fewer resources have moved faster. Here are six practical steps.

Open the doors. Set a national target for international students and staff, as Malaysia has done, and back it with a fast-track visa for foreign academics and students. Internationalisation indicators are where Sri Lanka’s scores are closest to zero, so they offer the biggest gains for the smallest effort.

Fix the staff equation. Retaining and rebuilding the academic workforce should be a priority. That means competitive pay for research-active staff, funded PhD places linked to returning service, and allowing universities to hire experienced Sri Lankan academics from the diaspora on flexible terms.

Pay for performance. The University Grants Commission should link a portion of university funding to measurable improvement in research output, internationalisation and graduate outcomes. Research allowances should reward research.

Bring employers inside the tent. Employer reputation is worth 20% of the QS Asia score. Chambers of commerce, export associations and large employers should formalise partnerships with universities on curricula, internships and joint research.

Professionalise reputation management. Every university in the rankings should have a small, well-staffed office responsible for data quality, ranking submissions, international partnerships and global communications.

Let the best rise faster. Moratuwa’s progress shows what focus can achieve. Give a handful of universities more autonomy over hiring, admissions and partnerships, in return for clear performance targets.

Conclusion

Sri Lanka’s universities have long performed below what our income, literacy and history would predict. The 2027 rankings show that the gap is not closing; it is widening. Countries that were poorer than us a decade ago, and some that still are, now have universities that the world takes seriously. Ours are slipping further down the table each year, not because our academics are less able, but because the system around them has stood still while the rest of Asia has moved.

For a country that hopes to sell services, attract investment and keep its talented young people at home that is not an academic concern. It is an economic one. The great fall can still be reversed – but only if we stop treating the rankings as somebody else’s problem.

CT Holdings PLC and its key subsidiary, Cargills (Ceylon) PLC, recently reported a strong performance for the second quarter of FY2026/27, driven in large part by growth across the Group’s key operating sectors of Retail, FMCG and Restaurants. Alongside this performance, the Group announced a series of senior executive appointments, effective from January 2027, as part of its long-term succession planning and continued commitment to developing leadership from within the organisation.

Commenting on the results and appointments, CT Holdings PLC and Cargills (Ceylon) PLC Chairman Louis Page said: ‘Cargills, which is a key subsidiary of CT Holdings, has always been built with a long-term perspective. Through different generations and different periods in our country’s history, we have continued to invest, grow and evolve. That commitment has not changed.’

Strengthening professional leadership

The new appointments encompass leadership positions across Retail, Dairy and Food and Beverage, as well as Group Finance. They bring together a team of experienced executives who have grown within the Group and played important roles in developing and expanding its businesses over many years. Collectively, the strengthened leadership team brings deep institutional knowledge, extensive operating experience and a strong understanding of the values and culture that have shaped the Group for decades.

Reflecting on the appointments, Page went on to say, ‘The appointments we are announcing are an important part of that journey. One of the greatest strengths of Cargills has been its people and our ability to develop leaders from within. These are individuals who have grown with the Group, understand our businesses and our values, and have demonstrated their ability to lead.’

As the Group has expanded in scale and complexity, strengthening professional management and empowering individual business leaders with greater responsibility and accountability have become increasingly important. The new leadership structure is intended to provide experienced executives with clear accountability and the responsibility to take their respective businesses forward, while preserving the institutional knowledge, values and long-term perspective that have shaped the Group over generations.

‘As the CT Holdings Group becomes larger and more complex, it is important that our businesses continue to be led by strong professional management, with clear accountability and the freedom and responsibility to take the Group forward,’ Page said.

Committed ownership with a wider social purpose

Alongside this evolution in management, the Group’s controlling ownership is intended to remain stable and committed through Odeon Holdings, the parent company of CT Holdings. This long-term approach to ownership is also being shaped by a broader philosophy of stewardship and social responsibility.

The Chairman further commented, ‘At the same time, I want there to be equal clarity about the committed ownership of the Group. I believe that long-term committed ownership carries responsibilities that extend beyond the company itself.’

Through the trust arrangements associated with Odeon Holdings, a significant part of the economic benefit derived from the Group is intended ultimately to support charitable causes in Sri Lanka. Elaborating on this commitment, Page said, ‘It is intended that the ownership held through Odeon Holdings will, through trusts, increasingly serve a wider social purpose. I am committed to contributing 50% of the economic interests in the capital and profits of Odeon Holdings, derived through its investments in CT Holdings PLC, towards charitable initiatives in Sri Lanka, with particular emphasis on education, supporting and advancing women’s causes, and the development of art and theatre.’

Based on the current market capitalisation of the CT Holdings Group, Odeon Holdings’ underlying net asset value is estimated at over Rs. 60 billion. This places a baseline value of at least Rs. 30 billion on the economic interest intended for charitable initiatives focused on Sri Lanka. This valuation excludes the voting control premium inherent in Odeon Holdings’ position as the ultimate parent of entities with an aggregate market capitalisation of approximately Rs. 300 billion. Annual charitable contributions arising from Odeon Holdings are expected to amount to approximately Rs. 330 million over the coming years and are expected to increase substantially after five years. Effectively, Odeon Holdings has committed 50% of its distributions to charitable causes in Sri Lanka.

Speaking of his longer-term vision for the Group, he added, ‘We want Cargills to remain a strong and growing Sri Lankan institution. We want it to be led by capable professional managers who are empowered to take the business forward. We want its ownership to remain stable and committed for the long term. And we want a meaningful part of the wealth generated through that ownership ultimately to serve the country and communities that have supported Cargills over generations.’

Taken together, these developments reflect a clear long-term direction for CT Holdings and Cargills: stable and committed ownership, increasingly strong professional management, continued investment and growth, and a wider social purpose. ‘Stable, committed ownership and professional management are not alternatives. Together, they provide the foundation for CT Holdings and Cargills to continue growing, creating opportunity and contributing to Sri Lanka for generations to come,’ Page said.

Confidence in Sri Lanka’s long-term prospects

The Group remains optimistic about Sri Lanka’s medium- to long-term growth potential, supported by the progress of economic reforms, the resilience of the Sri Lankan people and the country’s strategic position as a hub in the Indian Ocean. The Group has demonstrated its confidence in the economy through continued investment and the expansion of its portfolio across Retail, FMCG, Restaurants, Real Estate, Entertainment and Financial Services. These investments reflect its commitment to building enduring Sri Lankan businesses, creating opportunities and contributing to the country’s long-term economic and social development.

Sri Lanka’s campaign to win their maiden Under19 Men’s Asia Cup title ended in disaster with a 106-run hammering at the hands of Afghanistan at Al Amerat, Oman yesterday.

It was Sri Lanka’s second successive defeat in Group B following a 45-run loss to Bangladesh on Saturday, and it put them out of contention from the tournament.

Sri Lanka’s only win was against associate member Malaysia in their opening match. It was a disappointing performance from Sri Lanka of whom much was expected.

Sri Lanka made it to the semi-finals in the last two editions in 2024 and 2025, but not so on this occasion.

Once the Afghanistan batsmen had battered the Lankan bowling for 275, the writing was on the wall for them. Knowing they needed a good start if they were to challenge that total, Sri Lanka began quite disastrously losing two wickets in the first three overs to be 5-2 and were soon 41-4 with right-arm pacer Noor Ali Niazi having claimed all four wickets for 18 runs in six overs.

Kithma Withanapathira tried his best to resurrect the innings with a 48-ball half-century (58) inclusive of 8 fours and 2 sixes but hardly found any support from the other end. Sri Lanka were eventually bundled out for 169 in the 35th over to give Afghanistan their third win in as many matches and finish on top of Group B.

Afghanistan’s innings was built on a superb century from Subhan Zakhail who made 107 off 111 balls (13 fours, 1 six) and a half-century from Abidullah Nadarjan (55 off 64 balls, 7 fours). Seamer Sethmika Seneviratne was the pick of the bowlers finishing with 3/44.

With Bangladesh beating Malaysia in their final Group B match by a thumping margin of 205 runs yesterday, they went through to the semi-finals with Afghanistan.

Scores:

Afghanistan (U19) 275 (49.5) (Abidullah Nadarjan 55, Subhan Zakhail 107, Shah Faisal Rahimi 33, Tahir Sarwary 32, Sethmika Seneviratne 3/44, Vigneshwaran Akash 2/60) beat Sri Lanka (U19) 169 (34.1) (Kithma Withanapathirana 58, Sethmika Seneviratne 23, Extras 20, Noor Ali Niazi 4/35, Amir Hamza 2/42, Sohail Khan 2/42, Mohammad Ali Barakzai 2/24)

Sri Lanka has made considerable progress in restoring macroeconomic stability following its unprecedented economic crisis. Fiscal consolidation, improved revenue mobilisation, debt restructuring and the rebuilding of foreign exchange reserves have helped restore confidence in the economy. These achievements must be protected.

However, economic stabilisation is not the same as economic transformation. A country can improve its fiscal accounts while continuing to face structural weaknesses in its external sector. Sri Lanka’s challenge is particularly evident in the persistent gap between its foreign exchange earnings and its commitments to finance imports, service external obligations and meet other international payments.

This raises an important question for the 2027 Budget: How can public expenditure be transformed from an instrument primarily concerned with allocating financial resources into a strategic instrument for strengthening the country’s capacity to earn foreign exchange?

Recent discussion in the Daily FT, including the article 2027 Budget should strengthen external sector capacity, has rightly drawn attention to the relationship between fiscal policy and external-sector pressures. This discussion deserves to be taken further.

The issue is not whether Sri Lanka should increase or reduce Government expenditure. It is whether the composition, quality and expected economic returns of that expenditure are appropriate for the country’s development requirements.

The 2027 Budget should therefore mark a transition from expenditure discipline alone towards expenditure effectiveness, without compromising fiscal and debt sustainability.

The primary surplus is necessary, but not sufficient

Sri Lanka’s achievement of a primary surplus of 5.4% of GDP in 2025 demonstrated the progress made in fiscal consolidation. The IMF’s May 2026 review projected a primary surplus of 2.3% of GDP for 2027, reinforcing the importance of maintaining a credible fiscal anchor.

However, a primary surplus measures Government revenue less non-interest expenditure. It does not, by itself, establish whether the economy is generating sufficient foreign exchange to meet its external commitments.

Similarly, a Government Budget surplus does not automatically produce a balance-of-payments surplus. The two accounts measure different economic relationships.

The external sector is influenced by merchandise exports and imports, tourism, other services, workers’ remittances, investment income and external financing. Consequently, fiscal performance must be assessed alongside the country’s capacity to generate and retain foreign exchange.

The policy implication is clear. Sri Lanka should maintain fiscal discipline, but it should not treat the achievement of a primary surplus as the ultimate objective of economic policy.

The more important question is whether the available fiscal resources are being used to strengthen the productive and foreign exchange-earning capacity of the economy.

Understanding the widening external-sector challenge

Sri Lanka›s external-sector position requires continuous attention.

According to the Central Bank›s August 2026 external-sector assessment, the cumulative merchandise trade deficit reached approximately $ 7.2 billion during January-August 2026, compared with $ 4.3 billion during the corresponding period of 2025. Tourism earnings declined by 10% over the same period, although workers› remittances increased by 19.8% to approximately $ 6.1 billion.

These developments demonstrate that individual sources of foreign exchange earnings can move in different directions, while import expenditure can increase substantially.

The IMF›s May 2026 projections also indicated a current account deficit of $ 534 million for 2026 and $ 115 million for 2027.

These projections should not be interpreted as an inevitable outcome. They should instead serve as an early warning that the country›s external-sector capacity needs strengthening.

Sri Lanka must pay attention to both sides of the equation: increasing foreign exchange earnings and reducing avoidable foreign exchange expenditure.

This does not mean indiscriminately restricting imports. Imports of machinery, technology, energy, intermediate goods and essential inputs are necessary for economic growth. The objective should be to ensure that foreign exchange is used productively and that the economy develops a stronger capacity to generate the resources needed to finance these commitments.

Making public expenditure an instrument of foreign exchange generation

Not all Government expenditure produces the same economic returns. Some expenditure increases immediate domestic consumption, while other expenditure creates productive assets, improves efficiency and generates future income.

The 2027 Budget should therefore distinguish between three complementary expenditure priorities.

First, strengthening domestic productive capacity.

Investment in agriculture, fisheries, manufacturing, renewable energy, transport and logistics can reduce production costs, improve productivity and lower avoidable import dependence.

For example, improving agricultural productivity through irrigation, technology, storage, research and better market access can reduce the need for selected food imports while improving rural incomes.

Similarly, developing renewable energy and improving energy efficiency can reduce exposure to imported fossil fuels, strengthen energy security and release foreign exchange for other productive uses.

However, import substitution should not become an excuse for protecting inefficient domestic production. Investments should be guided by productivity, quality, cost competitiveness and long-term economic viability.

Second, expanding foreign exchange-earning activities.

Sri Lanka needs a broader and more diversified export base.

Traditional merchandise exports, including apparel, tea, rubber and coconut products, remain important. However, greater attention should be given to value addition, product diversification, market development and integration into international production networks.

There are also substantial opportunities in tourism, information technology, business-process outsourcing, professional services, maritime services, logistics, education and specialised knowledge-based services.

Public expenditure should support the infrastructure, skills, research, digital connectivity and institutional arrangements required to develop these activities.

Third, investing in future sources of competitiveness.

Sri Lanka should not limit its ambitions to expanding existing industries. It should also identify emerging opportunities in artificial intelligence, digital services, advanced manufacturing, biotechnology, renewable-energy technologies and other knowledge-intensive activities.

This does not mean that the Government should attempt to manufacture every new technology domestically. Rather, it should facilitate partnerships between Sri Lankan entrepreneurs, universities, international investors and technology providers to identify commercially viable opportunities.

Public investment in research, technical education, innovation and industry partnerships can help position Sri Lanka in higher-value segments of international markets.

Connecting the BOI, EDB and National Business Facilitation initiatives

One of the most important requirements is to ensure that public expenditure supports a coordinated institutional system.

The Board of Investment (BOI), Export Development Board (EDB) and National Business Facilitation (NBF) initiatives should operate as complementary components of a broader economic development strategy.

The BOI should concentrate on attracting and facilitating quality domestic and foreign investment, particularly investment that expands productive capacity, introduces technology, develops export industries and creates employment.

The EDB should strengthen export development by helping businesses identify international markets, improve product standards, diversify their markets, develop brands and integrate into global value chains. It should also give greater attention to services exports and emerging sources of foreign exchange earnings.

The National Business Facilitation initiative should help remove the administrative obstacles that delay investment and business activity. Simplifying approvals, improving inter-agency coordination, digitising procedures and developing an effective National Single Window can reduce the time and cost of doing business.

These institutions should not operate as separate administrative entities pursuing disconnected objectives. They should function as a coordinated system, with clearly defined responsibilities and measurable outcomes.

The 2027 Budget should support this coordination through appropriate institutional funding, performance targets and accountability mechanisms.

The ultimate objective should be to convert investment proposals into actual investment, investment into productive activity, and productive activity into exports, employment and sustainable foreign exchange earnings.

Improving the quality of public investment

A major weakness in public expenditure management is the tendency to assess projects primarily through their financial allocations and physical completion rather than their wider economic returns.

The 2027 Budget provides an opportunity to strengthen project appraisal and monitoring.

Major public investment proposals should be evaluated not only by their construction costs and immediate outputs but also by their expected contribution to:

Additional foreign exchange earnings.

Savings of avoidable foreign exchange expenditure.

Export competitiveness and diversification.

Domestic value addition and productivity.

Employment and skills development.

Private-sector investment and technology transfer.

A project that requires substantial imported equipment may initially increase foreign exchange expenditure. However, if it subsequently generates export earnings, reduces energy imports or improves national productivity, its longer-term economic contribution may be substantial.

Conversely, a project with relatively low initial foreign exchange costs may produce limited economic returns if it does not address a genuine productive need.

The Government should therefore introduce an external-sector impact assessment for major public investment projects.

Such an assessment should identify the project›s foreign exchange requirements, expected earnings or savings, implementation period, risks and long-term economic returns.

It should also distinguish between short-term costs and longer-term benefits. This would enable policymakers to make better-informed decisions rather than judging investments solely by their immediate impact on the balance of payments.

Coordinating fiscal, monetary and trade policies

Public expenditure cannot strengthen the external sector in isolation.

An increase in Government expenditure can stimulate household consumption and business activity. If domestic productive capacity does not expand correspondingly, additional demand may be directed towards imported goods and services.

The situation can become more challenging if commercial bank credit expands rapidly and finances consumption and import-intensive activities rather than productive investment.

This is why fiscal policy must be appropriately coordinated with monetary, credit and trade policies.

The Central Bank should continue to safeguard price and financial stability, while allowing monetary and exchange-rate policies to respond to evolving economic conditions within its statutory mandate.

Commercial banks should be encouraged to strengthen lending to viable productive activities, including export-oriented businesses, SMEs, technology-based enterprises and industries capable of improving domestic value addition.

Trade policy should support competitive access to essential inputs, modern technology and international markets. Unnecessary administrative barriers and unpredictable policy changes can discourage investment and weaken export competitiveness.

The objective is not to control every import or direct every lending decision. It is to establish a policy environment in which fiscal resources, financial intermediation and international trade reinforce domestic production and sustainable foreign exchange generation.

Mobilising private investment and international partnerships

The Government cannot finance the entire transformation required by Sri Lanka’s economy through the national Budget.

Public resources are limited, and debt sustainability remains a critical consideration. Therefore, public expenditure should also be used strategically to mobilise private investment.

Well-designed public-private partnerships can support infrastructure, renewable energy, logistics, industrial development and other commercially viable activities.

However, such partnerships must be transparent, competitively structured and supported by appropriate risk-sharing arrangements. They should not create hidden fiscal liabilities or transfer unreasonable risks to the public.

Sri Lanka should also make more effective use of its international economic relationships.

Investment promotion, export market access, technology partnerships, development finance and participation in regional and global value chains should be treated as interconnected elements of economic strategy.

The objective should be to attract investment that contributes to production, exports, skills, technology and employment rather than investment measured merely by the amount of capital announced.

Establishing an external-sector-oriented expenditure framework

The preceding proposals require a practical mechanism for implementation.

I would therefore suggest that the Government consider introducing an External-Sector-Oriented Public Expenditure Framework as an integral part of its medium-term fiscal and development strategy.

Under this framework, major expenditure proposals would be assessed against their expected contributions to domestic productive capacity, export earnings, import efficiency, foreign exchange savings and private investment.

The Finance Ministry should provide the overall fiscal framework and ensure consistency with debt sustainability and medium-term expenditure limits.

Relevant sectoral ministries should identify investment priorities and establish measurable performance indicators. The BOI, EDB and National Business Facilitation initiative should contribute to identifying investment opportunities, export potential and administrative constraints.

The Central Bank should provide independent analysis of external-sector developments and associated macroeconomic risks, consistent with its statutory responsibilities.

An annual public report could assess the outcomes of major expenditure programmes, identifying whether expected investments, exports, employment and foreign exchange benefits have materialised.

Importantly, this framework should complement, not replace, existing public financial management and investment appraisal arrangements. It should strengthen accountability by connecting Budget allocations with measurable economic outcomes.

Summary

Sri Lanka’s economic recovery has restored a measure of fiscal stability, but its external-sector vulnerabilities remain a fundamental challenge. The 2027 Budget presents an opportunity to move beyond treating the primary surplus as the principal measure of fiscal success. While maintaining fiscal discipline and debt sustainability, public expenditure must increasingly be directed towards expanding productive capacity, strengthening export competitiveness, reducing avoidable import dependence and generating sustainable foreign exchange earnings. This requires a strategic approach to public investment, stronger coordination between economic institutions, and a measurable framework for assessing the external-sector consequences of Government spending. Ultimately, the success of the Budget should be judged not only by how much the Government saves, but also by how effectively it helps the country earn.

Conclusion: From fiscal discipline to economic transformation

Sri Lanka’s 2027 Budget is an opportunity to consolidate the achievements of economic stabilisation while addressing the structural weaknesses that contributed to the country’s external-sector vulnerability.

Maintaining a credible primary surplus, controlling public debt and strengthening revenue mobilisation remain essential. However, these objectives should not be pursued independently of the country’s productive and foreign exchange-earning capacity.

The fundamental challenge is to narrow the gap between what Sri Lanka earns in foreign exchange and what it must spend to sustain its economy and meet its international commitments.

This requires more than expenditure restraint. It requires better expenditure decisions, stronger productive investment, export diversification, import efficiency, private-sector participation and effective institutional coordination.

The BOI, EDB and National Business Facilitation initiatives can play complementary roles in translating these priorities into practical economic outcomes.

Ultimately, the success of the 2027 Budget should not be judged solely by the primary surplus it achieves or the amount of public expenditure it contains. It should also be judged by the productive capacity it creates, the foreign exchange it helps generate and save, the investment it mobilises and the employment and prosperity it delivers.

Sri Lanka needs a Budget that does not merely manage scarcity, but builds the country’s capacity to earn and save foreign exchange. That is the transition from economic stabilisation to sustainable economic transformation.

The Central Bank of Sri Lanka (CBSL) has barred the Ernst and Young (EY) partners who audited National Development Bank (NDB) from carrying out any further banking audits and forced the lender to reconstitute its Board audit committee, after a Rs. 13.6 billion fraud ran for three years before being uncovered once the 2025 accounts had been certified.

‘We have already taken action against the auditors,’ Director of Banking Supervision R. R. de Silva Jayatillake told the Committee on Public Finance (CoPF), chaired by SJB MP Dr. Harsha de Silva, on 5 November. ‘The partners involved cannot continue doing banking audits. We have also got the bank to reconstitute the Board audit committee.’

The reconstitution of the committee and other Board

committees was notified to the Colombo Stock Exchange, officials told the Committee, a disclosure Dr. de Silva said had passed largely unnoticed.

Jayatillake said the regulator had required the bank to submit a rectification timeline, was monitoring progress against it, and was conducting spot examinations.

The findings of the forensic audit were also being used to assess the fitness and propriety of individuals and to decide whether further orders or restrictions were needed.

The auditors flagged the fraud with an asterisk rather than a formal qualification or an emphasis of matter. Members were told those who carried out the fraud were largely compliant with reporting requirements and gave regulators, and possibly the auditors, the run around.

Dr. de Silva pressed the Director on whether the Central Bank was satisfied with the forensic audit carried out by Deloitte, a report the committee has not been given. ‘You shared some basic points,’ he said. Jayatillake replied that the exercise was a forensic audit and that relevant third parties had been interviewed.

Sri Lanka Accounting and Auditing Standards Monitoring Board (SLAASMB) Chairperson E. H. Mohotty told the committee her board’s separate inquiry into auditor conduct was complete and had been referred to the Attorney General on 15 October, 2026, for a view on legal action.

‘What SLAASMB looked at is purely on the auditing standards and how well the auditor performed the duties based on the auditing standards,’ she said. Asked whether she could disclose the findings, she said: ‘I think it is not.’

‘That means it is scary,’ Dr. de Silva said. He added that the Deloitte exercise had looked at NDB’s transactions rather than at the audit firm.

Central Bank Governor Dr. Nandalal Weerasinghe said the Bank Supervision Department was working through the SLAASMB report to establish what action could follow. ‘Basically, they have identified certain individuals,’ he said. ‘They have to look at whether the bank has taken actions against those individuals through the forensic audit.’

He said the regulator was willing to set out in detail the supervisory changes made across the sector since the fraud. ‘I think we can share in detail what Bank Supervision as a regulator has done to strengthen the process, not only at NDB but also other banks, based on the learning of this incident,’ Dr. Weerasinghe said.

Banks have been directed to tighten reconciliation of suspense accounts, he said. ‘Broader actions, I think we can share with you. That’s not an issue.’

Dr. de Silva said the opacity around specific enforcement was difficult to defend in a regulated financial sector. ‘I don’t think this can be completely confidential, and it is good to have some sort of transparency,’ he said. ‘I’m not saying give names, but what action you have taken, so that people would feel safe that their money is safe.’

The committee would accept material on confidential cover and proceed on the Attorney General’s advice, he said.

The Central Bank moved against NDB in early April, ordering restrictions on dividends, discretionary payments and branch expansion to protect the bank’s stability, issuing a regulatory statement to assure liquidity and publishing press notices on the institution’s condition. It then required the bank to commission the external forensic audit.

The Women’s Chamber of Industry and Commerce (WCIC) successfully concluded IGNITE 2026, its flagship youth entrepreneurship initiative, bringing together 100 female university undergraduates from 17 universities across Sri Lanka for a transformative day of learning, inspiration and practical business exposure at The Kingsbury, Colombo on the 31 October 2026.

Now in its second year, IGNITE has rapidly established itself as a premier platform for nurturing the next generation of women entrepreneurs. The program was designed to equip young women with the confidence, skills and entrepreneurial mind set required to transform innovative ideas into successful ventures.

Participants engaged in a dynamic program featuring interactive workshops, business idea development sessions, entrepreneur-led discussions and networking opportunities. The event provided valuable exposure to entrepreneurship, financial literacy, leadership and innovation through real-world experiences shared by successful business leaders and founders.

Speech-Language Pathologist and Founder/CEO of Ceylon Speechie Nadini Perera, conducted an engaging and interactive workshop titled ‘Build a Business That Fits Your Life and Can Reach the World’.

A highlight of the event was the inspiring stories shared by young Sri Lankan entrepreneurs, Spice Carriage (Lactoboost) Founder Lasni Silva, Blue Fish Ceylon Ltd., Founder/Director Bhagya Sandakelum, and Sleepyheads SL Founder Shehara Ferdinandis, who candidly discussed their journeys, challenges and successes, demonstrating that ambition, resilience and innovation can turn ideas into thriving enterprises.

WCIC Board Member Zahara Ansary conducted an interactive session, guiding students in developing and refining their business ideas.

The program’s Guest of Honour, Industry and Entrepreneurship Development Deputy Minister Chathuranga Abeysinghe, addressed the gathering, encouraging young women to pursue entrepreneurship as a pathway to economic empowerment and national development. Certificates of participation were awarded to all attendees in recognition of their successful completion of the program.

Speaking on the significance of the initiative, WCIC reaffirmed its commitment to fostering a stronger pipeline of women-led businesses by investing in young talent and creating opportunities for future female leaders to connect, learn and grow.

‘Through IGNITE 2026, WCIC continues to inspire and empower young women to dream bigger, innovate boldly and become the business leaders and job creators of tomorrow.’

The program was made possible with the support of Macbertan Ltd., as Main Event Partner, alongside Magellan Champlain and Nanaska Ltd., as Co-Event Partners.

The Embassy of Sri Lanka in Ankara, in collaboration with the Gaziantep Chamber of Commerce, successfully organised the first-ever Sri Lanka Business Forum in Gaziantep on 3 November 2026, bringing together members of the Turkish business community to explore opportunities for closer economic cooperation with Sri Lanka.

The Forum aimed at showcasing Sri Lanka’s trade and investment potential while encouraging the participation of Turkish buyers, investors and business representatives in Sri Lanka Expo 2027 (SLEXPO 2027).

The opening session featured remarks by the Ambassador of Sri Lanka to Trkiye, Niluka Kadurugamuwa, Gaziantep Chamber of Commerce Chairman Mehmet Tuncay Yildirim, and Honorary Consul of Sri Lanka in Gaziantep Sleyman Çiçek.

The speakers highlighted the growing opportunities for Turkish businesses in Sri Lanka and elaborated the importance of strengthening bilateral trade and investment relations through enhanced business-to-business engagement. They also encouraged the Turkish business community to make use of SLEXPO 2027 as a platform to explore new business partnerships and investment prospects.

First Secretary (Commercial) of the Embassy, Dilanga Hettiarachchi, delivered a comprehensive presentation on Sri Lanka’s trade and investment landscape, outlining potential areas of cooperation between the two countries. He also introduced SLEXPO 2027, highlighting the opportunities that it offers to Turkish buyers, investors and business representatives to connect with Sri Lankan businesses.

The event attracted leading investors, traders, buyers and other business professionals from the Gaziantep business community, providing a valuable opportunity for the Embassy to exchange views, establish new contacts and explore avenues for strengthening trade and investment cooperation between Sri Lanka and Trkiye.

Hatton National Bank PLC (HNB) yesterday announced a strategic partnership with the International Finance Corporation (IFC), a member of the World Bank Group focused on the private sector, to expand supply chain finance for Sri Lankan businesses and enhance HNB’s risk management and responsible finance frameworks.

The partnership combines HNB’s relationships with corporates and small and medium-sized enterprises (SMEs) across Sri Lanka with IFC’s global expertise in supply chain finance and financial-sector advisory.

IFC will help HNB develop scalable supply chain finance solutions connecting its corporate clients with suppliers and distributors. The initiative aims to ease working capital constraints for SMEs in these value chains, strengthen competitiveness and build more resilient, inclusive businesses, with a focus on expanding financing for women-owned businesses.

IFC will also review HNB’s responsible finance and risk management practices against international benchmarks and recommend improvements to its frameworks, analytics, governance and processes.

HNB Managing Director/Chief Executive Officer Damith Pallewatte said: ‘This partnership with IFC represents an important step in HNB’s strategy to build a more connected, inclusive and resilient financing ecosystem. Sri Lankan businesses require financial solutions that respond not only to their individual balance sheets, but also to the commercial relationships and value chains through which they operate.

By combining HNB’s deep understanding of the local market and longstanding relationships across the corporate, SME and microenterprise sectors with IFC’s international expertise, we aim to develop scalable supply chain finance solutions that improve access to working capital, strengthen business linkages and support sustainable growth. Equally, this program will advance our risk management and responsible finance capabilities, ensuring that growth is supported by strong governance, sound risk disciplines and fair customer outcomes.’

IFC Regional Vice President for Asia and the Pacific Sarvesh Suri said: ‘SMEs are the foundation of Sri Lanka’s economy, and their growth is critical for creating jobs, building stronger local supply chains and driving sustainable growth. Our partnership with Hatton National Bank aims to open new opportunities for Sri Lankan businesses and enable the private sector to play a stronger role in the country’s long-term development.’

With 256 customer centres, HNB stands as one of Sri Lanka’s largest and most technologically innovative private sector banks.

HNB is rated AA(lka) by Fitch Ratings Lanka Ltd. and was recognised as Sri Lanka’s Best Corporate Citizen for 2025 by the Ceylon Chamber of Commerce. Reinforcing its reputation for excellence, HNB was honoured with The Bracken Award for the Best Bank in Sri Lanka by the Banker Magazine, UK. The Bank was also recognised by The Asian Banker as ‘Sri Lanka’s Strongest Bank’ and awarded ‘Best Retail Bank in Sri Lanka’ for the 16th time, while receiving the title of ‘Best Bank for Large Corporates’ for the 02nd time at the Euromoney Awards for Excellence 2026. HNB is further ranked among the ‘Top 1000 Banks in the World’ as affirmed by The Banker Magazine, UK.

IFC – a member of the World Bank Group – is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2026, IFC committed a record $105 billion to private companies and financial institutions in developing countries, leveraging private sector solutions and mobilising private capital to create a world free of poverty on a livable planet. For more information, visit www.ifc.org.

Qatar Airways has unveiled a new onboard signature music composition created in collaboration with internationally acclaimed composer Hans Zimmer, introducing a distinctive sound identity inspired by Qatar and its culture.

The composition forms part of the airline’s bespoke five-track album, Burgundy Symphony, which captures different emotions and moments associated with travel through original music.

The collaboration combines Zimmer’s cinematic storytelling with Qatar Airways’ focus on creating memorable passenger experiences, with the music designed to reflect the journey from departure to arrival.

The launch was celebrated during Zimmer’s concert in Doha on 6 November, where audiences were given an exclusive preview of the collaboration through a film showcasing the creative process and inspiration behind the album. Passengers can experience the new composition onboard Qatar Airways flights.

The Burgundy Symphony album features five tracks: Dawn, capturing the anticipation of discovering new destinations; Dusk, reflecting the tranquillity of flying above the clouds; and The Orchard, inspired by moments of calm and Hamad International Airport’s distinctive ORCHARD experience.

The remaining tracks, Homecoming and An Ode to Qatar, celebrate the lasting memories of travel and Qatar’s cultural heritage, ambition and forward-looking vision.

The initiative forms part of Qatar Airways’ efforts to enhance the passenger experience through distinctive sensory elements that connect travel with music, culture and emotion.

Sri Lanka showcased its tourism offerings to the Canadian travel industry and public at the Salon International Tourisme Voyages (SITV) 2026, held from 30 October to 1 November 2026 in Montreal, Canada, through a dedicated Sri Lanka Pavilion organised by the Sri Lanka Tourism Promotion Bureau (SLTPB), in collaboration with the Consulate General of Sri Lanka in Toronto.

The Sri Lanka Pavilion brought together 12 Sri Lankan Destination Management Companies (DMCs), providing a platform to promote Sri Lanka as a tourism destination for Canadian travellers, strengthen business connections with the Canadian travel industry and explore opportunities for tourism partnerships.

The Pavilion was officially opened by the Tourism Deputy Minister Prof. Ruwan Ranasinghe, and the Association of Canadian Travel Agencies and Travel Advisors (ACTA) President Suzanne Acton-Gervais, at a ceremony attended by tourism industry representatives and visitors.

During the exhibition, the Deputy Minister also participated in a media briefing with the Editor-in-Chief of Profession Voyages, Gary Lawrence. The discussion focused on Sri Lanka’s prospects in the Canadian tourism market, its tourism attractions and opportunities to strengthen tourism cooperation between Sri Lanka and Canada.

The Sri Lanka Pavilion attracted interest from visitors throughout the three-day exhibition. The event provided an opportunity to promote Sri Lanka in Montreal and the wider Quebec market, particularly among French-speaking Canadian travellers.

The Pavilion also featured cultural performances by Sanketh Dance School and Madumini Art Foundation, showcasing Sri Lanka’s artistic and cultural traditions.

Canada remains an important source market for Sri Lanka, with 46,133 Canadian visitors recorded in 2025, making it the country’s 13th-largest source market. Sri Lanka’s participation in SITV 2026 contributed to promoting the country’s tourism offerings in Canada, particularly in the Quebec market, and strengthening engagement with the Canadian travel industry.