Manufactured Anxiety and Selective Economics: Why Prof. Colombage’s Criticism of the NPP Falls Short
Sri Lanka’s fragile recovery from the 2022 economic collapse has become a convenient platform for certain economists to project alarmist narratives. At the forefront of this trend stands SLEA President Prof. Sirimevan Colombage, whose recent remarks on inflation, growth, and balance-of-payments risks border more on scaremongering than serious economic analysis.
While presenting himself as a neutral technocrat, Prof. Colombage appears unwilling to acknowledge the structural and policy constraints under which the NPP government is currently operating—particularly within the framework of a binding IMF agreement.
Ignoring IMF Realities
Any honest assessment of Sri Lanka’s economy must begin with one fundamental fact: the country is operating under strict IMF conditionalities.
These conditions severely restrict fiscal flexibility. They limit tax concessions, require aggressive revenue mobilisation, and prioritise debt servicing over stimulus. In such an environment, expecting rapid growth or aggressive investment incentives is unrealistic.
Prof. Colombage’s repeated emphasis on “weak foundations” conveniently ignores this reality. The NPP government does not enjoy the luxury of policy experimentation. It must balance domestic needs with creditor expectations. That is not incompetence—it is constraint.
Stability Was Not Accidental
The restoration of low inflation, reduced interest rates, and improved reserves did not happen automatically. It was the result of politically difficult decisions taken by the current administration.
Tax reforms, subsidy rationalisation, expenditure controls, and institutional restructuring were deeply unpopular. Yet the NPP government implemented them precisely to avoid another collapse.
To now downplay these achievements while highlighting every remaining vulnerability reflects selective analysis rather than balanced economics.
Growth Takes Time After Collapse
Sri Lanka suffered one of the worst peacetime economic collapses in modern history. Output contracted sharply, businesses collapsed, and skilled labour emigrated.
In such circumstances, expecting growth rates of 6–7% within a few years is unrealistic. International experience—from Greece to Argentina—shows that post-crisis recoveries under IMF programmes are slow and painful.
A growth rate of 3–4% under fiscal compression is not a failure. It is evidence of stabilisation under pressure.
Port City and Hambantota: A Regional Reality, Not a Local Failure
Prof. Colombage frequently cites underutilised mega-projects as symbols of economic weakness. Yet he fails to explain why Sri Lanka struggles to compete with Dubai, Singapore, or Vietnam.
Those countries offer generous tax holidays, regulatory flexibility, and state-backed incentives. Sri Lanka, bound by IMF rules, cannot.
Investors are rational. They choose environments that maximise returns. Empty zones in Port City and Hambantota are therefore not policy blunders by the NPP government—they are symptoms of global competition under unequal conditions.
Blaming the government for this structural disadvantage is intellectually dishonest.
Reserve Management: Prudence, Not Deception
Criticism of currency swaps and temporary inflows also reflects selective pessimism. In a post-default economy with limited market access, such instruments are standard tools of reserve management.
India, China, and multilateral partners extended these facilities precisely to support Sri Lanka’s transition phase. Treating them as “fake reserves” is misleading.
What matters is whether the country can meet its short-term obligations and maintain import cover. So far, it has done so.
Climate Shocks Are Not Policy Failures
The economic impact of Cyclone Ditwah exposed Sri Lanka’s vulnerability to climate risks. But natural disasters are not the product of fiscal mismanagement.
Using climate-related disruptions to question macroeconomic policy reflects analytical overreach. The real challenge lies in building resilience—something that requires long-term investment, not short-term criticism.
Services Sector: Taxation with a Purpose
Concerns over taxation on service exports are legitimate. However, they cannot be divorced from revenue realities.
Sri Lanka’s tax base collapsed during the pre-2022 populist era. Restoring fiscal credibility requires broad-based taxation. Exempting every “promising” sector would recreate the very conditions that led to bankruptcy.
The NPP government’s approach seeks balance: encourage exports while ensuring revenue sustainability. This is responsible governance, not hostility to growth sectors.
FDI: Institutions Matter More Than Incentives
Foreign investors do not make decisions based solely on tax concessions. They prioritise political stability, regulatory predictability, anti-corruption enforcement, and judicial reliability.
The NPP government has made measurable progress in strengthening governance, procurement transparency, and regulatory oversight. These reforms take time to translate into investment flows.
Prof. Colombage’s narrow focus on incentives overlooks this institutional dimension.
A Pattern of Pessimism
What is most striking in Prof. Colombage’s interventions is their tone. Every statistic is framed as a warning. Every constraint is portrayed as a looming disaster.
Such narratives erode public confidence and discourage investment. When the country needs stability and credibility, constant alarmism becomes counterproductive.
Constructive criticism is essential. Persistent pessimism is not.
Economics Requires Context, Not Soundbites
Sri Lanka’s recovery remains incomplete. No serious policymaker denies this. But progress achieved under extraordinary constraints deserves recognition.
By ignoring IMF limitations, regional competition, post-crisis realities, and institutional reforms, Prof. Colombage’s critique presents a distorted picture of economic management.
The NPP government is not presiding over stagnation. It is navigating one of the most complex economic transitions in the nation’s history.
At a time when unity, confidence, and long-term planning are essential, what Sri Lanka needs is responsible analysis—not manufactured anxiety dressed up as expertise.