In a candid assessment of the nation’s economic trajectory, Milinda Moragoda, Founder of the Pathfinder Foundation, asserted that Sri Lanka can no longer afford the luxury of isolationism. He warned that clinging to an insular “island mentality” in a rapidly evolving global landscape is a recipe for economic stagnation.
During a recent strategic analysis, the veteran diplomat underscored that Sri Lanka’s path to recovery lies not in closing doors, but in decisive integration with the region and implementing painful but necessary domestic reforms.
Anchoring to the Growth Engine:
The India Factor Moragoda emphasized the strategic imperative of aligning with India, currently the world’s fastest-growing major economy. He argued that geopolitical idealism must give way to economic pragmatism.
“We are situated next to a global economic giant. To ignore this reality is futile. Our energy security, in particular, hinges on connectivity with India. By linking our electricity grids and establishing petroleum pipelines, we not only lower energy costs for our citizens but also signal to the world that we are open for business,”
Moragoda observed.
He identified the development of the Trincomalee Oil Tank Farm and cross-border land connectivity as critical pivots that could transform Sri Lanka from a vulnerable economy into a resilient regional hub.
Confronting the “Hard Truths” on State Reform Turning his focus inward, Moragoda delivered a sharp critique of the country’s management of State-Owned Enterprises (SOEs). He called for an end to the culture of political patronage that has bloated the public sector.
“It is time to tell the people the hard truth: we can no longer sustain loss-making institutions on tax-payer money. The era of using state entities as political employment bureaus is over. We must restructure these bodies, invite private sector competition, and depoliticize the economy. Leaders must summon the courage to make these unpopular decisions today to save the country tomorrow.”
Fiscal Discipline as a Non-Negotiable Commenting on the broader economic framework, Moragoda noted that the current engagement with the IMF should be viewed not just as a rescue operation, but as a catalyst for long-term discipline.
He stressed that a “National Consensus” is vital to ensure that economic policies remain consistent, regardless of changes in government.
“We must shift from a debt-driven consumption model to a production-oriented export economy. Without fiscal discipline, no amount of foreign aid will suffice,” he concluded.