AGP Executive Report

Easter Sunday Probe: Sri Lanka’s CID told the Colombo Fort Magistrate’s Court that the 2019 bombings were planned and coordinated under former SIS chief Major General (Retd.) Suresh Salley, prompting a foreign travel ban on ex-president Gotabaya Rajapaksa and two army officers. Detention Conditions: In a separate court move, lawyers said Salley is suffering PTSD and severe depression in custody, with a reported high risk of self-harm, and the court ordered the CID to urgently explain detention conditions. US Forced-Labour Trade Pressure: The US Trade Representative named Sri Lanka among 60 economies found to have failed to effectively enforce bans on forced-labour imports, setting up possible Section 301 tariff action. Fuel Cost Fallout: A new explainer links Sri Lanka’s rising fuel prices to global oil-route disruption, rupee weakness, and limited government subsidy buffers. Parliament Watch: A select committee has begun calling for public proposals to review election laws, including voter registration and presidential/parliamentary election statutes. Sports & Diplomacy: Sri Lanka’s travel ban on an ex-president and the country’s cricket calendar abroad also drew attention as international fixtures and tours continue.

Fuel & Cost of Living: Cabinet spokesman Dr. Nalinda Jayatissa said the fuel price hike was unavoidable to prevent shortages, citing a jump in the fuel import bill from $186m (January) to $521m (May) and noting the Treasury’s Rs. 57bn subsidy cushion while government absorbs part of per-litre losses. Energy Governance: A separate report raises alarm over WhatsApp/SMS electricity-billing messages allegedly sent by the dissolved Ceylon Electricity Board, questioning whether consumers are being scammed and whether billing is now properly handled by Electricity Distribution Lanka (EDL). Power Grid Upgrade: Sri Lanka is set to commission the country’s largest battery energy storage program, with grid-forming systems (40MWh each, up to 10MW discharge) across multiple substation sites to stabilise the grid and support higher renewables. Water & Sanitation Diplomacy: Health and Mass Media Minister Dr. Nalinda Jayatissa met UNICEF and SWA partners to strengthen water and sanitation under Heads of State initiatives. International Trade & Politics: Sri Lanka’s RCEP push gained momentum after Australia and New Zealand signalled support, with Foreign Minister Vijitha Herath saying membership is advancing. Weather Risk: Meteorology warns July-August could be hotter-than-normal with El Niño-linked low rainfall, pressuring water, agriculture, power and public health. Justice & Rights: Gotabaya Rajapaksa was allowed to testify online in the 2011 disappearance case of two rights activists, continuing the long-running legal process.

Executive-Presidency Debate: A fresh political commentary argues Sri Lanka’s repeated election promise to abolish the executive presidency never materialises after power is secured, pointing to partial 19th Amendment reforms that left the system largely intact. Economic Governance & FX: Another analysis says the government is avoiding a “Gotabaya-style” free-fall but drifting into stagnation, while rupee pressure remains a political barometer and fuel pricing continues to shape public anger. IMF & Public Finance: Coverage highlights the IMF’s role in Sri Lanka’s latest funding and the political pushback around loan dependency and reform conditions. Digital Security: Sri Lanka is moving toward a unified national cybersecurity framework to protect SL-UDI and other digital public services from fraud and account takeovers. Environment & Land Use: Government plans to gazette five forests as protected reserves, including steps to manage the Ellanga wewa cascade and reduce human-elephant conflict. Courts & Accountability: Courts are set to decide on further steps in the Kapila Chandrasena death case, while virtual testimony from ex-President Gotabaya Rajapaksa continues in the disappearance matter. Religion & Social Tension: Reports describe Buddhists throwing stones at a church during prayers, renewing concerns about religious hostility and security at worship sites.

Marine Safety & Governance: The Cabinet approved a new National Plan and first phase digital platform to respond to oil and hazardous chemical spills, expanding MEPA’s oil spill response coverage as ship traffic and port activity grow. Economy & Inflation: CBSL Governor Nandalal Weerasinghe warned inflation could edge toward 7% if fuel-driven pressures persist, after a 100 bps rate hike to 8.75% to keep prices from accelerating. IMF & Politics: The IMF completed its Fifth and Sixth Reviews, unlocking a $695m tranche, while critics renewed calls for strict use of borrowed funds for intended purposes. Court & Accountability: Colombo Fort Magistrate ordered summons for two lawyers in the Kapila Chandrasena death case, setting them to appear at the inquest. Defence & Diplomacy: US-gifted TH-57 “Sea Ranger” helicopters arrived for SLAF configuration and training, boosting SAR and disaster response capacity. Public Transport Pressure: Private bus operators plan a key meeting after diesel price rises, seeking relief or fare adjustments. Sports Administration: The Sports Ministry temporarily suspended three national federations’ registrations, moving control to the ministry secretary pending constitutional amendments and elections. Trade & Regional Links: Sri Lanka signalled deeper ties with Bangladesh, while IBCSL will lead a delegation to China-South Asia standards talks to help exporters cut non-tariff barriers. Crackdown: Customs arrested 13 foreign nationals at BIA over a Rs. 28.4m cigarette smuggling attempt.

Supreme Court on Bond Scam: Sri Lanka’s Supreme Court overturned a High Court ruling and cleared the way for prosecution in the 2016 Central Bank bond issuance case, ordering the matter to be expedited. IMF Energy Reform: The IMF confirmed Sri Lanka has met cost-recovery pricing for electricity and fuel, a key step for programme reviews, while CPC said fuel subsidy allocations end by June and prices were raised to manage the gap. Road Safety Crackdown: Police reported a sharp Vesak holiday spike in accidents—19 crashes and 24 deaths over two days—prompting renewed warnings on drunk and reckless driving. Environment & Land: Sri Lanka will gazette five forest reserves in Anuradhapura on June 5, including protection for the Ellanga wewa cascade system, and open elephant corridors to curb human-elephant conflict. Anti-Corruption Move: A businessman filed a bribery complaint alleging over Rs. 3.2 million fraud linked to Sri Lanka Ports Authority officials. Transport Upgrade: The luxury airport bus between Katunayake and Makumbura resumed, with fares set at Rs. 410. Sports Governance Watch: ICC scrutiny of Sri Lanka cricket’s new Transformation Committee continues to be “no news is good news,” with no sanctions yet.

IMF & Reserves Debate: IMF mission chief Evan Papageorgiou defended Sri Lanka’s reserve-building approach via the Central Bank, but economists are again questioning the risks of monetising inflows and calling for a bigger Treasury role. Fuel Prices/Cost of Living: CPC raised retail fuel prices again amid West Asia conflict, with petrol 92 up to Rs. 434 and diesel to Rs. 407, reigniting inflation fears. Judiciary & Governance: A June 1 meeting is set between President Anura Kumara Dissanayake and the Judicial Officers’ Association over a proposal to extend judges’ retirement age, with independence concerns. Constitutional Clash: The proposed “Dharma Court” for monastic discipline has sparked a political firestorm, with the UNP warning it exceeds constitutional authority. Foreign Investment Push: BOI launched a “Ready-to-Invest” platform offering pre-structured projects to speed up approvals and attract global capital. Environment: Five more forests are to be declared reserves, bringing protected forest reserves to 86. Labour Standards: Sri Lanka’s delegation is set to participate in the ILO conference in Geneva, as gig-worker protections and platform-economy rules move toward a new international standard. Road Safety Tragedy: A drunk truck driver allegedly killed six people at a Vesak soup kitchen in Meegoda after crashing into a food queue.

IMF & Economy: The IMF approved Sri Lanka’s combined Fifth and Sixth EFF reviews, unlocking about $695m (around $700m) and keeping the reform push on track, while noting growth has been revised down to 3% for 2026 and stressing the need to finish public financial and electricity reforms. Fuel Policy: In the same reform rhythm, Sri Lanka raised fuel prices by up to 6%—petrol to Rs. 434 and diesel to Rs. 407—as subsidies are phased out, with the President saying fuel subsidies will be ended by September. Infrastructure: President Anura Kumara Dissanayake is set to inaugurate construction of Central Expressway Phase II (Rambukkana–Galagedara), with Cabinet approval for Rs. 112bn+ and domestic financing. Monetary Debate: The Free Lawyers group renewed pressure on the CBSL, alleging large rupee money expansion linked to reserve-building dollar purchases. Health: Five new mammography machines worth Rs. 765m are headed to major hospitals to cut waiting times and improve early breast cancer detection. Diplomacy & Trade: Japan pledged $1.33m for freshwater fishermen in the Eastern Province, while a Sri Lanka–Germany business forum urged faster reforms and policy consistency to unlock investment. Sports & Society: Sri Lanka finished 12th at the Asian U-20 Athletics meet in Hong Kong with eight medals; Vesak coverage also highlighted a return to Dhamma-focused reflection beyond festivities.

Digital Governance: The government held an ICT-focused programme for coordinating executive officers to boost efficiency and service quality under the Digital Economy Plan. Public Finance & Energy: Six grid-scale Battery Energy Storage Systems have arrived in Colombo as Sri Lanka begins deploying 16 BESS units (160MW total) to stabilise the national power network. Ports & Trade: SLPA says Colombo Port congestion is rising with April throughput up 22%, and flags up to $2bn in port and logistics investments via PPPs, with expansion plans aimed at easing capacity crunch. Justice System: Parliament hears that 2,647 judicial vacancies remain unfilled since recruitment was halted in 2018, raising fears of delays and eroding public confidence. Sangha Discipline: The state is moving to amend monastic disciplinary laws, with agreements already discussed with the Attorney General and sent for Chief Prelates’ review. Monastic Abuse Case: Sri Lanka’s Buddhist hierarchy suspended a senior monk accused of sexually abusing an 11-year-old, pending legal proceedings. Regional Security: Multinational Exercise PRAGATI 2026 wrapped up in Meghalaya with 400+ troops from 13 countries training on counter-terrorism and interoperability, including Sri Lanka’s participation.

Vesak Message: President Anura Kumara Dissanayake used his Vesak address to urge Sri Lankans to build peace from within, stressing Buddhist values of non-violence, compassion and loving-kindness, and linking reconciliation to inner spiritual calm. Political Economy: Namal Rajapaksa hit back at the government, saying it protects politically connected businesses while ordinary people face higher taxes, fuel and electricity costs, and collapsing livelihoods. Public Order & Misinformation: Authorities denied false claims that Vesak celebrations were banned in the north, after an AI-looking “newspaper clipping” went viral online. IMF & Monetary Policy: A new IMF endorsement said Sri Lanka’s monetary stance is broadly appropriate and approved the fifth and sixth reviews, unlocking about $700m, even as critics warn the political and economic risks remain. Health Workforce: The government announced plans to recruit 13,600 nurses by 2029, with about half expected to be filled this year. International Links: VietJet Air opened a Colombo office and outlined plans to start Colombo–Ho Chi Minh flights in August 2026.

IMF & Macroeconomy: The Ceylon Chamber of Commerce urged Sri Lanka to stay engaged with the IMF after the country secured about US$695m under the EFF, saying continued reforms are key to stability and investor confidence. The IMF also warned against broad import restrictions, arguing currency adjustment should be allowed to work. Legal/Accountability: Colombo Fort Magistrate’s Court ordered the CID to arrest former Tourism Promotion Bureau-linked minister Basil Rajapaksa and others over alleged misuse of SLTPB funds for the 2014 Uva election, while a separate court decision is due June 2 on whether lawyers in the Kapila Chandrasena death inquiry should be summoned. Public Order: Sri Lanka’s state of public emergency was extended via an Extraordinary Gazette notification. Foreign Policy & Diplomacy: Sri Lanka reiterated the Indian Ocean as a zone of peace at a Moscow security forum, and inaugurated its new High Commission in Wellington. Governance & Services: 515 graduate nurses were recruited after a five-year gap. Transport/Infrastructure: Construction began on the Rambukkana–Galagedara section of the Central Expressway, and officials discussed measures to prevent flooding on the Katunayake airport road. Travel Policy: Sri Lanka waived ETA/visa fees for visitors from 40 countries. Energy/Prices: CPC said no fuel price drops are expected in the upcoming revision; global crude arrivals were also reported. Sports (minor): Sri Lanka named its Women’s T20 World Cup squad with Chamari Athapaththu as captain.

Public Security: Sri Lanka has extended the state of public emergency nationwide, effective 28 May, under the President’s powers, with details of duration and provisions still not released. Fuel & Energy: CPC says fuel prices may not fall in the next revision as global rates remain higher after the Middle East conflict; it also confirmed the first arrival of 89,000 tonnes of US WTI crude, with more crude shipments expected. Judicial Process: A Colombo Fort Magistrate will decide on June 2 whether senior counsel Rienzie Arsekularatne and junior counsel Udara Muhandiramge must testify in the Kapila Chandrasena death inquiry. Labour Rights: Amnesty reports Malaiyaha Tamil workers on private tea estates face forced-labour indicators, including threats, violence, debt bondage and restricted movement, and says the state is failing to ensure access to justice and protections. Trade & Diplomacy: A Sri Lanka–Maldives mutual legal assistance regulation was approved by Parliament’s Justice Committee; meanwhile, Sri Lanka opened its new High Commission in New Zealand to improve consular services for over 30,000 Sri Lankans. Economy & IMF: The IMF says Sri Lanka’s reform programme strengthened resilience, but warns the Middle East conflict is worsening risks and slowing growth. Governance & Justice Reform: NMSJ backs a bill to revoke seats of MPs who cross over against voters’ mandates, arguing it should also cover provincial and local representatives.

IMF Deal Watch: The IMF approved Sri Lanka’s fifth and sixth reviews, unlocking a US$695m tranche, while warning the Iran war and Cyclone Ditwah risks are still pushing the outlook “to the downside” and urging continued reforms. Monetary Policy: The Central Bank raised the policy rate by 100 bps to 8.75%, saying the move is needed for price stability after the rupee weakened on the energy shock. Customs Dollar Row: New criticism is growing over a Customs circular that kept using a higher US dollar valuation rate for import duties even as the rupee steadied, raising costs for businesses. Digital Government Push: ICTA is recruiting 400 “Digital Champions” for PIC-NET to accelerate digital transformation across public services. Public Order & Policing: Police warned that evading checkpoints may lead to force, after a vehicle was fired upon in Minuwangoda and suspects were arrested. Buddhist Governance: President Anura Kumara Dissanayake said laws will be amended to strengthen discipline among Buddhist monks, including re-establishing a disciplinary authority. Monsoon-Era Reality: Officials said climate change impacts are already visible, as Sri Lanka hosted a Commonwealth climate finance meeting. Visa/Travel: Sri Lanka is waiving on-arrival visas for tourists from 40 countries, including India, for 30 days.

IMF Deal Moves Forward: The IMF Executive Board has completed Sri Lanka’s combined fifth and sixth EFF reviews, unlocking an immediate SDR 508 million (about US$695m) disbursement, bringing total programme funding to roughly US$2.4b, with the Fund citing generally strong reform delivery but flagging risks from the Middle East conflict and Cyclone Ditwah. Monk Abuse Claims: Sri Lanka’s National Child Protection Authority says nearly 300 Buddhist monks have been accused of child abuse over the past three years, with charges against about 30, after the arrest of a senior cleric on alleged offences. Opposition on Period Poverty: Sajith Premadasa calls for national action on menstrual health, saying period poverty is harming education and work opportunities for millions of women and girls. Police Cyber Scam Alert: Police warn of fake traffic fine messages sent via SMS/WhatsApp that push victims to a counterfeit GovPay-style website to steal bank and card details. UAE Deportations: Seven Sri Lankans deported from the UAE after security scrutiny over alleged drone/missile-related online content are now under CID/SIS and police investigations. Diplomatic Move: Sri Lanka’s new Vatican envoy, Sumith Dassanayake, presents credentials to Pope Leo XIV, reaffirming ties and seeking blessings for national rebuilding. Sports (CWI): Cricket West Indies confirms a 2026 home season featuring Sri Lanka, New Zealand and Pakistan, with Tests against Sri Lanka starting late June.

IMF & Macroeconomy: Sri Lanka’s IMF Executive Board is set to decide today on the Fifth and Sixth EFF reviews, a move that could unlock about US$700m in funding, after staff-level agreement and generally strong programme performance. Monetary Policy: The Central Bank has raised the Overnight Policy Rate by 100 bps to 8.75%, signalling tighter defence of stability amid rupee pressure and inflation risks. Presidential Agenda: President Anura Kumara Dissanayake rejected claims of economic collapse, pointing to improved Treasury revenue, and also moved to amend the Vihara Dewalagam Act to strengthen disciplinary oversight in the Buddhist clergy. Foreign Relations: Foreign Minister Vijitha Herath began an official visit to New Zealand with a traditional Maori Powhiri welcome and talks with counterparts on governance, trade and sports. Customs & Security: Two Chinese nationals were arrested at BIA for cigarette smuggling worth about Rs. 7.53m. Transport Governance: The SLRSMU alleged a serious railway safety breach after station masters were reportedly not informed about signal-maintenance operations before an accident between Mirigama and Ambepussa. Diplomatic/Regional Politics: Tamil Nadu CM C Joseph Vijay met India’s PM Modi, pressing issues tied to Sri Lanka including fishermen arrests and the Mekedatu dispute.

Monetary Shock: Sri Lanka’s central bank stunned markets with a 100-bp rate hike to 8.75%, blaming Iran-war fuel pressure and a weakening rupee—moves that could shape borrowing costs and inflation expectations. IMF Countdown: The IMF Executive Board meets today (27 May) to decide on Sri Lanka’s 5th and 6th EFF reviews, potentially unlocking about $700m. Energy Security Push: Cabinet approved “Surakimu Lanka” to cut fuel-import vulnerability through energy efficiency and demand management. Foreign Policy Pivot: Defence Secretary Sampath Thuyacontha met Russia’s deputy defence minister in Moscow, while Foreign Minister Vijitha Herath is in New Zealand for talks and a Māori Pōwhiri welcome. Human Rights & Labour: Amnesty flagged forced-labour-style abuses against Malaiyaha Tamil workers on private tea estates; separately, a forklift-abuse case abroad ended in a suspended sentence. Crime & Controls: Customs arrested two Chinese nationals at BIA for allegedly smuggling 50,200 cigarettes; police also issued guidance on paper number plates during a contract gap. Tourism/Travel: Sri Lanka waived ETA fees for visitors from 40 countries, including the UK.

Central Bank Shock: Sri Lanka’s CBSL lifted its benchmark rate by 100 bps to 8.75% as the Iran-linked energy crunch pushed inflation higher and pressured the rupee, with the bank pointing to soaring oil prices and tighter foreign-currency conditions. Energy Grid Upgrade: Colombo Port received the island’s first commercial-scale Battery Energy Storage System, with 160MW capacity planned across Galle and Matara to stabilise the grid and speed renewables. Defence Realignment: Defence Secretary Air Vice Marshal Sampath Thuyacontha is in Moscow seeking financing options and cooperation to keep ageing helicopter fleets running amid Western sanctions. Sports & Youth Pressure: Sri Lanka Cricket faces fresh scrutiny over “parental invasion” and substandard coaching driving an overdose of school cricket, while Sri Lanka U-19 players accused in a hotel filming case are exploring settlement talks. Cricket Market Buzz: Vijay Shankar has signed for Kandy Royals for LPL 2026, joining a marquee group as the June 1 draft approaches. Crime & Security: A man was arrested at BIA with 8.365kg of Kush worth over Rs. 80 million, and banks say deposits remain safe after recent fraud incidents.