By Nishel Fernando
Despite the recent economic improvements, “very little” system change has been achieved, with the elite control remaining largely intact, said Advocata Institute Chairman Murtaza Jafferjee, stressing that political courage is needed to maintain the current path and enact meaningful reforms to prevent the situation from worsening.
“There was the Aragalaya movement, which called for a system change. Unfortunately, very little of the system has changed,” he said addressing the CMA Sri Lanka National Management Conference yesterday.
As Sri Lanka faced the worst economic crisis since independence in 2022, Jafferjee identified the root cause of the downfall as ethnoreligious nationalism, elite capture, where the country is run for the interests of about 1,000 people, excessive presidential power, a flawed electoral system (costly to be in politics), populist politics, weakened institutions and a poorly informed population on civic and economic matters.

Contrary to the popular belief, he argued that high government consumption and investments are driving the recurring large current account deficits. “Our current account deficit is basically a savings-investment gap. The reason for these large deficits and currency collapse is not a lack of exports but too much investment and consumption,” he explained.
He highlighted that the top 10 percent and 20 percent of households account for 36 percent and 51 percent of the country’s income and blamed these top income percentiles for driving excess demand, ultimately leading to the crisis.
However, Jafferjee acknowledged the current economic recovery, attributing the revival to sound policy decisions but stressed the need for political courage to implement the necessary changes.