S.M. Marikkar is no stranger to sharp political rhetoric or incisive critique. Known for his fiery speeches in Parliament and outspoken commentary, the Samagi Jana Balawegaya (SJB) parliamentarian also occasionally tempers his criticisms with moments of pragmatic reflection. Dressed in his trademark crisp white shirt, adorned with a Sri Lankan flag pin, Marikkar strikes a confident and composed figure, equal parts street politician and statesman.
In this interview with the Sunday Observer, the popular Colombo District MP weighs in on Sri Lanka’s current economic crossroads: the missed opportunity with U.S. tariffs, the urgent need for export diversification, the untapped potential of global markets, and why Sri Lanka must build strategic alliances not walls with its neighbours.
Q: The Government recently described its discussions with the U.S. regarding tariffs as fruitful. However, if the U.S. ultimately decides not to revise its position, what course of action does the SJB propose the Government should take in response?
A: “We raised early warnings in Parliament and publicly nearly two months before the tariff announcement, saying that such a move was imminent. Unfortunately, the Government failed to act preemptively. Only after the tariffs were imposed did they begin to respond. In contrast, when we assumed office in 2015, we successfully renegotiated and regained the GSP+ status. At the time, Mangala Samaraweera served as Finance Minister. This achievement was made possible through the strong diplomatic relationships we had carefully fostered.
My proposed solution is to negotiate and to arrive at an agreement. If we lose the U.S market, we will lose a significant portion of our revenue. This in turn will force us to revisit the IMF agreement, which will result in more taxation. Eventually it will be the people who will suffer.
Our party leader, along with a group of us, recently met the IMF team, particularly because there has yet to be a proper assessment of how the new U.S. tariffs will impact the economy.
It’s crucial that we begin negotiations immediately — there’s no alternative. At the same time, we must explore new market opportunities. The U.S. and European apparel markets remain important, but we have very limited access to major markets such as China and Africa. While those markets are currently underdeveloped for Sri Lankan apparel, we must actively pursue them. If we fail to diversify our exports and increase revenue from foreign direct investment or tourism, our economic survival will be at serious risk.
Q: You have consistently advocated for diversifying Sri Lanka’s export base. Do you acknowledge any meaningful steps taken by the Government in this direction?
A: I can’t say definitively whether the Government has or hasn’t taken steps, because nothing concrete has been presented to Parliament so far. While President Anura Kumara Dissanayake, who was elected about six months ago, has visited several countries, I haven’t seen any clear signs of foreign direct investment flowing in. To boost exports, we first need to develop the market and the production base. That means entering new sectors, encouraging FDI, and providing the infrastructure and incentives.
In 1981, many Japanese automobile companies showed interest in Sri Lanka, but due to a lack of enabling conditions, they ended up moving to Vietnam instead. Today, Vietnam is thriving. We need to think bigger, perhaps by adopting elements of the Singapore or Dubai models. Sri Lanka must become a trade and investment hub, not continue to rely solely on traditional exports such as tea, rubber, coconut, and apparel.
Q: In your view, where do the most promising opportunities lie for Sri Lanka’s economic growth and export diversification?
A: More than anything, we need to consider what incentives Sri Lanka offers to potential investors. At present, it feels like we impose tax upon tax, discouraging investment. Take Vietnam, for example — an investor bringing in machinery there might face zero or minimal taxes, while in Sri Lanka, the rate could go as high as 300 percent. We need targeted, investor-friendly programs and policies. First, we must ensure Sri Lanka is even on the radar of global investors.
Without visibility and incentives, they won’t come. Right now, our most valuable asset is our human capital. We can only fully leverage our human resources if we attract investors. Otherwise, there’s a clear limit to how much revenue we can generate through tourism and remittances alone.
Q: Do you think the Government is in a good position to make these changes?
A: They must take action, there’s no other way around it. In the past, they were always opposing reforms of this kind. For instance, in 2001, when there were attempts to restructure loss-making state entities under the ‘Regaining Sri Lanka’ program, the members of current government and associated groups strongly opposed it. I’m glad they are now reconsidering it, but if restructuring had been done at the time, we could have saved significant Government funds and perhaps avoided the situation we find ourselves in today.
Q: Do you feel the Government is now delivering on the promises made to the people during the election period?
A: They haven’t delivered on the promises made to the people, but in a way, I’m quite pleased about that. Just look at how they’re engaging with India, I believe it’s a step in the right direction. Adopting a confrontational stance towards India is simply not practical.
India is a massive market, and we need to explore what opportunities exist there. Sri Lanka cannot afford to remain isolated. We must build bridges, not mere physical ones, but also cultural, social, and diplomatic connections. These relationships go beyond economics. Ultimately it’s the people who stand to benefit the most.
Q: Would building a physical bridge with India be going too far?
A: That kind of relationship will be beneficial to both countries, I believe. South India, in particular, has a large and growing economy. Strengthening ties there can be especially advantageous for us.
Q: What is your take on Indian Prime Minister Modi’s visit to Sri Lanka?
A: I think this is a positive step. We have always supported stronger ties with India. In fact, we advocated for Sri Lanka to sign the Economic and Technology Co-operation Agreement (ETCA) with India, and we still believe it will happen eventually. Sri Lanka needs comprehensive Free Trade Agreements — not only with India but also with countries such as Singapore and China. The recent conversion of the USD 100 million Indian loan into a grant is also encouraging. Historically, whenever an Indian Prime Minister visits Sri Lanka, we benefit in some way.
Q: How must the Government balance its relationship with both India and China? Do you believe the Government is handling its relationship with China well?
A: The Government must manage its relationships with India and China carefully. We need strong ties with both nations, even though they may have their own tensions. Sri Lanka should not take sides, our approach must be balanced and diplomatic.
As for our relationship with China, it’s still too early to make a full assessment. We need to observe how things develop before drawing conclusions.
