The Sri Lankan state’s debt dependent and public sector heavy economic strategy is crowding out private investment, lowering domestic savings and foreclosing a sustainable economy in the long term, business and economic analysts warned this week.

The Central Bank’s growth projection were this week revised downwards by ratings agencies RAM Ratings and Standard & Poor’s who also warned that Sri Lanka’s long term growth depended crucially on cutting government spending.

Meanwhile, fear is silencing critics of the government’s economic policies, one business leader protested this week.

There appears to be no end to President Mahinda Rajapakse’s pompous self-regard. Having won the election and steam-rolled through the possibility of lifelong presidency, the president, through his ever obliging government, proclaimed the entire week, to be one of festivities, in order to commemorate his swearing in for a second term.

The Sri Lankan government is to apparently pay incentives to state employees to learn ‘local languages’, such as Tamil, to “reduce the communication gap with people of Tamil origin,” the Indian Express reported.

Al Jazeera has obtained photographs that appear to show Sri Lankan army atrocities against Tamil civilians and captured or surrendered Tamil fighters in the final days of the Sri Lankan civil war in early 2009.

Amid the newly enhanced ties between the United States and India, the contours of a shared approach to Sri Lanka’s ethnic crisis by the two states appeared in little reported comments last month by Indian National Security Advisor Shiv Shankar Menon.

Speaking in Washington, he outlined a twin track Indian strategy, which he said was supported by the US: first, restoring normalcy in the war-shattered Tamil areas, and, second, “creating an order [in Sri Lanka] within which, not just the restoration of democracy, but … an order within which all the communities feel that they can determine their own futures.”

News that Sri Lanka's Lessons Learnt and Reconciliation Commission (LLRC) has had it mandate extended by another six months was always expected, but there is an assumed logic behind Colombo's actions. The commission is the Sri Lankan state's attempt to fend off critics, buy time and forestall an independent, international inquiry.

The IMF recently praised Sri Lanka for bringing inflation under control. But on the streets, the price of food has been rising relentlessly.

Increases are seen in the price of wheat flour, bread, rice, vegetables, coconut, coconut oil, big onions  and red onions.

The cause? A combination exposure to global prices in the wake of IMF reforms, and the Sri Lankan state's ham-fisted efforts to fix prices in favour Sinhala producers and consumers at the same time.