Via the Financial Times, a report on come unusual commercial activities led by Sri Lanka’s bloated military:

The Laya is much like any other three-star resort on Sri Lanka’s glistening coast. About an hour south of Colombo, it is a popular spot for weddings and city dwellers hoping the sprawling beachfront garden, cricket pitch and bring-your-own-booze restaurant will help them forget the island’s economic crisis for a weekend.

Yet the hotel, part of a chain that includes a jungle lodge and safari retreat, is not a typical hospitality venture. It is just one commercial project run by Sri Lanka’s vast armed forces, which spans farms to a passenger airline.

There are few signs of the hotel’s martial ownership. While the staff are civilians, the Laya’s general manager is an army officer. “The people wouldn’t even guess that [these hotels] are military-run,” said Sanath Karunaratne, a retired major general. “It is a totally civilian environment.”

The military’s creep into the country’s civil sphere is a controversial, lasting legacy of the mass build-up during the 26-year civil war that ended in 2009. Despite more than a decade of peace, Sri Lanka’s military remains among the world’s largest on a relative basis.

The armed forces employ more than 250,000 people in a country of 22mn, equivalent to nearly 3 per cent of the labour force, according to a National University of Singapore study published last year. While defence spending has fallen as a share of government outlay, it remains the largest item, higher than its wartime peak even when adjusted for inflation.

Successive leaders saw few reasons to reform or reduce the size of the military, with former president Gotabaya Rajapaksa tapping his background as a war-era military leader to win power in 2019.

Yet with anti-government protesters forcing Rajapaksa to resign in July, and his successor Ranil Wickremesinghe embarking on an IMF-reform package to turn around Sri Lanka’s worst-ever economic crisis, pressure is growing to rein in defence spending. “The military is an albatross around Sri Lanka’s neck,” one foreign diplomat said. 

Mahindananda Aluthgamage, an MP from Rajapaksa’s party, last week questioned the island’s defence spending in parliament. While Wickremesinghe has cultivated ties with the military, he has commissioned a review designed to reform defence strategy.

“We have now concluded the war victoriously?.?.?. We have to move out of the phase we were in,” Wickremesinghe told a defence college this month.

Daniel Alphonsus, a former finance ministry adviser and author of the NUS paper, argued that with the upcoming $2.9bn IMF programme, authorities will find it “very difficult to ignore the largest line item in the budget, which is defence spending”.

For Sri Lankans, the military’s legacy is bitterly contested. Starting in the 1980s, the armed forces’ ranks swelled to fight the Liberation Tigers of Tamil Eelam, a separatist group seeking independence for the island’s Tamil minority from its Sinhala Buddhist majority.

As many as 100,000 people died in a conflict marked by widespread atrocities and alleged war crimes, before the army crushed the Tigers in a bloody campaign led by then-defence secretary Rajapaksa.

In northern and eastern Tamil regions, the military retains an outsized role in everything from security to business, a system critics said perpetuated abuses and prevented reconciliation. Some of the military-run farms are located on land seized from the Tigers that local civilians maintain belongs to them.

“It is to aid the Sinhala Buddhist nationalist state building project, which tries to erase other communities such as Tamils and Muslims,” said Ambika Satkunanathan, former head of Sri Lanka’s Human Rights Commission. “It’s also to create a security state.” 

The military, which did not respond to requests for this story, denies both past and contemporary allegations of abuses. The army’s pivot into hospitality began during the war, according to Karunaratne, the retired major general, when the armed forces ran leisure facilities for staff.

“The army had no idea how to run hotels then,” he said.

The Laya is now self-sustaining, according to staff. The hotel gets so busy on weekends that Mohamad Akram, the food and beverages manager, said the 350-capacity reception hall and 56-seat dining room were no longer enough. Patrons “love the taste of our food”, he said.

Some guests get a particular thrill from the venue’s roots. “People come here to dine knowing it is military run,” Akram added. “I have heard them asking, ‘Where is the army?’”

Critics said that whatever revenues these businesses brought did not justify the military’s size, which continues to consume vast government resources.

Rehana Thowfeek, an economist at the Advocata Institute think-tank, argued that commercial activities proved the military had more personnel than it knew what to do with. “We’re in peacetime,” she said. “You have to do something with them.”

About half the government’s salary bill goes towards military and security personnel, which Thowfeek said was as much about elections as national security. “Governments have used the military as their preferred place for giving jobs and to build their own voter base.”

Some observers stressed that military capacity could prove vital in times of need. The armed forces co-ordinated Sri Lanka’s response to the coronavirus pandemic, including testing, quarantine camps and administering vaccines, according to Sunil Jayasiri, a defence journalist at the Daily Mirror newspaper.

The Laya, meanwhile, has no plans to scale back. Staff said they were hoping to make the most of an uptick in tourism during the winter peak after successive disruptions from Covid-19 and fuel shortages during the economic crisis.

Akram pointed to a facility under construction that would become an even-larger reception hall. The current one “is not enough”, he said.