The US Assistant Secretary of State for South and Central Asia Nisha Biswal said on Monday that while Sri Lanka is on a path to reconciliation, much remains to be done on justice and accountability.

Speaking on US policies and priorities for 2016 at the Center for New American Security , Ms Biswal said Sri Lanka is on a path to reconciliation.

"Sri Lanka, which is rebalancing its own foreign and economic policy as it emerges from its self-imposed isolation, will benefit from its strategic location as a maritime gateway to some of the largest markets in Asia [...],"

"[It] deserves special attention as it continues to consolidate democratic gains in the past two elections and put the country on a path to reconciliation. The United States was among the first to welcome these moves and offer our support and assistance. Both Secretary Kerry and Ambassador Power visited last year – and I myself visited four times in 2015 – and this year we launched our first-ever Partnership Dialogue,"

Could Gotabaya Rajapaksa, Sri Lanka’s former defense secretary (and brother of previous president Mahinda Rajapaksa), bring the Sri Lanka Freedom Party (SLFP) together? Evidently a member of the country’s joint opposition has suggested that Rajapaksa be appointed to parliament, the implication being that this move would help to unify a political party that has remained divided since Maithripala Sirisena assumed the presidency in January 2015.

 Sri Lanka’s economic performance will continue to be constrained due to weak global demand and uncertainty of Sri Lanka’s policy in 2016 concluded the Asian Development Bank’s annual economic report.

The Asian Development Outlook 2016 (ADO) report found that fiscal reform to deal with the build up of excessive debt was much needed in Sri Lanka.

Former Australian Prime Minister Tony Abbott has come under criticism for his defence of former Sri Lankan President Mahinda Rajapaksa and his governments' close relationship with the Sri Lankan regime.

Mr Abbott wrote in an essay this week how he was “sure that the Sri Lankan president was pleased that Australia didn’t join the human rights lobby against the tough but probably unavoidable actions taken to end one of the world’s most vicious civil wars”.

The remarks triggered a spate of criticism, reports Guardian Australia.

Australian Tamil Congress national spokesperson Sam Pari said “it is disappointing that rather than upholding human rights, Abbott chose instead to please the Sri Lankan president who failed to protect and promote international human rights law and international humanitarian law”.

Human Rights Watch Australia director, Elaine Pearson, said his comments were “a slap in the face to the tens of thousands of victims of wartime atrocities and their families”.

Sri Lanka has increased government spending to boost 'aggregate demand' after coming to power in 2015, Prime Minister Ranil Wickremesinghe admitted in parliament, as a policies are now being devised to rescue the country from a 'stimulus' fallout.

"In 2015, when we built the government, there was a collapse in aggregate demand," Prime Minister Wickremesinghe told parliament.

"In that situation in April we raised (state worker) pensioners' payments by 1000 rupees, we raised state workers' salaries, private sector salaries were raised.

"Gas prices were reduced by 300, milk powder 68, wheat prices by 12.50 rupees sugar 10 rupee, green gram 40 rupee, sprats 15. Sustagen 100 rupees. Tinned fish 60 rupees. Maldive Fish 200, Chillies 25, kerosene 06 rupees."

"In this way we put more money in the hands of consumers to increase aggregate demand."

Sri Lanka's government and the country's construction industry have struck a compromise on the controversial plans for the construction of 65,000 houses for war displaced in the Tamil-majority Northern Province.

The leader of the Tamil National Alliance R Sampanthan said he would take up environmental concerns around the building of a coal-power power plant in Sampur with the Indian High Commission.

“The people of the area have been telling me about the substantial pollution and environmental damage which will be caused and have accused me of not taking any action on it,” said Mr Sampanthan. “A solar powered plant in place of the coal-fired one is very much in my mind.”

Concerns around the environmental impact have been raised for years, ever since the proposal to construct the plant was first floated. In 2011 civil society groups condemned the project as environmentally destructive due to the devastating impact of mercury leakage into the local ecosystem and the wider impact on global warming.