Dr. Coomaraswamy sets record straight on elections and fiscal discipline

Dr. Indrajit Coomaraswamy

Former Central Bank Governor Dr. Indrajit Coomaraswamy yesterday set the record straight over remarks concerning elections and the need to uphold fiscal discipline.

“Certain remarks which I made during a recent webinar organised by Capital Alliance have been the subject of misinterpretation in press articles which are currently doing the rounds.  The gist of this is that I advocate the postponement of elections in Sri Lanka,” Dr. Coomaraswamy said.

He issued the following clarification yesterday.

“I would like to clarify what I actually said on that occasion.  I pointed out that during some of the previous 16 IMF programs, progress was made in stabilising the economy, only for the approach of elections to result in the reversal of gains through indisciplined fiscal priming for narrow political gain.

“Significant progress has been made in stabilising the economy over the past 12 to 18 months.  In this context, I said that we should not allow elections to distract us, by which I meant that in the lead-up to any election, fiscal discipline should not be lost – as has happened time and again in the past, under multiple governments – and the long term macroeconomic program should be maintained.

“I went on to say that repetition of such fiscal indiscipline on this occasion would have much worse consequences than ever before, as the recent multiple crises have significantly eroded the resilience of both the economy and a large proportion of the population.

“I did not advocate the postponing of elections. Let me make it clear that I would under no circumstances advocate that the Constitution should be violated.   

“To summarise, what I said was: do not repeat the same mistake of having fiscal indiscipline as the elections approach.  The consequences this time will be much worse than anything we have known so far.  I said nothing about the timing of the elections.”