Three cheers, Mr. Governor; trust your words of wisdom reverberate in ears of politicians managing S

Friday, 12 May 2017 00:00 - - {{hitsCtrl.values.hits}}

Mr. Governor, the intellectual community and the civil society applaud your words of wisdom presented yesterday and say three hearty cheers! They hope and trust that these words reverberate in the ears of the politicians in governance over State finances.

It is our earnest hope that professional advice by the Governor and other independent colleagues at the Central Bank will continue to be forthcoming to guide the management of the nation’s finances, as the macroeconomic and monetary stability challenges are likely to become critical in the next two years.

We endorse the Governor’s advice, that in the backdrop of the expected global economic upheavals and uncertainties; the local economic imbalances and rising inflation; there is no option but to retain a higher interest rate environment locally.

We also agree with the Governor that attempting to enhance growth through imports facilitated by low exchange rates and allocation of scarce fiscal resources in pursuit of spends and investments which in the longer term are unable to produce sustained value addition are wasteful exercise detrimental to the interest of the country.

We are firmly behind the Governor when he strongly opposes attempts to defend the rupee using borrowed reserves, especially at a time Sri Lanka’s international credit ratings are in danger of a down grade.

Politicians in charge of State finances appear to expect Central Bankers to be magicians; and wish them to retain low interest rates, low inflation, and overvalued exchange rates in an environment where credit growth is high; and in addition empowers the politicians to exercise profligacy, engage in pet egoist projects and be free with capital and revenue spends even where sustainable returns are low.

No amount of external recognition awards, self-acclaimed praise said to have been articulated at international fora, blessings of religious leaders, hosannas sung by cronies and “help kaarayas” and slamming the conduct of the Central Bank can convince the intellectual community and the civil society to favour the alternative macroeconomic and monetary policies enunciated by arrogant, all knowing, egoist politicians masquerading as effective managers of state financial resources.

If politicians act deaf, dumb and blind in the context of the realities of the macroeconomic and monetary stability and ignore the best advice of the Governor and Central Bankers, the civil society will have no alternative but to adopt a response using Braille and a stingray tail, to explain the only way forward by which the elections promises of sustainable and inclusive growth and prosperity, with good governance, and without corruption and waste can be delivered.

Chandra Jayaratne