The slated appointment of State Minister of Finance Ajith Nivard Cabraal as the Governor of the Central Bank of Sri Lanka (CBSL) has been driving some regular political commentators up the wall. However, this development is a catalyst for more rapid change and transformation. It is fitting that in some quarters they feel they have to take the former Governor’s much spoken about appointment as a personal challenge. It is because Cabraal, a results-oriented person has a past as an effective if not controversial head of the Bank that matters – the Banker’s Bank.
The appointment indicates that the regime is willing to seem to rock the boat and take up challenges that are easily seen as being bold but non-conformist. Other regimes would have balked at appointing Cabraal particularly at this time because there were hordes lined up against the former Governor’s modus operandi.
But, the clear signal is that the regime wants results and not optics meant for ringside sightseeing. The outgoing Governor Prof. W.D. Lakshman had erudition but in terms of practical challenges, was he a good fit when the country was facing some very formidable economic challenges? This is not the time to venture an opinion, though the reader could draw his or her own conclusions.
The country needs to make sense of a very fluid and unwieldy looking global outlook that appears to change by the hour. There are odds being stacked against us almost on a daily basis, such as the latest US Centres for Disease Control (CDC) Level 4 assessment that classifies Sri Lanka as a currently dangerous territory for Covid spread. These yardsticks for assessing nations are notoriously unpredictable – after all we have been given high marks for our vaccination programme, and the numbers of infected and the mortality figures are steadily coming down now.
But developments are taking place at a frenzied pace and the Government’s team has very little reaction time before its component parties get down to taking decisions. That is the background in which the appointment of Cabraal was made and in him there is a new Governor of the Bank that can hit the ground running. That is due to past experience and the practical knowledge gathered during his previous tenure in the Governor’s role.
A certain measure of pushback is needed in a global climate in which decisions adverse to the country are taken seemingly without due consideration of all of the factors that ought to weigh on important measures that are adopted impacting on progress in a time of recovery. The State needs public servants that are not combat averse who are ready to point to flawed international assessments and call a spade a spade.
Export revenues have grown in the last two months and it appears that if closing the forex gap was a race, the country is winning it. It is not the conventional export sector segments that are making money – and on the contrary the electronics sector, etc., are making impressive gains. When the Minister of Finance Basil Rajapaksa says next year would herald in a production economy, he is making a pledge rather than venturing a forecast. The export sector has to earn, so that the country could afford to buy its way out of the current crisis.
Institutions have to be flexible enough to meet the challenges of such fluid and uncertain times in which the only constant would be a resolve to tweak policy until the correct set of initiatives are in place for recovery.
Though the medicine for an economic challenge such as what we face now can be bitter, it has to be administered in a way that the bad taste in the mouth does not kill the patient. There are a set of relatively new rules in place, such as the cash margin deposit against certain imports.
But contrary to opposition hysterics, this measure has not led to price hikes. Any policy would not sting if the implementation is closely monitored.
The Government’s team on the finance and economy front is almost entirely new now as of this week. A new Minister of Finance, a new Governor of the Central Bank and a set of rapid policy initiatives indicates the intent is good. There is no shirking of responsibility.
There is somebody minding the shop. This was not the case with certain past administrations. When a bomb went off causing considerable carnage in Colombo one former President not known for her sense of timing, expressed her helplessness before the Tri-Forces Commanders in the full glare of public television. “Can we come out of this?” or something to that effect were the words.
Before that Commander-in-Chief was out of the gate the battle had been half conceded. Signalling of intent is a major part of strategizing in crisis, and when it comes to matters of economy there can be no wavering and pusillanimity. Decisive steps taken during the past few weeks lets everyone know the leadership is up to the task. That is half the battle won at the starter’s gun.
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