20 September, 2021

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The Maligned Lakshman Shock: Patient Will Die Unless The New Governor Diffuses It Forthwith

By W A Wijewardena –

Dr. W.A Wijewardena

Far-sighted Central Bank Governors in the past

I learned a fine lesson from Governor Warnasena Rasaputra about shock treatments in central bank policy in early 1980s. In the first three years of that decade, money stock was rising at a phenomenal rate of 26% annually, inflation was unbeaten at above 20%, global interest rates were on the increase, and above all, the money multiplier was ominously accelerating from 2.27 in 1977 to 3.35 in 1982.

He told us from the Economic Research Department: “The chaotic situ in the market is so alarming that we have to shock treat the financial system. But remember, without a quick exit time, it will kill the patient. Your job is to come up with a market-based monetary policy plan to save the patient in the medium to long run.” Governor Rasaputra shock treated the financial system by introducing the most stringent quantitative policy controls, made a turnaround in the chaotic money market, and reverted to smooth transition to market-based monetary policy system.

That was a journey started by a far-sighted Central Bank Governor and continued by subsequent Governors, especially during the tenure of Governor A.S. Jayawardena. The Central Bank thus earned the reputation of being market-friendly and not anti-market. It enabled the Bank to work collaboratively with the financial institutions which were under its supervisory control. Such collaboration based on mutual trust is important because seeking collaboration in national interest does not work in a market.

The arbitrary fixing of the exchange rate

Now, Governor W.D. Lakshman has reversed it. In a letter addressed to CEOs of commercial banks and the National Savings Bank, which is in free circulation in the market today, he has asked the banks to keep their selling rate of the dollar within the agreed range of Rs. 200 to 203 per dollar. This amounts to introducing a maximum retail price or MRP to US dollar, like the MRP fixed on rice and sugar by the Government. The difference is that, in the case of sugar and rice, it is through a Gazette Notification issued under the authority of the Consumer Affairs Authority Law or CAAL.

But the MRP fixed on the dollar is not under any law or through a formal direction of the Central Bank. It is just a letter addressed to CEOs of banks, but its authority is much more powerful than those issued under CAAL. He has said that his request has the full backing of the Government and both the Central Bank, and the Government are working in concert on this matter. He has added: “Needless to say, the CBSL has necessary tools and intervention instruments, to be used to ensure that financial institutions duly comply in the greater national interest that is overwhelmingly paramount.”

Every commercial banker knows that Central Bank’s tools and instruments are more punitive than the punishments being meted out by courts of law. Fixing the exchange rate below the market rate is, however, not in the greater national interest as claimed by Governor Lakshman. It is profitable to buyers of foreign currency but injurious to its sellers. Hence, it serves only a part of the national interest: the buyers of dollars. In that category too, the Government which can now buy dollars at a cheaper rate to repay its foreign debt is placed prominently.

The Lakshman shock will breed a flourishing black market

The letter delivered a shock to banks. It was an unusual shock because, despite its objective of stabilising the market, it caused a major instability. Given the shortage of dollars in the market, banks had been buying and selling dollars above the prescribed range of the Central Bank. The range announced on the website of the Central Bank was Rs. 199 for buying and Rs. 203 for selling of dollars. But banks had been buying and selling dollars at a range of Rs. 220 and Rs. 230.

After the Lakshman shock was delivered, they quickly adjusted their rates on the respective websites to the prescribed range. However, there were no dollars available in the market at those rates. Hence, importers were placed on waitlists, this time longer than before because there was total uncertainty about the availability of dollars in the market. It was mayhem in the market as described by some independent newspapers.

Meanwhile in the black market, while dollars were scanty, the implicit rate moved further up to about Rs. 245 to Rs. 250 per dollar. Thus, a shock delivered to assure national interest began to work against the very people for whose interest it was to serve.

A threat to banks without tools

Though Governor Lakshman has said that the Central Bank has enough instruments and tools to ensure the fixing of the exchange rate at Rs. 203 per dollar, he has run out of those tools now. One of the prerequisites for him to do this miracle is the ability to supply an unlimited amount of foreign exchange to the market. But his foreign exchange reserve has depleted to a bare minimum level. At end-July, it amounted to $ 2.8 billion or six weeks of future import of goods. When services are also included, this falls to five weeks.

With the SDR allocation of $ 787 million, and the SWAP facility of $ 150 million from Bangladesh in August, at end-August, it has increased to $ 3.6 billion, a marginal improvement of the import coverage to eight weeks but with service, it will be seven weeks. But with Central Bank’s commitment to meet essential imports on account of fuel, medicines, and food items, and Government’s debt servicing, this is a peanut. What this means is that banks must rely on their dollar collection to keep the rate fixed at Rs. 203 as required by the Central Bank. This will surely drive importers to a state of desperation.

Using monetary policy tools in the wrong way

The market participants are smarter than bank regulators. Hence, once they have been driven to a desperate situation, they resort to other means of satisfying their demand. It foils the objectives of the regulator. Apparently, having realised this, the Central Bank has now gone into a panic mode. Two days after the Lakshman shock, it issued a formal directive to banks under the Monetary Law Act forbidding banks to open Letters of Credit or LCs without a full cash margin in the case of a wide range of imports, not to grant loans to importers to fill that cash margin, and the margin is to be released on production of evidence that moneys have been paid through the country’s banking channels.

This last condition is somewhat puzzling because banks set off the cash margin against the release of foreign exchange to meet the liability on account of the import bill. There is no question of releasing the margin back to the importer. What the direction means is that the Central Bank anticipates importers to bring cash again to banks to pay for the foreign exchange they remit for imports. This is double whammy for importers, and it would practically dry out the import flow to the country.

But it does not preclude a daring importer to borrow money from the informal markets at high rates, satisfy the margin requirement, open an LC, get the goods into the country, borrow again from the informal market to meet the liability on account of the import bill, and repay the second loan out of the sales proceeds of the goods imported. There-again, the costs would be prohibitive and passed onto consumers. What this means is that the national interest proclaimed in the Lakshman shock has been effectively eliminated through other means.

With fixing of exchange rate, no prospect for going to IMF

The Lakshman shock has put Sri Lanka backward by two steps when it comes to negotiating with IMF for a rescue package. As presented by the ex-central banker Prof. S. Colombage in an article last week, the monetary model of IMF is based on a financial programming model developed by J.J. Polak in 1957. This was further developed by two other IMF staffers, Robert Mundell and Marcus Fleming which is now known as Polak-Mundell-Fleming Model.

Mundell got the Nobel Prize for Economics for this contribution in 1999 and the other two were opted out because they had pre-deceased. One of the fundamental premises of this model is that the exchange rate should be a flexible rate, and not fixed as is in Sri Lanka today, to generate the balance in the relevant markets, namely, goods market, money market and the foreign exchange market. Hence, any approach to IMF is pre-conditioned by the release of the exchange rate, among others, from the arm-twisting tactics of the central bank today.

Survival challenge till Budget 2022 is presented

Sri Lanka’s economy is at a crossroads today. The new finance minister is expected to present his maiden budget in two months’ time. However, it is not certain whether Sri Lanka would be able to survive the next two months. The economic crisis which the finance minister talked about in Parliament last week has graduated from a crisis to a total catastrophe now.

The expectations of the top policymakers in the Government that the country would get a new flow of dollars through the tax amnesty bill, investments in the Port City, and foreign direct investments, are yet to be realised. Without dollars available in the market, the economy will come to a standstill. This is the biggest challenge faced by the new finance minister. Time is running out and he is expected to act fast.

Myanmar’s insane attempt at fixing Kyat rate

There is a fine example from Myanmar which Sri Lanka’s economic policy leaders should be mindful of. For many years, Myanmar had fixed its exchange rate at 6 Kyats per US dollar. However, dollars were not available either at the central bank or with banks at this rate. This gave rise to a flourishing black market in which dollars were bought and sold freely with the blessing of some of the top political leaders. Accordingly, the black-market rate which amounted to Kyat 240 in 1997 rose to 1,300 in 2005.

Since then, the black-market rate hovered between 850 in tourist seasons and 1,400 in off-seasons. The newspapers began to publish the black-market rate along with the official rate. Myanmar had a multiple exchange system started first in 1993. In this system, the central bank issued Foreign Exchange Certificates or FECs that could be sold at a higher rate in the open market. Thus, it was simply a validation of the multiple exchange rate system by authorities. Sri Lanka also had a similar system called Foreign Exchange Entitlement Certificates or FEECs till it was abolished in 1977.

Myanmar’s Export First and Import Second policy

Then in 1997, Myanmar introduced a new domestic economy based economic development policy titled ‘Exports First and Imports Second’. In this policy, any importer desirous of buying foreign exchange should necessarily earn foreign exchange by exporting goods and services. Thus, those who do not export do not have access to foreign exchange.

In Sri Lanka, though there is no such formal policy announced by the Government, the market developments under the shortage of dollars at the official rate have forced banks to entertain the requests from exporters for dollars first and meet the requirements of others later.

This led to a further deepening of the black-market in Myanmar offering opportunities for those who earn foreign exchange to earn an additional income which economists call an unproductive rent. The imports contracted causing problems for the export sector as well. It also led to the thriving of an illegal market across the borders of Myanmar that relied on unofficial payment systems like the hundoo system.

Myanmar’s Central Bank emulating the black market

When the situation became unbearable, and graduated to a major catastrophe, Myanmar sought IMF technical assistance in 2012. A prerequisite to this assistance was to unify the official exchange rate equal to the going average black-market rate of 818 Kyats per US dollar. However, since the Myanmar government failed to introduce the economic reforms as necessary and continued to print money excessively, the official rate began to fall and now it is at 1,600 Kyat per dollar. The sins committed by Myanmar in the past have now visited on it like a powerful demonic force. It is a good lesson for Sri Lanka’s Central Bank and its economic policy leaders.

Kill the market and reap the evil

Governor Lakshman has announced that he will step down from the post this week. During his tenure as Governor in the past 20 months, he has delivered a series of non-reversible fatal shocks to the country’s monetary and financial system. Wittingly or unwittingly, he adopted as the Bank’s monetary policy framework an ideology known as the Modern Monetary Theory or MMT propounded by a breakaway group from mainstream monetary economists, though it is irrelevant to a country like Sri Lanka whose currency is not a reserve currency.

During his tenure, the Central Bank became a virtual printing press expanding the money stock by Rs. 2.8 trillion or 35% in the guise of following an alternative economic policy stance. At the last lap of his Governorship, he has now delivered a final shock to the forex market. Unless the new Governor removes these shocks forthwith, he will have only a dead patient as was experienced by Myanmar in early 2010s.

*The writer, a former Deputy Governor of the Central Bank of Sri Lanka, can be reached at waw1949@gmail.com

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Latest comments

  • 4
    0

    A question to Mr. WAW,
    Interesting reading of the outcome of 20 months of “Saubhakiya Dekhma” in operation.
    From what I read and understood, outlook appears to be dark and bleak!
    Are we staring at the US$ rate going to top SL Rs. 1000 + next year sometime or thereabouts?
    Or, If and when, SL seeks IMF assistance and successfully gets it?
    These are the questions.

  • 7
    6

    Oh God who appointed this old fashioned man as governor, why was he considered as crucially important ? How intelligent is the appointing authority ?
    There are several chaps in this little third world country , PB Jayasundera, WA WIjewardena, Rasaputra , NM Perera, Gamini Corea who are elevated as economic miracle men.
    Are they ?
    I have not come across a single book or thesis written by any of these guys considered as a global text accepted by the world over. They are not referred to in any text book on economics.
    Sometimes the powerful countries indulge these little egos and give them jobs in places like IMF. When that happens our silly media plays it up like as if the man has reached nirvana in economic theory !
    All most all of them received their PhDs in Western Universities thanks to the Western tax payers.
    They all studied on scholarships given by the West.(Perhaps not NM and Gamini Corea whose education I think was funded by their own family). The subject and the intellectual atmosphere in these centres of learning was something new to these men from backward cultures. Every year there are hundreds of PhD students passing out , and the majority of them become mediocrities or dabblers or even crooks in their own country.

    • 2
      4


      Deepthi Silva

      .
      Who are you to make such sweeping statements? I ask, after googling your name as a way of finding out who you are. Pardon me, but your name is fairly common, so I couldn’t discover who you are.
      .
      So the test of who is suitable to be hailed by you as an authority is whether you have personally seen books authored by these economists. And who do you think you are?
      .
      I grant that you have made a valid argument. but your insulting Dr W.A. Wijewardena (throwing him in with the others) and insulting him is reprehensible. What do you know of him?
      .
      I know him, and therefore I say that, as all too often is the case, you are showing yourself to be a woman who exults in nastinest. I don’t read many of Dr W., but I have read this very clear and important article and am grateful that he has written this bold article. There is much truth in it, even a guy like me can see it.

      • 3
        0

        SM,
        .
        Our people are world champions at generalizing.
        From dawn to dusk, they have been doing it. Facts check- can open their eyes.
        .
        “All most all of them received their PhDs in Western Universities thanks to the Western tax payers.” There are govt and non-govt entities that fund the research projects.

        PhDs are funded by tax payers ?
        Most of research are being funded by third-party funding bodies.

        Not thanks to the western tax payers, but the truth is thanks to cheap labour being exploited in the guise of ” research projects” by PhD students.

  • 3
    0

    Long exposure (2007 to 2014) of an academic, very high repute in a subject of his choice – interpretation of the Legal aspects, but when it came to the interpretation of the outcome of voting by a UN body, he scrambled the numbers and turned it as victory, when in fact it was sad defeat at the hallowed assembly in Geneva. That was a vain attempt at trying to fool the masses to win votes at the forthcoming hustings.
    Perhaps proves (my view) is academics are very thorough in the subjects of deep interest to them, gathering knowledge in depth over a period of time.
    However, the negative is that they being in the cocoon of Academia, usually, not always, tend to distanced from the realities of life (my view and happy to be corrected). Also, may attempt to trial their theory formulated! (Not suggesting in this instance).
    That was SL experience of one of our esteemed academics, why or why did we choose another, well respected by peers and students of economics (no reflection on economics knowledge at all is intended) to carry out the pivotal task of Governor CBSL?
    Viyath Maga!? Better choice PBJ better choice.
    Whither SL?

  • 5
    0

    Governor WADL is the proverbial rat that jumped from the sinking ship. He did irreparable damage during his tenure. Shameless man!!

    • 2
      0

      Asaipillai,
      I don’t think it is right to put the whole blame on the former Governor WADL who was appointed by the current President of Sri Lanka, Gotabaya Rajapaksa from December 2019, replacing Dr. Indrajith Coomaraswamy. The fact is that WADL do not have any experience in the past about Central Bank of Sri Lanka. He is more an academic than a practical man. Sri lanka’s economy faded day by day since the conflict started particularly after the 1983 riots/genocidal war against Tamils. In May 2009 the country had the opportunity to revive the economy but the power and money greediness of Rajapaksa family corrupted this country and every institutions including Judiciary, military and Central Bank become servants of power rather than servants to the country. Every one used the opportunity to maximise their personal benefit because they are not accountable for anything. The fact is we don’t know the true economic status of the country even now. So, the blame should go to the people who gave up their powers to power greedy politicians in the name of Lord Buddha.

  • 1
    0

    Is the current situation a result of the outdated political ideology of. WDL despite that his economics foundation has been solid and will be solid. Or is it that he allowed his principles to be affected by his policies and created a Lakshman mess instead of a new economic thinking .

    • 0
      0

      What about his protege Dr, K who was in treasury and not micro economics

  • 0
    0

    Should be not macro economics

  • 4
    0

    As always the case, this is an excellent article by Dr Wijewardena. The Central Bank and the Government are fooling themselves (and ruining the country) by trying to govern by decrees and price controls. Where is Sri Lanka heading?

  • 0
    0

    Pick twit of Anuki Premachandra

  • 5
    0

    Thanks Dr WAW, for this fine but frightening essay, which made shivers runs down my spine.
    If recent history is to inform the future, Sri Lanka is in for a rough time indeed, especially since we hear that that lacertilian-like, Cabral chappie who sports an inane and permanent ear-to-ear grin, is poised to resume the governorship of the CBSL, on condition of course, that he is paid a pension for life, not only for this upcoming tenure, but also to include his previous 12 years or so, as well.

    Such fun in Lanka, if things were not so terrible.

    And as if to celebrate our impending doom, the ageing lion king has taken an entourage to deliver a keynote speech at the G20 Interfaith Forum (armed of course, with the success of having resolved all the interfaith problems in his own country), as well as do some much needed shopping on the side for various necessities of life such as underwear https://www.thehindu.com/news/international/sri-lankan-pm-mahinda-rajapaksas-italy-visit-sparks-controversy/article36395018.ece

    • 0
      0

      Dear Easton Scott,
      .
      When you made this comment, there would have been no others visible. Thanks for the vivid language, conveying the tactile sensations that it produced in you. Although we don’t know who you are, your comments usually set us thinking.
      .
      Add to that the comment made by the Professor who earned his bread and butter by showing how to connect bits of wire (and many other observations being made both here and elsewhere) and the scenario is frightening indeed.
      .
      Professor Kumar David’s articles on Economics are erudite, and written with his customary verve. He, too, has to be taken seriously. Long ago, he worked in Zimbabwe. So, these are clear warnings; but what can we do? Dr Wijewardena is not given to hyperbole; he says it is already a catastrophe.

  • 5
    0

    If the new Governor is going to be old Cabraal, he will embalm the patient and cremate following the advice of the boss.

  • 4
    0

    “”””Governor Lakshman has announced that he will step down from the post this week. During his tenure as Governor in the past 20 months, he has delivered a series of non-reversible fatal shocks to the country’s monetary and financial system. Wittingly or unwittingly, he adopted as the Bank’s monetary policy framework an ideology known as the Modern Monetary Theory or MMT propounded by a breakaway group from mainstream monetary economists, though it is irrelevant to a country like Sri Lanka whose currency is not a reserve currency””””””

    Not many would agree that it was governor lackshman’s failure not to have done the due all these months, and consequently, CB became a press machine of notes however, this article would somehow support RULING bunch of facists in finding theirarguments as to why that miserable man would be the next governor. Former dpty has not uttered a single word about Cabral and his actions how they influenced in srilanken economy during his tenures – is a greater mistake of the kind of aritcles, as I see it. However, it is fair Eran W and other gentleman to pronounce it as louder as they could that Cabrals appointment will not be appropriate at all at this highly critical juncture of srilanken economy.

    • 1
      0

      Dear LM,
      .
      There are some people who are very intelligent, but are generous in spirit – and in word. Dr Wijewardena is a man who looks for the good things in those whom he meets and works with. He’s all the time on the look out for honest people and for hidden talents.
      .
      In his articles, he takes immense pains to write clearly for dumb fellows like us. So, although you can’t expect him to start a revolution, he also is not a man who harbours secret hatred of those whom he associates with. You usually find him having something nice to say about his associates. It seems clear to me that you’ve combed the web for any comments that he has made about Cabral. His not having said anything about the Twelfth Governor of the CB (Ajith Cabral) is significant.
      .
      LM, we’re not children. Study this for what it says about Dr Wijewardena:
      .
      https://www.colombotelegraph.com/index.php/gaping-omissions-in-article-on-cbsl-governor-coomaraswamy/

  • 3
    0

    “”””Governor Lakshman has announced that he will step down from the post this week. During his tenure as Governor in the past 20 months, he has delivered a series of non-reversible fatal shocks to the country’s monetary and financial system. Wittingly or unwittingly, he adopted as the Bank’s monetary policy framework an ideology known as the Modern Monetary Theory or MMT propounded by a breakaway group from mainstream monetary economists, though it is irrelevant to a country like Sri Lanka whose currency is not a reserve currency””””””

    Not many would agree that it was governor lackshman’s failure not to have done the due all these months, and consequently, CB became a press machine of notes however, this article would somehow support RULING bunch of facists in finding theirarguments as to why that miserable man would be the next governor. Former dpty has not uttered a single word about Cabral and his actions how they influenced in srilanken economy during his tenures – is a greater mistake of the kind of aritcles, as I see it. However, it is fair Eran W and other gentleman to pronounce it as louder as they could that Cabrals appointment will not be appropriate at all at this highly critical juncture of srilanken economy. xxx

  • 2
    0

    Thank you, Dr. W.A Wijewardena for this timely explanation about what’s happening in the Sri Lankan economy, the last two paragraphs itself paints the whole picture of what has happen and what’s to expect in the future.

  • 10
    0

    Poor Lakshman he is a good fellow and not badly brought up either. I knew him those days and it is obvious he was jut a pawn in the Rajapaksa Game of Bankrupting the Economy. If he took a firm stand on anything he would have got kicked out earlier, which actually would have been a good thing. YES.

    Anyway I am glad he has plucked up the courage, told the powers to bugger off, and decided to pack his bags. I wish him well. Now its Cabral’s turn to defecate all over the floor.

    • 0
      0

      Thanks, Professor Kumar David.
      .
      Your brief comment tells us clearly that you think that the bleak picture drawn for us reflects the real position. So, we can start readying ourselves for the worst.
      .
      I had no clear views about Professor Lakshman.
      .
      I think that I’ve told you that my elder daughter who ought to have fared well in Colombo University had to go through hell because of no fault of hers. I asked her yesterday. She spoke warmly of his daughter who had done a Sociology Special Degree, and now has a PhD. She used to bring them little treats from home, and had always been kind and decent.
      .
      I don’t want to spin unwarranted yarns out of that about the virtues of the then Vice Chancellor, but what I was told bears out what comes from your sharp mind.
      .
      I know that Economics is a difficult subject; it’s not for nothing that a Nobel Prize is awarded for the subject. I also realise that many students of Economics hold accountants to have knowledge that is relatively superficial. The subject is quite beyond me.

  • 4
    0

    Let me be bold in saying that I have only a Billionth part of knowledge of the author in this subject. But my common sense tells me that as per the author if the Central Bank do have almost absolute authority over its licensees to the extent that a mere letter is enough for full compliance of the “friendly-request” then that regulator must be careful, even think hundred times, before it must open its mouth. I knew from the way the policies were pronounced and the total disregard to the logistics of implementation will march this country towards a hermit state. The only difference could be that the leadership here will not have a reputation of executing its unwanted uncles with an anti-aircraft gun. True! Every country recognizes the basics, namely, “Thou art thine own refuge”. But if you pronounce a “juche” principle, very openly, to the point of being naked, you are committing suicide in driving a country towards a famine. However, in theory “juche” or “self-reliance” or “local-first” are the same and that is what is practiced covertly even in five-star democracies. They will ensure that the balance of trade is favorable amongst many other indicators.

  • 5
    0

    “Patient Will Die”

    The patient is dead ……… who can do a Lazarus?

    Native, can you walk on water?

    • 2
      0

      nimal fernando

      “Native, can you walk on water?”

      No, I can’t.

      Can you?

      Probably SJ would confirm if Mao, SiriMao…. did such magic/miracle.

      I did hear a British Magician Dynamo (stage name) was seen by many walking on Thames River without any assistance.
      Watch this please:
      https://www.youtube.com/watch?v=qEc_jeGBVxs

      • 0
        0

        Oh boy Native! ….. Don’t get me into trouble …… I’m on my best behaviour respecting our elders ……. whose service I have a lot of respect/regard for ….. even though I don’t agree with them.

        People have limits …….. shouldn’t push them too far …………

      • 1
        0

        Dear Native Vedda,
        .
        I clicked on the link that you gave me. this is what I got:
        .
        Video unavailable
        This video contains content from NBC Universal, who has blocked it in your country on copyright grounds.
        .
        I have long been fearful what would happen if one or both of these were to happen:
        .
        a. Our Internet links get blocked
        .
        b. Our electricity fails.
        .
        Has (a) happened?
        .
        Mercifully, I can tell you, from Bandarawela, Sri Lanka, that our electricity is still working very well. If that goes off, we can’t use even mobile phones for more than a day. Then what?
        .
        Some commenters must keep their identity secret. My revealing it clearly does serve a purpose, however.
        .
        Panini Edirisinhe (NIC 483111444V)

  • 5
    0

    Incompetence or not, Prof. Lakshman is not the only academic who has prostituted professional integrity. He will soon be replaced with sleazy opportunist who has already proved his credentials in failed Greek bonds & hedging deals. In this scenario, its the final curtain before the lights go out in SL.

    Myanmar continues under a military junta, shut out internationally, apart from, maybe, China, similar to SL but will SL end up worse as the collapsed Afghanistan? Until now, Afghanistan’s economy depended on 75% foreign aid but now aid has dried up & China is eyeing to clean up Afghanistan like vultures hovering over a dying body, while Pakistan is already sniffing around, trying to keep it barely alive to expand its jihadi network of uncontrollable terrorist extremists. With a collased economy, SL too, will be easy pickings forf vultures with our own extremists, in leau

  • 3
    0

    Why is SL delaying declaring bankruptcy?

    Declaring bankruptcy will give some breathing space for the people. May be the military Junta thinks it is bad for them.

  • 3
    0

    A central bank should be run on sound macroeconomic principles, not ideology and political economy

  • 1
    0

    You will have heard of or even watched the movie ‘Italian Job’. It tells the story of a criminal gang doing a “big job” in Italy to steal gold bullion from an armoured security truck.
    ~
    Click on the link below as this is also an Italian Job of some sort as the crooks are enjoying a gourmet feast of Italian delicacies using the money robbed from a country called Sri Lanka whilst there are food queues at home due to mismanagement of the economy. They are criminals in all but name!
    ~
    https://ibb.co/JQ3FQVC

    • 1
      0

      KP, When food is so valuable, why did the Easter attack include hotel breakfast to create chaos. They used the Cardinal group to massacre because of their God hatred, not understanding that when the cup of karma is full, there has to be judgment in consequence. A harmless Kabul church has been martyred today with gunshots. Earlier groups cut off necks. Can they outdo their creator except to reap what they have sown, if not here, even eternally.

  • 2
    0

    Sri Lanka is facing an imminent economic collapse, and it is due more to the dictatorial policy decisions made by Gota himself than due to actions of officials who are not free to implement what they, as professionals, feel is right for the country and the people. Please see what the noted Indian journalist, Shekhar Gupta, says on the matter. He even mentions the writer, Mr. W.A Wijewardena, in the video talk.
    .
    https://theprint.in/on-camera-latest-news-videos/

  • 3
    1

    Many of our economist sound like know all pundits. May be they should go out and solve all the economic problems of poor countries !

    They are so opinionated perhaps they can solve the problems of USA and China !

    Without the other essential features of background and culture, just memorizing economic theory in the Western universities has made them dangerous and unattractive fools

  • 4
    1

    Sinhala man now don’t lose control in your comments. I am only pointing out that very ordinary skills get elevated in this country to Himalayan heights.

    If you look at any economics magazine in a developed country, even a journal produced by a university, a report by a financial institution you will find hundreds of very well written articles which are much superior to what our so called economist produce.

    When the average standard is low we all suffer. Think about it

    • 0
      0

      Dear deepthi silva,
      .
      You have written, “what our so called economist produce.”
      .
      Is that meant to be singular or plural? Hopefully the latter. I know it’s only a typo, but it does make a difference, doesn’t it?
      .
      I think that if you are critical of all our savants, you’ve got a point. If the latter, I will be able to tell you something about Dr Wijewardena whom I have known only for about five years – so it isn’t going to be because of kinship or some unsavoury dealings.
      .
      Panini Edirisinhe of Bandarawela

  • 1
    0

    even lakshman got a shock when he found that he got a pension for life after screwing the economy.

  • 1
    1

    Refer Sinhala man comment.

    I also searched the web for “Sinhala Man” . Could not find him ! May be now he is a dual citizen living in a Western country ! “Sinhala Man” may have become “Simon” to adapt to the new culture

    Sinhala man, you are intelligent indeed !

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      Dear deepthi silva,
      .
      I’ve explained my Sinhala_Man handle umpteen times. Let me know whether to repeat. I have been making all too many comments on CT, consistently, under that name, from about April 2015 on – after accessing the site from within Sri Lanka became possible.
      .
      As for my real name, and some indication of where I live, I have been revealing it frequently; even on this page, above, yesterday, together with my National Identity Card number. I suggest that you search using that name, perhaps in conjunction with Colombo Telegraph. and then you will even see my “Maha Kalu Sinhalaya” visage. I have written a few articles which have attracted many ad hominem responses. Some uncomplimentary things have been said, but none has questioned my authenticity. When googling, please note the idiosyncratic spelling of my surname (passed on to me by my father). The extended family spells even worse, but this was not my invention. The first name also is real; my father was a teacher, and gave me the name of a Sanskrit grammarian.
      .
      I came to know Dr Wijewardena owing to CT. That may make more interesting reading than this!
      .
      Panini Edirisinhe

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    Sinhala man , We are all suffering! Where is the redeemer ?

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