Already, even as a State Minister, Cabraalhas made statements which would make an Ordinary Level student of Economics cringe. For instance, he is on record saying recently that the excessive printing of money does not cause inflation. What peculiar ‘Cabraalian’ theory of economics is he trying to foist on a naïve and gullible Sri Lankan public?
After hearing that former parliamentarian turned convicted murderer Duminda Silva had been granted a presidential pardon, we could have been excused if we thought that that the present regime couldn’t stoop any lower in doing what it wants regardless of the repercussions of its actions.
Had we done so, we have been proved wrong. This week, it sent a politician, State Minister for Money and Capital Markets and State Enterprise Reform Ajith Nivard Cabraal back to the Central Bank as its Governor.
This broke a seventy year tradition since the founding of the Central Bank in this country of keeping the Central Bank free from political interference. Politicians may have appointed persons who they believed would be loyal to them- Cabraal by Mahinda Rajapaksa in a previous incarnation as Governor and more infamously Arjuna Mahendran by Ranil Wickremesinghe- but they didn’t desecrate the institution to the extent of appointing a person who was an active politician. Well, now they have.
What adds insult to injury is Cabraal’s track record as Governor. At this time of great economic peril to a country battered and bruised by the Covid-19 pandemic, appointing Cabraalwould have been justified had he been an economic genius, a Sri Lankan J.K. Galbraith so to speak, who could have delivered in this crisis situation.
To give credit where it is due, Gotabaya Rajapaksa first appointed Professor W. D. Lakshman as Governor of the Central Bank when he assumed office. Although 78 years old at the time of assuming duties, Lakshman was a well-respected academic who held the Chair of Economics at the University of Colombo and had a glittering academic career at the university.
Professor Lakshman’s credentials were never in doubt although there was some criticism about the appointment given professor Lakshman’sage. Nevertheless, the years sat lightly on Lakshman and by all accounts he was a worthy successor to Indrajith Coomaraswamy. In retiring six weeks before his tenure ended, Professor Lakshman chose his words carefully but hinted that all was not well in the Central Bank and that his economic philosophy for the nation was not what was being implemented.
That sort of class, finesse and academic nous Cabraal certainly does not possess. Apart from being a chartered accountant by profession, his curriculum vitae is quite pedestrian by comparison. All offices he has held are by virtue of being Governor. His only talent appears to be being able to switch political loyalties at the correct time, having begun his career as a provincial councillor in the United National Party.
What Cabraal is instead famous for is his management of the Central Bank during his previous tenure, which also came under the microscope after investigations were launched into the Bank’s bond fiasco courtesy of Mahendran and the Finance Minister at that time, Ravi Karunanayake.
A Presidential Committee conduct a forensic audit following the bond sale scandal. What they discovered was even more scandalous. While all the attention was focused on Mahendran, Karunanayake and their nefarious activities, it was also revealed that during the years between 2006 and 2015, when Cabraalwas Governor, the Central Bank incurred losses to the tune of Rs. 10 billion, at approximately a billion rupees every year.
Among the issues that came to the fore during that forensic audit was the notorious hedging deal which cost the government dearly and was found to be irregular by the Supreme Court. Cabraal was still the Governor when this deal was entered into and would have had input in to the decision- or, if he thought it was inimical to the country’s economy, he would have looked away and said nothing just so he could please his political masters.
So we know Cabraal is no economic whiz-kid being brought in to perform miracles and rejuvenate the Sri Lankan economy which is on its deathbed, what is he being offered the plum position for? After all, he had to sacrifice a cushy political career with all its attendant perks to take up this position.
With Basil Rajapaksa now firmly ensconced in the Finance Ministerial chair, it appears as if the government is wanting a ‘yes man’ who will always say ‘yes, sir, yes, sir, three bags full’, whenever Basil wants him to.
Already, even as a State Minister, Cabraal has made statements which would make an Ordinary Level student of Economics cringe. For instance, he is on record saying recently that the excessive printing of money does not cause inflation. What peculiar ‘Cabraalian’ theory of economics is he trying to foist on a naïve and gullible Sri Lankan public?
In viewing the broader political canvas rather than the economic landscape alone, what matters more is not what damage Ajith NivardCabraal can do to the Sri Lankan economy- but what the decision to appoint Cabraal means, in terms this new political culture that is emerging.
The previous Rajapaksa regime headed by the then all-powerful Mahinda Rajapaksa acted arbitrarily and with indecent impunity, especially after the 2009 victory in the Eelam war and their subsequent election victories in 2010. This was clearly manifested in actions such as impeaching and removing Chief Justice Shirani Bandaranayake from office and in the imprisonment of then General Sarath Fonseka.
Fed up with such actions, the Sri Lankan voter astounded the world by sending Mahinda Rajapaksa packing, compelling him to return to his Medamulana abode from where he clung on to a window and claimed that his defeat was brought by the minority communities. His acolytes displayed an electoral map of the districts he won and lost to justify this claim.
One would have assumed that any reasonable and astute person- and his political disciples- would have been chastised by such an experience, learnt lessons from it and been careful enough not to repeat the same mistakes. What the appointment of Cabraal as Governor of the Central Bank signifies is that these are not astute or reasonable persons and that those lessons have definitely not been learnt.
What needs to done then is that the regime should be taught the same lesson again- and yet again, if need be!
