Gross Errors in Financial Management in Sr Lanka under the Gota Administration

Sanjeewa Jayaweera, in The Island, 20 April 2022, with this title “Ali Sabry confesses to the mistakes made”

Ali Sabry (AS), the newly appointed Finance Minister, was unusually candid and forthright in a couple of recent television interviews. He acknowledged the many mistakes made by the government on the economic front. Many believe that repenting over serious mistakes made, causing irreparable harm to the country’s citizens, is still unforgivable. These mistakes were made repeatedly over time, despite many independent economists and financial analysts asking for a reversal, making the crime harder to forgive. The words arrogance, egoistic, pompous, condescending and stupid will easily define those responsible for running the economy in the last two years.


As the Finance Minister, Sabry will lead our team to discuss the way forward  with the IMF, and other lending agencies, and be responsible for negotiating with the creditors. We, therefore, need to assess his capabilities and readiness to make the hard and unpopular decisions that a few of us have been demanding for the last 18 months.

Sabry believes that the incumbent regime and the political setup are what the country needs to work within to comply with the country’s constitution. Yes, true enough.

However, an acknowledgement that the President and the Prime Minister (PM) should resign due to the magnitude of the mistakes made in the last two years was not forthcoming. He pointed out that if the President does resign, the constitution requires a replacement to be found from the current Parliament, which the citizens of the country may not want.

In both interviews, AS blamed the gang of four (G4) comprising Prof. W D Lakshman, Ajith Nivard Cabral, P B Jayasundara and S R Attygalle for the numerous mistakes. According to him, all in the Cabinet, other than Vasudeva Nanayakkara, wanted to seek an IMF bailout and float the rupee, several months ago, but were prevented by the G4. They had held sway over the entire Cabinet, promising a home-grown solution that never materialised. It was both revealing and shocking that the President, PM and the Cabinet dithered as long as they did and confirmed their lack of economic and financial knowledge. Unfortunately, the people of this country now have to pay the supreme sacrifice.

It was good to hear AS speaking of the need to increase taxes by widening the tax net and the increase in rates. He acknowledged that many avoided paying taxes, through various methods. He also spoke of the need to price certain supplies in line with cost, presumably fuel, electricity, gas, and water. The need to restructure many loss-making state-owned enterprises (SOEs) was also mentioned. A few months back, he stated that trade unions, within the state sector, should not be allowed to take industrial action, which many of us also endorse. He said that many decisions that would need to be taken in search of economic recovery would be unpopular, but he would push for such changes as he is not interested in reelection. A refreshing declaration from a politician!

Whether AS will remain the Finance Minister, for the foreseeable future, is to be seen. People are demanding the removal of the President and his government as a prerequisite to stop their agitation; This is an issue that needs to be resolved sooner than later. As an educated professional, I believe and hope that AS might still have a role to play in the future. Although the need of the hour is to sweep away the current lot (225+1), a few professionals with a clean record have to be retained and their experience utilised.

A couple of press announcements in the last 48 hours confirm nothing much has changed or been learnt from the recent debacles. First, the news that SriLankan Airlines has floated a Request for Proposals (RFP), to lease 21 aircraft, left many of us incredulous. That this loss-making “white elephant” needs to be immediately privatized or closed down has still not been understood. There is no doubt in my mind that Emirates and Qatar Airlines, and others will quickly fill the void left by the closure of SriLankan, and tourists will still be able to fly to the country.

The other news item was the purported decision by the GOSL to appoint Bandu Samarasinghe, a professional comedian, as the next Consular General in Milan. However, Prof. G L Peiris, the Foreign Minister, subsequently stated that the name of Samarasinghe had only been proposed. The citizens of this country expect that future appointments to such positions will only be from those trained in this speciality.

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