Karan Thapar, in article headed “ “If Ranil Doesn’t Take Tough Steps, Sri Lanka Economy Could Fall into Abyss: Former Central Bank Head”
Indrajit Coomaraswamy identified four critical steps that the government must immediately start to implement as the first stage of restoring the economy to better health.
One of the most highly regarded former governors of the Central Bank of Sri Lanka has said that if Ranil Wickremesinghe does not implement very tough measures, the country’s economy can fall into the abyss. Indrajit Coomaraswamy says he believes it will take the Sri Lankan economy at least five years to get back to where it was – provided certain tough steps are implemented by the Wickremesinghe government.
In an interview to The Wire, Coomaraswamy identified four critical steps that the government must immediately start to implement as the first stage of restoring the economy to better health.
First, it needs an IMF arrangement because the country doesn’t have foreign exchange or rupees. An arrangement with the IMF will act as a certificate of good housekeeping and also facilitate funding by other institutions and, possibly, by friendly supportive countries.
Second, Wickremesinghe must find a way of getting essential supplies such as food, fuel and medicines, and for this he needs to arrange bridging finance. Although India has already given, in swaps, loans etc., up to $3.8 billion, Coomaraswamy is hopeful India will give more. He is also hopeful that Japan will step in and help but, in this case, it could require Sri Lanka restoring some of the projects linked to Japan which were terminated by the Rajapaksa government. However, Coomaraswamy does not think there will be much help from the United States because its attention is diverted in other directions.
Third, Coomaraswamy says major structural reforms are necessary. They include reform of the functioning of including the disinvestment of state-owned enterprises as well as ensuring that the price of utilities are cost reflective. In other words, subsidies must be constrained. Coomaraswamy also believes that Sri Lanka must give independence to its Central Bank and strengthen the Fiscal Management Responsibility Act.
Fourth, Coomaraswamy says steps need to be taken to improve the business climate of the country. He believes work to identify the necessary measures has been done earlier but it now needs to be pulled together and implemented.
These are all tough measures and will not be easy to implement. Already poverty in Sri Lanka has increased by 750,000 people. A strategic and well-devised communication strategy will be necessary to convince the people of Sri Lanka that they have to accept more sacrifices before the country returns to better economic health.
A NOTE from Wikipedia on Indrajit:
“Coomaraswamy was born on 3 April 1950 in Colombo, Ceylon. He was the son of civil servant Rajendra Coomaraswamy (Roving Raju) and Wijeyamani. His paternal grandfather C. Coomaraswamy was a civil servant and his maternal grandfather S. K. Wijeyaratnam was chairman of Negombo Urban Council. He has one sister, Radhika. Coomaraswamy was educated at Royal College, Colombo and at Harrow School. He was captain of Royal’s primary cricket team. He was captain of Harrow’s cricket team from 1967 to 1968 and also played rugby for the school for three years. After school he joined Emmanuel College, Cambridge from where he received BA (Hons) and MA degrees. He played first-class cricket for Cambridge University Cricket Club between 1971 and 1972. He then proceeded to the University of Sussex from where he obtained a DPhil degree.……. https://en.wikipedia.org/wiki/Indrajit_Coomaraswamy
A NOTE from Michael Roberts, 3 August 2022:
Indrajit is the brother of Radhika Coomaraswamy (of the ICES and UN at various stages of her career) and both were born intoa well-placed Tamil family in Colombo. Indrajit was educated at royal college in colombo and proceeded to the exclusive Harrow college in England where he played both cricket and rugger for the school and was good enough to captain its team in 1967(?).
Indrajit playing for Harrow
He went on to Emmanuel College in Cambridge and represented Cambridge in both cricket and rugger –no mean feats. When he returned to Sri Lanka in the early 1970s I recall seeing him play rugger for the CRFC and/or Sri Lanka; in fact, the Wikipedia account notes that “Coomaraswamy played rugby for Ceylonese Rugby & Football Club and captained the national team in the 1974 Rugby Asiad. He also played cricket for the Tamil Union Cricket and Athletic Club.”
I recall chatting with him once at “Barefoot” in more recent times –probably during a function relating to the Gratiaen Prize in Literature. He is as erudite as well-balanced a personality. His assessments must be treated seriously.