CB chief says no going back to old ways; urges politicians to walk the talk

Dr. Nandalal Weerasinghe
Pic by Nimalsiri Edirisinghe

• Calls for consistent policies; says can’t go back to old ways once IMF deal clinched
• Stresses need to end repeating cycles of balance of payment deficits once and for all
• Urges need for Cabinet and Parliament to work towards one direction to resurrect economy

By Shabiya Ali Ahlam 

Central Bank Governor Dr. Nandalal Weerasinghe yesterday stressed the need for the country’s political authorities to be consistent with their plans to pull the island nation out of the ongoing economic crisis, so that the cycle of economic mismanagement can be broken once and for all. 

Dr. Weerasinghe asserted the need for the higher-ups to be consistent with the policy decisions already taken and ensure they do not go back to old ways and practices once the International Monetary Fund (IMF) deal is clinched. 
“What happens all the time is that they (politicians) are not consistent in their activities, specially with the macro-fiscal framework. We need to maintain consistency over a period of time,” said Dr. Weerasinghe during a forum that was organised to celebrate Sri Lanka Internet Day 2022, yesterday in Colombo. 

“Whenever we go to the IMF, we agree to go towards a certain path and once the programme is over, we go back to old ways and end up in repeating cycles of balance of payment deficits,” he added. 

Dr. Weerasinghe stressed on the importance to understand who has fiscal authority and the roles of the Cabinet and Parliament, so that all sections are working in one direction towards achieving a single goal. 
According to him, this time around, the majority of the political parties appear to have identified the need for fiscal consolidation and the ongoing debates in Parliament show that all sides are determined to increase government revenue and reduce the deficit, so that the ongoing economic crisis can be tackled at the earliest. 

“This is a positive that I see. Going forward, if this continues, I think we can see a positive outcome,” he said. 
Sri Lanka is facing its worst economic crisis at the moment, as a result of decades-long mishandling of the economy. The latest of such blunders include the 2019 tax cuts, excessive money printing through the pandemic, ban on chemical fertilisers and botched rupee devaluation in March this year.  
Sri Lanka has already gone to the IMF 16 times, after printing money to boost domestic demand and losing
foreign reserves.