CB Governor blames liberalisation agenda for current state of economy

Prof. W.D. Lakshman
Pic by Pradeep Pathirana

The newly-appointed Central Bank (CB) Governor Prof. W.D. Lakshman blames the country’s liberalisation policy package for the current state of the economy. “From late 1970s onwards, we were implementing a socio-economic policy model involving an increase in the liberalisation of markets with globalisation. While the policy model generated some good results, my view is that, as a whole, it has produced a series of anti-development tendencies in the economy and policy,” Prof.  Lakshman opined.

He was addressing the 61st Annual General Meeting of the National Chamber of Commerce, in Colombo, on Tuesday. 

He lamented that the current subpar economic growth and unimpressive private sector credit growth are results of the liberalisation policy package adopted by the successive governments in the country. 

Prof. Lakshman however acknowledged the arguments, which could be raised in support of the liberalisation agenda.

“Those who supported the policy package would have argued that Sri Lanka came to suffer those adverse results because the recommended policy package of liberalisation wasn’t implemented correctly in full. They consequently argued that a large part of the liberalisation agenda was unmet,” he added. Prof. Lakshman said that he intends to support the government to find an alternative socio-economic policy to the liberalisation agenda while noting that the country is at crossroads at the moment. 

He insisted that import substitution is important as much as exports to reach Sri Lanka’s socio-economic objectives.   

Further, he said that the CB would continue its current accommodating monetary policy while supporting the government to achieve its growth initiatives. (NF)