Inside story about Indrajit Coomaraswamy becoming Central bank Governor

By D. B. S. Jeyaraj 

“All changed, changed utterly” – The memorable lines from Irish poet Yeats came true on the morning of July 2, 2016 for Dr. Indrajit Coomaraswamy after he received a telephone call at 6. 30 am. The early caller was none other than Malik Samarawickrama, the Minister of Development Strategies and International Trade. The former was functioning as a senior adviser to the ministry. However it was not a ministry-related matter that the minister was calling about. It was a far more serious and important issue affecting the welfare of the nation.  

Samarawickrama, the Minister of Development Strategies and International Trade then officially informed President Sirisena that he was releasing Indrajit as his senior adviser. President Sirisena then stunned everyone by tweeting that he had appointed top economist Indrajit Coomaraswamy as the new Central Bank Governor

 Samarawickrama informed Coomaraswamy that President Maithripala Sirisena and Premier Ranil Wickremesinghe had decided to appoint the 66 years old economist as the 14th Governor of the Central Bank of Sri Lanka (CBSL). It was Samarawickrama’s task to persuade Indrajit Coomaraswamy to accept the offer. Malik and Indrajit go back a long way being old Royalists and fellow ruggerites playing for the Ceylonese Rugby and Football Club (CR & FC) at one time.   

Minister Samarawickrama knew that making Indrajit consent to becoming the CB Governor would be an uphill task. Despite his many creditable achievements and accomplishments, Indrajit Coomaraswamy was not an ambitious go-getter type of guy. He belonged to that dying breed of public servants who never hankered after office but carried out whatever duties entrusted to them efficiently and loyally. Though Indrajit was now a retiree, he was still active with many irons in the fire.  

Apart from being senior adviser to Samarawickrama’s ministry, Indrajith was involved with a number of other assignments. He had been appointed non-executive Director of John Keells Holdings (PLC) in Feb 2011 and a Director at Tokyo Cement Group in March 2011. He was also a Director of SEEDS (guarantee) Ltd and the Nawaloka College of Higher studies. He was also a member of the Sri Jayawardenepura University Board of Study (Public Administration).  

More important than all these were his family commitments. His wife Dr. Tara Coomaraswamy (nee Fonseka) and two sons Imran and Arjun are in the UK. His elder son is married and Indrajit is now a proud grandfather. Indrajit makes it a point to be with his family for 3 to 4 months every year. This was like a sacred commitment for him who laid great store upon family values. In fact when some influential friends had spoken to him about the CB Governorship in January 2015, Indrajit had told them he was not keen about it as he had to be in Britain for four months annually.  

Central Bank Governorship  
 Being aware of all these matters, Samarawickrama knew that Indrajit would decline the CB Governorship. Besides the controversy shunning apolitical, he would not have liked being the CB Governor in the current volatile situation for obvious reasons. Still Samarawickrama was confident that like Marlon Brando in “The Godfather” he could make an offer that Indrajit could not decline.

 
Samarawickrama a shrewd judge of men and matters relied on two characteristics of Indrajit to help accomplish his seemingly impossible mission. The first was his inherent patriotism. If the country beckoned he would do what he felt was his duty. The second was his tendency to face challenges and overcome them in his quiet, unobtrusive manner. In a prolonged conversation, Malik outlined the perilous nature of the prevailing political situation. He pointed out that the Govt was at a critical juncture and that its fragile unity was under threat. Ultimately the country could be affected badly.

 
Malik impressed upon Indrajit the fact that the President and the Premier  were at loggerheads over the CB Governor issue. There was no meeting of the minds between both on a suitable appointment for the post except for one choice. Indrajit Coomaraswamy was acceptable to both the President and Premier. Besides the credibility of the CB as an institution had been seriously eroded in the recent past. It would be a tremendous challenge to restore integrity. Under these circumstances Indrajit had to agree and agree immediately emphasised Malik Samarawickrama. Time was of the essence.  After much discussion, Indrajit seemed willing. However he asked for a little more time. He then conferred with immediate family members. While his wife and sons are in London, Indrajit’s only sibling Radhika Coomaraswamy is in Sri Lanka. Once the intricacies, importance and urgency of the situation were explained the “family” too was willing. Indrajit then called Malik and uttered the magic word “Yes”! However he added a caveat. He would like the official offer to come directly from both the President and PM. Malik agreed.  

Samarawickrama then got in touch with the President and the PM. He then informed Indrajith that the Premier would call him after the President called. Thereafter President Sirisena who was happy to hear that Indrajit had consented telephoned him formally and asked him to come and meet him. This was followed by the PM.   

Indrajit Coomaraswamy born on April 3, 1950 has a BA (Hons.) and MA degree from Cambridge University and a doctorate from the University of Sussex. He had joined the CB as a staff officer in 1973 and been seconded to the Finance Ministry from 1981 to 1989

Indrajit Coomaraswamy then went over and met the President in person. He was accompanied by Minister Malik Samarawickrema. The President had with him a letter from the acting Finance Minister Lakshman Yapa Abeywardena proposing Indrajit Coomaraswamy for the Post of CB Governor.

Samarawickrama, the Minister of Development Strategies and International Trade then officially informed President Sirisena that he was releasing Indrajit as his senior adviser. President Sirisena then stunned everyone by tweeting that he had appointed top economist Indrajit Coomaraswamy as the new Central Bank Governor.  

President Maithripala Sirisena 
Thus ended the period of anxiety and agony caused by the CB Governor episode. Indrajit assumed duties on Monday July 4. He was given a letter of appointment for the customary term of six years and sworn in as Central Bank Governor by President Maithripala Sirisena at the Presidential secretariat. Finance Minister Ravi Karunanayake had also sent a letter supporting and recommending Indrajit as Governor. Prime Minister Ranil Wickremesinghe was also present at the event demonstrating clearly that the choice of Indrajit Coomaraswamy as Governor was a united joint decision. Indrajit also met the PM separately for a discussion after being sworn in. Later in the day, both the President and PM addressed the Govt Parliamentary group where it was asserted that the Govt was acting cohesively and could not be divided or defeated through conspiracies.  

The satisfactory resolution of the CB Governorship crisis and the subsequent show of unity presented by the President and PM have made some Govt ministers jubilant. Earlier fears about a political split between Sirisena and Wickremesinghe over the CB Governor issue have evaporated. So much so that some ministers are “cock a hoop” and in a state of denial about the serious difference of opinion that existed between Maithripala and Ranil and by extension the Sri Lanka Freedom Party (SLFP) and the United National Party (UNP). Mangala Samaraweera assured the media at a press conference that there was absolutely no rift between the two and insisted that they were both committed to go ahead with the common agenda. Cabinet spokesperson Dr. Rajitha Senaratne said at the weekly briefing that there was no “SLFP -UNP divide” over the matter. “In fact, after this issue, they [Sirisena and Wickremesinghe] have become closer and friendlier” Senaratne claimed.  

Notwithstanding these ministerial pronouncements, the reality was different. The CB Governor issue had caused a serious problem between the President and the PM. Due to reasons that are well –known, the President was firmly opposed to the 13th Governor Arjuna Mahendran continuing as the CB head. The PM on the other hand was equally determined to ensure Arjuna Mahendran continuing as CB Governor. Lakshman Arjuna Mahendran had been appointed Governor in January 2015 after his predecessor Ajith Nivard Cabraal had resigned when Mahinda Rajapaksa lost the Presidential elections in January 2015. Mahendran was appointed for the remainder of Cabraal’s original six year term which was due to end on June 30, 2016.  

Premier Wickremesinghe however wanted to retain Mahendran and nominate him as governor for a fresh term of six years. Earlier the CB came under the purview of the Minister of Finance. However, Wickremesinghe who in addition to being PM was also the Minister of National Policies and Economic Affairs had brought the CB under his ministry. Matters got complicated when Mahendran became enmeshed in a scandal concerning the issue of Treasury Bonds by the CB. With the Mahinda-led Opposition and significant sections of civil society gunning for Mahendran, there emerged an orchestrated demand that the Governor should quit. The PM steadfastly refused to comply saying that nothing substantial had been proved against Mahendran.  

The President differed with the PM on this. In politics where perception was often the reality, Sirisena felt that the public outcry against Mahendran was too powerful to resist. Besides the majority of those in the SLFP claiming to be Sirisena-loyalists wanted Mahendran out. President Sirisena himself opined that Ranil Wickremesinghe was denting his clean, incorruptible image due to his stance on Arjuna Mahendran. Sirisena was worried that the Govt would be seriously undermined if it continued to keep Mahendran on as Governor.  

Parliamentary Committee on Public Enterprises  
So when Arjuna Mahendran’s tenure was close to ending, the President took up the position that he would not re-appoint him for a further term. He requested Ranil to suggest an alternative. The PM refused and insisted on Mahendran. A civil society organization filed a writ of Quo Warranto against Mahendran continuing as Governor. As pressure on him mounted, Mahendran indicated that he would not serve another term until and unless he was vindicated of corruption charges against him. The Parliamentary Committee on Public Enterprises (COPE) headed by JVP MP Sunil Handunnetti was conducting a probe. The PM also told some civil society representatives that Arjuna Mahendran would be appointed Governor again only after he was cleared by the COPE investigation. It became obvious that the CB would have no Governor after June 30.  

This resulted in a situation where there was speculation that an acting Governor could be appointed for an interim period until the COPE investigation was over. (It was presumed that the COPE would clear Mahendran). The Attorney General’s Dept proffered an opinion that an acting Governor could be appointed. An emergency meeting of the Monetary Board was held and a letter from the AG’s Dept was produced. This was shot down by the Secretary Treasury/Finance Ministry Dr. R. H.S. Samaratunga who made it very clear that there was no provision for an acting Governor under the Monetary law.  

This made it imperative that a fresh CB Governor appointment be made. President Sirisena took the initiative in compiling a list of seven names as potential Governors and submitted it for the PM’s consideration. Ranil however rejected it outright and instead recommended that Charitha Ratwatte be appointed Governor instead. Charitha Ratwatte a former Treasury Secretary was currently functioning as senior adviser to the Prime Minister. He belonged to the inner circle of Wickremesinghe’s close confidantes. Even as Ratwatte’s name was publicly mentioned, there was speculation in the media that Ratwatte would resign after two months to enable the re-appointment of Mahendran as Governor.  
Once again there was opposition to Ratwatte as a potential governor. He had been earlier a UNP party chairman. The SLFP as a party was opposed to a CB Governor who could be partial towards the UNP. Besides it was suspected that Ratwatte would only hold office as a stop gap measure and then resign to make way for Mahendran to return. President Sirisena determined to prevent the re-entry of Mahendran refused to appoint Charitha Ratwatte as Governor. He said that the SLFP as a party was opposed to Ratwatte. Sirisena re-submitted a list with five names to Wickremesinghe. The Prime Minister rejected it completely and re-iterated that Ratwatte should be appointed. It was a virtual UNP-SLFP political stand off.  

A thoroughly exasperated President then decided to take matters into his own hands. He decided to go by the book and appoint the senior most Deputy Governor of the CB as new Governor. Actually the CB from its inception in 1950 had been dutifully following that procedure for decades. An incumbent Governor was succeeded by his senior most deputy. It was Chandrika Kumaratunga as President who first deviated from this practice by appointing former Hayleys Chairman Sunil Mendis as Governor in 2004. Mahinda Rajapaksa followed in her footsteps by appointing Ajith Nivard Cabraal in 2006. Then the Sirisena-Wickremesinghe Govt followed suit by appointing Arjuna Mahendran in 2015.  

Two Senior Deputy Governors  
Now President Sirisena tried to rectify matters by sticking to the time-tested standard procedure. There were two Senior Deputy Governors. One was Dr. Nandalal Weerasinghe who was promoted to that position on September 27, 2011. The other was Dr. P. Samarasiri who was promoted as Deputy Governor on July 14, 2014. While Weerasinghe was regarded as being closely associated with former Governor Cabraal, Samarasiri was allegedly a confidante of ex-Governor Mahendran. Since Nandalal Weerasinghe was the senior of the two President Sirisena decided to go ahead with him.  

Initially President Sirisena tweeted on June 29 that he was going to appoint a new governor after some hours. He was at that time out of Colombo. Upon returning to Colombo, President Sirisena embarked on an unorthodox move. He arrived at the CB unannounced on June 30 with the intention of announcing the appointment of Nandalal Weerasinghe as Governor. Having got wind of the President’s move both Arjuna Mahendran and Ranil Wickremesinghe rushed to the CB. Wickremesinghe informed a surprised President that as a matter of protocol, he (Ranil) as the minister under whose purview the CB fell, had to be present when the President visited the institution.  

In a further move that flustered President Sirisena more, the Prime Minister vetoed the idea of announcing the appointment of a new Governor. Wickremesinghe pointed out that though the CB was now placed under his ministry the existing laws governing the institution stipulated that the Minister of Finance should propose the name of the Governor to be appointed. Since Finance Minister Karunanayake was in the far east and scheduled to return only on July 4, the President could not appoint anyone Sirisena was told. A chagrined President departed without making an announcement. Later in the night a “mysterious” media communiqué was released. It said that the appointment of the Governor would be made after Finance minister Karunanayake returned to Colombo. The Presidents office and Media ministry disowned the press release. It was later reported that the communiqué had emanated from the PM’s office.  

Friday July 1 dawned without a Governor at the helm at CB. Both the President and Premier stuck to their positions stubbornly. The situation was indeed bleak and a major rift threatening to break apart the Govt loomed large on the political horizon. There was even speculation that Parliament may be prorogued. It was at this point that President Sirisena summoned a group of people with knowledge and experience regarding matters concerning the CB. His intention was to find a way out of the mess by finding an alternative acceptable to both sides.  

“It seems that destiny is taking a hand” exclaims Rick Blaine played by Humphrey Bogart in the unforgettable movie “Casablanca”. Destiny was indeed taking a hand in the life of Indrajit Coomaraswamy in the form of two “Samares”. One Samare was Treasury Secretary Dr. R.H.S. Samarathunga. The other Samare was of course Cabinet Minister Malik Samarawickrama.

 
Treasury Secretary Dr. R. H. S. Samarathunga
 Even as President Sirisena was discussing possibilities and probabilities the name of Indrajit Coomaraswamy was suggested for the first time as a contender for the Central bank Governor stakes. Amusingly enough the President misheard the name “Coomaraswamy” as Kumarasiri first. It was the secretary to the treasury , ministry of Finance Dr.R.H.S. Samarathunga who enlightened the President in full about the qualifications and capabilities of Indrajit Coomaraswamy. Dr. Samarathunga an administrative service officer had worked at the Dept of National planning under the purview of the ministry of Finance for over 20 years. It was then that Samarathunga had become associated with Coomaraswamy who was senior to him. Both had specialised in macro economics.  

Indrajit Coomaraswamy born on April 3, 1950 has a BA (Hons.) and MA degree from Cambridge University and a doctorate from the University of Sussex. He had joined the CB as a staff officer in 1973 and been seconded to the Finance Ministry from 1981 to 1989. He had then relocated to London and worked at the Commonwealth Secretariat from 1990 to 2008 holding several posts. He had served as a Commonwealth Consultant in Colombo for 15 months in connection with the CHOGM summit held in 2013. Currently he was senior adviser at the Ministry of Development Strategies and International Trade.   

After listening to Treasury Secretary Samarathunga extolling the virtues of Indrajit, President Sirisena felt intuitively that Indrajit Coomaraswamy was the right man for the job. Since he was already an adviser to Malik Samarawickrama, the President contacted his Minister of Development Strategies and International Trade. Samarawickrama, who is also the UNP Chairman is a close confidante of Ranil Wickremesinghe and a member of the Premier’s inner circle. Malik liked the idea of Indrajit as Governor and felt the suggestion was feasible. However Malik knew very well that the proposal had to be put across convincingly to the PM.  

Initially a list of three names inclusive of Indrajit was sent to the PM. It was sent back with a strong reply stipulating again that Charitha Ratwatte be appointed. The President was miffed but was still prepared to wait a little longer. It appeared that the President had been convinced by Dr. Samarathunga that Coomarswamy was the most suitable choice under prevailing circumstances. It was now the turn of Samarawickrama to persuade the PM to agree. Minister Samarawickrama having years of experience in interacting favourably with Ranil went about his mission quietly and diplomatically. He was greatly aided by two factors. One was that Ranil and Indrajit had been chums since boyhood and had no issues. The other was that former President Chandrika Kumaratunga also backed Indrajit’s candidacy.

  
Minister Malik Samarawickrama   
Finally on Friday July 1 night, Premier Ranil Wickremesinghe also agreed to Coomaraswamy after much persuasion. At last there was a common choice acceptable to the President as well as the PM. An elated President entrusted the task of making Indrajit comply to Samarawickrama. Indrajit blissfully unaware that his life was going to change utterly received the fateful telephone call from Minister Malik Samarawickrama at 6.30 am on July 2. Love of the country and the love of a challenge made Indrajit amenable to the proposal. The rest as they say is history.  

After being appointed on Monday July 4, new CB Governor Indrajit Coomaraswamy went over to the CB and assumed duties officially at the 15th floor. He was given a rousing welcome by employees at the CB. He was no stranger to the institution having commenced his career there in 1973. He addressed the CB employees where he made some interesting and important remarks. In a sense that speech indicated what he intended doing as Governor during his tenure. Here are relevant excerpts:–   

“The Central Bank of Sri Lanka is one of the great institutions in this country, and I am acutely aware that a primary responsibility; arguably the primary responsibility of the Governor is to uphold its reputation and credibility. And I can assure you that I will do my utmost to do so at all times. Of course, I can’t do this on my own. I need the cooperation of each and every one of you to maintain this as one of the great institutions in the country”.  

“My parents went abroad when I was about 11 years old, so I had much of my secondary and university education abroad. But as I was doing my degree and thinking of what I should do in the future – there was no doubt in my mind as to what my career should be and that was to be as a staff member of the CBSL.......I started my career here and that was a great source of pride, to be able to say that I started my working life in this institution, and I continue to be enormously proud that I was part of this staff of this great institution for 15 years. So in a way, it is coming the full cycle. It’s like coming back home after a long absence. It is a great pleasure, privilege and an honour to be able to come back”.  

“Of course, I am deeply indebted to the President for appointing me as the Governor of the CBSL. I am also indebted to the Prime Minister and the Finance Minister for supporting my appointment and I very much hope that I will be able to fulfil the trust they have reposed in me”.  
“When I met the President, he just told me one thing: “Do your work in a straight way and do not fear anybody in discharging your duties.” Now my intention is to follow his direction and to carry out my functions according to his wishes”.  

Vision of the Prime Minister 
“When I met the Prime Minister, he laid out his vision for where he wants to take this country and there is a big role for the CB. And in many ways, if we are not able to fulfil our functions in the way they should be fulfilled -- in terms of creating a platform for macroeconomic stability with strong macroeconomic fundamentals, having financial sector stability so there is confidence right through the system -- nothing else is possible. That is the first step, to get strong macroeconomic fundamentals, to have the financial sector which is the lifeblood of the country stable, and people within the country and outside having confidence in it”.  

“So that is our responsibility. And as I said, because I genuinely believe that nothing else will really take off, unless we are able to do our job well, to fulfil our functions well. So we have a big responsibility, and I look to all of you for assistance and cooperation in doing this. I did play a little bit of sports in my youth and one of the lessons that I learnt, the key lesson probably, from playing sports, is that a captain is only as good as his team. You know, however smart or clever the captain is, unless his team has talent and there is teamwork, it’s not going to work.”  

“I want to leave three thoughts with you as to what the CB, in my view, should be imbued with, what its culture should be. One is clearly, integrity. Two is technical excellence and three is professionalism. I would like those three concepts to be the guiding principles for all of us as we go forward. And if any of you think that I am not living up to those principles, please find a way of getting that message to the 15th floor, that I personally am not living up to those three principles. Because, that, in-terms of leadership, that is important. I need to be able to set an example, and I am going to do my best to do so and if you have ever any shortcomings as I said, I would like to hear”.  

“And you know there is always concern about the balance between politics and economics. In my view for much of our post independent years – I am not putting this on one party or the other party, or one government or the other – but if you look back from 1948, for most of the time, politics has trumped economics. It is our job to convince our politicians that good economics is good politics. We need to, as a CB, to get away from this cycle of stop – go policies, of creating artificial booms through misaligned policies. We need to set a good framework, as I said, for the economy. We have a representative democracy. The people elected by the people – the Government – of course have sovereignty reposed in them”.  

“However, the Monetary Law Act sets about some very specific responsibilities for the CB. And it is up to us to fulfil those responsibilities in a very technocratic, objective and free way. That is not to say that we should be criticizing the Government of the day. That is not our business. But there are channels through which we can get independent advice through to the Government. I am very keen and I have spoken to our leaders too about this, that the CB does its work independently and in a technical way and discreetly advises the Government about what we think is the best way forward for those segments of policy and practice for which the CB has responsibility. So, I need your cooperation”  

Colleagues at Central Bank  
After Indrajit Coomaraswamy’s inaugural speech to CB employees, I communicated with famous film maker and CB assistant Governor Asoka Handagama. I asked Asoka about Indrajit and how the new Governor was received by colleagues at the CB. This is what Handagama said – “He was very well received and is highly respected. As he correctly mentioned in his inaugural speech, the Bank’s top priority should be to bring back the lost reputation and credibility. For that, maintaining Integrity, technical excellence and professionalism are of utmost importance. The Bank has a challenging task of correcting misaligned economic fundamentals. Everybody believes his (Coomaraswamy) words it seems. He is a man with principles and is like a fatherly figure to us. The staff will give the fullest support to a leader of his calibre. I think if he fails to restore the lost credibility and the reputation of CB, no one else will be able to do”.  

 The new CB Governor also conducted a well attended press conference. Speaking to the media Dr. Coomaraswamy promised to “give his absolute best shot” to restore the institution’s credibility, increase transparency in the Bond market and stabilise macro-economic fundamentals to achieve growth in Sri Lanka. The nation at large hopes and prays that the14th Governor of the Central Bank of Sri Lanka would indeed be able to give his absolute best shot for the institution and country. 

D.B.S.Jeyaraj can be reached at [email protected]