UNP MP Harsha de Silva yesterday alleged Central Bank Governor Nivard Cabraal’s 2012 and beyond road map was “nauseatingly one-sided propaganda” whilst it failed to address the balance of payments issue.
Here is the full statement of Dr. de Silva.
Without taking away from the hard work of the private sector for having driven this nation’s growth in 2011 which must be appreciated and encouraged in spite of the road blocks placed in its path by the regime the Road Map of Monetary and Financial Sector Policy for 2012 unveiled yesterday by Mr Nivard Cabraal is nothing but a nauseating propaganda attempt. It is an unprecedented one-sided analysis that reads more like an UPFA election pamphlet aimed at plugging the so-called ‘Mahinda Chinthana’ as opposed to an objective assessment of the economy and the future challenges.
The language is not only politically coloured but does not address the major external sector challenges the country is facing. The 140 slide marketing presentation has just two mentions of the trade deficit and one repeated set of bullets saying that it is not an issue as worker remittances, tourism and FDI will offset the same. It has no analyses of the possible scenarios for exchange rates and interest rates given the current rupee defence strategy, but says it has more than sufficient reserves to intervene in the foreign exchange market, presumably to hold the currency at the current level.
There is no mention of the appreciating real exchange rate but an unbelievable declaration that the exchange rate remained competitive giving the lie to what the President mentioned during his budget speech as justification for the devaluation.
The three words ‘balance of payments’ which is absolutely the most important issue of the day is not even mentioned once in the entire presentation. It is like Hamlet without the Prince of Denmark or better yet like the regime’s version of how the war was won without mentioning the name of General Sarath Fonseka!
The propaganda document completely ignores the fast increasing high cost and short term commercial debt the nation is committing itself to, particularly from China, and does not mention a single risk involved in this strategy. It also does not even mention in passing the issue of rapid credit growth and rising asset prices that recently led to Sri Lanka being categorized as a country with the highest-risk in its financial system.
The presentation, in a typical sales approach, makes multiple misleading comparisons of Sri Lanka with crisis ridden European nations such as Greece and Portugal to show we are doing better than them in self selected criteria but there is only one comparison with India and Thailand and two with Malaysia besides literacy rates.
If the Central Bank continues to be politicized in this manner with its Governor becoming a virtual sales and marketing manager for the regime to sell all manner of items from IIFA to commonwealth games, dancing to the tunes of Los Lobos in the Caribbean with politicians and henchmen of the regime, one shudders to think what would happen when the veil over the propaganda material, presented in so-called professional presentations like this, is removed.
It is sad to see how an institution once held is such high esteem and led by professionals of the calibre of Dr. Warnasena Rasaputram and Deshmanya A.S Jayawardena has fallen to this level. The Central Bank must immediately start presenting objective analyses of the economy if its credibility is to be maintained.