Central Bank’s amended Monetary Law Act ready by end 2018
The Central Bank (CB) is seeking to amend the Monetary Law Act to support flexible inflation and these amendments will be ready by the end of the year, CB Governor Indrajit Coomaraswamy has said. The cabinet has approved the framework for the amendments and the amended law will come into force by the end of this year, he added.
“The legal and accountability framework built into the amended act involves greater independence to the Central Bank. Greater accountability on one hand and greater independence on the other hand is the ideal way forward,” noted Dr. Coomaraswamy.
He made these remarks at a recent, well-attended gathering in Colombo. The occasion was the Colombo Development Dialogues on ‘Integrated Development impact through partnerships and innovations’ organised jointly by UNDP Colombo, Dilmah and South Asia Centre of London School of Economics.
Dr. Coomaraswamy stressed that Sri Lanka has been a twin deficit economy because there has been a large demand in the system. “The fiscal consolidation and the forward looking monetary policy is a cold turkey that we have to go through. It’s not enough to do the stabilisation measures, you need to have aggressive reforms. The reason why Sri Lanka’s growth rate is low is that in my view our economic reforms have lacked stabilisation,” he noted.
Elaborating further he mentioned that it would have been better if the country was more aggressive in strengthening the growth rate of the economy. “The great mistake would be to go for artificial pumping up growth which is what we do all the time. You have to break that cycle and the only way to do that is to do the stabilisation and the economic reforms side by side,” he added.
He also stated that adoption and adaptation of technology are the key determinants for the success of countries in the East and South East Asia. They had clear policy frameworks which Sri Lanka has not done in a coherent way. Often innovation in an economy is driven by Foreign Direct Investment (FDI) and this is why Sri Lanka has been very unsuccessful in relation to countries in the East in attracting FDI. “You need angel investors, venture capital private equity up the chain to support these start- ups,” he noted.
| SL never misses an opportunity, to miss an opportunity | |
| While the people and the country leaders keep harping about a missed opportunity of what the country and the government should have done at some point, the country is grappling with weak institutional structures. Also while the education system is not equipped to face sustainable development in the country, no measures are taken to retain the young talent leaving abroad.A panel of experts shared these concerns at the Colombo Development Dialogues titled ‘Integrated Development impact through partnerships and innovations’ organised by UNDP Sri Lanka together with Dilmah and South Asia Centre of London School of Economics (LSE) at the Cinnamon Grand in Colombo. “In Sri Lanka we never miss an opportunity to miss an opportunity,” said Dr. Rajesh Venugopal from LSE, in his opening remarks. Back in the days when the country was known as Ceylon, people tasted the fruit even before the tree was planted and there was lot of positivity and enthusiasm among the people. Today things have changed a lot where the country needs to cope up with, additionally, the adverse climate changes. While the country is in between two large economies in the world India and China, better governance, effectiveness and inclusion of all society is required, he added. UNDP Sri Lanka Policy and Design Specialist, Sonali Dayaratne explained that involvement of a civil society is always a positive sign for growth. “We need to inculcate a value system and revisit the education system,” she noted. Sri Lanka is currently grappling with weak institutional structures. The education system is not equipped to face sustainable development in the country. In the 1960’s Sri Lanka was ahead of all East Asian countries, she added. European Union Ambassador to Sri Lanka and Maldives, Tung-Lai Margue stressed, “If Sri Lanka doesn’t manage to retain the talented youth from going overseas, the country will have big problems in the future.” The country has now moved from being a developing country to a middle income country, he added. Unilever Sri Lanka Chairman Carl Cruz elaborated that with science and technology you can move forward in leaps and bounds. Think of innovative ways of working in an organisation and look at the challenges and opportunities. “There are no CSR functions at Unilever: 50 per cent growth is generated by brands whereas sustainable practices make more people join the firm. If you don’t change you will be irrelevant,” noted Mr. Cruz. |