DBSJeyaraj.com on Facebook

Inside Story About Indrajit Coomaraswamy Becoming Central Bank Governor

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Print this page

By D.B.S.Jeyaraj

“All changed,changed utterly” – The memorable lines from Irish poet Yeats came true on the morning of July 2nd 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.Indrajit Coomaraswamy 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.

President Maithripala Sirisena greeting Dr. Indrajit Coomarswamy-pic via: twitter.com/MaithripalaS

President Maithripala Sirisena greeting Dr. Indrajit Coomarswamy-pic via: twitter.com/MaithripalaS

Samarawickrama informed Coomaraswamy that President Maithripala Sirisena and Prime minister Ranil Wickremesinghe had decided to appoint the 66 year old economist as the 14th Governor of the Central bank of Sri Lanka. It was Samarawickrama’s task to persuade 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.

Malik Samarawickrama knew that making Indrajit Coomaraswamy consent to becoming Central bank 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 , Coomaraswamy was involved with a number of other assignments.

Minister Malik Samarawickrama

Minister Malik Samarawickrama

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. Indrajit was also a member of the Sri Jayawardenepura University Board of Study(Public Administration).

More important than all these were Coomaraswamy’s family commitments. His wife Dr. Tara Coomaraswamy (nee Fonseka) and two sons Imran and Arjun Coomaraswamy 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 Coomaraswamy who laid great store upon family values. In fact when some influential friends had spoken to him about the Central Bank 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 Coomaraswamy would decline the Central Bank Governorship. Besides the controversy shunning apolitical Coomaraswamy would not have liked being Central bank Governor in the current volatile situation for obvious reasons.Still Malik Samarawickrama was confident that like Marlon Brando in “The Godfather” he could make an offer that Indrajit Coomaraswamy could not refuse.

Samarawickrama a shrewd judge of men and matters relied on two characteristics of Coomaraswamy to help accomplish his seemingly impossible mission. The first was Coomaraswamy’s inherent patriotism. If the country beckoned he would do what he felt was his duty. The second was Indrajit’s 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.

cbsl

Malik impressed upon Indrajit the fact that President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe were at loggerheads over the Central bank 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 Prime Minister. Besides the credibility of the Central bank as an institution had been seriously eroded in the recent past. It would be a tremendous challenge to restore integrity. Under these circumstances Indrajit Coomaraswamy 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.Indrajit 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 was 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 Prime Minister. Malik agreed.

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

Indrajit Coomaraswamy then went over and met President Sirisena in person. He was accompanied by Malik Samarawickrema. The President had with him a letter from the acting Finance minister Lakshman Yapa Abeywardena proposing Coomaraswamy for the post of Central bank Governor.Samarawickrama the Minister of Development Strategies and International Trade then officially informed President Sirisena that he was releasing Coomaraswamy 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 Central bank Governor episode. Indrajit Coomaraswamy assumed duties on Monday Juy 4th. 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 Coomaraswamy as Governor. Prime Minister Ranil Wickremesinghe was also present at the event demonstrating clearly that the choice of Coomaraswamy as Governor was a united joint decision. Indrajit also met the Prime minister separately for a discussion after being sworn in. Later in the day both President Sirisena and Prime Minister Wickremesinghe addressed the Govt Parliamentary group where it was asserted that the Govt was acting cohesively and could not be divided or defeated through conspiracies.

Dr. Indrajit Coomaraswamy received his appointment letter as the new Governor of the Central Bank from President Maithripala Sirisena, this morning (July 4) at the President’s residence

Dr. Indrajit Coomaraswamy received his appointment letter as the new Governor of the Central Bank from President Maithripala Sirisena, this morning (July 4) at the President’s residence

The satisfactory resolution of the Central bank Governorship crisis and the subsequent show of unity presented by the President and Prime minister have made some Govt ministers jubilant. Earlier fears about a political split between Sirisena and Wickremesinghe over the Central Bank 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 Maithri 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 Prime Minister. Due to reasons that are well –known, President Sirisena was firmly opposed to the 13th Governor Mr.Arjuna Mahendran continuing as the Central Bank head. Prime Minister Wickremesinghe on the other hand was equally determined to ensure Arjuna Mahendran continuing as Central bank 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 30th 2016.

Premier Wickremesinghe however wanted to retain Mahendran and nominate him governor for a fresh term of six years. Earlier the Central Bank 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 Central bank under his ministry. Matters got complicated when Mahendran became enmeshed in a scandal concerning the issue of treasury bonds by the Central bank. 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 Prime minister steadfastly refused to comply saying that nothing substantial had been proved against Mahendran.

The President differed with the Prime Minister 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 Wickremesinghe to suggest an alternative. The Prime minister 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 Janatha Vimukthi Peramuna(JVP) MP Sunil Handunnetti was conducting a probe. Prime Minister Wickremesinghe 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 Central Bank would have no Governor after June 30th.

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 A-G 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 Central Bank Governor appointment be made. President Sirisena took the initiative in compiling a list of seven names as potential Governors and submitted it for the Prime Minister’s consideration. Wickremesinghe however rejected it outright and instead recommended that Mr.J. 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 Central Bank 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.

Two Senior Deputy Governors

A thoroughly exasperated Sirisena then decided to take matters into his own hands. He decided to appoint the senior most deputy governor of the Central bank as Governor.There were two senior deputy governors. One was Dr. Nandalal Weerasinghe who was promoted to that position on September 27th 2011. The other was Dr.P. Samarasiri who was promoted as deputy governor on July 14th 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.

Outgoing Governor Arjuna Mahendran and Prime Minister Ranil Wickremesinghe

Outgoing Governor Arjuna Mahendran and Prime Minister Ranil Wickremesinghe

Initially President Sirisena tweeted on June 29th 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 Central bank unannounced on June 30th 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 Central Bank. Wickremesinghe informed a surprised President that as a matter of protocol , he(Ranil) as the minister under whose purview the Central Bank 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 Central Bank 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 4th 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 Prime minister’s office.

Friday July 1st dawned without a Governor at the helm at Central bank. Both the President and Prime minister 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 Central bank. 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 unforegettable 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.

Dr. R.H.S. Samarathunga  ~  Secretary to the Treasury, Ministry of Finance

Dr. R.H.S. Samarathunga ~
Secretary to the Treasury, Ministry of Finance

Indrajit Coomaraswamy born on April 3rd 1950 has a BA (Hons) and MA degrees from Cambridge University ad a doctorate from the University of Sussex. He had joined the Central Bank 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 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 Samarawickrama liked the idea of Indrajit as Governor and felt the suggestion was feasible. However Samarawickrama knew very well that the proposal had to be put across convincingly to the Prime Minister.

Initially a list of three names inclusive of Indrajit Coomaraswamy was sent to the Prime minister. 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 Prime minister to agree. Malik Samarawickrama having years of experience in interacting favourably with Ranil Wickremesinghe went about his mission quietly and diplomatically. He was gretly 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 1st night Wickremesinghe also agreed to Coomaraswamy after much persuasion. At last there was a common choice acceptable to the President as well as the Prime minister. An elated President entrusted the task of making Coomaraswamy comply to Samarawickrama. Indrajit Coomaraswamy blissfully unaware that his life was going to change utterly received the fateful telephone call from minister Malik Samarawickrama at 6. 30 am on Juy 2nd. Love of the country and the love of a challenge made Coomaraswamy amenable to the proposal. The rest as they say is history.

Dr. Indrajit Coomaraswamy delovering his Inaugural speech as Governor of the CBSL

Dr. Indrajit Coomaraswamy delovering his Inaugural speech as Governor of the CBSL

After being appointed Governor on Monday July 4th Indrajit Coomaraswamy went over to the Central bank and assumed duties officially at the fifteenth floor. He was given a rousing welcome by employees at the Central bank. He was no stranger to the institution having commenced his career at the Central bank in 1973.Coomaraswamy addressed Central bank employees where he made some interesting and important remarks. In a sense that speech indicated what Coomaraswamy intends 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 eleven 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 Central Bank of Sri Lanka…….I started my career in the Central Bank of Sri Lanka 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 fifteen 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 Central Bank of Sri Lanka. 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 fulfill the trust they have reposed in me”.

“When I met the President, he just told me one thing, he said “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 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 Central Bank. And in many ways, if we are not able to fulfill our functions in the way it 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 fulfill 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 sport in my youth and one of the lessons that I learnt, the key lesson probably, from playing sport, 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 Central Bank, 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’m not living up to those principles, please find a way of getting that message to the fifteenth 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’m 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 central bank, 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 Central Bank. And it is up to us to fulfill 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 Central Bank 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 Central Bank has responsibility. So, I need your cooperation”

Asoka Handagama

Asoka Handagama

Colleagues at Central Bank

After Indrajit Coomaraswamy’s inaugural speech to Central Bank employees I communicated with famous film maker and Central bank assistant governor Asoka Handagama. I asked Asoka about Indrajit and how the new Governor was received by colleagues at the Central Bank. 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 is 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 Central bank no one else will be able to do”.

Dr Indrajith Coomaraswamy

Dr Indrajith Coomaraswamy

The new Central bank 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 Sri Lanka’s 14th Central Bank Governor would indeed be able to give his absolute best shot for the institution and country.

This article written for the “DBS Jeyaraj Column” appears in the “Daily Mirror” of Jul 9, 2016, it can be reached via this link:

http://www.dailymirror.lk/dbs-jeyaraj-column

DBS Jeyaraj can be reached at dbsjeyaraj@yahoo.com

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Print this page