Newly appointed Central Bank Governor Indrajit Coomaraswamy said today he was delivering certain ‘professional services’ as an economist to the Sri Lankan-born jailed hedge-fund manager Raj Rajaratnam.
“My job was to provide him with research reports,” Dr. Coomaraswamy said addressing his first news briefing as the Central Bank Governor.
Criticism has already been levelled at him by joint opposition parliamentarians about his connection to the Galleon Fund of the disgraced Mr. Rajaratnam, who was sentenced to11 years after he was found guilty of a securities fraud in the US.
Dr. Coomaraswamy said he got to know Mr. Rajaratnam as a friend from his university days.
“I set a framework when I was in London to provide him with macroeconomic research. He knew my background and he wanted me to help. This happened for about 10 to 11 months and then he was charged. So it took about a year after that for me to legally wind up the operations,” he said.
“I knew him as a friend…he helped Sri Lanka and he had done a lot of positive things…lot of charity work. That was the Raj Rajaratnam I knew.”
Speaking about major challenges faced by the economy in the short-term, Dr. Coomaraswamy said it all boils down to fiscal discipline. Protracted high fiscal deficits by successive governments have been a major drag on the Lankan economy and the main cause for the present instability. Dr. Coomaraswamy, throughout the past, has continuously criticized the vicious cycle of higher budget deficits, higher interest rates, and higher inflation and overvalued exchange rate, which have made the country’s exports less competitive.
This is diametrically opposed to what many of those South East Asian economies did managing their economies for prosperity.
Dr. Coomaraswamy minced no words to say that the co-ordination of fiscal and monetary sectors will be key to achieving economic stabilization in a sustained manner.
“Clearly the Finance Ministry has a very important role to play as well,” said Dr. Coomaraswamy who served both in the Central Bank and the Finance Ministry in his early career. However in a country where politics trumps economics almost all the times, this cohesion is going to be extremely challenging.“The main challenge is to ensure stabilisation of the economy is achieved in a sustained way. Because if you look at our history during the last 30 to 40 years, we start implementing stabilisation programmes, but we never pushed them through. So, we have these ‘stop-go-policies’ – we let the economy get overheated and then we get in to balance of payment problems (because we lack strong macro-economic fundamentals) and/or high inflation and then we hold breaks by putting in place contractionary policies.
If you look at it, we have had these repeating ‘stop-go-policy’ cycles,” he reminded.
Therefore he reiterated the biggest challenge is for the Central Bank and the policy makers to commit to strong macro-economic fundamentals, which can be sustained for over 30 to 40 years.
But he warned the process would be not without pain.
“The stabilisation programme means pain. So, we need to get through that pain. If we do get through that pain, I think there are prospects of faster growth going forward,” he remarked.
so you are the one who provided professional service for inside trading
Liberal One Tuesday, 05 July 2016 07:16 PM
Don't lose the respect we have for you by saying that Raj Ratnam helped Sri Lanka. Do you mean he helped by financing suicide bombings here?
Gamarala Tuesday, 05 July 2016 07:25 PM
It was not securities fraud - it was insider trading.
Mason Tuesday, 05 July 2016 07:33 PM
Every one has a skeleton in the cupboard, and the new CB Governor seems no exception.
karu Tuesday, 05 July 2016 07:45 PM
Looks like, you too have starting trouble.
Timothy YU Tuesday, 05 July 2016 07:45 PM
Name me one good person on this earth which has not crossed a thief. A thief sometimes hides himself behind this Honest person, this doesnt mean that the Honest one is dishonest. Indrajit is a man undoubtedly of good credentials and stone throwers are those who are thieves still outside.
Randimal Tuesday, 05 July 2016 07:48 PM
Already in hot water for aiding a LTTE financier and a convict now in US jail.
Mevan Tuesday, 05 July 2016 08:12 PM
If Dr. C'swamy did something wrong US law enforcement would not have allowed him to go unpunished. This sort of things happens only in Sri Lanka.
Lankan Tuesday, 05 July 2016 09:43 PM
This is cheap politics to stop Tamils getting top posts!
Nihal Amarasekera Wednesday, 06 July 2016 02:15 PM
Whatever; what we are left with is to keep our fingers crossed and hope for the best. Hopefully no more billions will flow down the drain towards Party Funds.
Ravi Wednesday, 06 July 2016 04:05 PM
Note : Just compare : Mr Edwin Aariyadasa was a consultant to Sakwithi.However, we know about Mr Aariyadasa's integrity.
Gayan Wednesday, 06 July 2016 03:13 AM
TNA too gave professional services to LTTE.
Nelum Wednesday, 06 July 2016 04:07 AM
Dr Coomaraswamy , You say "he helped Sri Lanka and he had done a lot of positive things…lot of charity work. That was the Raj Rajaratnam I knew" - You were 59 years old when these events happened. I can't believe a grown man like you who had a lot of experience, were naive enough to trust this man. What about the negative things he did to Sri Lanka.
Henry Wednesday, 06 July 2016 04:10 AM
Please refrain adding fuel for fire, we have had/suffered enough.
Jema Wednesday, 06 July 2016 04:40 AM
You've already failed your integrity test before even you start.
rodney Wednesday, 06 July 2016 05:58 AM
How many who have become billionaires by engaging in insider dealings in the stock market in Sri Lanka are helping the so called Joint opposition
NARAYANA Tuesday, 05 July 2016 06:19 PM
No argument of professional capability, demonstrate honesty through work keeping distance with political roughs
sobers Tuesday, 05 July 2016 06:42 PM
Your integrity, qualifications, performance... are superior. Ignore these cheap comments by destructive politicians.
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