Advising Prime Minister On Selection Of The Next Governor For The Central Bank!
Hema Senanayake
I suppose it is wishful thinking on my part. Still I wished if I could advise Prime Minister on the selection of a person for the appointment of the governor of the central bank after Arjuna Mahendran, assuming that he is leaving soon. If I happened to advise him on one-to-one meeting I would do so only if I am allowed to talk to him as a colleague at least for that moment. The reason is not that I have a superego; instead I want to make sure whether he got my point in correct perspective. Let me explain this point quickly before we get back to the subject matter.
One day I went to hear a Buddhist talk. The Venerable monk made a nice Dhamma sermon. After the sermon, people were allowed to ask questions. During the time for questions, I observed that many times people presented two or more views on a very unique point of Dhamma made by the monk. Later, after the session I asked the monk as to why different individuals understood differently on a same point of Dhamma. I got a beautiful answer which I will never forget.
The monk explained that different individuals understand Dhamma differently as individuals have developed something known as “Five Faculties or Five Mental Factors” differently within their minds. As such none of the perspectives submitted by each individual when asking questions were wrong, but their questions show the different level of development of their minds in regard to the said five mental factors, he said.
On a different plane the monk’s above point equally applicable to any no-commonsense subject and in this particular case it applies to central banking too. Different individuals have different level of understanding of the subject. How can I advise PM meaningfully unless I do not know as to how far he has developed his “faculties” in regard to central banking? In regard to the subject, I am the boss not him and economics, especially monetary and macroeconomics, are not common sense subjects any more. As such any economic advisor must prepare his boss privately, confidentially and respectfully, in order to tackle any issue presented or submitted to him by any official –appointed or elected- for a decision. That is why I insist that I should be able to talk to him as a colleague, in order to give him any meaningful advice.
Since, I am not going to get a chance of my choice I have opted to give my advice through media by writing this article. Who would make a good Governor of the central bank? In regard to this question perhaps PM might need an advice.
Recently, Deputy Minister Eran Wickremaratne replied to this question. He said that the person should have an economic background first. What kind of economic background should he have? Eran’s statement does not explain it. Secondly he said that, since the Central Bank is a large institution, that person should have high-end managerial capability. I am not convinced. Former Federal Reserve chairman of the United States, Ben Bernanke had been teaching in Princeton University when he got appointed as a member of Federal Reserve. After a short period he was then appointed as the chairman of the President’s Council of Economic Advisors and subsequently he was elevated to be the Chairman of Federal Reserve which is the U.S. version of central bank. Ben Bernanke had no high-end managerial capability until he was appointed to be the Head of Federal Reserve. Thirdly, Eran pointed out that the person must have clear integrity with having no conflicts of interest. I agree.
