Appoint A Pro Bono Advisory Council To The Monetary Board!
By Hema Senanayake –July 2, 2016
Hema Senanayake
A new Governor to the central bank would be appointed soon. I am not sure who he or she is going to be. But what I am sure is that if the new governor thinks that this is a job he can do fairly easily with currently serving members of theMonetary Board and top bureaucrats of the institution and with the help of IMF economists then he or she is mistaken. Many economists and interested intellectuals including many lay readers on the subject have awakened to this truth now.
One of the readers of Colombo Telegraph, commenting on one of my recent articles had observed that given the mess … now entrenched in the Central Bank, it would need someone with extra-ordinary ability to be appointed as the governor. The extra ordinary ability which he was referring must be about the theoretical and practical know-how in regard to managing the country’s monetary infrastructure with a view to achieve the best possible economic growth for the wellbeing of our people.
Assuming that a new governor would be appointed to the central bank, in my view for the most responsible job in our governmental system, I invite him to think outside the box through which he may be able to develop the expected extra-ordinary ability. In order to think wisely and outside the box he may need to listen to some near extra-ordinary intellectuals who have submitted their analyses relentlessly in the recent past in order to put the central bank on correct path. Those people think outside the box and work outside the establishment.
As such I would propose that the government must immediately appoint a pro bono advisory council to the Monetary Board under which the Central Bank functions as its operational arm. This kind of advisory council exists even in the United States. It advises the Federal Reserve Board which is equivalent to our Monetary Board. The said advisory council is named as The Federal Advisory Council (FAC). Its function is defined as follows: “FAC, which is composed of twelve representatives of the banking industry, consults with and advises the Board on all matters within the Board’s jurisdiction.” (Official website, Federal Reserve)
Such a council, possibly with a fewer number of members, is badly needed for Sri Lanka. Yet, this must be a pro bono council and this is important due to two reasons. First, some serious economists with integrity do not want to get remunerated by political masters. Secondly, when the council is on pro bono basis there won’t be any unqualified friends of politicians who would be interested to get appointed. I believe, there are qualified Sri Lankan economists with intellectual integrity who could be appointed for the council.
I am serious on this suggestion. Why? Forget about bond scams, yet the central bank has been at low ebb professionally in managing monetary infrastructure and advising on fiscal policy to the government. Let me justify my argument with citing just two real examples. One example is to prove the weaknesses of existing system or the establishment which weakness we want to eradicate by appointing a pro bono advisory council to the Monetary Board. The other is to prove the lack of economic wisdom on the part of IMF economists so that if anybody thinks that IMF economists can advise us accurately then he or she might understand that such thinking is not close to reality.
