April 27, Colombo (LNW): Medical professionals among Members of Parliament initiated the establishment of a new caucus named the Parliamentary Medical Consultant Members caucus. The caucus, aimed at leveraging medical expertise within the legislative body, was officially formed on Thursday.

Professor Channa Jayasumana, representing the Anuradhapura District, was elected as the Chairman of the newly established caucus. The caucus also appointed notable figures in the medical field to key positions, including Health Minister Dr. Ramesh Pathirana and former Health Minister Dr. Rajitha Senaratne as Patrons.

Dr. Sudarshani Fernandopulle and Dr. Kavinda Jayawardena were elected as Vice-Chairmen, while Dr. Thilak Rajapaksa assumed the role of Convener and Dr. Upul Galappatti as Deputy Convener.

The formation of this caucus underscores the recognition of the importance of medical expertise in parliamentary decision-making and highlights a concerted effort to address healthcare-related issues from within the legislative framework.

April 27, Colombo (LNW): The national observance of World Malaria Day took place at the Kurunegala Malaria Control Unit premises, presided over by Health Secretary Dr. Palitha Mahipala. The event commenced with a public awareness walk through Kurunegala City on Thursday, underscoring the significance of collective action in combating malaria.

World Malaria Day, marked annually on April 25th, centers on the theme ‘Accelerating the fight against Malaria for a fairer world.’ Malaria remains a significant global health concern, impacting communities worldwide.

Sri Lanka achieved a significant milestone in public health when it was certified as a malaria-free country by the World Health Organization in 2016. However, in 2023, the country reported 62 malaria cases, primarily among individuals who had traveled to African countries.

The commemoration held particular significance as it took place at the site of the first Anti-Malaria Unit established in Sri Lanka in 1911. Dr. Palitha Mahipala highlighted Sri Lanka’s remarkable achievements in public health, noting the eradication of malaria from the country eight years ago, following 105 years since the unit’s inception.

While celebrating past successes, Dr. Mahipala emphasized the ongoing threat posed by malaria due to its persistence in neighboring countries. He affirmed the national commitment to sustaining efforts in malaria prevention and control, highlighting the importance of continued vaccination programs and collective responsibility in this endeavor.

Dr. Mahipala underscored the necessity of ongoing vigilance and education to prevent the resurgence of malaria in Sri Lanka, emphasizing the importance of referring suspected cases for investigation and strengthening anti-malaria initiatives as a national priority.

As Sri Lanka continues its journey towards safeguarding public health, the commemoration of World Malaria Day serves as a reminder of the importance of sustained efforts and global collaboration in eliminating this debilitating disease.

April 27, Colombo (LNW): Imthiaz Bakeer Markar, a Member of Parliament from the Samagi Jana Balawegaya (SJB) and former Media Minister, held a meeting with Pakistan’s newly appointed High Commissioner to Sri Lanka, Major General (R) Faheem Ul Aziz, on Thursday, April 25th.

Their dialogue centered on fostering educational and cultural relations between the two nations. During the discussion, Markar extended an invitation to the High Commissioner to visit Masjidul Abraar, Sri Lanka’s first recorded mosque located in Markar’s hometown of Beruwala.

This interaction underscores the importance of diplomatic exchanges in strengthening ties between Sri Lanka and Pakistan, particularly in areas of mutual interest such as education and cultural heritage.

April 27, Colombo (LNW): During the weekly cabinet media briefing at the Government Information Department, Cabinet Spokesman and Mass Media Minister Dr. Bandula Gunawardhana announced the Cabinet of Ministers’ approval of the Education Minister’s proposal to foster collaboration between Sri Lankan universities and foreign counterparts. These partnerships aim to advance higher educational cooperation and facilitate multidisciplinary research initiatives.

Among the approved agreements are:

1. Memorandum of Understanding (MoU) between Sabaragamuwa University and the University of Salford, United Kingdom, focusing on disaster resilience and promoting multidisciplinary research for integrated natural resource management.
2. Tripartite MoU involving the University of Jaffna, the National University of Singapore, and Singapore Health Services (Pvt) to establish a regional collaboration center dedicated to global health initiatives.
3. MoU between the University of Ruhuna and the Southern Health NHS Trust of the United Kingdom and Northern Ireland, pertaining to the Marie Project addressing the mental health impact of menopause on women worldwide.

1. A special meeting of the Members of Parliament representing the ruling party led by President Ranil Wickremesinghe has been held at the Presidential Secretariat. During the discussion, special attention of the MPs has reportedly been drawn to the government’s future course of actions, implementation of development projects and preparation of developmental plans covering all electorates.
2. Opposition Leader MP Sajith Premadasa has refuted media reports claiming that he had refused to meet the President of Iran Ebrahim Raisi during the latter’s recent visit to Sri Lanka.
3. The Cabinet approval has been received to hand over the management of Mattala Rajapaksa International Airport to Shaurya Aeronautics Pvt. Ltd of India and Airports of Regions Management Company of Russia or an affiliated company thereof for a period of 30 years.
4. Under Secretary for Trade and Foreign Agricultural Affairs at the U.S. Department of Agriculture (USDA), Alexis Taylor, paid a courtesy call on President Ranil Wickremesinghe.During the discussions, the Sri Lankan leader was briefed on the ongoing dairy modernization program supported by the U.S.
5. The Colombo Magistrate’s Court has ordered the Criminal Investigations Department (CID) to expedite the probes related to the ‘X-Press Pearl’ maritime disaster.
6. The Cabinet of Ministers has approved the proposal presented by the Minister of Power and Energy to appoint a committee to study the matter and make recommendations to prepare a necessary legal framework for the introduction of a regulatory body for energy sector.
7. The Court of Appeal has deferred the verdict on the bail request made by the Director of Medical Supplies Division (MSD) Dr. Kapila Wickramanayake. Thereby, the decision on the bail request, which was slated to be delivered today by Appeals Court judge D.N. Samarakoon, is expected on 30 April.
8. Non Cabinet Minister of State Plantation Enterprises Reforms and State Minister of Finance, Ranjith Siyambalapitiya, announced that in the first quarter of this year, state revenue has reached an impressive Rs. 834 billion. This achievement not only surpasses the projected revenue but also indicates a growth of 6%.
9. President Ranil Wickremesinghe received official handovers of generous financial contributions for the ‘Children of Gaza’ Fund. This is an initiative the President established to alleviate the suffering of those affected by conflicts in Gaza.
10. Sri Lanka won the Bronze Medal in the Mixed Relay 4x400m at the Asian U20 Athletic Championship. The team, which consisted of Jathya Kirulu, Jithma Wijethunga, Themiya Rajapaksha and Takshima Nuhansa, finished the game third while China clinched the Gold, and India won the silver.

April 26, Colombo (LNW): Chinese state energy giant Sinopec is pushing for greater access to Sri Lanka’s market, where rival India is also seeking to expand its presence, as it looks to build its first fully-controlled overseas refinery, reflecting a change in the firm’s global strategy to compensate for slowing demand growth at home.

Sinopec, the world’s largest oil refiner, is expected to complete a feasibility study by June for a plant at the Chinese-run Hambantota port, after winning Colombo’s approval last November, official soureces confirmed. 

While the China-based sources say the investment, which Colombo pegged at $4.5 billion as the country’s largest-ever foreign investment, is commercially driven, neighbouring India is pushing a rival plan to build a fuel products pipeline to the island nation southeast of the subcontinent.

This move, which is a major change in Sinopec’s foreign strategy, is perceived as a reaction to China’s slowing increase in demand.

The proposed investment, estimated at $4.5bn by Sri Lankan officials, would be the country’s largest-ever foreign investment.

While the initiative is commercially driven, it also places Sinopec in competition with India, which is promoting a rival plan to build a fuel products pipeline to Sri Lanka.

State-owned Indian Oil Corporation is currently the second-largest fuel supplier to Sri Lanka, following government-owned Ceylon Petroleum.

Sinopec’s investment in Sri Lanka, along with another project in Saudi Arabia, is part of a broader effort to leverage the company’s expertise and financial resources for global expansion.

This comes as oil demand in China approaches its peak amidst economic slowdown and the rise of electric vehicles.

The company’s international investment strategy has evolved following a decline in Chinese oil and gas investments abroad, which dropped to $344m in 2023 from a record $31bn in 2012, the report said, citing London Stock Exchange Group data.

In negotiations with Colombo, Sinopec is seeking greater access to the import-reliant Sri Lankan market, a critical factor for its final investment decision.

Sri Lanka, facing a foreign exchange crisis, desires a refinery that would satisfy 20% of its domestic fuel needs and allow for exports to generate hard currency.However, Sinopec believes focusing on domestic sales could be more profitable.

The company is considering constructing either a 160,000 barrels per day (bpd) refinery or two phased 100,000bpd plants, primarily producing gasoline and diesel.

Sinopec has been requesting more accommodating conditions for the project’s domestic marketing share for several months now, but Colombo has not agreed.

Sinopec declined to comment and requests for comments from India’s foreign ministry and Indian Oil Corporation did not elicit a response, the publication said.

Sri Lanka’s power and energy minister, Kanchana Wijesekera, has indicated that the government is maintaining its stipulation for the refinery’s output and expects Sinopec to sign an investment agreement by June.

Sinopec’s Hambantota project is a top priority, alongside a significant investment in expanding a refinery into a petrochemical complex at Saudi Arabia’s Yanbu port, in partnership with Saudi Aramco.

April 26, Colombo (LNW): Colombo’s sky line welcomed new land mark as leading multi-business Indian enterprise ITC yesterday began its global hospitality journey with the opening of “ITC Ratnadipa” the 352-room luxurious facility in Colombo inclusive of first of its kind sky bridge, an architectural marvel.

Situated in the prestigious Falle Face area, the twin towers of “ITC Ratnadipa” reminiscent of iconic structures seen in Singapore and Malaysia. As President Ranil Wickremasinghe said at the inauguration ceremony, the sky line of Colombo has a new gem   

It is the first overseas hotel for ITC which has over 130 properties in over 80 destinations in India. ITC Ratnadipa also marks the addition of the 16th Luxury Collection Hotel in ITC  Hotels portfolio. 

The Luxury Collection, one of Marriott International’s leading global brands, comprises world-renowned hotels and resorts offering unique, authentic experiences that evoke lasting, treasured memories. 

ITC Ratnadipa also marks the entry of any of Marriott International’s luxury brands in Sri Lanka. The Luxury Collection hotels are a part of Marriott Bonvoy, the world’s largest hotel loyalty program.

President Ranil Wickremesinghe was the Chief Guest at the opening of ITC Ratnadipa which along with the Sapphire Residence complex involved an investment of US$ 500 million. 

Prime Minister Dinesh Gunawardena, Indian High Commissioner Indian High Commissioner to Sri Lanka Santosh Jha and ITC Ltd., Chairman and Managing Director Sanjiv Puri were also present along with business and tourism industry leaders.

Operated by the wholly owned subsidiary WelcomHotels Lanka Ltd., ITC described ITC Ratnadipa as a jewel in Colombo’s skyline that promises to enrich the tourism and hospitality landscape of Sri Lanka. 

This luxury destination draws inspiration from the national flower of Sri Lanka, the floating water lily, which is a recurrent motif across the hotel. ITC Ratnadipa or “Island of Gems” offers 352 guest rooms, suites and service apartments, each adorned with private balconies with breathtaking waterfront views. 

This landmark complex situated along the shores of the Indian Ocean on one side and Beira Lake on the other, comprises two stellar towers that stand gracefully together presenting impeccable hospitality at both ITC Ratnadipa Hotel and the luxurious Sapphire Residences.

Connecting the two towers at a height of 100 meters, is the first of its kind, state of the art ‘Ahasa’ sky bridge, an architectural marvel. 

ITC is one of India’s foremost multi-business conglomerates with businesses in consumer goods, hotels, paperboards and packaging, agri business and Information Technology. e launch of the magnificent ITC Ratnadipa in Colombo. Embodying the rich architectural and cultural history of Sri Lanka, this flagship hotel will create extraordinary luxury hospitality experiences for discerning business and leisure travellers,” Chairman Puri said

April 26, Colombo (LNW): I happened to read an article titled “Jeremy Hunt urged to review Bank of England’s independence” published in an international website ” The Telegraph” on 20 April 2024 (read the article here). This article is about a written request of 40 senior Conservative Party lawmakers demanding the UK Chancellor of Exchequer (Finance Minister) for a review of the monetary policy independence of the Bank of England (BOE). The request has given several reasons why the present BOE is not in the interest of the general public.

During the past few decades, almost all country governments have followed the BOE model of central bank monetary policy independence. This independence means that the central bank has the freedom to use its policy instruments to control the inflation at low levels, irrespective of the rest of the economy and government policies. Sri Lanka is the latest (14 September 2023) to this independence list which has already created enormous tensions over the abuse of independence by the central bank Board. Therefore, political leaders who have already started a campaign against the independence might find useful in reading the UK’s request stated above.

Therefore, this article is to highlight the background and irrationality of the beleaguered independence in the current context of macroeconomic globality.

Emergence of central banks and monetary policy 

The BOE is the first central bank that operated as the lead commercial bank in the capacity of the bankers’ bank with the state license. Later, it was given the autonomy to carry on banking on the monopoly of national currency printed by it on behalf of the government. Recently, the BOE apologized for its financing associated with slavery trade in its early period as a commercial bank.

Early central banks were established to unify currencies with a legal tender and to operate as bankers’ banks and clearing house for the objective of maintaining financial/banking system stability. In that time, financial/banking crises happened due to multiple currencies issued by commercial banks as and when the public lost the trust in currencies issued by some banks. Therefore, the monetary policy at that time was the provision of liquidity or loans to banks in order to support economic activities taking place akin to banks. As such, interest rates and money printing/lending operations of central banks until 1980s were confidential operations known to commercial banks only. Further, Further, they were operated as part of or supporting the broader economic policy of the contemporary governments.

Later with the increasing monetarization of economies through the legal tender/sovereign currencies, central banks commenced the conduct of the monetary policy for economic stability objectives with greater transparency and periodical public communications. Accordingly, setting of central bank interest rates for lending to banks became the key policy instrument announced to the public from time to time. Therefore, money printing was primarily linked to interest rates policy of central bank. In extraordinary economic times, central banks also operated special loan schemes through money printing at concessionary interest rates.

Later, central banks were influenced by monetarists who argued that general prices and inflation are a result of the amount of money circulating in the country. Therefore, central banks in developed countries commenced the use of interest rates to regulate the money stock for the undisclosed target or control of inflation. This was presented as the monetary policy for price stability. As a result, they tended to separate the monetary policy from the fiscal policy so that monetary policy is a good internal control system of the government for the price stability policy while the fiscal policy was free to carry out political agendas of elected governments. It is this approach that is pursued at present for monetary independence of central banks.

1997 BOE independent model and its collapse in 2007

The new approach was the legally recognized model of BOE independence for monetary policy introduced in 1997. The model involved in four elements.

• Transfer of bank supervision/regulation function from BOE to Financial Services Authority (FSA).

• Setting up the monetary policy committee (MPC) in the BOE to decide on interest rate or Bank Rate (or base rate) paid to banks for their overnight deposit balances at the BOE.

• The government prescribing the inflation target for the BOE monetary policy.

• The government reimbursing the cost incurred by the BOE in monetary operations carried out to stabilize market interest rates.

• Setting up a tripartite committee of BOE, FSA and Treasury to take special policy decisions on financial stability where the BOE undertook relevant research.

Accordingly, this was the UK’s new governance system for regulation of the financial system through division of responsibilities.

Many countries followed this independent monetary policy model in line with BOE and monetarist recommendation for central banks to act on taming inflation. The new system contains an independent MPC set up in law, a pre-announced inflation target for the conduct of the monetary policy and the decision of central bank interest rate by the MPC based on inflation trends and forecasts. Accordingly, fiscal policy requirements such as borrowing at low cost are not considered in the monetary policy.

However, the US followed its own model of central banking (Fed) with both monetary policy and bank supervision for broader macroeconomic objectives of stable prices, maximum employment and moderate long-term interest rates in the interest of promoting and safeguarding the real sector. Instead of specific MPC, the Federal Open Market Operation Committee (FOMC) consisting of members of the Fed decides on Fed’s interest rates and money printing operations in consideration of Fed’s multiple mandates.

However, just in 10 years the UK model miserably failed with the onset of the financial crisis in September 2007 in the US and Europe. The run on Northern Rock bank was the trigger in the UK. As the bank supervision had been taken out from the BOE, there was a confusion as to who is responsible for preventing bank runs. Therefore, after the run on Northern Rock was spread across the country, the BOE had to provide the lender of last resorts (LOLR) as a part of national policy decision to the Northern Rock and other banks for rescue operations whereas the government had to nationalize banks to rebuild the public trust.

Northern Rock moment of BOE rescue, 19 September 2007 

(Source Financial Times)

As a result, under the system reform in 2012, the prudential supervision of banks and shadow banks was given back to the BOE through a new subsidiary “Prudential Regulatory Authority” (PRA) established under the BOE while the consumer protection/fair market supervision was vested with Financial Conduct Authority (FCA) established from the FSA. Accordingly, Financial Policy Committee (FPC) was set up in the BOE parallel to the MPC to decide on specific regulatory policies for financial stability issues.

Meanwhile, the MPC and monetary policy framework continued as before. It is this new but tainted independence that has come under attack at present. However, no one seems to complain about the BOE independence in handling supervision.

Key feature of the independence

It empowers the central bank to act on interest rates and money printing focusing on the inflation target (2% at present in developed countries), irrespective of impacts it will have on the economy. For example, in the case of monetary policy tightening (raising interest rates), the central bank does not care whether firms become bankrupt, unemployment rises, investments fall and budget deficit and debt rise due to higher interest cost and economy and living standards collapse.

Instead, the central bank only looks at annual increase of the consumer price index (or inflation rate) each month and keeps on raising interest rates until the inflation rate or the annual growth of the consumer price index on average is around the inflation target.

As the central bank is not aware of any formula for its interest rate to achieve the inflation target, given externalities on the economy, it gradually changes the interest rate during several years until it is satisfied that the actual inflation is on track towards the target. For example, the BOE has raised the interest rate 14 times so far for a total increase of 5.15% from November 2021 (i.e., from 0.10% to 5.25%). However, inflation has not firmly reached the target of 2% as yet. The case is same for many central banks including the Fed and European Central Bank.

Four key hypotheses running monetary policy

The process of monetary policy is based on four main hypotheses which are highly debatable on empirical grounds.

• Inflation is always a result of the monetary expansion beyond the growth of the real economy. This implies that the higher monetary expansion fuels the demand for goods and services than the supply causing price increases in general. The deflation is the opposite story. This hypothesis is known as the quantity theory of money, a mathematical view first introduced in 7th century. Therefore, the monetary policy uses interest rates to affect credit and the monetary expansion to control inflation.

• The trade-off exists between inflation and unemployment though wages. For example, if employment rises, the resulting increase in wage income causes higher demand and inflation. This is known as Phillip curve introduced in 1958. Accordingly, the monetary policy uses interest rates to affect the demand, production and employment looking for a preferred level of inflation. Therefore, central banks look for a balance between inflation and unemployment on the Phillip curve version of the inflation and unemployment.

• The transmission of effects of interest rates on credit, demand, production, employment and inflation takes years of lags until the inflation reaches the target. Therefore, this transmission is believed to take place through interest sensitive demand sectors of the economy.

• Monetary policy is able to anchor inflation expectations of the public towards the target. As the main cause of inflation is the inflation expectations that get translated into future wage and price settings, the monetary policy is expected to revere such expectations towards the inflation target over time. This is the hypothesis of inflation anchoring by the monetary policy.

Accordingly, all public communications rest on conceptual explanations as to how interest rates will dive the economy for price stability through hypotheses stated above. The policy performance story is supported by the actual trend of inflation and statistically computed inflation forecasts.

Current concerns that have led to question the independence

The present regime of high interest rates and adverse effects on economies world over have caused serious public concerns and doubts over central bank independence in advanced market economies. Major sources of concerns are listed below.

• Significant increase in the cost of house mortgage and consumer credit that has reduced households income available for other living expenses. This has caused significant erosion of livings standards and savings and social tensions.

• Rising budget deficit due to high interest cost on rollover/refinancing of debt where fears are rising over future tax hikes to meet rising debt service payments. It is reported that the average interest cost on US federal debt stock (US$ 31 trillion at present) has risen so far to 3.05% from 1.57% in February 2022 whereas interest cost in proportion to tax revenue has risen to 35.7% from 24.3%. The US new debt is raised at interest rates of 4%-5% at present as compared to below 1% during the Pandemic time in 2020. One can imagine how Sri Lanka got into the chronic bankruptcy when yield rates of government securities were pushed arbitrarily by the central bank to around 30% in 2022 from their levels of 5%-8% in 2021. 

• Although a significant disinflation towards 2% inflation target has been noticed, central banks are not seen ready yet to start cutting interest rates as they do not see the full confidence in sustainability of the present disinflation path. The reason is the rising GDP and wage growth with historically low unemployment rates which are not considered favourable for cutting interest rates in view of the treasured hypothesis of inflation-unemployment trade-off.

• In the UK, there is a complaint among some Conservative Party Parliamentarians that the collapse of Liz Truss government in 49 days over the mini-budget for tax-cut based growth at the end of 2022 has been largely assisted by the BOE acting in concert with financial markets by predicting increased borrowing and higher interest rates. Liz Truss government had to step down to avert the financial market turmoil (Read an article here).

Overall, a wide resistance is growing against continued high interest rates despite the significant disinflation path observed in the past year. However, some economists tend to believe that the prevailing disinflation is largely a result of the gradual recovery of the supply chains disrupted by the Pandemic and war in Ukraine and, therefore, high interest rates are only another source of disruption to supply chains as central banks never had policy experience in dealing with global Pandemics. This view is largely based on strong growth, employment and wages that continue to prevail despite high interest rates and underlying hypotheses. 

Action to save the humanity from central banks

In view of the background presented as above, serious concerns are being raised world-wide whether monetary policy independence now is in the interest of humanity of the modern era. Some of key concerns are listed blow.

• The main reason is the bureaucratic manner in which the monetary policy independence is pursued for so-called price stability without any empirical evidence whether central banks have an undisputed ability to control inflation at targets as advocated by old monetarists.

• The key driver of monetary policy is the inflation forecast made by statistical models used by central banks. On this ground, central banks call them data dependent and futuristic like divine human. The BOE is longest serving forecaster of inflation for decades. However, the study made by Princeton Economics Professor Ben Bernanke, a former Fed Chairman for two terms, has proved the model’s inappropriateness. The BOE has accepted its findings and recommendations. Similar concerns have now been raised on the inflation forecasting model of the Fed too. In that context, independent monetary policy has lost the public trust in its basic mechanism.

• Given the dynamism in the price mechanism operative in modern market economies, the ability of central bank interest rates (mostly overnight rates) as a single instrument to control prices and inflation at preferred targets is a myth as four hypotheses underlying policy operations as stated above are not supported by real world data. In fact, it is the role of fiscal policy and supply side markets that are quite dominant on prices where interest rate is only one factor affecting the cost side of the economy.

• It is now believed that economy is less sensitive to interest rates where interest cost is passed on to the price structure causing cost-pushed inflation. This is the reason why inflation doesn’t respond to the monetary policy as expected and central banks wait years to see the effects. In fact, one mandate of the Fed is to maintain moderate long-term interest rates because of this cost factor-based competitiveness.

• The significant volatility caused on public finance and living standards without any certainty of the outcome on price stability or inflation is a fundamental concern.

• In modern market economies, money is also an economic resource like other resources produced by markets to support the production drive. Government deficit finance through debt and banking business are the major producers of monetary resources to activate production activities. Therefore, central bank money and interest rates are only trivial operations in money markets to provide reserves of sovereign currency required in a fraction to support the market supply of monetary resources. It is especially required because central banks operate payments and settlements systems. Therefore, a magical role of price stability by independent monetary policy is only tribal myth.

• Significant abuses of independence also have been reported from several central banks. For instance, the unethical and unlawful wage hike granted by the Central Bank of Sri Lanka for its employees no sooner the independence was given is now under the investigation by the Parliament. Reports are available from several central banks on insider dealings in monetary operations to support profits of friendly dealers as monetary operations are hardly audited in view of the independence.

Remarks

Overall, the inhuman way of the conduct of independent monetary policy is seen as the basis for the UK’s demand for the review of the independence. Therefore, the demand is equally valid for other central banks too who do not coordinate monetary policies on the national front for the benefit of the general public. 

Therefore, the proposed review is about the integration of the monetary regulation arm of the governments (now outsourced to the central banks) within the broader national policy framework where the elected governments will take the responsibility for the national policy front.

This requires governments to ensure that monetary resources are produced and supplied through a range of credit/financial products with different risks that can facilitate business innovations and improvements in living standards with humanity of the modern world. This is mostly required in low income countries like Sri Lanka which lack market development and quality living standards even after decades of political independence.

As most lawmakers are good businessmen, they should be able to disregard monetary hypotheses and to understand common sense of the demand, supply and prices of money and its role on modern living standards and humanity for which they are accountable in the country governance inclusive of the Constitution. 

Instead, if they are willing to give the independence to the central bank because few persons want it to run as they wish to keep hypothetical price stability, it will be the worst inhumanity they incur in this century.

(This article is released in the interest of participating in the professional dialogue to find out solutions to present economic crisis confronted by the general public consequent to the global Corona pandemic, subsequent economic disruptions and shocks both local and global and policy failures. All are personal views of the author based on his research in the subject of Economics which have no intension to personally or maliciously discredit characters of any individuals.)

P Samarasiri

Former Deputy Governor, Central Bank of Sri Lanka

(Former Director of Bank Supervision, Assistant Governor, Secretary to the Monetary Board and Compliance Officer of the Central Bank, Former Chairman of the Sri Lanka Accounting and Auditing Standards Board and Credit Information Bureau, Former Chairman and Vice Chairman of the Institute of Bankers of Sri Lanka, Former Member of the Securities and Exchange Commission and Insurance Regulatory Commission and the Author of 12 Economics and Banking Books and a large number of articles published.