Respected Central Banker W Wijewardana in an article in a news paper has said “During his tenure Prof Lakshman, the Central Bank became a virtual printing press expanding the money stock by Rs. 2.8 trillion or 35% in the guise of following an alternative economic policy stance. At the last lap of his Governorship, he has now delivered a final shock to the forex market The Lakshman shock has put Sri Lanka backward by two steps when it comes to negotiating with IMF for a rescue package. (https://www.ft.lk/columns/The-maligned-Lakshman-shock-Patient-will-die-unless-the-new-Governor-diffuses-it-forthwith/4-722964 )
According Sources close to Prof Lakshman the one time top academic who has even taught PB Jayasundare was often the subject of ridicule by Jayasundara.
Prof Lakshman had no say what so ever in the CBSL key decisions.
Whilst he struggled to be independent he was forced to reverse his professionals decisions. Prof Lakshman had very little room to maneuver because he was appointed by the President on Jayasundare’s recommendation. Jayasundara began his political vendettas by first axing Two members of the Monetary Board of the Central Bank of Sri Lanka (CBSL), Nihal Fonseka and Dr. Dushni Weerakoon, they were forced to resign with effect from 31 May 2020, veteran banker Nihal Fonseka was appointed to the Monetary Board in July 2016, while Dr. Weerakoon who is the Executive Director of Institute of Policy Studies, was appointed only in July 2019.
Lakshman was very unhappy with this move. Then Jayasundare forced several bank chairman and directors of banks to resign using the Finance ministry Secretary and appointed his cronies. We refrain publishing their names in disgust.
Prof. Lakshman was Chairman of the governing body, the Monetary Board, the Board is responsible for making all policy decisions and for the management, operation and administration of the Central Bank. There too we understand PB Jayasundare called the shots. An ex central banker told LNW that Lakshman was like a puppet. A SLPP stalwart told LNW, PB was the de facto governor and finance secretary . He is a control freak. He is becoming very unpopular.
So no wonder Lakshman said last week “If you take a look at what happened over the past two weeks, you may understand the situation on inconveniences that were caused that led to my decision,” he further said “If I decide to open up myself, I will comment on the reasons for my premature retirement”. Professor Lakshman is a well-known economist who served as the Vice Chancellor of the University of Colombo from 1994 to 1999. In 2005, he was awarded the “Deshamanya” title for his contributions to the academic field.
The poor man leaves the CBSL at a time the economy is totally messed up and he is seen as a total failure. Let us all hope the new Governor who is very experienced Governor is given the freedom to take decisions and he can stand up to the elusive President’s Secretary Jayasundare. Several business leaders welcomed Cabraal’s appointment, given his experience and influence in the government.
They expect his second coming to be far more productive given that he has learnt from his past stint. Prof Lakshman must certainly open up and clear his name. For Example Wijewardena says “During his tenure as Governor in the past 20 months, he has delivered a series of non-reversible fatal shocks to the country’s monetary and financial system. What more? You owe it to your family and students Prof Lakshman.