Money printing not panacea for current crises – civil society activist

Rs 20.14 bn printed in 30 days

By Shamindra Ferdinando

Former Governor of Uva, Southern and Central Provinces, Rajith Keerthi Tennakoon, yesterday (08) said that the developing political, economic and social crisis couldn’t be addressed by printing money.

The continuation of money printing to address the issues had jeopardised recovery efforts, Tennakoon said, in his new capacity as the Executive Director of the Centre for Human Rights and Research (Sri Lanka).

Tennakoon said that the government policy with regard to printing money remained the same even after Ali Sabry, PC, on April 04 succeeded Basil Rajapaksa as the Finance Minister. Dr. P. Nandalal Weerasinghe received the appointment as the Governor of the Central Bank on April 08, Tennakoon said.

Quoting from the latest Central Bank data, Tennakoon said that during the past four weeks (April 08-May 08), currency notes worth Rs 20.14 bn had been printed.  The civil society activist asserted that this was the government response to its failure to restore political stability, increase revenue and control expenditure.

Pointing out that the ongoing Galle Face protest launched on April 09 and planned work disruptions during this week would cause further deterioration, Tennakoon said declaring that the ruling SLPP couldn’t absolve itself of the responsibility for prolonging the political crisis.

The top SLPP leadership appeared to have quite conveniently forgotten that one-third of its own parliamentary group demanded the removal of the Cabinet-of-Ministers, including Prime Minister Mahinda Rajapaksa.  Noting that the public demanded the resignation of both President Gotabaya Rajapaksa and Premier Mahinda Rajapaksa over the current crises, Tennakoon said that since January 2020 the duo oversaw the printing currency notes worth Rs. 1,795 bn. This amount was even bigger than the annual state revenue, Tennakoon said, urging the government to take remedial measures before the collapse of the national economy.

In other words, the government, in spite of entering into a dialogue with the International Monetary Fund  (IMF) and Finance Minister Sabry’ acknowledgement of mismanagement at the highest levels, the government seemed to be on the same track, Tennakoon said.

Tennakoon said that those at the helm of political power appeared to have ignored the warning signs. Sharp drop in tea exports, disruption of foreign orders/supply chains as a result of work stoppages in export zones, ruination of agricultural crops, disruption in lucrative fish exports and drop in tourist arrivals caused by shortage of fuel and gas as well as continuing protests meant the recovery process was yet to start, Tennakoon said.

Tennakoon warned that economic issues couldn’t be addressed as long as the government failed to resolve the simmering political crisis over the demand for the resignation of the entire Cabinet-of-Ministers, including the Prime Minister and some demanding the resignation of the Cabinet-of-Ministers and the President.