Structural reforms crucial as Sri Lanka moves ahead: Dr. Indrajit Coomaraswamy

By Hiran H. Senewiratne

Sri Lanka has achieved significant economic stabilization over the past three years, but full recovery remains elusive, former Central Bank Governor Dr. Indrajit Coomaraswamy stated at the Royal Commonwealth Day event in Colombo.

Speaking at the gathering, organized by the Royal Commonwealth Society of Sri Lanka under the theme “Personal and Community Resilience”—Coomaraswamy emphasised that the country is still in the early stages of meeting its long-term economic goals. “We are closer to the beginning than the end of this journey. Notably, despite political transitions across three presidencies, including the current administration under President Anura Kumara Dissanayake, Sri Lanka has maintained policy consistency,” he said.

Held at the Capri Club Colombo with South African High Commissioner Sandile Edwin Schalk as chief guest, the event highlighted Sri Lanka’s progress and persistent challenges.

Dr. Coomaraswamy acknowledged strides in navigating the IMF programme and nearing completion of debt restructuring, calling these “remarkably complex” achievements.

“Each time Sri Lanka engages in an IMF program, we make progress, but this progress often unravels during election cycles,” Dr. Coomaraswamy explained. He invoked Lee Kuan Yew’s pointed critique of Sri Lankan elections as “auctions of non-existent resources” to underscore how political cycles undermine fiscal discipline.

Emphasizing the stakes of sound governance, he stressed, “Macroeconomic management is paramount. When it fails, everyone pays the price. The public sector, private sector, and civil society are all adversely affected.”

He warned against complacency, arguing that fiscal rules must be treated as critical safeguards. “If these rules are loosened or diluted, the entire nation should voice opposition because their erosion risks collective suffering.”

South African High Commissioner, Sandile Edwin Schalk, emphasised the untapped potential for strengthened economic ties between Sri Lanka and South Africa. He urged the two nations to formalize bilateral agreements on trade and investment, highlighting mutual benefits that could drive growth and collaboration.

“Tourism, for instance, holds significant promise. Both countries, as distinctive tourist destinations, could greatly benefit from joint efforts to promote tourism,” the South African High Commissioner said.