Treasury Secretary Reveals How Sri Lanka's Crisis Could Have Been Prevented

COLOMBO (News 1st); Mahinda Siriwardana, Secretary to the Treasury, shared his insights on the events leading up to Sri Lanka's economic crisis and the ongoing efforts to steer the country towards recovery. 

Speaking on the third anniversary of his appointment and the launch of his book, 'Sri Lanka's Economic Revival, Refelections On The Journey From Crisis To Recovery', Siriwardana recounted his experience as Deputy Governor of the Central Bank of Sri Lanka (CBSL) and the warnings he issued that went unheeded.

"My association with this crisis spans beyond the last three years. In the two years leading up to the economic crisis, I was serving as Deputy Governor of the Central Bank of Sri Lanka. During this time, I had witnessed the crisis unfolding before my eyes. I did my best to warn the leadership of the CBSL regarding the impending risks to the Sri Lankan economy," Siriwardana stated.

He expressed frustration over the lack of channels for officers at his level to communicate these concerns directly to the political leadership or the general public.

"Unfortunately, these warnings were disregarded until it was too late. A crisis that could have been and should have been avoided, unfortunately, became a reality," he added.

Upon his appointment as Secretary to the Treasury on April 8, 2022, Siriwardana made it his mission to ensure transparency with both the political leadership and the public regarding the true status of the economy, the reform journey, and the challenges ahead.

Siriwardana also emphasized the importance of vigilance and disciplined macroeconomic policy in light of recent policy developments in the United States. 

"There is a long way to go, and there could be many other surprises that come our way. Whilst as policymakers it may not be possible to anticipate all such future shocks, what we can control is our focus on efforts to continue disciplined macroeconomic policy and a commitment to building robust fiscal external buffers, and diversifying our non-debt creating inflows," he noted.

He called for a concerted effort from both the public and private sectors to foster a conducive business environment, facilitate trade, streamline regulatory procedures, and provide targeted support to emerging industries. "It is necessary to embrace innovation, adopt best practices, and explore new markets to unlock the full export potential, so as to improve Sri Lanka's resilience to whatever shocks may lie ahead of us," Siriwardana urged.

The recent US tariff-related developments pose a significant challenge for Sri Lanka, necessitating bold measures from the government. "It is an important wake-up call for all stakeholders in the country to decisively shift from the past practices of postponing essential reforms to enhance non-debt creating inflows," he concluded.