Nivard Cabraal may have been indulging in a
spot of sour grapes but Hard Talk's
interviewer was shocked.
'Are you suggesting you don't care whether
the EU reviews its special trade deal with
which allows you to export hundreds of
millions of Euros worth of clothes to the EU
every year?' he asked, almost like a
Scottish elder rebuking sin from the pulpit.
And this from the Governor of the Central
Bank whose primary responsibility is price
stability and inflation management.
Nevermind that he was a political appointee
embroiled in controversy over pyramid
Perhaps a considerable latitude of choice
was given to Cabraal in the matter of
content by his political masters back home
but in his replies he betrayed a certain
lack of maturity. A maturity he in fact
proudly said was available in abundance in
the garment industry of Sri Lanka.
This is very probably true but one finds
that Cabraal prevaricated and hedged without
any show of decorum or subtlety, and there
lies the difference between a nailed
interview and a failed one.
Nevermind that he got his wife to hurriedly
resign from the family company in which a
Gold Quest front company had bought
considerable shares, a day after this
columnist called him up for an official
quote on the Gold Quest investigation
exclusively published in The Sunday Leader.
Nevermind that he shut down the Special
Investigations Unit (SIU) investigating
pyramid schemes and in particular Gold Quest
and its front companies and kicked out of
office three CID officers dealing with the
Exclusively in The Leader
Nevermind that he had the CID interrogate
this columnist for over five hours on her
sources when the closure of the SIU was
exclusively published in The Sunday Leader.
And for Nivard Cabraal, despite extensive
preparation, the interview with Stephen
Sackur did not go well. There was an air of
controlled panic as the Governor became more
anxious and the questions more searching.
In fairness, not even the most eloquent of
debaters would have been able to defend the
present Rajapakse administration in its many
political and economic follies, but then
again by his own admission, Cabraal has
contributed in no mean measure to the policy
direction of this myopic administration.
The GSP+ is not just another concession and
Hard Talk's Stephen Sackur was not letting
Nivard off the hook. "A corollary to what
you are saying is that actually you would
rather allow the army or the para-military
groups a free reign to do what they will in
the north free of any EU monitoring and
observation rather than keep the concessions
on trade," he said.
No need for subsidies
Nivard may have dismissed the concessions as
nonchalantly as a Medieval Knight dismisses
a small dragon but as the interview
demonstrates, his answers merely confirmed
the interviewer's proposition.
Nivard was to also dismiss the GSP+ as a
sort of subsidy and said Sri Lanka must
learn to do without subsidies. "That was
never something that will work and.it's like
a subsidy. You know we don't really need
subsidies to do certain things and the
moment you rely on subsidies, the moment you
rely on concessions, your own productivity
falls and that's something that we don't
want," he said.
Curious this thinking really. Especially
since it was Cabraal's own government and
extremist allies, who screeched from
political platforms, about subsidies being
denied to farmers not many moons ago.
Industry on the brink
And what pray does the industry have to say
about it? The GSP Plus facility, which is
dependent on good governance criteria and
the acceptance of UN conventions on human,
labour and political rights is coming up for
renewal later this year and entitles the
country to duty free imports of some 7000
items to Europe. The garment industry is
dependent on the GSP Plus facility for its
survival and the fate of over 100,000 jobs
and over US$ 2 billion in export earnings
hang on Sri Lanka getting the facility
extended for 2009-2011.
Despite the cavalier attitude displayed by
the Central Bank Chief, a loss of the GSP
Plus facility was the urgent topic of
discussion at the recently concluded
committee meeting of the Joint Apparel
Association Forum (JAAF) under the
Chairmanship of Ajith Dias, an industry
grouping of garment, textile and accessory
Members voiced concern over the controversy
and even decided to collectively meet
President Rajapakse as a delegation in order
to find out the exact position. Dias in fact
contrary to Cabraal's rantings told The
Sunday Leader it was vital to the industry
that the GSP+ is retained.
And the Rajapakse regime facing as it is,
severe condemnation on its horrendous human
rights record, is a regime well stuck. And
indeed it is paying a price for its
diabolical foreign policy that seeks to do
business with pariah states.
The point is not lost on Hard Talk's Sackur
as he puts this very fact to Cabraal. And if
Cabraal thought to himself that he was doing
well by brushing off hard questions with an
easy familiarity of a hardened nut, he had
got it all wrong.
Firstly the message Cabraal was beaming out
was that the government having bungled on
the human rights front was now willing to
sacrifice the people of Sri Lanka at the
altar of obnoxious politics and pugnacious
Secondly he was in fact confirming that Sri
Lanka was shifting its focus in the world,
and in doing so was looking for like minded
countries that took a Babylonian view of
atrocities of all kinds.
When it was put to him that Sri Lanka was
shifting the focus of its friends in the
world to such countries as Iran, Burma and
Pakistan, Nivard Cabraal said no country
likes to be isolated and Sri Lanka would
like to trade with all countries.
Ironically that is exactly what Sri Lanka is
-- isolated. And no amount of weak spin from
the likes of Nivard Cabraal is going to
change that fact.
Funnily enough, Cabraal had earlier this
month published in many newspapers the fact
that his interview with Hard Talk had been
blacked out, with some media reporting the
BBC as saying the tapes had been
Cabraal reportedly had flown especially to
London for the interview after the BBC
invited participation at the show at a
senior level of government by somebody who'd
take all questions and be able to handle a
particularly aggressive line of questioning.
Perhaps it was this initial criteria that
made Cabraal act so consciously pan faced as
he spewed out his prepared answers which in
the end were not as pippin as he perhaps
intended them to be.
Tinge of shame
Again not that anyone would have ready
answers for the antics of the Rajapakse
government. And indeed Cabraal had the grace
to blush - or perhaps it was the lighting
that showed on the TV screen a tinge of
shame on his cheek of modesty - when the
tiny matter of pyramid schemes was put to
It is easy enough at the tail end of a
grueling line of questioning to say that
something was absolutely wrong and
politically motivated as was his answer to
allegations of corruption leveled against
Indeed the only thing that was politically
motivated in the whole Gold Quest saga was
the controversial appointment of Cabraal as
the head of the Central Bank at a time the
Bank was conducting extensive investigations
into the Gold Quest scam and in fact into
Cabraal's own family companies connected
with Gold Quest front companies.
In fact it was all one could do not to fall
down laughing when Cabraal said his wife had
resigned from the company as it was proper
procedure to do so when he ascended the
Central Bank throne.
But the readers of The Sunday Leader know
better. It was in fact the day after a
series of questions were put to Nivard
Cabraal by this columnist in the course of
The Sunday Leader investigation that
Cabraal's wife thought it expedient to
Be that as it may, as the head of the
Central Bank it may have made economists
squirm as he tried to cook the books and
squeeze out what he called a 'core
inflation' figure of 8% while all reports
indicate the country's inflation rate has
hit an astronomical 28%.
To hear Cabraal talking one would think he
lived in a different country. He pounded
figures on the table expecting to impress.
It did little for the viewers of Hard Talk
especially if they came from a tiny island
Cabraal urged his viewers to look at the
macro economic numbers that Sri Lanka has
been able to generate. Growth he said has
been at nearly 7 percent for three years
running. Unemployment he said was the lowest
ever at 5.4 percent. Sri Lanka's reserves
have been the highest at its 3 « billion
dollars. The country's exchange rate is
stable now. There are many plus factors that
are in the Sri Lanka economy that sometimes
we have not being seeing in perspective,
particularly because the conflict has been
the item that has been the taking the front
page he said.
Tell the marines
Well Cabraal can tell this to the 45% or as
he says 15.2% poor of this country. He can
tell this to the average housewife. And he
can tell it to the marines.
On the matter of UN backed monitors for the
north and east Cabraal used the double speak
employed by the government when speaking to
international/local English speaking
audiences as opposed to local audiences.
He attempted to laud media freedom and
praise the work of international NGOs, two
groups that have suffered immensely under
the hand of this government. Why do we need
monitors when we have these two groups
working freely he said tongue nicely lodged
in his left cheek. And By George you need a
free media and a heavy NGO presence if you
are to sell yourself to the world as a
vibrant democracy. Alas for Cabraal however
one could easily tell that neither the Hard
Talk man not the BBC viewers were buying it.
For Ajit Nivard Cabraal life is decidedly
more rosy. He speaks of resilience, of a
near 7 percent growth, of unemployment at
its lowest, of overall poverty levels
dropping to 15 percent, of debt to GDP
ratios also falling. In every aspect of
economic life we have been doing better than
what we have been doing in the past, he
Try telling that to the woman at the Sunday
pola trying to make ends meet. The lady at
the supermarket; the child at the boutique;
the man ploughing his fields.
Stephen Sackur: Earlier this year the Sri
Lankan Government formally withdrew from the
long ignored ceasefire agreement with the
Tamil Tigers. The Colombo government
believes it can win a conclusive victory
over the rebels and maintain Sri Lanka's
economic growth. Ajith Cabraal is the
governor of Sri Lanka's Central Bank. Is his
country's economy strong enough to withstand
the capital and diplomatic costs of the
Q: Nivard Cabraal, welcome to Hard Talk
A: Thank you.
Q: Now the ceasefire which was long ignored,
finally came to an end in Sri Lanka at the
beginning of this year. Is it the
government's intention now to eradicate the
A: Actually the government is looking
at providing space for all Tamil moderate
parties to also come in and take their
proper place in the political spectrum. What
has happened is, as long as the LTTE was
strong.the LTTE was in a dominant position
that they were in, it was impossible for any
other Tamil group, a moderate Tamil voice to
come in and make their voices heard. So it
was essential that the terrorism had to be
dealt with, if the other groups had to be
given the space to make their voices heard.
Q: But my point is that there have been
ceasefires in the past. There have been all
out government offensives against the Tigers
in the past and this civil war has not ended
and gives no sign of ending, and you as the
Governor of the Central Bank must find your
heart sinks when ceasefires are abandoned
and the war is back on in full force.
A: Yeah, we got to admit that it is
always tougher to run an economy when there
is some conflict going on rather than when
its not there. But today the challenge is
that many countries have had to face threats
of terrorism in dealing with their own
economies, and sometimes it is essential
that we put it back and put it behind us, if
we are to really move forward and that's the
position we are taking too, because for
people to come in and invest in Sri Lanka we
have to ensure that we provide them with a
Q: You can't do that, can you? You certainly
can't put the war behind you, or put it on a
shelf, and pretend it's not happening for a
start. You have to spend two billion dollars
or more a year funding the war.
A: Yeah. Well it's a little less than
that. We spend something like 3.8 percent of
our GDP on the war and on defence, and it is
something similar to what lots of other
countries also spend. For example, Singapore
spends, 4.9 percent of their GDP.
Q: With respect, a country like Sri Lanka
where 45 percent of the population live on
less than two dollars a day, it makes no
sense whatsoever from an economic point of
view that you spend upwards of two billion
dollars a year on defence!
A: Actually that figure may not be
Q: What, which one?
A: Yeah, the four point er.the 45
percent. Sri Lanka had a 22.7 percent below
the poverty line in the year 2002. But last
year the latest figures that have come out
show that it has come down to 15.2 percent.
So there has been an appreciable drop in
poverty as well in Sri Lanka and that mind
you, has been in the context of the amazing
amount of difficulties we have been having,
which shows that we have a resilience in our
economy and it is what this entire thing is
Q: But foreign investors are nervous, the
ceasefire has collapsed, the war is on in
full force. Foreign investors, for example,
the Japanese Telecom giant NTT is pulling
out of a major investment with your own Sri
Lanka Telecom Company!
A: Yeah, but if you really see the
Japanese investor has sold out at a profit
to a Malaysian investor and Sri Lanka's
foreign direct investment was the highest
ever last year, at 751 million dollars it
was the highest ever figure that we have
ever recorded, and then when Sri Lanka went
for a bond issue just in October last year,
we went for a 500 million dollars and we had
subscription for 1.6 billion dollars.
Q: Well of course you did. And you know why
you did, because you were offering the most
extraordinarily high interest rate. Over 8
and a quarter percent interest rate.
A: Yeah, true enough, but still for
all that is about the level of interest any
country which has a rating such as ours
would be able to offer.
Q: Because your credit rating has sunk.
A: Yeah, but credit ratings...
Q: And the reason is, people look at Sri
Lanka and they look at an economy in a war
time situation that looks extraordinarily
fragile. That's why you are burdening
yourselves with these enormous interest
rates to service your foreign debt because
you find it difficult to establish your
A: No, it is really not that simple.
If you look at it overall, if you look at
the macro economic numbers that Sri Lanka
has been able to generate, our growth has
been at nearly 7 percent for three years
running, and that mind you, with this kind
of environment that you are talking about.
Our unemployment is the lowest ever at 5.4
percent. It's the same as that UK
unemployment rate, our reserves have been
the highest at its 3 « billion dollars. So
you have seen, our exchange rate is stable
now. There are many plus factors that are in
the Sri Lanka economy that sometimes we have
not being seeing in perspective,
particularly because the conflict has been
the item that has been the taking the front
Q: I take your point and it is your job as
the Governor of the Central Bank to put a
positive spin on Sri Lanka's economic
performance, but one looks at the
international agencies that rate, for
example, your country's credit worthiness,
and Fitch which is highly respected has
downgraded your credit worthiness and one
looks at the IMF report that focuses on
inflation, that they say is well above 20
percent and is not the result of
international commodity price inflation. For
example, oil or other food stuffs, it is the
result of in their words poor economic
management at home.
A: Yeah, firstly that particular
report is not the IMF report. It has been a
staff report. IMF gives out what is known as
an Article 4 surveillance report, and that
report which the IMF takes responsibility
for, does not contain any such number like
what you just mentioned.
Q: So you are saying inflation doesn't
A: No. I'll explain to you exactly
how it works, the report that you quoted
from is a staff report which has been very
poorly structured, and we have in fact made
it known to the IMF that we do not agree
with it at all.
Q: With great respect, I think our audience
might struggle to see the difference between
an IMF report which is a staff report, and
an IMF report which is an official report -
the fact is, the IMF people have been
looking at your economy, they talk about
poor domestic management, and they talk
about an inflation rate which is dangerously
A: No, I'll just explain to you,
because IMF report, the official IMF report
- the UK also has an IMF report which is an
Article 4 report, and that Article 4 report
is a positive one as far as Sri Lanka's
economy is concerned. We do have headline
inflation which is high and we appreciate
that if you say so and we also..
Q: You accept that it is over 20 percent
A: Yes, absolutely, but it is simply
the cause that has been as a result of the
very high commodity prices all over the
Q: The report we are arguing about
specifically says that is not the case. One
only has to look at neighboring countries,
which have the same sort of problems with a
higher oil price than you have where
inflation is not running at over 20 percent.
A: But you will find that in many
countries their inflation has risen by about
50 percent. You see, the way inflation is
calculated is not the same all over the
world. It is not a steady, standard method,
but what we have seen in Sri Lanka, yes, our
headline inflation has gone up but the core
inflation - what you mean by core inflation
is the increase in your prices without
taking food as well as energy into account,
the United States does it the same way,
Philippines, Canada all those countries take
the core inflation, which is without food
and without energy. None of you take the
core inflation of Sri Lanka which is the
demand driven inflation which we have to be
managing. That you will find in between 7-8
Q: Without wishing to get too technical, it
seems to me that Sri Lankans, when they
consider their lives today they are going to
look at the fact that the price of rice,
bread and oil.cooking oil has gone up
between two and three times in little more
than a year and they are going to say to
themselves we are living in a war economy,
we are spending more and more on this battle
against the Tamil Tigers and our own living
conditions are worsening.
A: Yeah, but that is also not really
accurate, because if you look at the Sri
Lankan per capita it is 1617 dollars up 50
percent over the last three years and mind
you, these are the last three years that you
have mentioned that were the tough years for
us. So what it means is there have been huge
economic turmoil right across the world. All
the countries in the world are today
grappling with inflation. The oil prices,
what you missed, have gone up three and a
half times over the last four years. That's
a huge number, and we import every single
drop of oil to Sri Lanka.
Q: You would accept therefore that given the
way you say that your problems are really to
do with the international economy. You would
accept that Sri Lanka really cannot afford
to be economically or indeed politically
isolated in the coming months wouldn't you?
A: No, I don't think we are in anyway
politically isolated. We have seen many
countries investing in Sri Lanka. We have
very good partnerships being done between
Sri Lanka and so many other countries.
Q: Well let's talk about isolation - let me
put to you a few examples. For example, the
key allies and partners in Sri Lanka in the
past few years, that is Japan, the United
States, the EU, Norway; they have all
condemned your government decision to
formally renounce the ceasefire. They made
great efforts to stop you doing that.
A: Yeah, you see finally Sri Lanka
has to look at the overall situation from
the Sri Lankan perspective as well. When you
look at the fragility of the ceasefire
agreement that you were just mentioning, the
LTTE were never serious about it. It was
always a contingent liability upon Sri Lanka
to have this all the time at any moment.
They were able to pull the rug under our
feet, and then that was always having people
not coming into Sri Lanka because they were
all nervous because they did not know at
what moment the LTTE could renege on that.
Q: Why did, if it's all about the Tigers,
why did the government refuse to accept UN
backed monitors to actually look at what was
happening on the ground in the north and
east of your country?
A: You see Sri Lanka has a very
vibrant democracy. There are many
newspapers. There are many international
NGOs in fact you know we have as many as
Q: I'm talking about international monitors.
A: Yeah, I'll explain to you.
Q: People who can come in entirely
independent from the outside under a UN
mandate and actually report on what you know
is a very very difficult situation in the
north of your country with serious
allegations of human rights abuses from your
A: Yeah, but you know we really don't
need to have them coming in because there
are so many other institutions.
Q: .but you do need to have them coming in,
clearly you need them..hang on, when a
British Minister Kim Howell from the British
Foreign Office can say and I quote "The
Tamil Tigers are not the only source of
violence in Sri Lanka. Civilians in
government controlled areas regularly fall
victim to brutal attacks by para-military
groups after acting with apparent impunity."
A: Of course, I have not seen that
particular statement, but there are many,
many more reports also that we have seen
where many NGOs, many MPs have come in and
have found that Sri Lanka has a very good
record as well. So you see there are
different sides to this story. It is a 25
year old conflict and naturally there would
be certain tensions that would take place.
But overall we have seen that in the
difficult circumstances that Sri Lanka has
managed well and that we have come out well
in this whole exercise and there are many
people who still have a lot of respect and
regard for Sri Lanka.
Q: Well, I'm amazed that you as the Governor
of the Central Bank cannot on the telephone
talk to your own President Mr. Rajapakse and
say to him "Sir, we have to do something
about a major problem." We've got the
Japanese for example, your biggest bilateral
donor, they are saying they are reviewing
all of the strategic aid to Sri Lanka okay,
because they are concerned about human
rights. The EU is considering whether or not
to review a crucial trade deal. All because
of deep unhappiness about your government's
human rights record.
A: Yeah, if you just take those two.
Japan - Japan has not in anyway pulled out
at all and Japan has been very supportive of
Q: The Japanese Envoy Yasushi Akashi said in
January he was, quote, gravely concerned,
and the government's strategy in Sri Lanka
was being constantly reviewed.
A: Yeah, but they have not pulled
anything out, I mean we have very very good
relationship with Japan and that is
The EU, you see personally I have been
advising government from the point of view
of the Central Bank, that it is time the
government as well as the economic people
who are involved in industry, do not rely
only upon concessions to do their business.
You see, we are today moving to a free
market economy right across the world and it
is important that Sri Lanka also recognises
that they have to do business in the market
place without concessions but if they do get
concessions it is very welcome.
Q: Let me be clear about what you are saying
because it's very important. You are
suggesting to me that you don't care whether
the EU reviews its special trade deal with
Sri Lanka which allows you to export
hundreds of millions of Euros worth of
clothes to the EU every year?
A: Let met put it this way, you see
sooner or later the EU will have to not give
this concession because it is a special
concession that they are giving - the GSP+,
but there will come a time when Sri Lanka
will have to stand on its own and export
like any other country, because to the EU,
there were many countries exporting. So the
moment you have these additional concessions
in order to buttress you to export your
productivity is dropping. Your own methods
will not be as stringent as you would like
But you know Sri Lanka's apparel industry is
a very mature one, we have very good
standards. We commend ourselves saying that
you know, we are an exporter of garments
without guilt. So there are many good things
going for the government industry.
Q: Of course a corollary to what you are
saying, sorry to interrupt, but a corollary
to what you are saying is that actually you
would rather allow the army or the para-military
groups a free reign to do what they will in
the north free of any EU monitoring and
A: I'm looking.
Q: Rather than keep the concessions on
A: No. let me put it this way. I may
not have made it very clear. We appreciate
the concessions, that's fine. That's very
true. But at the same time we as a nation,
we as an industry in this particular area
which is now becoming quite mature, we need
to understand that we should not be only
looking at concessions to look forward. But
the government deals with the political
spectrum and then sees how best they could
get the additional concessions, that's fine
but we are advising the industry not to rely
upon specific concessions in order to do
That was never something that will work
and.it's like a subsidy. You know we don't
really need subsidies to do certain things
and the moment you rely on subsidies, the
moment you rely on concessions, your own
productivity falls and that's something that
we don't want.
Q: It is interesting that the government,
your government is very happy to take aid
and concessions from another group of
countries and I could list Iran, Burma,
Pakistan where you have burgeoning trade
relations and indeed aid relations as well.
You seem to be shifting the focus of your
friends in the world.
A: Actually, we don't, we.our
position has been we have to trade with
everyone. You see, no country would want to
be isolated when doing their trade.
Q: You get rice as aid from Burma don't you?
A: No, no we pay for it, we pay for
it, every single grain.
Q: That's not what is reported. It says you
get a 100,000 tonnes of rice at knocked down
A: Nobody would want to
give.especially a country like Burma, will
not be able to give rice at a concessionary
rate and we don't really need to.
Q: I wonder whether Sri Lanka really wants
to position itself in the world where its
key trading partners become countries like
Iran - which of course gives about 70
percent of your crude oil, but in return..
A: We pay for it.
Q: I know you do. In more ways than one
because you have said quite openly, your
government, that you fully support Iran's
A: I don't know about the programme
part of it.
Q: But that's the price you pay isn't it?
A: No, no we have been trading with
Iran for the last 25 years, it was not
something that happened recently.
Q: But I'm asking you.
A: We have been trading with Iran, we
trade with the US, 33% of our garment
exports go to the US, 29% of our garment
exports go to the EU. 12% of our tea goes to
the UK, so we have, so we trade with all the
different countries and India today is one
of our biggest trading partners.
Q: You have a long personal history in
accounting, you've traveled and worked all
over the world, does it make sense to you
that Sri Lanka now is lining up with the
countries I've just listed like Iran and
Burma and losing support it seems in the
countries of the EU, the United States and
Japan? Does that make sense to you?
A: No actually, if you really think
about it we have not lost from anyone.
Q: No. I don't want to nurse the argument
again but I can give you lots of quotes
which suggest there is real concern in the
West about the way your government is
A: Not really, because when you
really think about it Sri Lanka was at one
time a tea, rubber coconut industry country.
We used to export tea, rubber, coconut.
Today we export many many items to many many
countries. We import from many many
countries so our trade basket has got so
diversified that we work with so many
different people and I think that's very
important for Sri Lanka to ensure that we
have a wide range of countries with whom we
Q: If I may be frank, is there a sense in
which for your government, the war is useful
because it takes the tension a way from some
other endemic problems you have in your
country not least corruption?
A: Actually, that would be rather
unfair to say for no government would want
to have a war with them. The worst thing
that can happen to a country. This has been
there for 25 years.
Q: But it takes the attention away from
endemic corruption doesn't it?
A: This has been there for 25 years.
It is a tough, difficult problem at the same
time we got to deal with other major issues
as well. We have had poverty which we have
had for a long time. We are dealing with
that. Our infrastructure development that we
are going through now is one of the biggest
ever infrastructure phases in our history.
Q: And you officially..forgive me.I want to
stick to this issue of corruption, because I
think it is important..
A: I'm coming to that...
Q: The Transparency International Directory
in your country says corruption is rampant.
It says cronyism and nepotism are the key
problems. You need political patronage to
get any position in this country. It says
during the past three years this
politicisation of office has become ever
A: I think those are all rhetoric
which people can say but at the end of the
Q: You are refuting that there is a cronyism
and nepotism problem?
A: There..there may be instances. I
appreciate and I do say there maybe certain
instances where you may have projects going
where there can be leakages but if you
really think about it today our total number
of projects Sri Lanka is handling is about 4
1/2 billion dollars. Hitherto the biggest
phase of development we had in
infrastructure development projects was
about 1 « billion dollars and that was way
back in 1977 or 1980. Today we are having
two new ports being built. One new airport,
three major highways, three new power
plants, all of which are essential for Sri
Lanka's growth in the future and those are
important facets of development for the
Q: Indeed they are, but Mr. Cabraal is it
not a problem for you when you turn your
face to the international community and say
money you provide in terms of investment
will be clearly and efficiently spent in my
country. Is it not a problem for you when
your own position and your own behaviour has
come under a cloud of allegations including
calls for your resignation inside your own
A: You see people can say anything
that they want but I have shown the world as
to what I am. I have been selected by the US
Government to be an Eisenhower Fellow. My
peers have elected me..you mentioned about
accountancy..elected me to be the president
of the Institute of Chartered Accountants.
The most prestigious body, by unanimous
vote. So my own credentials I think are very
well known, but I think in Sri Lanka, the
political spectrum is such that there can be
political people who would want to discredit
anyone and they do that and that's quite
Q: There were allegations, to be specific
that your family firm was involved, may be
tandentionally, but was involved in another
company which was involved in Pyramid
selling which of course is illegal in Sri
A: That's absolutely..
Q: You, when you got to the Central Bank,
called off a Central Bank investigation into
A: That is absolutely.
Q: Why did you do that, briefly, why did you
do that? Did you call off that
A: That is absolutely wrong, let me
explain to you. That is absolutely wrong, it
was firstly, it was not a family firm. It's
a firm where I had 2% of the shares and if
that is a family firm.
Q: Your wife is a director.
A: My wife is a director, was a
Q: So it is a family firm. You were
chairman, weren't you? Before you divested
you were chairman?
A: No, no. Let me please..one
minute.please allow me to tell you then you
can tell me. My wife, the day I became the
Governor of the Central Bank, she resigned,
so that it was in the proper procedure and
then after that the entirety of the
investigations have been going on and during
the last two years the efforts that I have
put in in order to reduce the Pyramid
schemes have been much much greater than it
has ever been. So these are the political
issues that people like to take out and we
are quite used to it in Sri Lanka. You know
we are quite used to that.
Q: We are running out of time. Do you think
Sri Lanka, with the war going on, with
corruption endemic, is in any position to
really fight off a global slow down?
A: Look at our resilience with all
these difficulties. We have been having a
near 7 percent growth which any other
country would have been proud to have. Our
unemployment is at its lowest, our overall
poverty levels have dropped to 15 percent
which is very very manageable. Our debt to
GDP ratios are also falling. In every aspect
of economic life we have been doing better
than what we have been doing in the past.
Q: Nivard Cabraal. We have to leave it
there, but thank you very much for being on