Long term vision can avert crisis - Governor

It is vital to look at the national framework and position the economy against the global economy, based on a long-term vision Central Bank Governor Ajith Nivard Cabraal said.

He was speaking on ‘Lessons Learnt from the Global Financial Crisis’ at the ‘The Key Person’s Forum’ organized by the Federation of Chambers of Commerce and Industry of Sri Lanka (FCCISL) yesterday.

Elaborating on Practice of “Long Termism” instead of “Short Termism” he said it is important to be guided by long-term trends and not be guided by daily markets.

“Read early signs of vulnerabilities in major economies.

People generally tend to ignore vulnerabilities in big economies, and in fact, even gloss over them, but, never ignore those,” the Governor said.

Organizations need to use several policy initiatives and implement them simultaneously. Develop many partnerships at the same time.

There are higher chances of success if many tools are used. Do not place reliance on one particular strategy only.

“People respond to decisiveness, not procrastinating “wishy-washy” actions and vague responses.

It is essential to develop ability to move quickly and decisively,” he said.

“Respond to untrue and alarmist stories.

Do not ignore and think that negative stories will just fade away. They must be dealt with, clearly and accurately,” the Governor said.

“Be conscious of the law of unintended consequences.”

“Sometimes, different outcomes arise due to certain seemingly unconnected actions.

A “scenario analysis” where the key stakeholders are consulted, will be very useful.

A close watch in the first few months of execution of any plan, where even unconnected outcomes are watched, would be useful,” the Central Bank Governor said.