Colombo, Economy

Media analysis and the chutzpah of the Sri Lankan government

The quality of chutzpah has been described vividly as a boy who murders his parents and pleads with the judge for clemency on the basis of being an orphan. In the BBC interview aired April 16, 2008, the arguments of Central Bank governor Nivard Cabraal aptly lived up to this vivid portrayal of chutzpah.

Media Analysis in Sri Lanka
To say that the Sri Lankan media analysis of this interview was mixed, is to put it mildly. “Nivard gets foxed by straight talk” announced the Sunday Leader on April 20. The Island editorial the next day, “Hard Talk and not so soft options”, made a contrary assertion. It not only praised the governor and the interview but went on to accuse all critics of being LTTE lobbyists!

It is tempting to analyse such interviews as if they were a boxing match. Picking sides, asking who got in the most punches, whose face got bloodied and whether a knock-out blow was dealt or not. Notwithstanding such a posture in local media analysis it is important also to analyse the content of such interviews from the perspective of public interest. The political interest of “looking good” in the international media is not always convergent with the peoples interest of knowing the truth of our situation in Sri Lanka. I am writing to contribute towards the latter.

The governor Nivard Cabraal did well by any standards to maintain his poise and composure under a rigorous and attacking barrage of questions by BBC’s Stephen Sakur. Anyone seeing the interview is likely to have been impressed by the calm and collected manner of his responses. Unfortunately, his equanimity was not complemented by the quality of his arguments. These were for the most part obfuscating and unsound. Nevertheless, they demonstrated the perseverance with which government propaganda is being manufactured and, more than anything else, the chutzpah which has come to characterize the regime of President Mahinda Rajapakse. I will cite just two examples.

 Chutzpah to obfuscate common sense observations
Asked about the difficulty of maintaining investor confidence in the midst of a war situation and criticism on human rights records, He argued that investor confidence was not flagging. The evidence was this: when Sri Lanka went for a 500 million bond issue last October, it was heavily over-subscribed. This is a story that has been trumpeted repeatedly in Sri Lanka. The message is that creditors are clamouring to lend money to Sri Lanka. Sakur had done his homework. The real reason, he challenged, was that interest rates offered by the government on those dollar bonds were outrageously high. Then the chutzpah showed up: But, counted the Governor, the interest rates were high only to be in line with the credit rating of Sri Lanka. Therefore, his conclusion remained, creditors find us attractive!

International agencies assign credit ratings to countries based on a rigorous array of complex but well documented criteria. A lower credit rating is a sign of higher risk and lower confidence on the part of creditors. When the credit rating is low it requires higher interest rates to lure credit. If there is anything to glean from high interest rates that are driven by a low credit rating — which the governor acknowledged — it is that creditor confidence is low, exactly as Stephen Sakur was pointing out.

But such boring logic is for people without chutzpah. But for the governor, attracting creditors who have low confidence by offering high interest rates means that, suddenly, creditor confidence is also… HIGH! And, pigs can fly. It is like a man, shunned even by prostitutes, who gets some offers only after offering to pay double the normal rate, now boasting that this is indeed proof of how attractive he is to women.

Lies, Damn Lies, and Statistics
When challenged that the economy was fragile, the Governor countered. Unemployment, he said, was at an all time low at 5.4%. Increasing employment is a sign of a growing and healthy economy. Normally, falling unemployment describes just that. But, sometimes, these statistics can lie.

According to the Central Bank’s own figures (latest Annual report) the Sri Lankan economy has been steadily loosing the capacity to provide employment. Over the last three years the economy has shed 476,000 jobs. And this shedding of total jobs has happened even though the government has been steeply increasing the number of jobs in the public sector – by 92,367 in the same period. (See table).


Total Employment

Public Sector Employment










Source: Annual Report, Central Bank of Sri Lanka, 2007

This means that the rest of the economy — the tax paying part of the economy — lost 568,367 jobs in three years! The question about the fragility of the economy was spot on, but the Governor knew how to obfuscate the facts with statistics. This was an astounding show of chutzpah. He took hold of the very fact — of the Sri Lankan economy shedding jobs at an alarming rate — and used it with a statistical sleight of hand to pretend the exact opposite: that job availability had reached a new high! And, just watch how the pigs fly.

Discerning the true predicament
A government propaganda machine with a greater sense of shame might have tried to avoid talking about employment and unemployment altogether. But the lack of shame is the essence of chutzpah. This lack of shame is certainly not limited to government assertions about economics. Consider the long touted palpably false reason for not appointing the Constitutional Council — because minority parties couldn’t agree on a nominee. And, a pig flies like a bee! Chutzpah has become second nature to the government propaganda machine, and the people of Sri Lanka need to be aware.

It is the hope of all people in Sri Lanka to have a more peaceful and prosperous future. For that, we as individuals and as a society need to make wise choices in the present. It is a very Buddhist idea that the first step to wisdom is a discernment of our true predicament. But, when media analysis of government claims is at the level of partisan shouting matches, replete with name calling, the task of discerning our true predicament is being poorly served.

  • Malinda Seneviratne

    interesting piece. but is the malady only limited to cabral, state media, ministers and so on? there is much chutzpah that obfuscates much common sense understanding coming from the private media, opposition, federalists, eelamists and the so-called peace activists.

  • Jude

    Great Article!

    food for thought….

    Even though I don’t agree with everything the author says, I certainly see the point.

  • Raj

    Can someone please post Nivard’s academic qualifications? From what I’ve read he is a Sri Lankan Chartered Accountant (?).

    Thank you

  • Veedhur

    The article clearly shows the incompetence of the current CB Governor – which is not news. But beyond that, hard talk or not, what do you expect the CB Governor to say – the ‘real’ state of the economy? For that matter any CB Governor, given the direct implications of his/her utterances can only say what ‘the’ CB Governor had said!?

    Malinda’s ‘chutzpah’ seems to be the appeal for boys clemancy is based on alleging the neighbours and some other folk in the town are also do it.

  • Jack Point

    Nivard Cabral’s profile is here:

  • Raj

    Thanks Jack,

    I’m trying to figure out how a CA becomes the Central Bank governor?

  • My grandfather, a former deputy governer of the Central Bank in the 80s, passed away shortly before Cabraal’s appointment. I am very grateful for this. Mr.Cabraal has infected a nation’s key economic institution with myopic vision, slaving under a reckless, corrupt regime’s blade.

    He has neither the economic credentials or experience to be running such an institution…even when compared to governor’s of the past. While he does have to tow the government line to an extent, he plays with figures much like child. He’s an eternal optimist at a time when most of the population is experiencing inflation, unemployment and a lack of personal liberty.

    Cabraal has constantly maintained this dogged determination to paint a pretty macroeconomic picture. Sadly, he’s the only one who is convinced. The CB itself has very questionable stats that are used to paint such a picture….what irony that he questions the validity of international sources.

    He adopts a tone of arrogance with the international community and yes..double speak as well. Sri Lanka is in no condition, economically or politically to be isolated. .to be free of subsidies. I wonder if the Rajapakse regime thinks they can pull a Mahatir Mohammed, having lived in and studied that point in economic history…I can tell you that it was very very different. Sri Lanka is an economic weakling with poor micro and macro economic prospects. This can all be turned around if there is a collective will among leaders to clean up…but Sakur asking Cabraal about nepotism and cronyism is utterly pointless, much like asking a rogue about the crime rate…

    Soon there will be no yarn to spin Mr. Cabraal….but then it will be the “mere” 15% under the poverty line that suffer….balderdash! Has this man even travelled beyond Colombo! Sri Lanka is incredibly poor and I judge this not on stats and comparisons to other nations. The majority of people in Sri Lanka cannot afford the basics, they have no financial or personal security, poor infrastructure (forget airports in the middle of nowhere…roads?). And the pyramid schemes…gosh what a crack pot…the interview a success? I am ashamed to call myself Sri Lankan in the presence of such an “educated” man.