Dhananath Fernando 00:19 Hello, hello everyone! Welcome back to our programme. We are in conversation with Dr. Sarath Rajapatiranar. As you know, he authored an excellent book. It's about Sri Lanka, the policy challenges for globalisation, especially in particular in Sri Lanka, and we discussed about four chapters. And if you have been following us, the last chapter was quite a crucial one, which is about the ideological framework, which pretty much move moves countries globalisation friendly or globalisation unfriendly. And on chapter five, Dr. Rajabatirana, we are going to discuss another important theme. First of all, welcome back to our programme. Dr. Sarath Rajapatirana 00:58 Thank you for having me. Dhananath Fernando 01:00 And today is a conversation about the impact of the international financial institutions on globalisation, and you are doing a deep dive about World Bank analysis in the 1970s and 1980s, and of course you have been you have been in a key role or a position, leadership position at the World Bank after your central bank stint. So it's interesting to know because generally, when you speak about globalisation, these generally the international institutions have always been in the public conversation, so first of all, I would like to know what are your initial thoughts on impact on globalisation, especially with related to the international financial institutions such as World Bank. Dr. Sarath Rajapatirana 01:56 Yeah, actually, there was I begin by saying it's not the money part that is important, right? It's important to say that at the beginning, it is a sort of the type of arrangement that the IMF and the World Bank has keep it in those two. There are others also, but this is the main two main institutions. Not every they didn't go rushing to these people in time. They, the rest of the world, looked at it at the proper time to invite them. Some people didn't want to invite them. Others did invite them. Right. People who didn't want to invite them thought they were not very good. Then they were meaning the people who were doing this were not top to mark. But you know, at the end of the day, it turns out that it is a very good thing because, as I said, not the money, but the way of analysing an economy, and that was very helpful to countries who. Dhananath Fernando 03:05 Dr. Rajputan, it's an interesting statement that you made. It's not about the money because generally the public perception is okay. You heading towards a crisis, you go to IMF mainly as a bailout, which is for money. Same with World Bank with a lot of development aid. If it's not for money, what what is it? What what is there which is beyond money? Was it the credibility? They have some people say it's a credibility. Some people say it's a technological know-how. You have been in both sides on the table. What can they bring beyond money? Dr. Sarath Rajapatirana 03:41 Actually, the thing is that money can be misleading. Also, if people continue to give you money, then you don't take it seriously, right? So, actually, the what is the programme that they produce in order to help a country, which I have done for many countries, is very helpful to the country, and also it gives a learning experience for the other party who as good as you. Yeah, you know, I I met in people from different parts of the world who are good, if not better than you. Dhananath Fernando 04:15 Right, Dr. Sarath Rajapatirana 04:16 but they have studied in the same places. Like my friends from Chile, they they studied Milton Friedman, and so so therefore there are a lot of things that we learn in the process. Dhananath Fernando 04:29 Now, Doctor Ajay, Padilla, in fact, you said sometimes the people on the other side, that is mainly that representing that particular country, are better than you. So I think some people may think in that case, why that country's resources cannot do a better plan? That is a common, you know, narrative that has been brought in. Okay, we have the people. Let's do our own plan. And generally, people call it like a homegrown sort of solution. What is the difference? Like, why do you stay? I mean, how do you see the role of like? Okay, you in fact said there are better people most of the time on the other side. But what with those better people, the World Bank brings. You mentioned about the plan or the programme, which comes probably from experience from different parts of the world. Or am I missing anything with your experience? What else? Dr. Sarath Rajapatirana 05:21 No, I think to me that money. What is more important is the what type of programme is being being used to say get the economy to grow faster. The other thing is that, or I won't say that they are all gone to same schools as we have, Dhananath Fernando 05:40 right? Dr. Sarath Rajapatirana 05:41 And they are you know equally good or equally bad, what the case may be. But I have not met anybody in the 30 countries I worked on whom I thought was not good. Everybody else, by the time they come to that position to represent their country, then they have done a lot of good work. Dhananath Fernando 06:00 So, Dr. Ajay, in in this chapter, chapter five, we are going in detail about the 1970s and 1980s programme. So, from your going back with your previous chapters, you have defined certain periods as globalisation friendly and unfriendly, and accordingly, 70s seems to be a little globalisation unfriendly, and 80s is after the 1977 reform, so it's more globalisation friendly. Yeah, let's start with 1970s World Bank sort of analysis. How do you how do you view that? And also, you have given some critique on the programme as well. Actually, I Dr. Sarath Rajapatirana 06:39 have become very unpopular by doing that because the top one of the thing that we had to do in the bank mostly is that I am working with a with a very personal, very advanced knowledge, and I I carry the bad news saying this is wrong analysis. Right, I was just talking to the person today, they say, for example, first deal with the fiscal deficit, then deal with the balance of payment deficit, then deal with the you know any deficit. Dhananath Fernando 07:15 Right. Dr. Sarath Rajapatirana 07:16 Actually, it turns out that if you think about it correctly, it is some to zero, so it doesn't make any sense to say start with this and that. Although some people who are not involved in this thing, today we can go do this next time do the other. Don't work like that. So become unpopular because one of the jobs that I had to do is to criticise, evaluate the work of my colleagues. Dhananath Fernando 07:46 Right, and they Dr. Sarath Rajapatirana 07:48 are very good friends also. That's Dhananath Fernando 07:50 a tough Dr. Sarath Rajapatirana 07:51 job, Dr. Tough Dhananath Fernando 07:53 Joya. So coming back to 1970s World Bank analysis, like how do you see that? Like what was the impact on, in a way, in your books theme, like globalisation by the 1970s report on Sri Lanka. Dr. Sarath Rajapatirana 08:09 Yeah, actually, I'm very glad the World Bank and the IMAB got involved because this is something new to these people. It's a new new thing, but also they because they have worked on so many countries, and I can have one case. I can give one incident in one of the countries, maybe Indonesia. One guy complained saying, "We have done this. What you guys are doing, we have done it. We know this and don't waste our time on business, but in other the people who are doing the work have long years of experience, about 3040, years of experience. That's a very big. There's a difference between people who have long experience and people are there for a short pile, so that way it was very helpful, Dhananath Fernando 09:04 right, right, Dr. Sarath Rajapatirana 09:05 and also get to you to concentrate on the type of economics that you need in order to analyse it. Dhananath Fernando 09:12 And Dr. Ajpatan, so in the in the 1970s World Bank analysis, like what made like after such an analysis still to to to be to follow more globalisation unfriendly policies was it was there any influence from the World Bank? No, Dr. Sarath Rajapatirana 09:34 no, no influence of our bank report. So the the report there's a discussion. So if we prepare a programme, shall we say, for the World Bank to give money, say to say another country, that's a big discussion that takes place. I myself have been in that discussion about Sri Lanka when I when I talked about when I was representing when I was in. Central Bank, and it is actually it's a very nice discussion. Dhananath Fernando 10:05 Right, Dr. Sarath Rajapatirana 10:06 people sit around the table and they say, "Yeah, this is what we can do. How far can we go with this type of analysis? So there's a very good understanding between two parties, Dhananath Fernando 10:21 and someone this is slightly out of the context from the chapter, but generally, those who kind of in a worldview of globalisation, unfriendly policies tend to say that this globalisation is in a way quite influenced by international institutions like World Bank or the IMF, as someone who have been like worked there, knowing people, and also you mentioned in your previous chapter that that ideological stance actually play a role in a way. So how does it that ideological stance in that sense come pretty much to the World Bank. I mean, how their institutional structure works, and is there any truth that is it like a World Bank sort of a project or IMF project to keep the globalisation narrative up and running? How do you respond to that? Dr. Sarath Rajapatirana 11:20 It's not really ever done. Dhananath Fernando 11:23 Okay. Dr. Sarath Rajapatirana 11:23 What is done is to have sit around the table. Dhananath Fernando 11:26 Right. Dr. Sarath Rajapatirana 11:27 Actually, when I started doing it, I said we we sit around the table, so we we are very neutral to each other. Most of us have been in the universities together. We we we know the subject matter, and we can say they what you can do, and then we have examples of the countries. It's a very friendly, nice environment. They are your friends, Dhananath Fernando 11:50 right? Dr. Sarath Rajapatirana 11:50 They have not come to say you know they they have the background, they have experience, and we learn from them. They learn from us. Yeah, Dhananath Fernando 12:02 excellent. And then, so that was the 1970s, pretty much the analysis. And then there was you are going in depth for the 1980s. That's after pretty much the liberalisation in 1977, sound, Dr. Sarath Rajapatirana 12:15 sound. Yeah. Dhananath Fernando 12:16 How do you compare and contrast the two sides? Dr. Sarath Rajapatirana 12:20 What I had to say that I that some of the people who on the other side of the table had not seen as finely as we had done about liberalisation. For example, if I ask some person at that time in 1970 about liberalisation, they would not know. They give wrong idea, and so I am very ready to all this. Liberalisation is not giving people the import anything they want. It's way of allowing prices to determine determine the outcome of a particular way of doing Speaker 1 12:58 it. Correct. Dr. Sarath Rajapatirana 12:58 So, so therefore a wrong understanding at the beginning, and also people who are liberalisation may globally unfriendly people are lefties basically. Yeah, who are you to come and tell us what to do? Dhananath Fernando 13:16 Right. Dr. Sarath Rajapatirana 13:17 Yeah, Dhananath Fernando 13:17 got it. Dr. Sarath Rajapatirana 13:18 And so they have the right to ask, of course, you know, I have never met anybody that I felt that was doing too much, you know, trying to take you on on the discussion. But together we look at it. Dhananath Fernando 13:36 Got it. And Dr. Ajay, in terms of your critique, which even you have mentioned in the chapter, could you provide some basis on why you think it could have been done better in your critique? Could you provide a foundation where it stems from? Dr. Sarath Rajapatirana 13:55 Yeah, I think that it stems from let's say the political ideology of the people. They say going to the fund themselves is to the World Bank at IMF is something they don't like. Let's say the truth. So you go there, and in front of you is a guy who have been doing it for a long time. You have open discussion, and you know why do you say that? Then you say this is the reason, and you can give example of other countries that you worked on, but but they have been successful, but not have been successful, being very neutral about it. So, Dhananath Fernando 14:34 and Dr. Ajay, in terms of you at the beginning you mentioned it's not about money, Dr. Sarath Rajapatirana 14:40 yeah, Dhananath Fernando 14:40 but in for developing countries, the support by the IMF and also again for other developing countries, the support by the World Bank has played sort of a pivotal role in a way of also accessing sometimes the other funding because when you know when you're on a World Bank project. Or when the IF pretty much the backing is there, the other donors are somewhat open to work with you because you know at least there is some level of fiscal management oversight is Dr. Sarath Rajapatirana 15:11 there. That's right. Dhananath Fernando 15:13 How do you see this context? While money is not the, I mean, while money is not the sole reason, it's about the programme, as you said, and the experience. But what we have seen is even if you look at our debt profile, we have borrowed a lot of money from the World Bank at quite concessional rates, and that played a pivotal role because we really did not have to borrow money at those quite expensive rates from the markets for a long time. So how do you see? While you said it's not about the money, but isn't it actually there was a big part the money also brought in when it comes? Dr. Sarath Rajapatirana 15:51 Actually, I said that because country can be left to do what they want to do correctly. We can give you examples of other country that following a particular path was more or better than the path they actually did follow. So that way, there's always reckoning. You are checking: is this going to work for you? And people who generally go and to meet, I held at many teams in different parts of the world. It's a very friendly environment. People, it's not like people expect. You can have a good discussion, you know. So it's good to share this experience. Yeah. Dhananath Fernando 16:38 And Dr. Aybin also in your chapter, what it's basically mentioned is generally the World Bank programmes are quite well targeted. Yes. Dr. Sarath Rajapatirana 16:49 IMF also. Dhananath Fernando 16:50 IMF also. Yeah. How do you see like this better targeting? Where does it like comes from? Whether it's from solid economics or whether there's a different tool law. Why you particularly say it's like I think Dr. Sarath Rajapatirana 17:04 I think one of the thing way to put it is that when you have IMF World Bank programme, it uses economics. Dhananath Fernando 17:12 It Dr. Sarath Rajapatirana 17:13 doesn't have fair. It uses the they basically say it's economics. Dhananath Fernando 17:18 Right. Yeah, Dr. Sarath Rajapatirana 17:18 that is what will Work economic works, Dhananath Fernando 17:21 right? Yeah, and also let's also look at the other countries who basically went through the IMF or the World Bank programmes, and of course most of them are yeah good friends around in this region who have also pretty much taken the World Bank's assistance. Dr. Sarath Rajapatirana 17:41 Yeah, Dhananath Fernando 17:42 would you like to bring some examples whether those countries had a sort of a globalisation friendly policies with their support and prospered pretty much faster, or whether what was like the destination difference? No, I Dr. Sarath Rajapatirana 18:00 think it will be better faster if you follow the right economics. Yeah, economics is there to escape you. Dhananath Fernando 18:09 Got it. Finally, Dr. Patti, any final thoughts? One thing before before the final thoughts, like in in in I think not many people are also aware how the World Bank and IMF also gets their funds, because they, when they enter into a programme with a country, they also secure funds from different. I mean, there's a membership model that every member contributes. Would you quickly give a? No, let's Dr. Sarath Rajapatirana 18:39 start with the World Bank. Dhananath Fernando 18:41 Yeah. Dr. Sarath Rajapatirana 18:42 the when it disappeared about many many years ago, Second World War after Second World War, they want to have a better arrangement. They they want to help their countries develop, and they wanted to get the best out of the money that you get from other other people to help you. So generally, the result of such a evaluation by people who know this business is always better than just saying, "Let's try to do this. But people who have some experience, so there are people also in those countries have very good experience also. Dhananath Fernando 19:29 Yeah, Dr. Sarath Rajapatirana 19:30 and you learn from them, and they learn from you. There is no question about that. Yeah, Dhananath Fernando 19:35 excellent. Any final thoughts, Doctor Rajapatira? Although Dr. Sarath Rajapatirana 19:37 there are one place, okay, Indonesia, Dhananath Fernando 19:40 right? Dr. Sarath Rajapatirana 19:41 Some people hate these institutions. Dhananath Fernando 19:43 Oh, is it? Dr. Sarath Rajapatirana 19:44 Yeah. Who are you? You know. So one guy said, "I don't want to talk to you. Dhananath Fernando 19:50 Right. Dr. Sarath Rajapatirana 19:51 Because I know what you're going to. I said, "I I don't think that's correct. Because then I was very fluent in Indonesian Dhananath Fernando 19:59 also. Right. Dr. Sarath Rajapatirana 20:00 Yeah, so I said, sir, don't say that. That's not right. Then I give you the example. Then he became very friendly and say, no, no, I got it wrong at the beginning. I withdraw that. No, I, I want. I just listen. I'm not going to interrupt, but just just listen. Dhananath Fernando 20:19 Yeah, no, it's a very important point that you brought out because not many people have been in that table, so they are pretty much getting to a judgement by by a critique or a view provided by another person who haven't been in the table. So no one really knows what has been the conversation. Dr. Sarath Rajapatirana 20:41 So yeah, but it's very sensible things people say because you learn from them. From them, Dhananath Fernando 20:46 yeah, Dr. Sarath Rajapatirana 20:46 yeah, Dhananath Fernando 20:47 yeah. Any final thoughts, Dr. Rajapatiranath on the influence on the institutions, mainly the World Bank, on Sri Lanka's globalisation context, and how do you how do you see it? Like even afterwards, there were multiple chapters. Yeah, Sri Lanka. I mean, World Bank has been a main partner, development partner for a long time. Dr. Sarath Rajapatirana 21:08 Yeah, there are many people in the world who don't like the world. World Bank. Yeah, they don't like it. They say, why are you modelling these people? Why are you saying, you know, how do you know they will use the money properly? Actually, you don't know. You have to say when you write a evalu, do a evaluation. You you want to have an idea. What is the money going to spend? Who is going to spend it? How going to monitor it? So those things are there. And what I found was that lot of people are very sensible. They can help you to understand things that you don't understand because they are very different. Each country is very different from the other. So, so I think having overall exposure to the World Bank and the IM is a good thing because you you get an idea of how things could be done. Dhananath Fernando 22:05 Excellent. Thank you very much, Dr. Rajabatirano, for joining us to discuss about chapter five. Dr. Sarath Rajapatirana 22:10 Yeah, Dhananath Fernando 22:11 and we are looking forward for the conversation on chapter six. Dr. Sarath Rajapatirana 22:14 Yeah, chapter six has a lot of other things that I yeah Dhananath Fernando 22:18 absolutely. So please stay tuned and watch our videos and comment, and you can become an Advocata Insider, which helps us to bring these type of videos on a free of charge basis. But by becoming an Advocata Insider, you have the exclusive access for some of our content. At the same time, you can support to uplift the economic literacy in Sri Lanka, so that will end up in shaping up the public policy space based on right economics, as Dr. Rajavatina said, because ultimately the right economics determining the scarcity of resources based on the prices is what helps countries to prosper and progress. Dr. Sarath Rajapatirana 23:01 Now I'm going to say something that should not be should not be exposed anywhere. Okay. So when when India Indonesia one, the guy said I'm an engineer. Right. I don't let economists tell me what to do. Yeah. I said yeah. Okay, so we can talk about it, and then it turns out that you know he expected to see the head of the mission coming. The old man from maybe Westerner is found. That's not the case with me and my assistant who were there, and he was very cross with us for no reason, but we played his game. We went early to this place, and we were there early. And we were we had to climb. He gave that place to meet because he he had this vision of an old man coming and difficulty climbing the chairs. No, we were running up the stairs. Right. Yeah. So at the end of the day, I said when we started, you said you don't want to be influenced by the World Bank and that you are you are in you have a different way of looking at it. But I just want to tell you something. I said I climbed all these steps, but I was very happy that it was made by an economist, by an engineer like you. So because there are some something you can do, there are other things we can do, there are things none of us can do. So he doesn't. So he realised. Then actually, I invited him when he came to Washington. He come and see us. I'll introduce you to the Vietnam to the Indonesian group. Very nice people to talk to. Dhananath Fernando 24:53 Thank you. And so Dr. Sarath Rajapatirana 24:53 that guy really guy realised that he went. So you run into. Dhananath Fernando 25:01 So please subscribe us. You can find us in Singal as Advocata Plus, and also in Tamil as Advocata Kural. We'll see you with another episode next week. Transcribed by https://otter.ai