Business Times

Life and times of Dr. H.N.S. Karunatilake

Tribute to a distinguished Central Banker and scholar
By Prof. S.S. Colombage, Senior Professor,Open University of Sri Lanka and former Central Banker

The book, “Life and Times of Dr.H.N.S. Karunatilake” is a fitting tribute to the former Governor of the Central Bank of Sri Lanka on his first death anniversary. This publication was launched at a commemorative ceremony held at the Sri Lanka Foundation Institute on March 12. Renowned scholar Venerable Thirikunamale Ananda Thero delivered the commemorative lecture highlighting Dr. Karunatilake’s excellence in his multi-faceted roles as a devout Buddhist, as a valiant patriot, as a distinguished economist, as an accomplished scholar, as an independent central banker, as a disciplined administrator, and as a kind-hearted employer. It was a solemn occasion for the family members and relatives, former and current central bankers, financiers, friends and well-wishers to express their sincere gratitude to this outstanding and outspoken gentleman who never compromised his noble principles for personal gains.

Dr. H. N. S. Karunatilake

Contributions to advancement of knowledge
Dr.Karunatilake – Neville – to his friends was widely acclaimed, among other things, for his immense contributions to the fields of banking, finance, rural development and poverty reduction. In addition to his enormous responsibilities in the Central Bank, he took the trouble to teach Economics at several universities at a time when there was a severe shortage of staff in the universities to teach the subject, particularly in Sinhala language.

This gave him an opportunity to train many of today’s high ranking scholars and practitioners in the fields of Economics, and Finance and Banking. He taught at the University of Sri Jayawardenapura (then Vidyodaya University) and the University of Colombo. Dr. Karunatilake was well known for his devotion to students. As rightly stated in the commemorative book, he was proud to see many of his students achieving high positions in the Central Bank, Ministries and various other organizations. He was also instrumental in setting up the Bankers’ Training Institute (presently, the Institute of Bankers of Sri Lanka), and he became the first Chairman of the Institute.

The Sri Lanka Economic Association (SLEA) became prominent during Dr. Karunatilake’s tenure as its President with numerous activities including the publication of bi-annual “Sri Lanka Economic Journal” and the USAID funded monograph series on contemporary economic issues and regular public economic forums.

Firm believer in independent central banking
Dr. Karunatilake strongly believed in the concept of independence of the Central Bank which has become globally fashionable nowadays. As articulated in the commemorative publication, he bravely expressed his candid opinions on various economic policy issues. Specifically, the Annual Reports of the Central Bank for the years 1975 and 1976 prepared under his close guidance were critical of the nationalization policies adopted by the then government stressing their adverse repercussions on domestic investment, foreign aid, foreign reserves and other macroeconomic variables.

As the Governor of the Central Bank, Dr. Karunatilake made an enormous contribution to restructure the Bank to fulfill its mandated objectives. He paid special emphasis to expand financial facilities to the rural poor who have no access to formal banking institutions. He, therefore, revitalized the network of Regional Rural Development Banks to provide savings and credit facilities to the low income earners so as to supplement President Premadasa’s “Janasaviya” poverty alleviation programme.

While helping the poor at the grassroots level, Governor Karunatilake also kept a critical eye on the government’s economic policies in his own style. At the macroeconomic level, he was very much concerned about the financial and price stability as well as economic growth of the country at the height of the southern youth unrest. He implemented robust monetary and financial policies, which later helped to accelerate financial activities and economic growth to unprecedented levels.

He also gave high priority to liberalize the financial sector by introducing far reaching reforms and to maintain stability of the financial system by strengthening the supervision arms of the Central Bank. Also, Governor Karunatilake took initiatives to evolve a centralized database system to collate and disseminate district level socioeconomic profiles by setting up an Operations Room at the Central Bank equipped with the state-of-the-art information technology.

As stated by S. Pattividaa, Secretary of the Commemorative Committee, in his address to the gathering, many of us would not have survived the terrorist bombing of the Central Bank in 1996 if not for the visionary strategy of Governor Karunatilake. He had the far-sightedness to calculate such threats way back in 1990, and took action to install steel barriers and electronic security devices for the safety of the bank employees and the general public. Those precautions saved several hundreds of lives.

Young economists nurtured
Dr. Karunatilake nurtured many young officers in the Central Bank showing them the way how to apply the theoretical wisdom they gained from the university to analyze the day to day economic and financial problems and to formulate prudent policies to deal with them for the benefit of the masses. I was fortunate to join the Economic Research Department of the Central Bank immediately after my graduation at Peradeniya when Dr. Warnasena Rasaputra was the Director of Economic Research, and Dr. Karunatilake was his deputy.

As raw graduates, we were compelled to make presentations on different economic themes at regular research forums held at the Bank, sans the luxury of now common multimedia facilities, of course! We were always encourage to write papers and publish them. The ‘Staff Studies’, which was the Central Bank’s flagship publication at one time, also emerged during that period providing a launching pad to the Bank’s researchers to disseminate their scholarly work in a professional manner. Dr. Karunatilake along with Dr. Rasaputra contributed immensely to launch and to continue that professional journal for many years. Many of us are indebted to both of them for their visionary thinking that guided and inspired us to get deeply involved in economic research.

Uncompromising personality
Dr. Karunatilake was bold enough to call a spade a spade even in the presence of the highest authority of the land. This honorable quality forced him to sacrifice his lucrative positions in the Central Bank many a times, as mentioned in the commemorative volume. But Dr. Karunatilake never got disturbed in the face of such irritable incidents, which others considered as his downfalls, and strangely, he enjoyed every minute of such calamities with a smiling face reflecting his undaunted personality. He always wanted to serve the motherland, and therefore, he did not look for foreign assignments even at the worse times of his career.

On several occasions, he declined the government’s offers of positions such as the Alternative Executive Director post in the IMF and an Ambassador posting to Germany.

As noted in the commemorative publication, Dr. Neville Karunatilake had some opponents within and outside the Central Bank who could not tolerate his unblemished and straightforward qualities. Nevertheless, he won the hearts of the majority for the very same qualities as vouched by the vast crowd gathered to commemorate his first death anniversary.

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