ECONOMYNEXT – Sri Lanka President Ranil Wickremesinghe had called Maldives’ President-elect Mohamed Muizzu to convey his felicitations and expressed hope for stronger expand strengthen relations.
“During their conversation, President Wickremesinghe expressed his heartfelt desire to elevate the existing close and friendly bilateral relations into a robust and multi-faceted partnership,” a statement said.
“Both leaders emphasized their commitment to the betterment of the citizens of Sri Lanka and the Maldives, with President Wickremesinghe highlighting the pivotal role of enhanced economic cooperation.
“This expanded cooperation aims to encompass diverse fields such as education, healthcare, bilateral trade, and investment, promising mutual growth and development.’
Large numbers of Sri Lankans are employed in the Maldives.
Maldives as a less activist monetary authority where economists do not try the same tricks such printing money to boost growth under ‘data driven monetary policy’ and an external anchor keeps them in check.
Unlike in Sri Lanka the International Monetary Fund has generally allowed the external anchor to tie the hands of the economic bureaucrats, making it less easy for them to print money, engage macro-economic policy and trigger currency crises.
As a result the country has grown steadily and is now importing labour. Sri Lanka also used to import labour before a central bank was set up in 1950 allowing inflationist economic bureaucrats to create monetary instability.
The Maldivian Rufiyaa which traces its origin to the Indian rupee at 4.70 to the US dollar at the beginning of the Bretton Woods has only depreciated to 15.3 to the US dollar so far.
Sri Lanka’s inflationist economic buraucrats have busted the rupee from 4.70 to 325 so far. Of that 113 to 325 came after the end of the civil war amid flexible inflation targeting and aggressive macro-economic policy to target potential output, denying monetary stability to the people. (Colombo/Oct01/2023)