He was a pragmatist and like a mechanic who had to use the best tool to solve the problem at hand. A mechanic would not be concerned about the country of origin of the tool or its shape or its make as long as he could unscrew a stubborn nut or bolt by using it. What matters to him is the end result: addressing the defect in the machine and make it work again.
Similarly, as an economist, Neville did not have permanent loyalty to any particular school of thought. At one time, he was a classicist. Then, if the situation calls for, he could appear as a Keynesian. At an extreme level, he was a monetarist. On certain occasions, he was a rural economist and a development banker. Before a lay audience, he was a Buddhist economist. In his spare times, he was a mystic well versed in occult sciences like astrology and palmistry. In a nutshell, there was nothing which he could not do or on which he could not offer an opinion. He was a jack of all trades.
Neville: The Pedagogue
The writer’s first encounter with Neville was in 1969 when he was a student of the Vidyodaya University, now known as the University of Sri Jayewardenepura. Neville, a senior economist of the Central Bank at that time was a visiting lecturer at the university taking courses in monetary economics, economic development and banking. The writer had the fortune of studying both monetary economics and economic development under Neville.Neville was practically teaching students in all the four years reading for economics and management and his triumph herald car entering the university gates in the evenings was a common spectacle everyday at that time. Unlike many other lecturers who depend on lecture notes to talk, he relied on his memory and a standard text book to deliver his lectures. He came to classes with a text book, referred to the book occasionally and talked on the subjects in perfect Sinhalese, a language in which he had never received instructions during his academic career. Occasionally, he stopped his talk and asked a question from the students. When students could not give him the correct answer, he explained the answer in full with practical examples.
Neville’s Academic Development
Neville completed his secondary education at Trinity College, Kandy, joined the prestigious University of Ceylon and read for an honours degree in Economics. Having passed the degree examination with honours, he joined the then fledgling Central Bank as a staff assistant in 1953 and was soon absorbed as a staff officer. He was posted to the Money and Banking Division of the Economic Research Department as an economist. Then, he proceeded to the UK and joined another prestigious institution of higher learning, namely, London School of Economics or LSE for his post graduate studies. He came back to the Central Bank armed with an MSc Degree in Economics having specialised in money and banking.
His MSc dissertation, ‘The Variable Reserve Ratio as an Instrument of Monetary Policy’ was later published by the Central Bank. In his mid-career, he got another scholarship to join another prestigious university, now on the other side of the Atlantic, Harvard University. There, he read for a Master’s Degree in Public Administration and Policy, thus joining the rare group of students who have studied economics on both sides of the Atlantic. In mid 1970s, he submitted his published work, ‘Economic Development of Ceylon’ to the University of London and earned a doctorate. He was thus a scholar who never stopped learning.
Ups and Downs in Neville’s Career
Neville’s destiny was such that he had both ups and downs in his career at the Central Bank. He was the Director of Economic Research in 1975 when Felix R Dias Bandaranaike, commonly known as FRD, was the Minister of Finance. FRD desired the Central Bank to paint a rosy picture about the economy in its annual report and Neville resisted it. In fact, he published in the report an account depicting the failure of the nationalisation of the plantation companies by the government, based on the findings of a field study done by some central bank researchers.
To please the Minister, he could have killed the report, but he did not. Like a true professional, he allowed the report to go, but at the cost of his position as the Director of Economic Research. The top management of the Central Bank, having succumbed to the wrathful pressure of the Minister, transferred Neville overnight from Economic Research Department to the Employees’ Provident Fund Department which was considered as the ‘Siberia of the Central Bank’ or a penal colony at that time. This did not deter the jack of all trades in Neville and he set on to modernise EPF. But the work had to be halted midway, because after the elections of 1977, he was brought beck to the lime light by the new government, first as an Assistant to the Governor and within months as the Deputy Governor of the Bank.
Neville: The Non - conformist
Neville had associated himself with banking education in the country having served as a lecturer at the Bankers’ Training Institute or BTI, the forerunner of the current Institute of Bankers of Sri Lanka or IBSL. After becoming the Deputy Governor, his role in BTI became a different kind. He was actively involved with Governor Warnasena Rasaputram in the formation of IBSL as an incorporated body and became its first Chairman in 1979. This too, he could not do for long.
Another descent in his career came in 1983 when he had differences of opinion with the then Minister of Finance, Ronnie de Mel. He was a non – conformist and considered an eye – sore by the powers of the day that were waiting for an opportunity to go for his jugular on the very first occasion available. Unfortunately, by being a noted outspoken person, this coveted opportunity was provided by Neville himself.
When the country went for a new series of currency notes in 1983 depicting fauna and flora and printed by a new currency printer, the country experienced a sudden upsurge of forged currency notes. Neville in an interview with The Island newspaper had told that when the substandard currencies were printed by the Bank against his advice, he knew beforehand that they would easily be forged. This interview was considered by the powers of the day as a crime committed against the authorities by a senior central banker. As a result, Neville lost not only his post as the Deputy Governor but also his job at the Bank. He was compulsorily retired by the Monetary Board of the Central Bank.
Neville and SLEA
As far as the Central Bank was concerned, Neville was now retired into wilderness. But he did not keep quiet. He continued his professional life as an economist. There was Ceylon Economic Association or CEA which had been a vibrant professional body many years ago, but inactive and defunct in 1970s. Neville, together with his other university colleagues, resuscitated CEA as Sri Lanka Economic Association or SLEA and started publishing its quality journal, earlier named Ceylon Economic Journal and now renamed Sri Lanka Economic Journal.
During this period, he also invested his time in the preparation of a research publication titled ‘The Economy of Sri Lanka’ covering the pre and post – independence economic performance of the country. He was a live wire in SLEA and a regular contributor to its Journal.
Neville’s involvement in SLEA was not received favourably by those who were opposed to him. They did not want to join SLEA and hence took action to form a rival association called Sri Lanka Association of Economists or SLAE. Since this new association had the patronage of the Central Bank Governor, Dr Warnasena Rasaputram, it was financially and member-wise well off.
Now the challenge for SLEA was to fund its activities, since there was no official sponsorship for them. Those who were involved in SLEA are aware that Neville stood for a bulk of its expenses out of his personal resources. Hence, the formation of SLAE was not a real threat to SLEA and it continued its professional work unabated. This was a creditworthy achievement of Neville.
Neville: The Governor
But Neville was like a rubber ball. The harder you hit a rubber ball on the ground, the higher it would rise when it bounces back. Hence, a person in the calibre of Neville could not be kept in wilderness for long. Soon there was going to be a change in the political leadership of the country. The incumbent President, J.R Jayewardene was to relinquish his duties and a fresh presidential election was to be held. The candidate for Presidency from the ruling party, R. Premadasa, prevailed upon the outgoing President that he needed reliable officers in key positions.
One such official he wanted in a key position was Neville as the Governor of the Central Bank. Accordingly, Governor Rasaputram who had three more years to go was requested to retire prematurely and Neville was appointed to the Post. This was a grave risk he took, because at that time, the country, engulfed by a youth insurrection, was in mayhem and the key position holders of the government had all been targeted by the youth rebels. The post of the Central Bank governor was such a key position. Yet, Neville, being a daring risk taker, took the challenge and assumed duties as the Central Bank Governor prior to the election.
A Facelift to the Central Bank
With the appointment as Governor, Neville got a free hand in his work. He started to modernise the Central Bank in his own way. The main Central Bank Building which had been in a dilapidated state was refurbished and upgraded; its dusty atmosphere was replaced by a new modern look. He put a stop to the wide spread drunkenness among some central bank officers by enforcing strict discipline.
The Bank’s activities were streamlined with more emphasis on its regional development work. The indefatigable Neville travelled throughout the country promoting development work and development banking. New institutions like the Credit Information Bureau were established. IBSL was forced to upgrade its activities. The writer, as its Director of Studies had to take the lead in developing IBSL with the help of its ever cooperating staff.
The Karunatilake Barrier
During this time, Neville was alerted by the intelligence agencies that the Central Bank had been targeted for attack by terrorists. He took precautions to thwart such an attack. While the Central Bank’s security was strengthened, it was directly connected to the Army headquarters through radio connections to facilitate effective defence of the building in the event of an attack.
He constructed a steel barrier in front of the building to prevent any attack group from entering the premises. It was this barrier, known as ‘the Karunatilake Barrier’, which saved the lives of thousands of Central Bank employees when the Bank was eventually attacked by terrorists in 1996.
Neville: The Institution Builder
Neville had a photographic memory. He could recall any past event or the name of a person he had met in the distant past without any difficulty. One such occasion was when he officiated as the Chief Guest at IBSL’s certificate awarding ceremony in 1989. On this occasion, Neville, in his speech, pulled up the IBSL management for failing to celebrate its Silver Jubilee which happened to fall in that year. To its much embarrassment, the management came to know about it only on being reminded of it by Neville.
Despite such occasional reproofs, Neville extended his full support to IBSL whenever it needed help. On one occasion, when the top management of IBSL had to be dismissed at short notice on account of a grave examination negligence and an interim trouble shooting management team had to be installed, Neville, as Governor of the Central Bank, released a number of competent officers from the Central Bank to manage the institution. This team, working day and night, was able to restore normalcy in IBSL within a short period of time.
Keeping Politicians at arm’s length
Following the tradition of the Central Bank to remain apolitical in the eyes of the pubic, Neville never entertained politicians in the Bank. Nor did he attend meetings chaired by politicians. There were many occasions where branches of the Regional Rural Development Banks were opened in outstations. Yet no politician was invited to these functions by him. He did not attend even the Consultative Committee on Finance at Parliament, but got his Deputy Governor to do so.
On one occasion when the organisers had got the Deputy Governor to be seated in the audience among other public officers ignoring the protocol, he protested to the officials of the Ministry and got seating accommodation for him at the Head Table along with the Minister. He was mindful of the need for providing a good salary to Central Bank officers. On one occasion, he surprised the unions by offering them even a higher salary than the one demanded by the unions.
Neville: The Writer
Neville was very much concerned about research and publications. He himself published a number of books during his long professional life. When he was a Senior Economist at the Economic Research Department, he translated into Sinhalese the standard text book on banking of the day, Modern Banking by R.F Sayers, and had it published by the Educational Publications Department of the Government. This translation filled a long felt need of students studying banking in Sinhala medium at the university level.
He also published a book on Buddhist economics, titled ‘This Confused Society’, questioning the basic tenet in economics to treat man as an economic animal. During his Governorship, he got funding from the US AID to publish under the auspices of SLEA a pamphlet series, authored by reputed economists of the country, on various economic issues of the day. In addition to the hundreds of research articles he published in journals, he himself authored several other books on economics during his academic career.
The Final Descent
But unknown to him, his fate began to make a cruel smile on him once again. When his term was to expire on 30th June, 1992, on account of his good work, all the indications had been that he would be given another six year term. Just before the term was to expire, he attended the Commonwealth Central Bank Governors’ Annual Meeting in London with confidence.
But when he returned to the island, he was shocked by the Central Bank Protocol Officer at the Airport by telling him that someone else had been appointed as Governor from 1st of July. So, Neville’s tenure as the Central Bank Governor ended abruptly and unceremoniously just after two and a half years of holding that position.
Neville: The Advisor
Neville was appointed as an Advisor to the Ministry of Finance thereafter. He operated from a separate office handling regional development and poverty alleviation. All officers of the Central Bank cooperated with him in this task. He got the Central Bank to conduct a comprehensive rural poverty survey island-wide. The data were to be used for policy making on attacking poverty and promoting regional development. But, Neville could not complete the work.
After the Parliamentary elections in August 1994, a new government was voted to power and that government decided that Neville’s services were not necessary. This put an end to Neville’s long public service spanning over four decades. He went into full retirement, but took part in academic work and politics. When the Central Bank celebrated its Golden Jubilee in 2000, Neville published a long book on the history of the Central Bank as an ex – employee and an authority on the subject. This is the only book available today covering the full history of the Bank during its first fifty years.
Neville: The Retiree
Even in retirement, Neville never forgot IBSL. He attended all the convocations of the IBSL with his wife and socialised himself with the alumni and the senior bank officials during the annual alumni dinner. He took pleasure in awarding certificates and prizes to students during the convocation. After all, his life was so much connected to BTI, IBSL and banking education, he could not simply allow it to fade into memory. Until he became seriously ill in 2008, he was a regular attendee at IBSL’s convocations giving it both grace and dignity.
Neville: The Legend
Neville left this world in January, 2010. But his contribution to banking, banking education and Sri Lanka’s economy will be remembered forever. He had educated generations of students at both undergraduate and postgraduate levels at universities and BTI. All these students carry fond memories of his academic wisdom and professional probity. This is what the man has earned as a true professional and it is an earning that can never be priced accurately.
(To mark the six months’ commemoration of Dr H.N.S Karunatilake’s death)
The writer is a retired deputy governor of the Central Bank of Sri Lanka. To read previous columns in the series go to the WatchTower section on the main navigation panel or click on the links below. He can be reached on [email protected]