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| Sunday, 29 February 2004 |
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Features |  |
| News Business Features Editorial
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'Wheeler dealers feel threatened with JVP as watchdog' by Hana Ibrahim Management Consultant Nihal Sri Amerasekere is what one would call a modern day crusader battling the crimes of economic mismanagement and its accompanying fallouts, fraud and corruption through public interest litigations.
A former senior consultant on World Bank and USAID funded projects and a Consultant/Advisor to the Government, he has successfully prosecuted in a civil action the fraud in the Hilton Hotel construction setting a precedent for derivative actions in law. More recently he filed a writ application against the Inland Revenue Act, which he terms 'perverse' and which granted amnesty to a large number of tax defaulters. Vehemently opposed to a Colombo-centric business hierarchy dictating policy that determines the welfare of the larger segment of entrepreneurs and the productivity of the country, here he talks about economic mismanagement, the infamous Inland Revenue Act, the benefits of a SLFP-JVP alliance, proper governance, corruption in the private sector and the need for electoral reforms to usher in good governance. Excerpts of the interview Q: Yours has been a dissenting voice, critical of policy formulation determined by a group of Colombo based entrepreneurs. But successive governments have depended on these entrepreneurs to help policy planning. Why do you think Colombo based entrepreneurs are not the right people to help formulate policy? A: Entrepreneurs of the country comprise not necessarily the business community based in and around Colombo or the urban centres, but also the larger segments of society involved in agriculture, paddy cultivation, fisheries industries, retail trade, small and medium industries... Overall economic planning must take into consideration the needs and aspirations of all those segments, catering to their needs if we are to develop a sound population based policy, and make all segments of society feel the impact of development. Unfortunately, for several years, perhaps since Independence, the opinion making, the decision making process, the push for policy formulation is from a so called business community which is centred in Colombo. I do not consider the entirety of them as entrepreneurs. Some of them are merely directors and executives who are working for salaries, incentives or perks and commissions. Some in this large Colombo based business sector, as is well-known, are not actually involved in pure and simple business, but are also involved in pushing and peddling deals, which lead to the contemporary issue of fraud and corruption. Q: Fraud and corruption have often been viewed as issues specific to the public sector. Would you agree? A: No. One has to look at all sectors, particularly the private sector. When you go through a process of privatisation whereby you transpose public resources into the hands of the private sector to be managed by the private sector in a public-private partnership, there has to be accountability of those public resources managed by the private sector. Accountability to the people, accountability to the office... therefore fraud and corruption is not a facet that has to focus on the government sector. It encompasses the entire gamut of the business community. Q: You are a strong opponent of the Inland Revenue Act and have gone as far as to refer to it as a 'fraud perpetrated on the public' and have even initiated litigation. Why do you think of it as a 'fraud'? A: The perverse tax amnesty is a subject I've been pursuing for the last nine months or so. It is titled as the Inland Revenue Act, but it does not deal with inland revenue. It is craftily so titled and presented, misleading the public, perhaps even parliamentarians. But as per the schedule, it deals with a number of other statutes... Customs Ordinance, Excise Ordinance, Import Export Control Act, Exchange Control Act, Business Turnover Tax Act, the GST Act... so how can this be defined as Income Tax or Inland Revenue. One has to be dishonest if one is endeavouring to so hold out and it has been so held out to the people of this country. Q: Just how serious a flaw to good governance is the Act, and how does it perpetrate fraud and corruption? A: The 2004 budget estimates a total Tax Revenue of Rs 251 billion from all forms of taxes. The budget also estimates the level of borrowing this year to increase to Rs 350 billion. Last year our foreign and domestic debt level rose by Rs 190 billion. Capital expenditure budgeted for the development of the country for 2004 is Rs 140 billion. Now this perverse tax amnesty write off, collectible on books, is estimated to be Rs 200 billion or more. Would one run his own household in this fashion? Where your debt level is rising, does one go writing off Rs 200 billion, conferring privileges and bonanzas to a privileged few. Not to those who have contributed to society, but to those who have perpetrated fraud, violated the statute of Exchange Control, Customs Ordinance, Import Export Control Act or the Excise Ordinance. These are laws to enforce the Rule of Law in society. These tax revenues are the resources or the wealth of the people. Governments are not elected by the people to squander the wealth of the people. Q: Corruption being the norm in most aspects of society, one gets the feeling that the public have become resigned to what's going on. There is no public outcry, no public agitation on any of these issues. Why is that? A: Public outcry will come. It is there in the JVP developing its vote base. And why is there a fear psychosis? It is because of the JVP leadership. There has been representation by the JVP. In fact the JVP themselves joined me in intervening as a petitioner, challenging the Inland Revenue Bill in the Supreme Court. If you take article 27 of the Constitution, though it is not justifiable, a government cannot go back on its duties and obligations. Chapter 6 of the Constitution sets out the directive principles of the state policy and fundamental duties of government. And even though they are not justifiable to guide the government in governance, one cannot kick these articles enshrined in the constitution. Q: This brings one to the question of the election of people to public offices. Shouldn't there be some criteria. What should be the qualification for a political leader? A: The people must decide. He/she should be acceptable. But today the electoral system is such, the party decides. And the preferential system. So even if the person is not fit and proper, the system is such that he will get the vote for the party. No political party has a healthy dialogue within the party, like in the US or the UK, where there is a debate as to whether he is fit enough to hold office or not. That's why you need to have a change in the electoral process. Q: The United Peoples Freedom Alliance (UPFA) is being viewed with a certain degree of apprehension especially because of the JVP and especially by certain segments of civil society and the business community, who fear economic restriction of some form or the other. How do you view the alliance? A: This is in my view a good development, but it is being made out to be a bogey because those persons who did wheeler dealing to enrich themselves feel threatened. That's a good sign. That the plundering of resources and the placing of public resources is now having a watch dog and they feel uncomfortable. I think it is a very healthy sign of JVP coming in. It is a good sign that there will be some interaction of good check and balance to have at the end of the day a proper system of good governance evolving. These persons who have plundered the public resources are feeling fearful. What is there to fear. These are the very same segments that talk about transparency and public accountability. Q: How serious a drawback will the JVP's past be in its journey towards responsible governance? A: The LTTE has also had a very horrendous past. All political parties, at some point or the other, even the major political parties have had horrendous pasts. It is a process of politics in every country. Ultimately, you can't blame, you have to go to the cause as to why there was insurrection. Naturally there will be insurrection again if you don't rectify the mistakes, if you are going to plunder monies like you did on the tax amnesty, evidently the impact of it will be felt and the insurrection will be justified. The recent series of strikes ... more than the cause is the social unrest. If all the people had a good source ofincome, quality of life and living conditions, it will be very difficult for them to be moved into the street. But if that quality and the survival cycle becomes more and more difficult that will move people to revolution. The perpetrator of the cause is the major crime than the person who acts in reaction. It is like acting in self-defence. Q: What constitutes good governance A: There is no question of good governance and bad governance. Governments are elected to govern the country. The question is whether a government is able or capable of governing a country. You cannot manage in a bad way. One example that can explain the whole issue is that the Prime Minister caused several key ministries to be conferred on one person. Ministry of Transport, Ministry of Highways, Ministry of Aviation and Airports, and in addition to that Ministry of Defence. It is not a question of a large volume of work, it is a question of those ministries providing very important public services. How can one person be conferred with all these responsibilities. Whether you trust a person or whether he is capable is not the issue. It is the time factor. Can that person manage it? Or is that he is only a front and some other hidden hands are carrying out the functions of those ministries, who will not be responsible and accountable to public. And this poor minister will be held accountable and responsible. The ultimate the goal of good governance can be achieved if governments adhere to Article 27 of the Constitution very clearly laid out to create a just and free society. |
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