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| Sunday, 9 January 2005 |
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Opportunities in adversity by Surekha Galagoda The tidal wave that swept away more than 3/4 of the coastal belt has highlighted the need for a public sector accounting system, regional investments and a free way along the coastal line. "The disaster should be turned into an opportunity to rebuild the nation removing the shortcomings of the systems that were in place before and introducing new systems to make the country productive to face the challenges of the 21st century. "This has highlighted the need for a public sector accounting system that can report the economic and social value of public assets," Dr Indra Abeysekera Lecturer Department of Accounting and Finance, University of Sydney, Australia said. But as the country does not maintain asset registers at present giving an accurate figure is difficult though the damages to the infrastructure and the loss of public documents are estimated to run into billions, he added. For example in Australia asset registers are maintained by the government therefore at a time of a disaster they are in a position to assess the damages within a couple of hours at the touch of a button. A total of 30500 lives have been lost while the loss of private and public property is immense. More than 3/4 of the infrastructure and property along the coastal area are damaged. He said that all systems have to be established incurring a huge Investment. Therefore it is necessary to look at all aspects and establish a system that can be linked to a central database. At present none of the South Asian countries maintain asset registers. Abeysekera said at the moment the public sector accounts are maintained based on cash transactions but it is barely sufficient to ascertain the value of damages as it does not depict the value of assets or public performance during a given time period. In the event the government knew the values of assets in the public sector they could effectively plan and execute restructuring and rehabilitation of the damages caused by the disaster with the least cost over-runs. He said that the accuracy of the accounts in the public sector must be improved and it can be done by adopting the accrual system of accounting. Under this system of accounts transactions and events of monetary value are recorded as they occur which means that the monetary value of events and transactions are recorded using the double entry system regardless of the time the cash was received or paid on the asset. The advantage of this system is that it can show the performance of the public sector organisations during a period. He said the government should encourage investment in these affected areas by offering incentives. This will attract the investors and thereby help generate employment for people who have lost their livelihood. Fiscal incentives can be in the form of a tax holiday and economic incentives such as granting long term loans at a discounted rate or the government taking part in the ownership of such companies by investing in their shares. When the companies are prospering the government could dispose of their investments at a profit either through the Stock Exchange or through a private placement. The short term strategy of feeding the homeless is not sufficient to rebuild the nation as people need shelter and a livelihood to continue with life, Abeysekera said. He said that the government has decided not to permit the construction of houses along the coastal line and this has freed a block of land which can be used for other purposes. He was of the view that government could build a free way along the coastal line and it can be done on a BOT (Build own transfer) or BOO (Build own Operate) basis which will help the country have an efficient transport network and also get the private sector involved in the improvement of infrastructure. |
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