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| Sunday, 6 October 2002 |
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Biz Buzz by IRIS & AVED Integrity stands out as the most vital ingredient in the recipe for success of a nation and a society. This explains why countries like Sri Lanka with a free market economy, a democratic system of government, basic health care, free education, knowledge of English and a good legal system (ie. adequate laws, but not necessarily effective administration of justice), languish in poverty and stagnate economically. One clear advantage China has over Russia in developing economically is the absence of a Mafia, a corrupt Police force and business practices lacking credibility. China's economy had been growing around eight per cent or more per annum for the last decade or longer. Russia has had economic turmoil, bank crises and an erosion in the financial system. FDI flowing into Russia when compared with China (US$ 50 billion last year) is a droplet. The extent of distrust in the system of Russian business is high. Consequently, exporters of goods to Russia seek confirmation from a London or European bank on irrevocable Letters of Credit issued by Russian banks. Importers of Russian goods have lost money due to non-delivery of goods. All these add to transaction costs and erode competitiveness. Singapore is a model of integrity in business transactions and governance. Its economic performance is the envy of other successful South East Asian countries. Its vast financial reserves are estimated to last eight years of zero growth. It is the most preferred destination for regional headquarters, liaison offices and entrepot trading. It is a regional hub for sea and air transport. Its transaction costs are low and economic uncertainties few. As a result, business planning and corporate budgeting are relatively easy and meaningful. Integrity of business, public administration, the judicial system and governance in Sri Lanka is a mixed bag. There are many shining examples of integrity in the corporate sector, Department of Inland Revenue, the Police and other arms of public service. But there are a greater number who accept dishonest practices as an unavoidable way of life and a good many who resort to those possibilities. A Sri Lankan public servant had to recently face the rap of a regulatory agency of a foreign government for not expeditiously investigating alleged irregularities in official trade documents of a Sri Lankan exporter. The official concerned, under pressure from the business community not to impose on them more stringent rules than those suppliers from neighbouring countries with a lenient bureaucracy had had to contend with, had not pursued the complaints vigorously. It had been argued that public officials of those countries supported their private sector by turning a blind eye to irregularities and that Sri Lanka should follow suit. Such practice may help a group of traders in the short term, but in the long term, they and their country's economy will suffer, making it easier for Singapore and countries with sound business practices to attract a greater share of trade and investment. Europe and other advanced countries have reaped the benefits of integrity in business and public administration. Strict enforcement of laws, expeditious and fair administration of justice, penal action against offenders, recognition of good governance and upholding principles of justice can make Sri Lanka too a society with high integrity. Persons holding influential positions should avoid interfering in the administration of the Police and other public functions. The political leadership should, as has already been practised by a few, make it known that any interference with executive and law enforcement functions would be severely dealt with. It will be good to see, like in the British press, wide publicity given to cases of drunken driving or similar offences by a Minister or a senior public official or their family members. Publication of names and photographs of offenders in Singapore was an effective deterrent against acts of public nuisance. Singapore also launched many social marketing campaigns to change the outlook and perception of its society on issues such as integrity. Sri Lanka, in its quest for economic development should emulate and adopt such practices and campaigns. |
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