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| Sunday, 29 June 2003 |
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Features |  |
| News Business Features Editorial
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Post-Tokyo: policy imperatives by Amrit Muttukumaru Irrespective of fortuitous circumstances, the pledge of US$ 4.5 Billion of donor assistance spread over 4 years for the reconstruction and development of Sri Lanka is a defining moment in the country's history which gives us yet another opportunity to make a complete break from our suicidal past practices. This writer is of the view that under the circumstances, such a metamorphosis is most unlikely and it could be another missed opportunity and this time with terrible consequences. It is sincerely hoped that he is wrong and that such a change will occur. In last week's instalment of this article, the focus was on the peace process with specific reference to the proposed interim administration. In this concluding instalment, we will examine some of the critical factors responsible for keeping this country in its present parlous position while also highlighting some of the urgent policy imperatives needed to extricate us from this dire position. Only such a change will enable the effective utilization of this unprecedented quantum of donor assistance. Aid Utilization The utilization of aid in this country has always been weak and has been worsening in recent times. It has hardly ever exceeded 25%. It was only a mere 16 % in 2002. Nevertheless, this low rate has not prevented rampant waste and corruption in this country. When this is the reality, can we imagine what could happen with the proposal of the Finance Minister to raise the same to 45% by end 2004? What is the basis for the miracle that will virtually triple aid utilization? Our public service that is tasked with this responsibility has been described by no less a person than the Secretary to the Prime Minister as "corrupt, inefficient and bureaucratic" while also asserting that its overstaffing is the highest in Asia, if not the world"! He had reportedly made these observations in his keynote address at a seminar on the Public Service Commission (Island 12 June, 2003). Mr. Bradman Weerakoon arguably our most experienced public servant having been secretary to a record number of prime ministers certainly should know what he is talking about. Other reasons for weak implementation include deficiencies in project formulation and the snail paced legal system. Under the circumstances, isn't this 45% target rate for aid utilization in 2004 an absurdity and if this is foolishly pursued with will it not result in lowering the quality of projects and their implementation as well as breed inefficiency, waste, corruption and environmental denudation leading to social disruption? How can a government and a bureaucracy incapable of coping with flood relief in a few districts recently, undertake the massive task of efficient and socially responsible aid utilization amounting to US$ 4.5 Billion? Apart from the Presidential Task Force for disaster management, there are at least another 5 agencies which have responsibility for this subject! Worse than all this is the management nightmare resulting from the record 70 ministerial contingent composed of 25 cabinet, 35 non-cabinet and 10 deputy ministers with the irrational allocation of subjects with unabashed duplication. Sycophancy A potent reason not only for low aid utilization but for keeping this country down at its present level of appalling mediocrity is the sacrificing of merit due to the politicization of the public service, the old boy network in key appointments and the sycophancy it breeds. An inevitable feature of these arrangements are square pegs in round holes. Very often government tenders are also fixed on this basis. You name it, there is a committee or task force for anything and everything in this country, mainly composed of a select group of pliant or sycophantic persons who are re-cycled into several such committees. Even the peace process is constrained by this approach. Under these circumstances, there is no scope for independent and individual initiative that dares to go against current trends. This sycophancy has spread its tentacles throughout the body politic of this country which also includes large sections of the leadership of our business and professional community, religious clergy, NGOs and others. Indeed, civil society itself has been hijacked at the Tokyo donor conference by a select coterie of favoured NGOs. We have been pathetically reduced to a largely servile people where even well intentioned questioning or criticism on first principles is frowned upon. Hence, should the present plight of this country which is hurtling towards anarchy be a surprise? Consistent with this, the Constitutional Council set up under the 17th Amendment to the constitution to purportedly ensure the genuine independence of key public institutions such as the police, elections, public service, media, judicial, human rights as well as bribery and corruption commissions has unsurprisingly turned out to be essentially a cosmetic exercise. Many of the commissions are not even functioning. The Constitutional Council which is packed with lawyers seems to have largely appointed/recommended to the other commissions persons who they are comfortable with and who will not upset the status quo. The Human Rights Commission too seems to be imbued with this ailment. Although drastic legal reforms are imperative if this country is to move forward, it is very unlikely that this will ever materialise given the nature and vast influence of the legal fraternity in the affairs of this country. The same holds true to the accounting and auditing profession. All indications are that this affliction is spreading to the setting up of the Press Complaints Commission and the Sri Lanka Press Institute whose purported objectives are inter alia to enhance press freedom, prevent any abuse by the press and promote professionalism among journalists. Premature Privatization A looming danger with socially disruptive consequences is the premature privatization being forced on us by the proponents of globalization mainly the IMF, World Bank and WTO presumably at the behest of the US Treasury. There is much that can be said in favour of private sector philosophy chiefly competition, entrepreneurial spirit and the play of market forces subject to a fair regulatory mechanism to avoid abuses. The benefits of private enterprise will only accrue in the context of at least an acceptable degree of good governance, the strict application of the rule of law, the availability of a pool of competent managers, literacy in the English language, high productivity and above all discipline. Very sadly, 55 years after independence, Sri Lanka is highly deficient in all of these essential attributes. Most tragically, things are worsening and worse than all this is that at the Tokyo donor conference, these have been for the most part ignored or at best merited only a cursory reference. Management and technical education in this country is still largely at a relatively mediocre level. Why is it that our private sector has never shown any serious initiative to establish at least one world class management institute and technology institute? In the absence of this, how can Sri Lanka ever aspire to be a player of any significance at least regionally let alone on the world stage? Even a cursory comparison of the calibre, management competency and savvy of our captains of industry and commerce with that of their peers in the region such as India, Singapore and Malaysia would largely prove to be quite an embarrassment to us! Apart from all this, the regulatory landscape in this country is reflective of the atrocious state of our corporate governance with conflict of interest being its trademark. This includes the apex Securities and Exchange Commission, the Institute of Chartered Accountants and the Accounting and Auditing Standards Monitoring Board. The Bank Supervision Department of the Central Bank and the Attorney-General's Department have also made their own significant contributions to our horrible state of corporate governance. Under these and the other circumstances highlighted in this article, it is a futile and wasteful exercise to host extravagant investment forums around the world. Such forums at best can only hope to be of some interest largely to short-term, low technology and speculative investments to the exclusion of ethical, long-term and technologically savvy investments. Conclusion To sum up, the unprecedented donor funds pledged in Tokyo will only flow in if there is tangible and sustainable progress in the peace process which in turn is dependent on grasping ground realities and responding accordingly. In this connection, the required degree of bipartisan consensus between the UNF Government and the Executive President cannot be overemphasized. This is a challenge that should imaginatively be met with responsibility. Even if the funds flow in, in the absence of factors such as - an efficient and transparent mechanism to promote its rational utilization, all round good governance with accountability both in government and the private sector, strict adherence to the rule of law, merit being the sole criterion for the placement of human capital, steps being taken towards having a pool of competent managers and enhanced productivity, discipline as well as an acceptable degree of political stability, it would ultimately prove to be a liability by worsening our already crippling debt burden and social tensions. The single largest challenge facing this country is whether we have the capacity to completely break away from our past suicidal practices. This can only be a reality if there is political will and willingness for some risk taking underpinned by genuine love for the country. It is hoped that it is not an exercise in futility to expect our government, political leaders and leaders of civil society to at least this time put the interest of the country at the top of their agenda. The role of leaders of civil society to apply meaningful pressure on our political leaders and act as a watchdog also cannot be overemphasized. Can one be faulted in assuming that apart from the essentially customary cosmetic posturing, it will be business as usual until the eruption of the next calamity? The consequences of such nonchalance will be catastrophic this time around. The choice is ours. |
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