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Back to basics

21 Jun 2020

President Gotabaya Rajapaksa's now-famous venting of frustration against the Central Bank hierarchy has been the talk of the town in the past week. Opposition parties as expected have been quick to pounce on it and come up with their own interpretations of the episode, some complimentary and others capitalising on the opportunity for some useful pre-election mudslinging. Rather surprisingly, the complimentary remarks came from the beleaguered United National Party (UNP) whose spokesmen were quick to chorus that it was the very same Central Bank that also derailed the party’s economic plans and consigned it to history. Not surprisingly though, no mention was made of the Bond Scam that plagued almost the entire tenure of its rule and soured its relationship with the Central Bank. Meanwhile, the sum of the not-so-complimentary observations that came from other parties was to the effect that the Government's economic policies had failed and the Central Bank was being made the scapegoat. Be that as it may, the issue at hand here is that Sri Lanka has an unsustainable, bloated public sector that is more about quantity than quality. And that includes the Central Bank which for all intents and purposes has been found wanting in fulfilling at least some of its entrusted duties such as the supervision of financing and leasing companies which are in the eye of another, separate storm. It was only a week ago that the same set of officials met the Prime Minister in his office in a more amiable environment where the modalities of paying compensation to depositors of failed finance companies were discussed in detail. Therefore, the thunder and lightning that erupted at the meeting with the President must surely have come as a shock to the participants, which included the Governor himself in both instances. Former Central Bank Governor and current Senior Economic Advisor to the Prime Minister Ajith Nivard Cabraal ironically echoed the same sentiment as the UNP when he claimed that it was difficult to work with or get things done with the current set of officials at the Central Bank. What he failed to say is that it’s not a problem confined to the Central Bank but one that is common to almost every state institution currently in existence and that it is not something that happened with the last shower of rain. The systemic dysfunction we see today is the result of years of political influence coupled with lethargic management and an inefficient bureaucracy that has survived on not being accountable to anyone. The rot, or packing the state service with political cronies, began in the 70s and 80s with the notorious MP’s “chit” system and then escalated to epidemic proportions in the 90s and 2000s to become the debilitating crisis it is today, thanks to politicians using the public service as their personal job bank. Politicians from both sides of the political divide should be held responsible for the current state of affairs with the sole criterion for selection of the great majority of appointments being party affiliation and not professional credentials. It is a well-known fact that our state sector is far above sustainable capacity. Sri Lanka currently has an estimated state sector workforce of 1.5 million for a population of 21 million which economists believe is at least 25-30% above the desirable level. To be fair, if we consider the last three decades starting from 1990 to date, the UNP has been in power for a total of 10 years out of 30 and a decade apart on each occasion; it held office while the Sri Lanka Freedom Party (SLFP)-led governments have dominated for much longer periods, accounting for 20 of those years in much longer segments. Nevertheless, as the age-old Sinhalese saying goes: “Bandegattha bere gasiya yuthui”, meaning: “You have to play the drum that you strapped to yourself.” Shedding state employees will be political hara-kiri which no party will do or has ever done. The farthest any government has gone is to enforce a freeze on state sector recruitment which the UNP learnt to its detriment is politically suicidal. So, what then is the way forward? How does one get things done from square pegs in round holes? That is not to say that there are no knowledgeable and efficient public officials who diligently go about their business. There certainly are and the institutions they serve are testimony to it, but sadly, they are vastly outnumbered and overwhelmed by institutional mediocrity. The danger is that if the status quo is allowed to go on, politicians and parties, no matter what noble intentions and plans they may have for the country, are bound to learn the hard way that things are easier said than done. Institutional incompetence has been around for so long that it has evolved into a way of life at many state institutions. The sad part is that this is not due to lack of commitment or lack of loyalty on the part of individual employees, but rather the systemic incompetence ingrained into the DNA of the public sector over a long period of time due to the lack of political will, discipline, and supervision. The only way out is to set the right example from the very top, which is what the President seems to be doing. His tongue-lashing of the Central Bank bosses is consistent with his work ethic of being result driven, which is something alien to the state sector and bureaucracy at large. The President who is not a career politician, which in fact was his unique selling point at the presidential election, is obviously not one to care for political considerations and is only interested in getting the job done. This straight-up approach must surely be causing palpitations in his own political camp, but it is also about time that a political authority took the bull by the horns. It is important that the party in power throws its weight behind the President’s efforts to streamline the system and carry forward the headway being made in order to create a more transparent and efficient state sector. At the end of the day, whatever party is elected to office at the next poll must accept and reconcile itself to the fact that it will have to work with the elected President for the next five years. It will therefore be prudent for the victor to work with the President rather than try to run a parallel administration, which was the downfall of both the UNP and SLFP in the last such attempt. As we have previously mentioned in these columns, now is not the time for vanity projects or egoistic development. The focus should be getting the basics right and getting the maximum out of the institutions and systems in place for the benefit of the people. Lean and mean should be the name of the game in the next couple of years, allowing time for economic recovery to take root. In the post-Covid world, we have the opportunity to come back stronger if what is preached by the President is actually practiced by those under him.


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