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Economic or governance crisis?

Economic or governance crisis?

22 Oct 2023

It doesn’t take rocket science to come up with a prognosis on what ails and awaits – in consequence to it – this once proud and prosperous paradise of a nation. Years of unmitigated degeneration in morals, ethics, decency, and ultimately, in every aspect of governance due to poor leadership, have left this country broken at its foundations and, in turn, put its people in the doldrums.

At the time it gained independence from the British, Sri Lanka, or Ceylon, was both literally and metaphorically the jewel in the British crown and was the role model that the likes of Malaysia and later Singapore and even Korea and Japan aspired to in terms of governance and administration. The Ceylon Civil Service that comprised the crème de la crème of the public sector bureaucracy set the standards so high that there was no necessity for bribery and corruption commissions and in fact it is they who dictated terms to wayward politicians.

But as fate would have it, the reign of this exemplary civil service was short-lived, with politicians rapidly encroaching into bureaucratic space over the years, to the point that the entire bureaucracy is now in shambles and corrupt to the core.

The legacy of contemporary politicians – two of them accounting for 96 years of combined parliamentary experience between them and counting – is the introduction of the culture of privilege and patronage, a cancer that is eating into the very fabric of society and the bane of the nation. If not for this numbing cancer, it would surely shock the public conscience that despite the carnage they have collectively wreaked by way of moral degeneration, these politicians appear to be in no hurry to fade into the background through graceful retirement, but rather are busy paving the way for an even longer innings.

Sri Lanka must surely rank among the nations with the most complex legislation on the planet with laws upon laws being legislated on a daily basis that, leave alone a potential investor, even the average citizen is finding it hard to keep abreast of. And the icing on the cake: all of it being rammed through a Parliament that has long lost its mandate; first with the resignation of the original Prime Minister, followed by the entire original Cabinet not once but twice, and secondly with the resignation of the President who presided over that Government. Therefore there is a valid question pertaining to the ethics of a government with questionable credentials introducing laws that will have far-reaching consequences for years to come.

In any other ‘democracy,’ resignations of the prime minister, cabinet, and president would lead to the formation of a caretaker regime solely for the purpose of conducting a fresh election, but not so here, where the caretaker is doing the opposite and in fact folding up the electoral map on various pretences – first the lack of funds and now a sudden urge for electoral reform, the motives for which appear to be dubious at best, given the timing. 

While electoral reform is a necessity, it should be carried out by a government with a valid mandate and not by one with an expired mandate and dubious intentions. Further, in keeping with accepted democratic norms, it is unbecoming of a caretaker President to arbitrarily appoint a select committee to formulate electoral reform at a time when the Election Commission has already sought funds through the next Budget for conducting the Presidential Election due in less than a year.

Needless to say, this committee, like many others appointed in the recent past, will also gobble up millions of rupees in taxpayer funds at a time when the official excuse for not holding the Provincial Polls is lack of funds. What is obvious here is that despite all that this country has gone through in the past couple of years owing to selfish politics, nothing seems to have been learnt, with the same actors resorting to the same script and putting their personal political prospects ahead of the nation. 

For all intents and purposes, though Sri Lanka’s current crisis has largely been attributed to economic causes by the politicians who have presided over it, in the overall scheme of things it has more to do with governance issues and/or the lack of it. It has been said over and over that Sri Lanka’s governance problem stems not from the lack of laws but more due to lack of implementation, lack of political will to do so, and, when implemented on the rare occasion, direct political interference to stifle the process.

It is unfortunate that the political leadership has deemed electoral reform more important than legislative reform to stem the three evils of corruption, waste, and malpractice, holding to account those responsible for bankrupting the economy, and the recovery of misappropriated assets. Late Prof. A.D.V de Silva Indraratna, long recognised as the father of economics in this country, in a report published nearly three decades ago estimated endemic corruption in this country to be around 10% of GDP. 

In the ensuing years, that figure has only headed in one direction – up, while the State has looked the other way. It is regrettable that despite a wealth of evidence made available by foreign entities pertaining to large-scale corruption and money laundering, not a single ‘big fish’ has ever been netted in this country. Epitomising the pathetic state of affairs, the Justice Minister even accused a member of the Bribery Commission of bribery recently.

With the country’s economy having hit rock bottom, the people have all the right to question as to what is being done to stem the rot. If the country’s Justice Minister has no confidence in the only available mechanism to fight corruption despite a new anti-corruption law, where to from here?

One way out of the mess is to immediately work towards making the independent Bribery Commission independent, complemented by creating the post of an independent public prosecutor acting independently of the Attorney General’s office, which is burdened with a clear conflict of interest – acting as both State counsel as well as State prosecutor. It is also unfortunate that the new Anti-Corruption Act has very little scope in stemming State sector waste and malpractice, both of which lead to similar consequences as corruption itself.

Take for instance the Ceylon Electricity Board, which in a space of a few months this year has increased electricity tariffs on three separate occasions, leading to further haemorrhaging prospects of economic recovery. The CEB as expected has been quick to pass on the blame for the latest increase on the IMF – a classic case of misrepresentation of facts – but for the record, the IMF has only insisted on electricity tariffs being ‘cost-reflective,’ meaning that the onus is on the CEB to keep its costs down. 

It is well-known that the CEB is corrupt to the core, with an engineers’ mafia running the show. Wastage and malpractice at the CEB is almost legendary. Staff overtime payments running into many times the basic salary of workers, absurd payments such as for reading a metre correctly, company CEO-style perks for engineers, etc. all add up to driving costs sky high. While no attempt is being made to reduce costs, the entire burden of wastage, malpractice, and corruption is being heaped on the hapless public. 

More so, it will impact the business sector – most notably industrialists and hotels, which are heavily grid-dependent, making our products and services that much more costly and uncompetitive – killing the goose that lays the golden eggs these days.



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