Corruption is the biggest cancer in society
View(s):Corruption is the biggest cancer in the society and ‘we’ see the private sector corrupting the public sector and vice versa, according to a top professional and good governance activist.
Deputy Minister Eran Wickramaratne and Bar Association of Sri Lanka President-Elect Geoffrey Alagaratnam share a light moment.
Chandra Jayaratne, top business professional and good governance activist, addressing a panel discussion at the National Law Conference of the Bar Association of Sri Lanka under the theme ‘Sri Lanka Legal Summit 2015 – Governance, Regulation and Investment – The Way Forward’ on Wednesday said that all sectors of society have failed as ‘we have allowed’ bad governance. It’s important to voice when something is wrong, he said, adding that what needs to change is the ‘tone at the top’ and the ‘culture’. “Culture is the holy grail of good governance.”
Dr. Jayampathy Wickramaratne PC made the main presentation on ‘Governance Reforms’ which was the first technical session that Mr. Jayaratne was in. This panel included Bar Association of Sri Lanka President-Elect Geoffrey Alagaratnam PC, who acted as session chair; former Supreme Court Judge Saleem Marsoof, PC; Solicitor General Suhada Gamalath, PC, and the former Dean of the University of Colombo Law Faculty, N. Selvakumaran.
Mr. Alagaratnam suggested that in this backdrop of advocating good governance, the tax files of the politicians should be made public and also how they obtain funding for their parties should be made public. s
Mr. Jayaratne also highlighted that the new constitution should address the issue of who is supreme whether it’s the judiciary or the Executive. “What has happened (in terms of removing Chief Justices in the past) is a bad dream. Let’s hope it’ll never be repeated,” he said.
Mr. Selvakumaran noted that in the proposed amendments to the new constitution, it needs to be ironed out whether the President will be nominal or not. “If he’s to be a nominal President, then electing this president through an election is a burden on the national economy,” he said, calling to striking a balance between the powers of the President and how much money is going to be spent in electing him. Mr. Wickramaratne noted in response that the election of the president isn’t addressed in this constitution and that he will play a facilitator role. To this Mr. Alagaratnam pointed out that sovereignty is in the ‘people’. “People should realise their rights. This was somewhat evident in the last election.”
Mr. Marsoof joining in noted that during the past regime a fair amount of corrosion in the judiciary happened with impunity. “Good governance is a change of system. We hope the Yaha Palanaya will be bettering this country,” he said, making a strong case for anti-favouritism in appointing judges.
Mr. Gamalath agreed saying that appointing judges was a highly politicised exercise in the past. “We need to make sure that this will never happen in this society.”
Hiran Cooray, Chairman of Jetwing Hotels Group addressing the crowd on the panel on investment noted that one of their key challenges was getting approval (for new projects). “When we send our papers for approval, the authorities first look at how to stop it,” he said.
Saying that bribing was real, he added, “The only way you can activate it is if you give something and because we don’t we have to budget 12-18 months – wait 12-18 months where they (authorities) find different excuses not to give approval,” added Mr. Cooray, explaining how new projects were blocked by corrupt officials or inefficient regulation.
According to him local investors might have the patience given their commitment, but not so with foreign investors.
He added that the ‘one-stop-shop’ office in the tourism authority meant to speed up investment was “literally non-functional.” “It’s a stop – not a shop. If you go there you get stopped.”
At the panel discussion on the role of the regulator, Central Bank (CB) Governor, Arjuna Mahendran in order to negate explicit conflict of interest, when the EPF invests in banks’ shares that are regulated by the CB, noted that one way to address this conflict of interest of the EPF is establishing rules and ways of conducting business that would ensure risk in its broader sense is managed effectively.
“I have recently opened up a new department in the bank – Department of Risk Management and the CB is currently working with institutions in the United States and other developed countries on knowledge transfers to enhance risk management functions of the bank.”
He added, “I wouldn’t want to jump the gun and divest these (shares of listed banks) immediately, though it is desirable, because we have to have more liquidity in public markets for these bank shares, and indeed all the other shares which have been acquired by the government through the EPF in the last few years.”
Disagreeing with Mr. Mahendran, the Deputy Minister of Policy Planning and Economic Affairs, Dr. Harsha de Silva said, EPF management must not be a function of the Central Bank under any circumstances. “There are enough public and private sector agencies to do this. The regulator can’t trade in related entities.”
He said that this is incestuous and that the CB investment strategy should be rethought.
Dr. de Silva said the current agency functions of the Central Bank – public debt management and EPF management are associated with two conflicting objectives where in debt managing the bank will always have to borrow at the lowest possible cost (interest rate) but in managing the EPF the same bank has to maximize the returns by seeking highest interest rates.
He said establishing a risk management unit could be a short-term fix to the issue at hand, but in the long-term the CB should leave the business of fund management in the hands of specialized fund managers outside of the bank.
He said that capitalism isn’t bad, but crony capitalism is.
“In 1950 there could have been an argument for the Central Bank to manage the EPF (which was started in 1958) as there were no qualified fund managers. Now 60 years later there are enough and more agencies, public and private capable of successfully managing (the fund),” he said.
(Duruthu)