Corruption, slow killer in Sri Lankan society
Bribery, corruption and price mafias are killing the country, they have enveloped the country and a clear analysis points to the mother of corruption and the root cause being the 1978 constitution.
This was stated by Ravi Ratnasabapathy, Resident Fellow, Advocata Institute, at a media briefing at the launch of the report on “Price Controls in Sri Lanka – Political Theatre” presented by Advocata in Colombo last week.
On the sidelines of the event, he told the Business Times that: “Actually corruption starts with the electoral financing and it all started with the 1978 constitution which removed the disclosure of the campaign financing and the disclosure of sources. Regulation is a big area where corruption can come. Corruption kills our society and the country.”
The report is the outcome of a survey carried out by Advocata Institute to determine corruption . It recommends that the best way of reducing the prices is that instead of price controls, to foster competition and to take measures to improve productivity as evidenced in the telecommunication services. It also advocates deregulation.
Advocata is an independent policy think tank working for sound public policy ideas and its mission is supported by academics, journalists, business community and many others.
In the preamble of the report, Dhananath Fernando, COO, Advocata indicates that the deteriorating ‘cost of living’ has been glued in the minds of the people ever since 1970 and several years monetary expansion created cumulative increase in inflation and price escalation.
In its recommendations, the report indicated that the Government policies are contradictory and taxes and price controls are imposed on the same items. Taxes raise retail prices conflicting with the controls that are supposed to limit price increases. Price controls are of limited value in reducing costs.
It went on to indicate that controls can cause significant welfare losses, a deterioration of product quality, reduction in investment and in the long run, higher prices.
There is a serious constraint in the productivity aspect of local produce, like potatoes, big onions, etc as their prices in the consumer market are exorbitantly high. This is compared to the same imported product prices which are lower in the consumer market even after they pay taxes on the imports and serious enforcements of price controls are confined to items produced by the multinationals and large corporates.
Mr. Ratnasabapathy said that actually the Consumer Affairs Authority should be the Consumer Protection Authority as consumer rights are being violated and it would appear that it is irresponsible as it does not have a list of controlled prices. He said: “In certain cases we have seen the taxes resulting in pricing going up and if you cut the taxes prices will come down”.
He said that what is happening is there is a question in the quality of government expenditure since while the government is spending lot of money the people are not getting a service of value.
At the moment, he said that there is a lot of waste, there is lot of inefficiency and a lot of corruption all of which contribute to the increase in the cost of living.
Emphasising that the root cause of all the increase in the prices and services is widespread corruption which starts from political campaign financing. He said it has been reported that some politicians have spent more than Rs. 100 million on their campaigns and once they come to power their main intention is to recover those campaign expenditure.