The dust has, hopefully, settled on the election process and the selection of the new cabinet, a large group of state ministers and deputy ministers. Already the ‘Yahapalanaya” doctrine of good governance is being thrown in the faces of the President and the Prime Minister as disenchantment grows over not only the size of a [...]

The Sunday Times Sri Lanka

Treasury and the Public Service – Comment


The dust has, hopefully, settled on the election process and the selection of the new cabinet, a large group of state ministers and deputy ministers. Already the ‘Yahapalanaya” doctrine of good governance is being thrown in the faces of the President and the Prime Minister as disenchantment grows over not only the size of a gigantic cabinet but also some of its appointees who have brushed against the law on many occasions and escaped without a scratch or black-mark.

Despite these reservations and concerns whether the ‘national’ government will succeed or buckle under the pressure of a disjoined Sri Lanka Freedom Party and its former allies in the United People’s Freedom Front (UPFA), there is hope that the new regime with the installation of good governance institutions like the Constitutional Council will ensure a better tomorrow for Sri Lankans.

Two of the critical issues facing the administration are the country’s short and long-term debt crisis, and the efficiency of the public service. The Treasury via the Central Bank has been borrowing in a frenzy to settle local and foreign payments. That crisis is not going to go away easily. According to the Business Times (BT) team in one November 2014 report, the net debt per capita (per person according to economic indicators) was Rs. 321,000 and set to rise to Rs. 400,000 in the next 12 months.

The BT team has been in the forefront of reportage in the past few years of the country’s parlous economic state. A sample of the reports is as follows: August 2015 – Treasury injects Rs. 239.5 billion into 9 state owned firms including SriLankan Airlines; February 2013 – IMF turns down US$1 billion structural adjustment facility request from Treasury Secretary P.B. Jayasundera; July 2011- China is Sri Lanka’s top lender providing loan facilities amounting to around $ 3 billion; and in a report today (September 13,2015) – Colossal sum of Rs.15.5 billion spent for 2013 CHOGM (Commonwealth Summit) with several bills yet unsettled, from an earlier estimated Rs 3.5 billion.

Today’s claim by think-tank Verite Research (as reported by the BT) that the Treasury had a ‘potential’ slush fund enabling the transfer of funds between ministries or department without immediate parliamentary sanction (an essential requirement), has been widely reported in the past by the BT. Previously the BT has reported how funds allocated to one ministry were transferred to another, particularly in the case of education and health budgets being used for the influential Economic Development Ministry (mostly on vote-catching, populist and unproductive projects).

This in a nutshell is the state of the country’s finances and a challenging one for the Government with the first step of the economic agenda being to discuss a new, longer debt repayment plan with major lenders, giving some breathing space to the authorities. Sri Lanka needs millions of dollars in foreign direct investment to set off its yawning debt and that’s not going to happen in the short term.

How the government with too many ‘cooks’ would handle these worrying issues remains to be seen. However unlike in the past where the former government frowned on think-tanks, NGOs and civil society and rejected their proposals, suggestions and recommendations towards creating a more blessed society accusing most groups of conforming to a Western-dictated agenda, the new rulers of the nation are progressive, more forward thinking and acceptable to ideas and suggestions from civil society. And, there is many of this to help transform this nation into a no-turning-back development path, with some of Sri Lanka’s professionals making many strong suggestions on the way forward in articles published in the BT today.

While renowned economist Prof. Sirimal Abeyratne has recommended ways and means of managing the debt situation, more focus on exports and limiting wasteful spending, retired public servant and development economist Dr. Lloyd Fernando – with wide public service experience to back his constructive arguments – has provided an ideal model for a productive, motivated and politically-free public service.

At a Marga Institute discussion in Colombo last week at which Dr. Harsha de Silva and Eran Wickramaratne, two top economists and professionals in the government, were also present, Dr. Fernando presented a detailed development plan encompassing politics, economics and society and the way forward. A 2-part series on that progressive paper has been published in the BT with the final installment appearing today.

Perhaps the most striking comment during the discussion came from panelist Dr. Harsha Athurapane who has been leading the World Bank team in Colombo on the education sector for many years, who revealed that lack of motivation was one of the main problems in the public service. Backed by data, he said that the ‘real’ income of public servants including Ministry Secretaries has come down drastically over the years; for example what a Secretary earned in the 1980s is much less (in real terms based on inflation/COL) than what is earned today as their living costs and needs are much higher!

In today’s context, good management and enhancing productivity is all about keeping employees happy not only in the workplace but also at home. A happy and contended worker is not only more productive but stimulates and energises the workplace. That is the manthra of management which should be imbibed in the public service. Having said that there are some examples of an efficient public service where passports and driving licences can be obtained very quickly while a few department heads have become ‘entrepreneurial’ public servants (raising revenue and income through innovative ways).Dr. Fernando, who teaches at the Post Graduate Institute of Management, has many good suggestions on an efficient public service (based also on his own experiences coupled with new trends) which should attract the attention of policymakers.
Prof. Abeyratne, on the other hand, says there is no middle path to development. “We have a choice to either prosper or perish,” he says, arguing that for the first time Sri Lanka is ready for an economic take-off and that ‘this bus should not be missed”.
Sri Lanka has loads of talent, resources and brainpower to progress to an upper, middle income economy. The government must make use of this breadth of expertise, willing to lend their advice at no cost. Rather than repeated criticism (of past actions and deeds) a more constructive and objective culture needs to be inculcated by the new regime. Only then can this country move forward.

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