The inability of successive Governments to implement a plethora of reports on financial matters has now resulted in the advent of a permanent foreign anti-corruption adviser to the Cabinet of Ministers, on offer by a foreign Government that has put Sri Lanka in the basket of most corrupt countries in the world. Despite nearly 70 [...]


Ignoring all the domestic counsel and going for foreign advisors


The inability of successive Governments to implement a plethora of reports on financial matters has now resulted in the advent of a permanent foreign anti-corruption adviser to the Cabinet of Ministers, on offer by a foreign Government that has put Sri Lanka in the basket of most corrupt countries in the world.

Despite nearly 70 years of Independence, Government after Government, though quick to appoint Commissions of Inquiry and have mechanisms in place, continued to show scant respect for home-grown advice, though opting for anything a foreign ‘expert’ has to say. While foreign expertise in areas where there is a genuine deficiency must be accepted, counsel provided domestically on matters of Government finance has only been ignored for decades due to the lack of political will.

We have often quoted a statement made in Parliament by former President J.R. Jayewardene when he was Leader of the Opposition in relation to the annual reports of state corporations. These were regularly tabled in the House long after the year in review. He said discussing these reports was “a waste of time, waste of money and a waste of tongue”. When he became President he invited the private sector audit firms to assist the Auditor General and speed up these reports, but even so, the net result was the same. Nobody in Parliament bothered to analyse them.

It is one thing to say that Parliament is the final repository of public finance, but another when the numerous and voluminous reports of its oversight committees such as COPE and Public Accounts Committee end up with the ultimate beneficiary – the “bottle-man”, the man buying wastepaper.

The Auditor General has quite rightly pointed to the “degrading” statement by the US State Department following an international conference on Asset Recovery in Washington DC, saying it was giving the Sri Lanka Government a resident legal adviser. In the flush of the 2015 victory of the incumbent Government, there was a song and dance that the World Bank – and the US had sent teams to assist to help flush out the ill-gotten monies siphoned out by the high and mighty of the previous Government. They were to engage in ‘Asset Recovery’ i.e. to chase behind that cash and bring it home to the state’s General Treasury. Some information was provided by the US on corrupt activities on its own soil by Sri Lankan diplomats, politicians and officials a long time back – but nothing else has come to pass in realistic terms.

Part of the inaction to prosecute these wrongdoers is because this Government has played politics with that information. The delay in the enactment of the National Audit Bill (which was promised within 100 days of the new Government taking office in January 2015) is a textbook example of the Government’s reluctance and lack of political will to take home grown advice. But a Tax Bill drafted by the IMF on the Ghanaian model is already law. The UN’s International Anti-Corruption Day was marked worldwide on December 9 but here in Sri Lanka, it is just another date to make token reference to in the case of the country’s anti-corruption bodies.

Not only corruption but waste

On the allied subject of the recovery of stolen assets essentially by political leaders of this country is the equally significant subject of penalising those who squander public finance through willful negligence and corrupt intent.

Not long ago, a proactive Supreme Court went after some of them — from those engaged in the oil hedging exercise, to privatisation of public ventures like the Insurance Corporation. The Government of the day however, protected the culprits and even rewarded them.

Just last week, this newspaper reported the case where an international arbitration tribunal ordered a local company in which, among others, the EPF (Employees Provident Fund) was a share-holder, to cough up Rs. 1.3 billion (Euros 7,432) in damages to an Italian company for the termination of an interior decoration contract for the Grand Hyatt Hotel in Colombo. The startling disclosure is that the contract was signed on January 7, 2015 – 24 hours before the Presidential elections.

Two sets of political leaders are responsible for this state of affairs. One is the former Administration for investing EPF funds in hotel projects, risking the savings of millions of private sector employees; the other is the current Administration that irresponsibly halted the project knowing the legal implications of defaulting on contractual obligations.

This is what has happened in the case of the Colombo Port City project, the Hambantota harbour and Mattala airport where sovereign guarantees are given by a Government tying up future Governments and future generations. In the case of the Colombo Port City, the Chinese developers threatened to go for international arbitration in accordance with the signed contract and demand penalties for delays. At Hambantota they got an equity swap to gain a geo-political strategic foothold in the Indian Ocean much to the concern of India which sent a missive once again this week to Colombo.

Another classic case is the lease of four Airbus aircraft for SriLankan Airlines where the airline (and eventually the nation) has, as part of what they call a “restructuring exercise” found the aircraft were not what they wanted and ended up paying some US$ 100 million as a “Termination Fee” for aircraft we never will have at the end of it. That is Rs. 15 billion down the drain. Imagine the amount of schools and hospitals that could have benefitted from this wasted money. Similar stories are now emerging over the purchase of an expensive naval craft from Russia.

It is not only the recovery of stolen assets and prosecution of those wrongdoers who put their hands into the public purse that needs the Government’s attention. It is also those who indulged in criminal waste of public funds, mismanagement, inefficiency and willful negligence who need to be ‘burned at the stake’ to use a hyperbolic metaphor, as it were, for creaming off the fat of the land and busting up billions of rupees of the Sri Lankan people.

Nobody here would advocate the introduction of Saudi laws and practices, but a recent dragnet by the newly anointed all powerful heir to the throne of the House of Saud, the 32-year-old Crown Prince, arresting eleven senior princes, dozens of businessmen, current and former ministers and provincial governors and keeping them in custody in the Riyadh’s Ritz-Carlton on allegations of corruption, criminal schemes and money laundering has shaken the kingdom’s powerful elite. It has also won the admiration of the youth of that country disillusioned with its corrupt leaders.

The saddest footnote to Sri Lanka continuing to be labelled as a most corrupt country is the fact the anti-corruption was largely limited to election rhetoric and little substantive action; laws that are outdated and riddled as it is with political interference from the very top of the Administration for purely political considerations. Both major parties in the ruling National Unity Government are responsible for this sad state of affairs.

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