Merry fiddling while the country burns

Sunday, July 28, 2013

This week’s dire warning by the Committee on Public Enterprises (COPE) that Sri Lanka’s public and state banking sector would collapse if loss-making public bodies are not made duly accountable deserves immediate and imperative public attention.

Serious warnings and general despair 

COPE has called for the re-capitalization of the country’s national carrier as well as the gloriously unnecessary Mihin Lanka, (the sole purpose of which was to satisfy the egoistical whims of this administration), both of which have incurred gargantuan losses. It has also recommended that other loss-making enterprises be liquidated.

Yet it was not as if this warning comes as any surprise. It is also not as if the warning would be heeded by this government. In a private conversation last month, a senior public official with decades-long experience in Southern provincial land administration confessed to a looming uncertainty over the ability of the state coffers to pay the salaries of public servants in the forseeable future. ‘Will we have to privatise public administration? I cannot get persons of good education to even apply for public sector positions as no one trusts the state sector to deliver’ he said despairingly.

His despair is not singular. Indeed, COPE had observed in this most recent report that political recruitments into the country’s managerial and administrative sector should be halted and that only capable persons ought to be recruited. But the problem is, as that senior public servant said hopelessly but so aptly, very few good persons will want to be absorbed into Sri Lanka’s public sector with the rampant politicization, corruption and bargaining that takes place.

Extremely dangerous iceberg

Along with the warning issued by COPE, the Public Accounts Committee (PAC) which is the other financial oversight body in Parliament also focused this week on an astounding Rs 9 billion arrears incurred by Sri Lanka Customs during a five year period, observing that no action has been taken to recover these arrears.

COPE and PAC have traditionally fulfilled the role of issuing early warning safeguards in regard to the observance of financial discipline in the state sector, public corporations and other semi-governmental bodies. The entities identified as exemplifying irregular practices and outright corruption have included the Ceylon Electricity Board, the Bank of Ceylon, the Ceylon Petroleum Corporation, the Board of Investment, the Airport and Aviation Services, the Sri Lanka Ports Authority and the Samurdhi Authority of Sri Lanka.

Yet, grave and endemic practices of government corruption exposed in these reports are given only passing public attention. The trend is that some media publicity follows upon the presentation of COPE and PAC reports but thereafter public interest dwindles. This should however be far from the case.

The use of public funds attracts the concept of public trust and a government’s duty in that regard cannot be easily brushed aside. The issues highlighted in these reports reveal only the conservative tip of an extremely dangerous iceberg which courts economic ruin even as ordinary people struggle with the unbearably high cost of living while the financially profligate enjoy the beautification of Colombo and speed to their destinations outside the capital on newly built and gleaming expressways.

Oversight bodies shackled beyond effectiveness

Meanwhile, reports of the Auditor General have been equally revealing in regard to the financial mis-governance of state entities. The exposure of the 2004 VAT scam tax scandal which cost the Inland Revenue Department and the Ministry of Finance losses estimated in billions is notable. Willful or negligent action on the part of the state institutions is one good example. Many of those involved at the highest levels escaped the reach of the law. This continues to be the case in regard to the massive financial scandals that are currently taking place. The courts as well as the Bribery and Corruption Commission are shackled beyond all effectiveness except to be used as weapons of political witch-hunting.

Importantly however, in a context where President Mahinda Rajapaksa, his brothers and his large extended family control an unprecedented percentage of public institutions, accountability for severe financial mismanagement lies at the highest executive level. Coming down the political ladder, the corruption and negligence evidenced at local and provincial level is therefore only inevitable. The Auditor General has repeatedly warned of deeply entrenched corruption on the part of political appointees who do not have the requisite capacity along with general negligence in the public sector. And as Sri Lanka braces itself for a Commonwealth extravaganza in the coming months with additional financial burdens, it is apt to question whether we have lost our senses as a nation. The answer to that question is unfortunately all too self evident.

Bewailing at what is being done in our names 

So we go merrily to our doom with scarcely any protest at the grievous harm being done to this country’s financial systems in regard to prudence, good governance and economic sustenance. Yet these are issues that should dominate public debate and discussion as is the case in India where endemic government corruption led to public protests. Even more than in India, the criminal wastage and corruption that is a matter of course in the public sector has the potential of irreversibly destroying the Sri Lankan economy. But public reactions thereto remain minimal.

This process of extreme negativity cannot, of course, go on endlessly. There will undoubtedly come a harvesting of the destructive seeds that are being sowed in these ruinous times. At that time and assuredly, all of Sri Lanka and future generations will ceaselessly bewail at to what has been done to this country’s resources in our name.