Good governance a pre-requisite for economic development: Mr. President, you are on right path

AKD and the NPP Government must stay objective and must resist undue interference of these third parties in making decisions which are in the best interest of the country

There is a continuation of policy at least in the short term. There is no immediate disruption. Trying to do too much in too short a time invariably leads to disaster. The NPP Government is the first in recent times to continue with the economic policies of the previous regime. All this, in my eyes, points to a desire on the Government’s part of putting the country first rather than blindly following an ideology. My advice to the Government is to focus on governance reform. The economy will take care of itself in the short term

Despite the pre-election fearmongering of catastrophe, mayhem, violence and Marxism by the ‘metathesiophobists’ if Anura Kumara Dissanayake (AKD) and the National People’s Power (NPP) were to emerge victorious, the Presidential and General elections and the immediate post-election periods were probably the most peaceful since we gained independence in 1948. Kudos is due to the Government which was in power at the time of elections and the contesting parties for readily accepting the people’s mandate and transitioning power peacefully unlike the many other countries who in recent times have refused to accept the mandate of the people. 

Notwithstanding such positives, it is still very annoying to hear the petty comments, and see the churlish attempts, made by sore losers in disparaging our country in a manner akin to a death wish. It is doubly annoying when these rabble rousers are the very people who over the past 50 years tolerated systemic corruption and subserviently watched the abuse of power by rulers who, by their blatantly selfish actions, drove our country to moral and economic bankruptcy. They are now behaving like paragons of wisdom in finding fault in everything the new Government is attempting to do. It is just over three months since the Presidential elections and about six weeks since the General elections and the impatience displayed by the detractors is mind boggling given their blind obeisance to previous regimes who acted with impunity in driving our country to its economic ruin. 

AKD and the NPP did not inherit a model system of governance and/or a robust economy. They are compelled to contend with a perverse system which is deep rooted in corruption, cronyism and nepotism. They must wade through a morass of past misdeeds and excesses which have, unfortunately, been legitimised by parliaments which blindly rubber stamped each and everything placed before them by the ruling masters. Judging by the facts which are coming out of the woodwork, it is apparent that the rulers and the legislators have made merry with the country’s funds and the taxpayers’ money. The cost of ‘over the top’ security to past and sitting presidents where, in some instances the so deployed security personnel were/are used as glorified ‘domestic aides’, and the misuse of the President’s Fund are glaring examples. 

Against this background, should we not be giving AKD and the NPP both the time and space to study the situation and come with a plan than be breathing down their necks? I am not saying that everything the Government has done, and is doing, is hunky dory. There are ups and downs. Further, the Government does not have ‘ruling’ experience nor is it able to boast of past brilliance. In any case, who in the past was brilliant? Similarly, they have no track record of significant feats of technical prowess in governance and economic matters. But they have enough talent, untested though, in their think tank. 

Give them time

Notwithstanding the same, what the Government has clearly shown is that it would not resort to knee jerk reactions but would make changes to the status quo only after carefully studying the prevailing circumstances even in areas which were key components of the NPP’s manifesto. In my view, there has been no indication whatsoever, at least up to now, that it would abandon the key reforms it promised, namely, the equal application of the rule of law, the providing of equal opportunity for all citizens and by implementing the aforesaid, the elimination of bribery and corruption. Political reforms including the abolishment of the post of executive president and amendments to the constitution on matters such as ‘crossovers’ are still very much on the cards. If these are not implemented and operationalised within a reasonable period, then, we can classify them as significant misses and constructive criticism will be in order. But not now. Give them time.

I come across many business leaders and professional who believe that AKD/NPP are not doing enough in matters relating to the economy. Whilst I too want our country to do well economically, I am of the view that the economy will create its own momentum if the appropriate governance structures and vehicles are established. If we, and I say ‘we’ because the Government is representative of the people, can, as a first step, eliminate, or in the least minimise, the corruption and the waste through better governance and selfless thinking and enable the equal application of the law, equality of opportunity via a culture of meritocracy, we will immediately achieve modest economic gains. But more importantly, we will set the stage for sustainable economic prosperity which will contribute to the wellbeing of all citizens, not just the privileged few as was the case in the past.

Having spent 48 years of my more than 50 years corporate career in very successful organisations, I am sold on the unwavering belief that good corporate governance is the foundation of any successful business. The same must apply at a national level. Good governance is a prerequisite for economic development. The concept of ‘governance’ is not new. It is as old as the Neanderthals, and it is not too difficult to distinguish good governance from bad governance. In simplistic terms, governance at a national level is an agglomeration of policies, processes and institutions which combine in meeting the needs of society while making the best use of resources. 

For it to be effective, it must be characterised by accountability, transparency, and responsiveness. Studies confirm that countries with good governance have been able to achieve faster economic growth and sustain it over time. Good governance is also known for improving quality of life, health, and equity. It is in this light that I urge the Government to continue with giving priority to the entrenchment of governance and governance structures than break its head, now, in looking for new economic policies. Past practice has been for the incoming Government to immediately rejig most things the previous Government has done. 

Value destroying trap

AKD has not fallen into that value destroying trap. The NPP Government has been sagacious so far in not being in a hurry to change the economic policies of the previous regime. Indications are that the Government is carefully studying the pros and cons of these policies before proposing changes, if any. There are many detractors who continue to scoff at the Government saying that it was opposed to ‘this and that’ and now that it is in power, it is toeing the same lines which they had vehemently opposed in the past. Even if such is the case, what is wrong with it if it is not at variance with its governance principles? 

There is a continuation of policy at least in the short term. There is no immediate disruption. Trying to do too much in too short a time invariably leads to disaster. The NPP Government is the first in recent times to continue with the economic policies of the previous regime. All this, in my eyes, points to a desire on the Government’s part of putting the country first rather than blindly following an ideology. My advice to the Government is to focus on governance reform. The economy will take care of itself in the short term. 

Good governance has eight major characteristics. It is participatory, consensus oriented, accountable, transparent, responsive, effective and efficient, equitable and inclusive and, most vitally, follows the rule of law. 

It assures that corruption is minimised and the views of all, particularly of minorities, are considered and that the voices of the most vulnerable in society are heard in policy formulation. It must cater to the present and future needs of society. Although government is the key decision maker in governance matters at a national level, international donors, powerful regional countries, multinational corporations, trade partners, lobbyists and media often play an active role in influencing government decisions. In addition, there will be informal influencers such as ‘kitchen cabinets’, party loyalists, crime syndicates, land mafias, commodity mafias et cetera also at play. 

AKD and the NPP Government must stay objective and must resist undue interference of these third parties in making decisions which are in the best interest of the country. History evidence that it is these informal influencers who spawn non-transparency leading to speculation and citizen discontent. In my view, the time spent on establishing the appropriate governance practices is time well spent. If the government gets its governance right, economic development will automatically follow. Be thorough about it. No short cuts!

I believe that AKD and the NPP Government must focus on two key areas of governance, these being the equal application of the rule of law and the creation and nurturing of a culture of meritocracy. Get these two right and we will be on the road of sustainable success. 

Continuity and strengthening of a democratic state

A key goal, amongst many others, of AKD and the NPP Government must be the continuity and strengthening of a democratic state and a free civil society. Democracy is a freedom based on respect for rule of law, discipline, and protection of human rights. It is certainly not the freedom to do anything and everything one wants. To be effective, laws must be unambiguous and fair, and they must be transparent and public. They must be relevant. They must be equally applicable to all members of society irrespective of status, race, caste, creed, or gender. Most importantly, laws must be enforced. 

The United Nations (UN) sums up the importance of the rule of law aptly by stating that it is a key tool of governance where all persons, institutions, and entities, public and private, including the State itself, are accountable to laws that are publicly promulgated, equally enforced, and independently adjudicated. Laws which are consistent with international human rights norms and standards. The UN further states that the rule of law must include measures which ensure adherence to the principles of supremacy of the law, equality before the law, accountability to the law, fairness in the application of the law, separation of powers, participation in decision-making, legal certainty, avoidance of arbitrariness, and procedural and legal transparency. 

In keeping with the above, the Government must preserve, at all costs, the independence of regulatory, and monitoring bodies. It must not allow such independence to be impaired by the interference and manipulation of powerful individuals. There is nothing more frustrating, and disconcerting, to law-abiding citizens than inequality in the application of the law. 

The Government must be mindful that the non-enforcement, and the unequal application, of the law will create a credibility gap in the country’s system of governance, thereby denting the ability of a participating person to predict an outcome. Predictability is a key feature sought by investors and by those planning a future. The lack of legal predictability will cause a decline in foreign direct investment, local investment, and economic activity. Most multinationals rank ‘the rule of law’ higher than economic opportunity and political stability when making investments outside their home-base.

From a perspective of economic growth, the absence of a well-functioning legal system which enforces compliance and conformity, will result in parties being reluctant to contract current or future services because of the risk of breach and non-payment. Needless to state, this retards the pace of economic activity. Presently, the wheels of the various vehicles which are set up to judge commercial transactions and resolve disputes turn too slowly and this is a grave concern to those parties wishing to participate in building the economy in ethical ways. The government must address this.

 Also, irrespective of its brand of economics, it must clearly establish laws on property rights. Property rights are essential for economic development because they provide the foundation for investment, credit, and the efficient use of resources. As I alluded to earlier, good governance is a pre-requisite for economic development.

Law without power is a mere delusion

Effective law enforcement requires power, and in that respect, power is an absolute necessity. It is also correct to say that law without power is a mere delusion. Thus, there is a fine balance between the positive use of power and the negative use of power. Power without the law will lead to anarchy, oppression, tyranny, and chaos. The voting citizens have given AKD and the new Government significant power. 

It is pleasing to note, that time and again, AKD has stressed the importance of respecting the trust which the citizens have placed in them. The Government can facilitate that by entrenching the rule of law, strengthening the protection of the rights and interests of the individual, family, society, and the state, raising the legal culture and legal awareness of the population and educating citizens in the spirit of obedience and respect for the law.

 The Government must also facilitate to an extent reasonable the freedom of expression. Freedom of expression is the most fundamental human right. It anchors democracy and acts as the stepping stone to the furtherance of other human rights and freedoms such as fair administration of justice, education, adequate standard of living, equality, human dignity, and the rights of women, peoples, and minorities. 

‘Equality of opportunity for all’ was the key tagline of the AKD and NPP election campaigns. An effective way of enabling this is by fostering a culture of meritocracy where individuals rise to prominence and power based on their abilities and achievements, rather than birthright or privilege. The NPP think tank must be very aware that the principle of meritocracy is the foundation of a fair society, where hard work, talent, and innovation are rewarded. Meritocracy promotes equality of opportunity where everyone has the chance to succeed based on their own merit regardless of background. It is known to fuel innovation and economic growth. 

When individuals are recognised and rewarded based on their performance they are incentivised to innovate, create, and perform at their best. This, in turn, stimulates economic growth and prosperity. Further, if meritocracy is allowed to prevail, it will ensure that the most qualified, skilled, and effective leaders rise to the top. 

This promotes better decision-making, efficiency, and performance in both public and private sectors, leading to overall societal improvement. Meritocracy, at least in theory, offers an equal playing field, allowing individuals from any background to succeed if they have the ability and put in the effort. Without it, those from privileged backgrounds may have an unfair advantage, leading to increased social inequality and a decrease in social mobility.

In conclusion, a strong and equal enforcement of the rule of law and the deep entrenchment of a culture of meritocracy will lead to the elimination or the minimisation of corruption. This is the bedrock of the Government’s current thinking, and it cannot be more right. In my view there can be no sustainable economic development in the absence of good governance. Good governance is the need of the hour. Mr. President – you are on the right path. Keep the caravan rolling. Let the barking dogs continue to bark. 

(The writer is currently, a Leadership Coach, Mentor and Consultant and boasts over 50+ years of experience in very senior positions in the corporate world – local and overseas. www.ronniepeiris.com.)