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Thursday Nov 14, 2024
Thursday, 11 July 2013 00:47 - - {{hitsCtrl.values.hits}}
The problems are compounded by the current mixed system of obtaining approvals – some from local authorities and others from the centre. Even if some of these acts have no relevance, like if there is no forest in sight, approval will still be required from the Forest Department. The bureaucracy does not have people who will make a judgement call and have the courage to say you don’t need all these approvals. They insist even if they are not relevant to the proposed investment. (Very soon a person may not be able to break wind without getting approval from the Environment Agency and the Pradeshiya Sabha!)
Will devolution aggravate the problem?
The whole concept of devolution is to give power and authority to provinces. Those who get power will want to exercise it. Each province will have its own agencies for all the numerous acts that regulate everything. The probability is that the magnitude of the problem will increase. There is also bound to be inconsistency of interpretation across the provinces. There is a strong argument that can be advanced that devolving powers to approve or reject economic activities will work against economic growth. The tangle of a boxful of acts and regulations, provincial authorities with little experience and the desire to control and exercise power will strangle all new investment. There is also the added complexity that some may need to be persuaded to grant approval!
As devolution creates power, the urge to manifest independence will also emerge. This could give rise to a whole host of thorny issues. For example, a province may decide that it does not like tourism. Therefore, it can refuse to approve any tourism related activity. In this type of scenario, what can the centre do? It is not the sort of problem that can be resolved by sending the Army in.
Central planning is essential to achieve sustainable economic growth
In a small country like ours, there is a scarcity of resources like money, people, skills, water and land. The challenge is to devise strategies for growth that make the optimum use of the available resources. This means for example building a highway in the best place to stimulate growth. In a devolved society will there be pressure to give the same thing to all?
When a parochial provincial mindset is created by devolution, it must be expected that the province will always come first. The national interest will always be a poor second. This will mitigate against good central planning to make the best use of resources to drive the economic growth of the country.
Political dimension
Politics is a tough business in Sri Lanka. It costs a lot of money to contest elections. There is violence and thuggery and the politician must have his own mafia for protection. Sadly, some go into politics with the sole intention of making money. All of this has meant that although there are outstanding exceptions, generally the best brains and best skills are not attracted and drawn into politics.
The serious question for reflection is whether with devolution, we are likely to get in nine provinces good educated politicians with an understanding of economic fundamentals able to create strategies for growth, and also with a patriotic commitment to work for the good of the whole country. Will provincial elections in a devolved scenario create politicians who are good for generating economic growth or will it create politicians who will hinder and hamper growth and development?
Is there a devolved model that will work well?
The current model we have does not really support economic growth. The various acts and regulations stifle growth. The single most important factor that stimulates growth and development is the ease of doing business. If we want to grow, we must all contribute to the discussion of increasing the ease of doing business. Is there a model for devolution that will increase the ease of doing business? Or is it inevitable that in a small country like ours devolution must necessarily reduce the ease of doing business? An ancillary question is, will it create a more corrupt society? Corruption is one of the main blocks to the ease of doing business.
Discussion on devolution must move to what will generate investment and growth
The current debate on the 13th Amendment has consistently failed to evaluate its impact on generating investment and growth. It is investment and growth that will create a prosperous Sri Lanka. It makes no sense to look at it as some panacea to soothe parochial ethnic concerns.
The huge negatives of a devolved structure means that it is necessary to look at other ways to meet the concerns of ethnic or religious or any 
other segment of our society. But can we create without the 13th Amendment a society where regardless of race, religion, caste, creed, or colour, there is freedom to live and work without fear, a society where there is no selective discrimination?
This is not a dream that cannot be achieved. We have achieved just this in the Western Province, which is as multi as it can get. It is multi ethnic, multi religious and multi sub-sects of everything, etc. This is the conclusive proof that we do not require the 13th Amendment to create a society like the Western Province.
It is good to remind ourselves that the thriving multi ethnic/cultural society in the Western Province is underpinned by the strong economic profile of the province. When there are vacancies that cannot be filled, that is a state of full employment. That is the current scenario in the Western Province. There are areas of business that are finding it difficult to find people. The learning from the Western Province experience is that economic prosperity erases the concerns of minorities. This brings one back to the hypothesis that what we must always seek is the best model for creating investment growth and prosperity.
The writer has a Master of Arts Degree from Cambridge University, UK, and the AMP of Harvard Business School USA. He counts over 40 years of board experience having served as a Director of several companies in Sri Lanka and abroad. He was a Director on the main Board at Reckitt Benckiser PLC, UK, where he worked most of his career and at the time of his retirement was Global Director – Pharmaceuticals. He has served as the Chairman of the Board of Investment and Sri Lanka Telecom Limited and was a Senior Advisor to the Ministry of Finance. Currently, he serves as Chairman of Hemas Holdings PLC and First Capital PLC.
