Friday Nov 15, 2024
Friday Nov 15, 2024
Friday, 30 January 2015 00:00 - - {{hitsCtrl.values.hits}}
It is very critical that the current Government realises that all these people who voluntarily voted and worked for President Maithripala Sirisena’s victory are eagerly watching what results the new regime will produce for the country in the midst of all the policy pronouncements they have made. Given a 100-day timeframe promised, time is limited and a lack of progress can quickly turn the initial euphoria into antipathy
The MY3 campaign successfully propagated allegations of corruption, nepotism and impunity against the previous regime and fought a very effective election campaign.
The previous regime not just failed to address these allegations effectively but they also grossly failed to grasp a very significant underlying paradigm shift in the minds of the Sri Lankan voter – that of the maturation of the average Sri Lankan voter and their increasing attention towards the issues and policies put forward by the respective candidates.
Whilst the past elections were fought around promises, allegations and violence, there was a clear tendency to break from that cycle and give more prominence to assess issues and policies put forward.
The previous regime did publish their policy manifesto; however, their failure to e
ffectively address the key allegations of corruption and impunity just killed the credibility of anything stated in that manifesto. Besides, the social media campaign crafted not just by the MY3 camp but also an army of very creative social media activists, who all wanted nothing but a change in the way this country is governed, gave exponential boost to the credibility of these allegations.
It is very critical that the current Government realises that all these people who voluntarily voted and worked for President Maithripala Sirisena’s victory are eagerly watching what results the new regime will produce for the country in the midst of all the policy pronouncements they have made. Given a 100-day timeframe promised, time is limited and a lack of progress can quickly turn the initial euphoria into antipathy.
Taking a clear focused approach to a set of effective steps can enable quick results and help keep the momentum. The steps outlined below are definitely not an exhaustive list, however, the purpose is to focus attention on a clear framework so that the 100-day program can set the country in the right direction towards good governance and peaceful co-existence of all Sri Lankans.
1. Quick wins
There has been quite a lot of allegations of corruption and misuse of State funds. Whilst successful litigation of these elements is essential, it is also critical to show as quickly as possible demonstrative efficiencies, and savings within respective ministries so that the general public will gain confidence that a change of governance practices is indeed opening up ways for improvement.
We have already had news of stopping certain wasteful spends and reduction of fuel prices. Hopefully, these measures will have maximum effect on reducing the cost of living. However, it should also be noted that making sloppy allegations without proper investigation and credible evidence will only lead to losing face before the general public.
Unless quick wins and efficiencies are sustained, many of the allegations made will just wane as merely political vengeance and the new Government could well slide into a vicious cycle of losing confidence.
2. Powerful work teams
Almost invariably, pursuing a change program will involve clear direction as well as the ability to effectively bring about the desired results. This ability essentially entails putting together a talented team of like-minded people. This is important at the highest levels of Government to monitor overall result as well as within respective ministries and Government agencies.
Trying to bring in too many people from outside may well cause friction within the State agencies. It’s quite likely to be prudent to harness talent from within the respective agencies in the early days – from my own experience in working on certain assignments in State institutions in Sri Lanka, certainly there are very talented people within the system – what is important is identifying them and enabling them the right scope and motivation.
3. Policies and systems
Former British Prime Minister Baroness Margaret Thatcher once told her Cabinet of Ministers “get the policies right, the rest of it will fall into place”. President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe have both made early pronouncements in this regard to set the right direction. It is now important that these high-level policy statements are translated to specific polic
y frameworks and systems within respective ministries and other institutions.
There should be no room for anyone to engage in ‘system-override’ – in other words, no one should be allowed to illegitimately override established practices within ministries and departments to achieve their goals or have their work done. There should be a mechanism to seriously curtail the ability of anyone, be it politician or otherwise, to pressurise public servants to disregard established procedures within ministries and State departments and get things done.
Many Government ministers have already stated it a clear objective to have full transparency within their ministries – certainly a move in the right direction, they can also contemplate a further policy initiative, whenever there is a request made by a higher authority to entertain their requests, there is an automatic trigger to report the event to another higher office, regardless of the nature of the request.
Wickremesinghe has already announced that there will be a code of conduct for all ministers. This is a very good move which can then be complemented through control and evaluation systems set for various ministries and Government agencies.
We all know how much fire the previous regime came under for nepotism – sadly, we are seeing news of family members being appointed for various Government positions in the current regime as well. This code of conduct should address the issue of appointing related parties to public positions and also public transactions involving them.
4. Get the forensics
When taking over a new responsibility or a function, it is essential that a thorough investigation is carried out to ascertain the true state of affairs within that function. The new Government will enjoy a ‘honeymoon’ period of being able blame the previous regime for all problems within their respective departments for no more than a matter of months, after which they will invariably be the custodian of those departments and agencies and they will have to bear responsibility for all issues within their functions, be it brought forward issues or otherwise. Should they fail to get a good grasp of all issues within their functions at the earliest, they will soon run the risk of becoming part of the problem.
So it is imperative that formidable resources of forensic accounting and investigative skills are deployed as an urgent priority and dig deep within all the documents and trail of activities before taking on significant new initiatives within the various ministries and other Government agencies.
Baseless allegations will soon backfire unless they are all backed up with credible evidence. Besides, developing a thorough understanding of the true state of affairs will enable more effective planning. For instance, there has been many questions raised in the recent past about the methodologies followed to calculate national accounts and figures – no doubt, it is critical to know these figures accurately to be able to formulate robust economic policies.
5. Demonstrable equity and equality
A Sri Lankan friend of mine who works in a financial consultancy in the Caribbean was on vacation in the country during the last election times. He told me he went about the city in three-wheelers and during one journey he just enquired from the three-wheeler driver his views on the elections – the three-wheeler driver had jumped to mention that they felt like ‘dirt’ when they are pushed to the edge of the road when the politicians’ entourages whisked pass them on the roads with their security escorts. As a matter of fact, many of us can relate to the feelings of this three-wheeler driver.
Today the situation on the road with regard to official convoys is somewhat different, however, there a few spoilers too. Whilst the Government officials may keep security outriders and escorts, it is also essential to bear in mind the following – the conduct of these security convoys on the road will directly impact the perception of the Government in the minds of the people, by the way these convoys try to whisk pass traffic congestion it just signifies sheer arrogance and a presumption that their time is more important than the rest of the countrymen.
If they think their work is affected due to traffic congestion, it is important to appreciate that the same applies to the general public also. It is the hope of the people that everyone will receive equal respect on the road as well as off the road.
The above instance is just one example to illustrate the meaning of demonstrable equity – it is important that equity and equality is actually reflected in the way in which the Government and its ministers conduct themselves as well. In the modern era of social media activism any undue conduct on the part of a member of the Government can almost instantly turn the tide against the work program of the new government.
6. Keep score and communicate as one unit
Given the 100 day work program, keeping a good track of progress made and communicating the results to the people in regular intervals would be important so the momentum can be retained. It is also important to direct these communications in a unified manner.
We have been watching on media allegations of corruption, ad hoc inspections of various places and also different politicians visiting relevant institutions to make complaints against bribery and corruption. Whilst we commend the new Government for allowing freedom of expression, it might be in the interest of the government to keep track of all these allegations and follow them up in a coordinated manner. When people see all kinds of different approaches in handling the same issues of corruption it may signify a lack of command and control within the Government.
The new Government has announced the setting up of the Council Against Corruption – indeed a good move, however, it is equally important to ensure that this council comprises people with good investigative skills and effective guidelines to all concerned to channel their allegations through this council. Holding credibility and carrying the general public along this new direction are going to be essential elements in successfully seeing through this reform program.
7. Economics – get the basics going
By listing this as the last step in the series, it is by no means the least important. The success of the Government’s work program will be hugely dependent on progress made in this front.
World famous investor and billionaire, Warren Buffett has stated sound and clear in many of his speeches and writings that his focus of attention, as far as his investments are concerned, always remained on maximising shareholder value or in other words net wealth per share.
With regard to the new economic direction in Sri Lanka, Dr. Harsha De Silva, Deputy Minister of Policy Planning and Economic Affairs, has hit the nail right on the head – he has repeatedly stated that his focus of economic policies will be aimed at improving the economics of the Sri Lankan household. Across almost every economic indicator published by the previous Government, the country was doing well, if not thriving. However, it does not take an economics professor to figure out the challenges faced by the average household in Sri Lanka with the ever-rising cost of living.
The Gross Domestic Product or GDP and Per Capita GDP are all important statistics. It is also important to recognise that these figures are mere statistics in the absence of objective and meaningful build-up of the underlying data. Given the nuances and subjective elements involved in formulating national accounts, it’ll be prudent to develop methodologies to objectively track improvements to household income and livelihoods independent of national accounts.
Keeping a close tab on the following aspects would be important in achieving the stated objective of improving household income:
a) Have a clear understanding and statement of the role of the Government in the economy
Fault-lines in capitalist economies were clearly evident during the last global economic crisis in 2008. The recovery plans put forward by different governments, including the United States and United Kingdom, entailed extensive government intervention – so much for the advocates of laissez faire and free economy!
Sri Lanka has had capitalist-leaning as well as socialist-leaning governments in the past and despite facing times of acute challenges during the years of war, people of this country, fortunately, have not faced a serious financial crisis.
The previous regime was in favour of more State enterprises and Government intervention in economic activities whilst it is likely that the current Government may favour an approach of less Government intervention and focus on setting the right economic conditions for the private enterprises to prosper and create jobs.
Whatever the approach, it’ll be advisable to clearly state the economic policies and what role the Government will be playing in the economy – international and local investors will be keenly watching this direction, given the different political ideologies of the various constituents of the current government.
b) Keep focus on foundation principles
At very broad level, economic growth comprises,
n Increases in labour inputs to the economy
n Increases in output per unit of labour input
The first is about having more people to take up productive work and the latter is about improving the efficiency of employing the resources. It is widely documented that during the Blair-Brown years in the ’90s, the economy in United Kingdom benefitted immensely from the successful combination of these two aspects. It came mainly in the form of immigration, more women in workforce and technological advances. Sri Lanka still has the ability to gain from under-utilised labour resources and certainly making productivity gains should be a top priority across the board.
Measures taken to raise the productive capacity in a country are also referred to as supply-side economics – that is, in other words, the wide array of policy tools and direct measures deployed to increase output in the economy.
Late President Ranasinghe Premadasa rolled out many such measures to facilitate setting up of new production capacity. The previous regime headed by former President Mahinda Rajapaksa should be commended for the special relations developed with China and it should be appreciated that this country would not have benefitted from some of the large-scale infrastructure projects if not for this relationship.
c) Fiscal policy should be in sync with broad macroeconomic policies
Fiscal policy, or in other words the entire spectrum of how Government income and expenditure is managed, is an important policy tool as well as a significant influencer of economic outcomes in a country, whereas, macroeconomics encompasses the whole economy including fiscal and monetary policies utilised to stimulate sustainable economic growth.
Monetary policy involves the entire process to manage the money supply through various measures as interest rate, exchange rate policies and other monetary tools with a view to creating the necessary conditions to stimulate sustainable economic growth. Traditionally, the Central Bank of Sri Lanka has been the custodian of monetary policy whilst the Treasury played the key role with regard to fiscal policy.
It was abundantly evident that the previous regime preferred a pro-interventionist policy and therefore ended up having to shoulder a bigger slice of the investments in the country – a direct effect has been the run up in the amount of national debt and related debt servicing costs. Excessive Government intervention, in fact, led to colossal inefficiencies and burden to people – examples include having to fund losses in SriLankan Airlines through the Treasury and the inflationary burden on people as a result of excessive ‘printing’ of money.
What is essential is to set long-range goals for the overall economy and effectively sync fiscal and monetary policies together with their custodian agencies to successfully achieve those goals. The Central Bank of Sri Lanka and its pool of vast expertise is a national asset and they should be allowed the right scope and space to independently function and work towards the achievement of these goals.
Most developed economies have long ago enacted legislation to ensure near or full autonomy for their respective central banks or monetary authorities – this takes away undue influence on those professionals to effectively carry out the national responsibilities bestowed on the monetary authority.
It is also important to bear in mind that regardless of macro-economic statistics published, be it GDP or inflation, it’s not too hard for the general public to figure out changes in cost of living and whether they can afford it or not – so really, those with any intent of publishing ‘dressed-up’ numbers should know that they are just deceiving themselves and people will hand down a decisive response sooner or later.
Dr. Harsha De Silva’s goal to focus on household income is indeed a ground-breaking approach as far macroeconomic policy making in Sri Lanka is concerned. However, it would be advisable to give due attention to complementing this goal with effective methodologies to track progress, independent of national accounts and statistics.
Regardless of political affiliations and ideologies, all Sri Lankans are keen to see good governance in the country and meaningful steps taken to improve the standard of living of all Sri Lankans. People are also going to gauge the current regime against all the allegations that were thrown at the previous regime – corruption, nepotism and impunity. So it is in the interest of everyone to see this 100-day work program succeed and set the country on a sustainable path of economic prosperity, good governance and peaceful co-existence.
“It always seems impossible until it is done” – Nelson Mandela.
[The writer has completed the Masters in Business Administration from the Cranfield School of Management, United Kingdom. He is a member of ACCA, CIMA and CIM (UK) and he has also successfully completed executive education programs at the Kellogg School of Management, Illinois, USA. Over the years he has had many research based publications in the United Kingdom as well as Sri Lanka.]
