A critique on the Govt.’s economic policies

By Lacille De Silva

The Prime Minister had stated in Parliament that his wife gets a higher salary than him and would not hesitate to support the proposals to increase salaries of parliamentarians and to provide vehicles to MPs to carry out their work in their electorates. His plan to push these two issues conflicts with the electoral mandate given to them. They had been voted to run a responsible government. They should pursue electorate’s interest or national interest and not the selfish interest of greedy, myopic, visionless, opportunistic parliamentarians.

The PM must ensure that the scarce resources are managed sparingly with utmost care. He is aware that a bulk of our people live in misery despite being home to thousands of skilled and talented citizens. Due to corrupt political leaders, they presently live in frustration, hopelessness and poverty. Now that the war is no more, the PM had better give good leadership to stimulate the precious resource – the people. 

Due to the lack of far-sighted, altruistic, visionary-type, progressive parliamentarians in our legislature, the people are suffering endlessly for no fault of theirs. They had failed to fix our pressing problems. The political leadership at least now should evaluate situations correctly and take precise decisions.

Are they in an occupation by which they earn their living or in a business? Parliament is the people’s deliberative assembly belonging to the nation. 

Elected representatives are our agents, trustees and the delegates. Christopher de Souza, a Singaporean MP in Parliament, had said: “I believe most, if not all, of us present … would agree with me that political office is both a calling (and a passion). Those who want to serve must have the sense of duty and beyond that passion to the nation, as well as a desire to contribute to the public good of Singapore”. 

He had further elaborated – “For MPs, we are in this because we believe in the ethos of sacrifice that public service entails, listening to them, caring for them, offering encouragement in times of difficulty and mapping out real ways of progress for them and their children – that is fulfilling, that is politics”. Let me also quote how he had ended the debate – “Those who want to serve must have that sense of duty and, beyond that, passion to the Nation, as well as a desire to contribute to the public good”.

Independent Parliamentary Standards Authority in the UK

The British Parliament has also taken a giant leap forward and established the Independent Parliamentary Standards Authority (IPSA) in 2009, in the aftermath of what had come to be known as the ‘expenses scandal’, which now sets MPs pay, among other things. This no doubt was a total deviation from the past practice. 

For the first time in UK, an independent body considered and determined how MPs should be paid. IPSA introduced a pay structure, which became effective from May 2015. Consequently, MPs no longer will be responsible for setting their own pay in the UK. They do not now serve themselves with a larger spoon. But our MPs do!

These crucial changes had been made although MPs had controlled their own pay for centuries in the UK. It had also been revealed that MPs had held their pay at a lower level though they had continued to draw allowances, expenses etc. that were far less visible to the public, like our Parliamentarians? Political scientists frequently use the term “rent-seeking” to describe an individual or a group searching for ways in which they would benefit by manipulating the institutional environment to their own advantage. 

It had, however, culminated in the expenses scandal – 2009. This issue has created a huge uproar and had caused serious damage to the Parliament, Parliamentarians and to the confidence in MPs. IPSA has therefore established an international standard how politicians should be supported transparently and independently from the public purse. The PM should introduce a similar body now that he had already introduced the Sectorial Oversight Committees of British Parliament (having abolished the Consultative Committees), to strengthen good governance. If not, why? Couldn’t it be better to have it included in the proposed Constitution?

Independent Salaries and Remuneration Commission in Kenya

Do you know in Kenya too, owing to similar problems like ours, they have taken necessary steps to establish an Independent Salaries and Remuneration Commission, which had reduced the salaries of Parliamentarians elected to the current Parliament? The newly-elected MPs had threatened to disband the Commission for reducing their salaries. The activists Boniface Mwangi who had organised protests over the MPs pay dispute had said “This battle was a fight between 349 legislators and 42 million Kenyans. The Kenyans won”. 

President Uhuru Kenyata in his ceremonial address in Parliament had said that the government salary bill exceeds 12% GDP, above the internationally accepted level of 7%. He had therefore urged the MPs not to demand pay hikes because half of all revenue collected by the government had been set aside to pay government salaries. 

In Sri Lanka, as well, with too many Cabinet Ministers, State Ministers, Deputy Ministers (beyond the Constitutional restrictions) and an excessively overstaffed public sector, parliamentary pensions, perks, benefits, fuel, vehicle maintenance costs, etc., I am told, bills go far beyond 20%. Shouldn’t we add the cost of sustaining the Parliament – so called white elephant, for which government spends millions daily. 

How did the able Minister of Finance Ravi Karunanayake, a member of the Staff Advisory Committee (SAC), fail to call for detailed reports, relating to numerous issues amounting to billions raised by the Auditor-General concerning parliamentary administration year after year? The issues of uneconomical operations, enormous waste, serious frauds, corruption, abuse, misappropriation, theft, over-staffing, lethargy, mismanagement, lack of supervision, neglect, idle labour, tendering procedural violations, over-purchases etc. etc., if fixed, could pave the way to save billions.

In Singapore, there is zero tolerance for corruption and they pay MPs extremely well as in the case of other public servants. Australians too are among the best paid in the world. Why is the PM justifying the increase to MPs without solving the pressing economic issues before the country today? He should create necessary avenues to up lift productivity and promote growth to overcome financial instability due to excessive loans, corruption and top heavy government. 

Inconsistent, inappropriate and disruptive policies

The Government has also cut down allocations on health, education, etc. People do not have essential medicines in Government hospitals. The PM had said 43% of the population do not get even $ 2 a day. Owing to these reasons, namely lack of education and poor health, productivity capacity is drastically low. Children in certain categories do not have schools, they are less likely to become highly skilled workers. Their productive capacity of the economy, is diminished. Nevertheless, does that mean the PM wants salary increase and vehicles approved purely for MPs to ‘commensurate with their status’?

We expect our decision makers to consider the impact on low and modest income households if they finally agree to implement these proposals. At a meeting, two Sri Lankan economists had said that the Government’s economic policies are inconsistent, inappropriate and disruptive.

Razeen Sally had accused the government for “excessive increases in state spending and salaries”. Sally had also warned not to resort to “ad hoc” measures and should focus on fiscal consolidation and improving of local businesses and investment culture. 

Another respected former Central Banker/Economist Wijewardena had also said that the Government’s fiscal and monetary policies have been contradictory. He had added “both monetary and fiscal policies are working in opposite directions”. British Finance Minister Phillip Hammond recently had said that he is aiming to help struggling families and boost country’s long-term growth. He had added: “We have got to make sure that the prosperity that comes from seizing opportunities ahead is shared across the country and across the income distribution”.

Remember, hidden wasteful expenses, inefficiencies and corruption etc. cost billions in our country. Consequently, the wide gulf between rich and poor impairs social cohesion and compounds a wide array of social problems, including poor physical and mental health, crime, violence etc. It is time to re-think about how the decision makers should understand and restructure political and economic arrangements in the twenty-first century. The current systems are not working. It does not serve the needs of the humankind. 

We, the citizens, therefore, must look beyond the visible signs and beyond the border how and why the PM manifestly using political power to reward party men – without aiming to bring down ever increasing cost of living and achieving growth and development. Are they seemingly trying to provide their coterie with the necessary resources to fight future elections? To the leadership, the creation and allocations of state rents serves political purposes. Sri Lankan politicians do not like developing merit-based bureaucratic values, institutionalised competitive politics, established transparent government processes and an informed civil society as in the case of developed countries.

Whither, elections promises?

Prior to the elections, they assured that they would establish a framework of ‘strong financial control management system’. Shouldn’t they fulfil that before increasing the payments for MPs because such improvements will enable the PM to find the necessary resources?

I always maintain that our country is poor by choice. Our politicians have ultimately created an impoverished country. It appears owing to these, foreign debt had already shot up to billions of dollars. Economists believe the country is heading to a debt crisis. 

The PM speaking at the Business Today Top 30 awards ceremony last week had said: “I am keen to achieve 7% growth next year as opposed to the Central Bank forecast 6% because that will spur the required momentum. It is a make or break time for us.” Let me be frank –“It will not be easy, but it will be worth it”.