Major reasons for Lanka ’s debacle

[Harold Schiffman]

--   *ISSN: 1391 - 0531* *Sunday, June 24, 2007*
 *Vol. 42 - No 04*
 Financial Times
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    Major reasons for Lanka's debacle

(Joint press release issued by the Chairman of the Joint Business Forum
(JBIZ), Nimal Perera)

Until the late 1950s Sri Lanka had been an economically sound,
self-sufficient country in Asia. Having fought together to gain
independence, every community lived in harmony until the new language policy
was introduced. It was a known fact that our country was looked at as a
model by countries like Singapore to develop theirs in that era. Further to
that our country was proud to have had one of the best-managed Railway
systems and also the Public Service in the world. We did not have an
Executive President, a large Cabinet and Provincial Councils at that time.
The country was well governed by the House of Representatives comprised of
high caliber personalities headed by the Prime minister. They were well
supported by equally efficient and well-respected Government Agents. They
never meddled with the law of the country. It looks like that the changes
done subsequently to the Administrative and Legislative Structures and
constitution had not been beneficial to the country. The situation now is in
a highly deteriorated state in every aspect. We give below the Per Capita
Income of two Asian countries and Sri Lanka for 1960 and 2006 just to
indicate at what pace our country has moved.
   What has gone wrong? Many accept that the war, high cost power
generation, the language policy, preferential voting system, corruption and
waste and deterioration of the law and order situation have caused the
downfall of our country.

What has gone wrong? Many accept that the war, high cost power generation,
the language policy, preferential voting system, corruption and waste and
deterioration of the law and order situation have caused the downfall of our
country.

*War*
The 24-year-old war has done the biggest damage to the country both socially
and economically. Every leader in power has vowed that terrorism would be
crushed militarily. Military assistance from India was also obtained and now
24 years have gone by, more than 50,000 people have lost their lives, more
than 100,000 people have got disabled, more than 500 billion rupees have
gone down the drain and billions worth of properties have got destroyed.
These still continue and our lives have become more and more miserable and
uncertain. Although the leaders were always in favour of a negotiated
settlement, they always succumb to the terrorist's tactics of provocation.
The war situation has also created room for the deserters and arms and
ammunitions to move freely through out the country resulting in escalation
of violence and crime. The sufferings the citizens have to go through, the
battering the economy get, the destruction of property and moreover the loss
of human lives should come to an end immediately if the country is to
prosper. Budget approval for defense expenditure for the year 2007 was Rs
100 billion where as in a no war situation it should have been around Rs 30
billion. If the peace prevails, the country could easily save at least Rs 70
billion annually. This would enable the government to reduce the excessive
taxes and other levies and thereby lower the COL. Had the billions of rupees
spent on war utilized for the development process, by now the country would
have had many new highways, many flyovers in major cities, many power plants
and an highly improved transport system making the life of the people
comfortable.

*Expensive power generation *
Failure to set up Coal Power Plants in time as planned by the experts also
caused severe damage to the economy of the country. Ironically our decision
makers went for the most expensive method of power generating using
expensive fuel when other developed and affluent countries resort to low
cost methods. As a result of high cost of power many industrial ventures
struggled to survive and some collapsed as they became uncompetitive. This
has also become a big burden to the country's economy as the country's
biggest expenditure is for purchase of fuel which is being used mainly for
power generation. Last year alone the country has spent Rs 220 billion to
import petroleum products out of which around 70% totalling Rs 154 billion
have been for power generation. Had the proposed coal power plants been set
up in time as per the plans, the country could have easily saved more than
Rs 100 billion spent on fuel annually. These wasted funds during past many
years could have been utilized to reduce the burden on the economy. It is
commendable that the government has already made arrangements to commence
the Norochcholai Coal Power Plant and Kotmale hydro power project. What is
important now is to fast track these projects and to take immediate action
to set up the other plants in the locations already earmarked in Trincomalee
and Hambanthota.

*Language Policy *
It is a known fact that India is fast growing because of the IT and BPO
Industry. With the growth of the IT Industry many cities like Chennai and
Bangalore also developed. The secret behind the success of this industry is
the high standard of English. After gaining independence the Indian leaders,
continued to maintain the English standards without compromising the
international medium of expression for pseudo nationalism. English is also
an official language there. The level of English standard and English
pronunciation in our country was of a much higher standard than our
neighboring countries. In the good old days even a lower level employee in a
government organization could converse in English. But leaders of our
country for short term political gain neglected the English education and
introduced a new language policy in late 50s. Poor rural youth suffered from
this new policy as they were deprived of the English education making them
unemployable mainly in the private sector. This compelled them to seek
employment in the state sector using political influence and this was one of
the reasons why state institutions are over staffed, politicized and have
become less productive and unviable.

*Preferential voting system*
Another major reason for the debacle of the country is the present
preferential voting system. This system is not benefiting the country or its
people. This system has paved the way for many unsuitable candidates to come
into the parliament. They have lowered the status of the Parliament from a
standard of a supreme, sacred place to the standard of a fish market. This
electoral system has only increased the government expenditure (225 MPs for
about 140 electorates). They interfere with the law and order enforcement in
the country, functions of the Police and other government institutions and
protect the criminals thus increasing the crime rate and corruption. These
unprincipalled politicians prevent high calibre people in the public sector
to perform impartially. They are the main root cause for deterioration of
the discipline in the country, collapse of the important government
institutions and downturn of the economy. They are also responsible for the
destruction of the environment such as cutting down the forests, filling up
of marshy lands, etc.

Dishonest and incapable politicians who get rejected from the electorate for
not serving the people could still get into the parliament with this
preferential voting system. Our country could afford only a lean parliament
and a lean cabinet. If this happens many issues will get solved
considerably.

Another white elephant in the present system is the Provincial Councils. It
duplicates many functions, incurs heavy expenditure and has become a burden
to the country's economy. Income generated by provincial councils in 2006
was Rs 19.5 billion and the expenditure was estimated to be Rs 94.5 billion!
It would be more beneficial to the country if the state of District
Secretary (Government Agent) level is strengthened by way of giving them
more authority, sending them for management training and provide better
remuneration.

*Corruption and waste*
Everyday there are allegations by the citizens and the COPE report reveals
many instances of corruptions within political circles from local authority
level upwards and also in many state institutions. This is also a major
reason for the downturn in the economy as the amounts involved are estimated
to be large enough to make a huge adverse impact. Further substantial
amounts of funds are getting wasted as the inefficient politicians are not
very much concerned about the public funds. The amounts wasted on abandoned
partially built roadways (such as Airport expressway), government buildings,
abandoned CTB buses, railway compartments and other vehicles in government
organizations including in ministries are colossal and values once again
should be in billions of rupees. Sadly none is responsible. The general
practice (of ruling party politicians) is to always blame the previous
regime for the deficits but those in power continuous with the same
mistakes.

*Law and order situation*
The law and order situation of the country has hit the rock bottom with the
escalation of abductions, brutal killings and extortions and the irony is
that most of these are happening in highly secured city. When many vehicles
are being stopped two three times at the security check points, its baffling
how the abductors are always getting away. The Police Department has become
highly ineffective due to politicization. These are the end results of
preferential voting system and the protracted war in the country.

*Leadership*
The leader of a country should be brave enough to take correct decisions and
bring about the necessary changes and may call for a referendum if
necessary, in order to put the country on the right track. Short term he may
become unpopular mainly within political circles but in the longer term he
would be worshipped by the masses. It is high time that all stakeholders
look hard at the current situation and unite to urge the leadership to take
corrective measures. We also should urge the leaders of the political
parties to select respectable people from the electorates who are educated
and capable enough to govern a country. There are many capable personalities
within the country who are willing to assist and facilitate in finding
solutions to country's woes if they are called upon to do so like in South
Africa and Ireland.





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