ECONOMYNEXT – President Gotabaya Rajapaksa’s meeting with top staff of the Central Bank has had a mixed reception. The president admonished the Central Bank for not being adequately supportive of government policy with regard to reviving the economy. In a strongly worded speech the president demonstrated knowledge of the economic performance of other countries. He compared the assistance given by governments such as in the United States and Europe to businesses to revive the economy with facts and figures and said that the Central Bank should act accordingly.
From the beginning of his term of office, the president has been showing a strong desire to make a difference in the way the government functions. This may be the reason for some of the high level appointments he has made of former and present security forces personnel to positions in the civil administration. He also began to pay surprise visits to government departments to ascertain for himself the state of affairs and how they were serving the general public. When he found that they were not functioning in a manner that was effective and efficient he pointed this out and issued strictures to improve themselves. Recently following a meeting with staff from the prisons department in his office, he removed the prisons commissioner and replaced him with another from the same department.
These actions of President Rajapaksa have indicated to the general public that he is serious about making a change in the country. These actions by the president have been well received going by public opinion, as they all collectively blame the government systems for the situation they are in. Government departments have a poor reputation for being overstaffed and where the staff bring out the rule book to thwart those who come to them from getting either a benefit they are entitled to or solving a problem. It is the unfortunate experience of many that some form of gratification is needed to get the task accomplished.
CHANGE SYSTEM
In this context President Rajapaksa’s admonitions to government departments and officials will be viewed favourably by the electorate when it comes to the forthcoming general elections. This will be to the benefit of the candidates of the ruling party and to the majority that the government hopes to obtain. However, the president’s intention would also be to make a longer term impact on the future of the country. This can best come by a change of system and not only by pushing the existing system to deliver better results.
In two recent instances, the president’s cracking of the whip has borne immediate changes. The new prisons commissioner has successfully launched a search and seizure operation in the prisons that netted a harvest of mobile phones that had been held illicitly by prisoners. One of the factors that precipitated the president’s intervention into the prison system was reports that prisoners were utilising their mobile phones to continue to lead crime syndicates outside. However, these phones have been confiscated in the past as well only to make a reappearance later.
Following the public admonition of the Central Bank management, the bank immediately came up with a response to kick start the economy. They reduced the Statutory Reserve Ratio which has given banks more flexibility in lending to people to either start new businesses or to prop up existing ones by taking more loans. However, with international markets shrinking, and the possibility that those who take loans will not use the additional funds effectively, success is not guaranteed. It is important that the money is lent to those who can make good use of it and not due to political pressure.
INDEPENDENT INSTITUTIONS
The common factor that links the two institutions most recently addressed by the president is that of corruption. This is the common factor across the board as well. The power of these vested interests may explain the president’s reliance on the security forces personnel to take forward his vision. The drug lords who operate from within the confines of prisons have, in the past, been shown to be in league with politicians. On one occasion an entire container load of drugs was found in the harbour and apparently approved by a government ministry. But investigations into that case did not appear to progress.
The nexus between corruption that involved state institutions and politicians was once again highlighted in the Central Bank bond scam under the previous government. President Rajapaksa referred to this in his comments to the Central Bank management whom he recently addressed. During the investigations into that case, evidence also emerged that similar practices had taken place previously under successive governments. The foremost task for those who seek more efficient and problem solving governance in the country is to break the stranglehold that politicians have over the public service.
The rot that set in terms of the overpoliticisation of the public service got a boost with the 1972 constitution. This sought to give elected politicians control over the economy with laudable aim of democratising the economy. This was in line with the socialist dogmas that prevailed at that time. The 1972 constitution deliberately weakened the public service and judiciary and made them subservient to the political authority. One of the most significant changes was to change the position of the Permanent Secretary to the Ministry whereby the Secretary to the Ministry could be changed with every change of government. An effective and problem solving system of governance needs more independent institutions and the rule of law that continues beyond the government in power. (Colombo/Jun24/2020)