Yearning for better economic conditions

People voted the NPP government into power because the economic woes of the people were beyond a level that could be tolerated. The majority of the population cannot manage even two meals a day properly, while a few are in the lap of luxury.  

They were not bothered about corruption per se. But NPP said that it was the cause of all the evil.  If the NPP government feels that it was due to corruption, corruption only, well and good.

Eliminate the corruption, bring the culprits to book, recover the stolen goods, but improve our economic conditions. That is the real demand of the people.

It’s been six months and things have not changed for the better for people yet. It remains the same, if not worse.

What do people expect from government which they did not get for 77 years of ‘Ape Aanduwa’ even though this term was first used to describe the 1956 SWRD government? Relatively, people were better off under the colonial masters and they thought it will improve under Ape Aanduwa. But the complete opposite happened, except for few.

Creation of wealth and equitable distribution

What is fundamentally expected from the government, leaving out the ‘ism’ underlying the different announced policies of different governments? People expect twin action of creation of more wealth and equitable distribution of wealth amongst citizens.

I remember reading an article when I was in the Plan Implementation Ministry in 1974, about two economic indicators that were used to measure these. Most of the economic indicators do not really indicate the growth of a sectorial balanced economy that is robust.

An inefficient public sector, over balanced service sector, all show high per capita income. Creation of wealth was indicated in that article not by per capita income but for whatever reason, by the total use of energy by the economy. The other indicator was the Pareto Index (now Gini Index is used) that measured the distribution of wealth amongst citizens.

In the graph of these two indicators over the years from independence of the Sinhala nation from British, one could easily identify the rule by UNP and SLFP. During the UNP period, the energy usage was increasing while during SLFP governments, it was decreasing. On the other hand, the ratio of distribution of wealth was deteriorating during UNP governments, while during the SLFP regimes, it was improving.

None of the governments were able to improve both, and it showed focus of their policies. Even during the UNP regime, creation of wealth was not really improving, lagging behind way back in the 1970’s itself. Evidence of that was the uprising of the JVP in 1971 and the import restrictions imposed by Dr. N.M Perera.

Large scale corruption started only from 1978, but corruption at a lower level started long before that, simply due economic hardship.

Equitable distribution of ‘Poverty’

During the period of the National Front between 1970 and 1977, wealth generation was  bad despite them providing opportunities for local industries and agriculture by import restrictions.  

However, they ruined the estate sector by nationalising the estates. Nationalisation per se was not bad, but the management of the estates was handed over to their political stooges with low or no management skills. People hated their rule despite their effort to improve equitable distribution of wealth and effort to improve the local economy. In reality they equitably distributed poverty not wealth.

Disenchanted by the UNP’s rule of less equitable wealth distribution, people gave the United Front government two third majority. But at the end of it, they think that was the worst period in terms of economic struggle.

Corrupt people Vs corrupt system

NPP made out that the corruption is the almost the sole cause of poor economic condition. I believe poor economic condition is the cause of a corrupt system. One has to recognise corruption in Sri Lanka is not merely in the political level, the whole system is corrupted.

Without creation of wealth, corruption cannot be eradicated especially at lower levels. For some of the previous political leaders it may be addiction to wealth at any cost, but for majority of the people in the system, it is a necessity for survival.

Fixing the corruption at political level is only a beginning, cleaning a corrupt system requires improvement in economic conditions. Up to now, there have been no plans proposed by the government to make radical change in the economy. I stand to be corrected.

It is merely continuing with what previous inefficient, neo liberal governments have been doing. No change whatsoever. Why it is not happening?

‘L’ board government

Almost all the government MPs and minsters lack administrative experience. Dr. Harini’s retort that they did not have experience in corruption might sound great, but it does not solve the problem.

In fact, administrative experience is not a requirement for political leadership. They only need leadership quality to get things done by bureaucracy.

A retired Ceylon Civil Service Officer commented on social media that administration is to be handled by the bureaucracy, and minsters not having previous experience is not a handicap. What he said is really true as the British TV comedy ‘Yes Minister’ portrays.

Unfortunately, thanks to the great left politician Dr. Colvin R. de Silva who politicised the Sri Lanka Administrative Service (SLAS), successive governments for the last 53 years have ensured the SLAS has no place for meritocracy but mainly for people with low level intelligence who would say “Yes Sir” to political masters.

Bureaucracy at all levels today is mostly filled with mediocre staff, there are very few exceptions. They cannot come with up innovative ideas to revive the economy. I have worked with members of the Ceylon Civil Service and their capabilities are unimaginable for today’s administrative service officers.

Public Service is managed by the Public Service Commission and quality cannot be changed overnight. Fortunately, the choice of people for Ministry Secretaries, Heads of Department, SOE Heads and Boards are within the political Leaders. They need not appoint people from the rotten administrative service.

Variant of nepotism

Corruption really starts with appointing people incapable of doing things to government positions. If you appoint people from your family circle, it is start of corruption in the form nepotism. If you appoint people whom you know personally only to government positions, it is equally bad as nepotism. It is a variant of nepotism.

I was listening to one of the appointees of a government position saying, ‘When I was part of Aragalaya and protested in front of the Presidential Secretariat, I did not imagine that I will address people inside the Presidential Secretariat one day.’

I remember a discussion in 1972 in the E. O. E. Pereira auditorium of the Engineering Faculty of University of Peradeniya, where  Neville Jayaweera confronted Dr. Colvin R. De Silva asking him whether they are appointing people who believe in their policy or people smart enough to know who will win the election and join them in the campaign. Colvin said that bureaucracy is pro UNP and they will not follow directions based on our policy.

I do not think NPP appointments exactly fit Jayaweera’s comments, but somewhat similar. Appointing only people they know is not meritocracy. It is a variant of nepotism. Your roommate in university or the professor who guided you to follow different studies when you decided to quit the engineering faculty to pursue politics, are not the best appointees for a bureaucracy that will help you to create wealth.

Introducing meritocracy

When Gotabaya became president, he advertised publicly in the media for people to apply for various government positions so that he could select the best people to administer the government. Maybe it was an idea from Viyatha Maga. Finally, of course, he appointed people known to him, ignoring the applications.

The NPP government could have followed the same mechanism of inviting applications and followed it through to the end. NPP could have entertained applications from people who would want to contribute to the country.

The National Intellectuals Organisation (NIO) could have evaluated applicants and could have recommended people who would be best suited to administer the respective government institutions. That would have been a beginning of administration based on Meritocracy. I have seen people appointed to boards who have failed miserably as executives, probably because they participated in Aragalaya. Most often than not, competent people would not have participated in Aragalaya.

Apart from no signs of any announced coherent economic recovery plan, five heads resigning within six months of government and suspending the Chairman of the Palmyra Development Board pending investigations, within six months of appointment, shows very clearly the choice of people to run the bureaucracy has not worked at all.

Mange by task vs manage by relationship

There is another problem in appointing people known personally to the President, Ministers, MPs and Aragalaya participants. Political leadership will have to manage officers by relationship not by task.

One of the Presidents who managed people by task not by relationship was President Ranasinghe Premadasa. There may have been other issues with him, but his success in getting results in both legitimate and some alleged illegitimate activities, was his ability to manage people by task not by relationship. When he set a task and target date to an officer, the latter had to figure out how to execute in the given time and could not go back and give excuses for not achieving the target.

I personally know one instance where he gave a task with a two-month deadline for all  applications for the Janasaviya program to be captured in a computer system and from the computer system monthly payments had to be generated to the recipient’s respective bank accounts. The job was assigned to the then Chairman of NSB.

He said that 300,000 applications had to be captured from forms in English, Sinhala and Tamil, and payment processed. Sinhala and Tamil forms needed to be translated into English. The majority were Sinhala forms.  

The NSB Chairman told my manager who handled the job, “You have to do this in two months and I cannot go back to President Premadasa with excuses. If I fail, I am finished, so is your company.” It was sub contracted to our company and we had to figure out how to do it, and we completed in time.

If I am not mistaken, he also gave only two weeks’ notice to the Commissioner of the Department of Motor Traffic to remove the Sinhala ‘Sri’ from vehicle registration numbers.

Unpaid/low paid appointees

Previous governments have been paying excessive amounts to inefficient and corrupt people who ran institutions into a mess. That was the problem.

It is meaningless to appoint corrupt free and people working without financial compensation in the government, if they cannot create wealth.  It is far better to have efficient people who would cost a lot, it they can generate much more wealth. It is better to employ people who would collect a million rupees legally or even illegally, from generated surplus of multimillion, rather than employing people who collect, not even a cent and create a surplus of low value or no value at all.

Impact of improper appointments and management

There is a brilliant video circulating in social media, that all the taxes collected by government are snatched by SriLankan Airlines, Petroleum Corporation, Water Board, CEB and so on.

The major issue in all these institutions is that they are over staffed and inefficient. I remember in 2008, Lake House had 5000 employees but within few months, it was brought down to 2000 and if I am not mistaken, it is only around one 1000 now.

If they had not implemented a voluntary retirement scheme, managed by the Finance Director and the Deputy General Manager Finance, two brilliant managers, it would have been bleeding and the Treasury would have continued pump money to keep it alive.

SriLankan Airlines is continuing to bleed and, in that process, it continues to bleed the average citizen of the country. If it cannot be managed it should be divested or closed down. The average citizen cannot bleed to keep the NPP’s political agenda and the livelihood of the few thousand employees. Profitability cannot be changed overnight but do they have a plan to stop this bleeding? Citizens who are bleeding have the right know.

The overstaffed, inefficient and probably corrupt CPC, CEB, Water Board on the insistence of IMF, are raising the prices and the citizens of the country have to sustain the cost of overstaffed, highly paid, inefficient executives of these institutions.

NPP said that they will drastically reduce the price of both fuel and electricity. In the case of fuel, private companies are raking profit due to the inefficient CPC, a pro working-class government helping capitalist owners.

Target dates for action plans

In the last six months the government has not published a single development plan of any sector or state-owned enterprises.

I am not sure whether any targets were given to appointees to various government institutions to come up with a plan to improve performance. Already 10% of the term of government has gone.

I was told by a member of a government agency that they are in the process of preparing a work plan but no target date. What they were doing for six months without a plan finalized?

We have seen in the media that the project giving government buildings allocated for minsters previously to the private sector for generating revenue, mainly from tourism, has not moved much beyond policy decision. One media reported, those compounds are becoming jungles. Minister admits a decision has not been taken yet but no indication from him, or even a target date for those who are handling it.

I am reminded of what Albert Waterson, a World Bank planning expert wrote about failed five-year plans of governments of developing countries. He said those plans were not plans, but intentions. It appears the NPP Government has good intentions, but no plans for economic recovery up to now.

One could observe only two projects of the Government, namely digital payment – not digital economy –  and cases of corruption are moving forward. There is hardly any other visible economic recovery plan  or if so perhaps it is being kept a secret.

Conclusion

If the NPP government does not find ways of creating wealth and only focuses on eliminating corruption to improve the distribution of wealth, they will face the same results the United Front of 1970-77 faced.

They will be cursed for equitably distributing poverty. There is a good possibility the country will go back to politicians which NPP claims are corrupt, the same way the country went back to the Rajapakses after a dismal performance of Yahapalanaya