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All global indices are not kind to Sri Lanka
Obviously, this index has not been kind to Sri Lanka. For that matter, none of the other global indices such as ease of doing business, corruption perception, governance, rule of law etc have been kind to Sri Lanka. All these indices have ranked Sri Lanka very low, indicating that there is much to be desired if Sri Lanka wishes to improve its conditions. The impact of the outcome of these indices on Sri Lanka has been discussed by this writer in a number of previous articles in this series. Ease of doing business was discussed in an article titled ‘Doing business in Sri Lanka: There is a long way to go’ (Available at: http://www.ft.lk/2012/11/05/doing-business-in-sri-lanka-theres-a-long-way-to-go/).
The slippage of Sri Lanka in corruption perception was discussed in an article titled ‘Slippage in corruption perception: Should Sri Lankans take note of it?’ (Available at: http://www.ft.lk/2013/12/09/slippage-in-corruption-perception-should-sri-lankans-take-note-of-it/).
The article titled ‘Global Rule of Law Index: SL ranked at midlevel but has more challenges than rest of the group’ discussed the rule of law issues (Available at: http://www.ft.lk/2014/04/21/global-rule-of-law-index-sl-ranked-mid-level-but-has-more-challenges-than-rest-of-group/).
Results of global indices mostly ignored
Though these indices have worldwide acceptance, the policy authorities of the countries concerned have always looked at them either as a nuisance or as some international conspiracy against them. Thus, the message delivered by the indices has not been taken seriously by the countries to which they are most applicable. The result has been the division of the world into two groups: The countries which have good index values and countries which do not.
Mostly, the developed countries belong to the first category while the developing nations to the latter. This division as well as the disregard of the results of the indices by policy authorities of developing countries has made the outcome of the indices, compiled at great costs and labour, just an academic exercise with only limited practical use.
Central Bank’s attempt at educating the public
In this background, the Central Bank has published a timely box article titled ‘Insight into Global Indices’ in its Annual Report for 2013 (pgs 69-70). The purpose of the box article has been twofold: First, to express its reservations about the accuracy of these indices since they are based on perceptions of people who are being interviewed to gather information by the compilers of indices; second, to announce its plan for conducting an independent survey of its own to capture the sentiments of business executives of the country on many of the indicators covered in global indices.
Thus, in time to come, it is likely that the Central Bank might come up with its own home-made indices as alternatives to the indices compiled by the global compilers. They might counter the global indices but lose international comparability if they are not compiled by adhering to best global practices.
"Obviously, this index has not been kind to Sri Lanka. For that matter, none of the other global indices such as ease of doing business, corruption perception, governance, rule of law etc have been kind to Sri Lanka. All these indices have ranked Sri Lanka very low, indicating that there is much to be desired if Sri Lanka wishes to improve its conditions.
The overall score of the country, as mentioned above, has been consistently between 92.2 and 96.7 classifying Sri Lanka as a fragile state with high risk of failure. This is not a situation about which the country can be happy and complacent.
Though these indices have worldwide acceptance, the policy authorities of the countries concerned have always looked at them either as a nuisance or as some international conspiracy against them. Thus, the message delivered by the indices has not been taken seriously by the countries to which they are most applicable."
Central Bank: Perceptions are subjective and have a personal and cultural bias
The box article under reference, having appreciated the useful role which these indices play in informing the global policy makers of the comparable position of the countries involved, has spoken of the limitations of the index results mainly due to a shortcoming in the method of compilation. To gather information relevant to a country, selected groups of people are interviewed and they express their personal perceptions about the questions that are posed to them. These perceptions, alleges the Central Bank, are “subjective and reflect personal as well as cultural bias”. Hence, the validity of the results of the indices becomes debatable.
In addition, some of the indices use the results of other indices compiled by organisations like IMF and the World Bank. Hence, if the results of those indices are bad, so are the results of the indices that use those results as their inputs. The implication of such an inter-linkage of index results is the natural building of ‘badness’ or ‘goodness’ into the global indices so compiled. Thus, bad guys are always bad and good guys are always good which does not reveal anything that has not been known before.
Bad or good memories feed into long term perceptions
The Central Bank cannot be faulted for questioning the validity of perceptions as a meaningful revelation of the actual situation prevailing in a country. Perceptions are too often guided by emotions that do not permit a person to express his opinion on an issue in an objective manner. Historically accumulated memories also play an important role in forming long-term perceptions. If a child is caned everyday and if the child does not enjoy being caned, his or her perception of the cane is as an instrument of torture even when it is used for a pleasant experience – say showing the way to an ice cream parlour. If there are stories about corrupt practices of politicians or public servants and the laws do not reach them, the long-term perception of a person is that politicians and public servants are corrupt and the system that gives them impunity is also corrupt. Thus, perceptions are personalised views and should not necessarily reflect the common view of a population.
Perceptions influence almost all human actions
But this is not an issue common only to global surveys. In any public opinion testing exercise, the issue of biased perceptions will come up distorting the final result of the exercise. It is typical of elections in which the perceptions of voters are tested en masse. People vote for candidates at elections not after an objective and rational evaluation but based on the perceptions they have formed about them. It is not unusual for a person to vote for a candidate without properly evaluating the manifesto he has presented to the electorate. This behaviour is contrary to how a rational person should behave because rationality requires him to assess both the pluses and minuses of the issue at hand and choose it only if pluses are greater than minuses. But as Nobel Laureate Herbert Simon has found, people do not go for the depth of rationality when making decisions. Instead, they go for the best decision which they can make with the available information, time and brain power to process that information. He coined the term ‘bounded rationality’ to describe this behaviour because decisions are bounded by the availability of information, time and personal abilities. Thus, even at elections, people do not make the most accurate choice based on rational thinking; they make the best choice which can be called the optimal choice. And that optimal choice is good enough for minimising risks, avoiding losses and enhancing profits. Hence, perceptions are not that misleading.
Global indices gather perceptions of many diverse people
The compilers of global indices are aware of this nature of perceptions that might prevent them from portraying the true state of affairs of a country. Hence, they select people from diverse backgrounds and positions for gathering information so that everyone will not have the same perception on an issue. Such interviews are then cross-checked with published data to assess their veracity. The final outcome is produced after appropriately moderating the individual views expressed by them.
Three steps in building the Fragile State Index
In the case of Fragile State Index, the Fund for Peace has developed an analytical platform known as Conflict Assessment System Tool or CAST (available at: http://library.fundforpeace.org/cfsir1418). It uses three methods to arrive at its decisions. First, in a process called content analysis, millions of published documents relating to different indicators pertaining to a country are scanned and electronically assessed using special software produced for this purpose. Second, a quantitative data gathering is made by using information already published by diverse global institutions such as the United Nations, Transparency International, Freedom House, World Factbook, World Bank, and many other reputed organisations. Third, a qualitative review is done by comparing the results arrived through the two previous methods (available at: http://ffp.statesindex.org/faq-03-what-methodology). Thus, perceptions get into the Index indirectly through the indices compiled by other agencies that have captured perceptions of people to come up with their results.
Sri Lanka ranked low in all the sub indicators
The twelve broad indicators used by the Fund for Peace for compiling the Fragile State Index are as follows: Demographic Pressures (DP) that captures diseases and natural disasters making it impossible for governments to protect citizens or situations where they lack capacity or willingness to do so: In this aspect, Sri Lanka has been ranked at low levels scoring between 6.5 and 8.0 out of a total failed mark of 10.
Refugees and internally displaced persons (REF) placing a strain on the capacity of the Government to handle the issue thereby posing a security threat: In this aspect, Sri Lanka’s score is very poor ranging between 8.2 and 9.2.
Group grievances (GG) that underlie the existence of conflicts among different groups generating ethnic, religious, communal and sectarian violence and the helplessness of the state to handle them properly: Sri Lanka’s score in this aspect is most alarming demonstrating a score of almost total failure. Its score has ranged between 9.1 and 9.8.
Human flight and brain-drain (HF) demonstrating that there is little opportunity for people forcing them to leave the shores thereby creating a vacuum in the human capital stock: Sri Lanka’s score in this respect has been between 6.7 and 7.6 but has been rising in the recent years demonstrating the onset of a critical situation.
Uneven development (UED) that has taken into account income disparity and access to basic services: In this aspect also, the country’s score has been low ranging between 7.5 and 8.7.
Poverty and economic decline (ECO) that make it difficult for the state to provide for the citizens as demonstrated by the existence of budget deficits, government debt, youth unemployment, falling purchasing power etc: The country’s score in this aspect has been better than other aspects and its score has ranged at mid-level between 5.3 and 6.2.
State legitimacy (SL) involving corruption, lack of representativeness and failure to deliver that is promised by the Government. This aspect covers a wide range of social and political issues such as level of corruption, government effectiveness, political participation, electoral process, level of democracy, drug trade, protests and demonstrations and power struggles: Sri Lanka’s score here has been very low and it has ranged between 8.1 and 9.2.
The public services (PS) that captures the ability of the state to deliver the basic services that cover policing, criminality, education, water and sanitation, infrastructure, quality healthcare, telephony, internet access, quality roads and reliable energy etc: Sri Lanka’s second best score has been in this area where it has scored between 5.5 and 7.0.
Human rights and rule of law (HR) that includes press freedom, civil liberties, political freedoms, human trafficking, political prisoners, incarceration, religious persecution, torture and executions: Sri Lanka has been ranked very low in this area and its score has been between 7.2 and 9.0. The score has deteriorated significantly in the recent few years.
Security apparatus (SEC) covers whether the government has the monopoly on the use of legitimate force and the power of the state is weakened when there are other power groups which also use force on citizens alongside the Government: In this area too, Sri Lanka’s record is very low and its score has ranged between 8.0 and 9.0.
Fractionalised elites (FE) that cause the local and external groups to intervene in the ordinary affairs of the state weakening its position: Sri Lanka’s score in this area has been very low and it has ranged between 6.7 and 9.5.
External interventions (EXT) covering the failure of the state to meet its domestic and international obligations: In this area, Sri Lanka’s track record has been at mid level scoring between 6.1 and 6.8.
The overall score of the country, as mentioned above, has been consistently between 92.2 and 96.7 classifying Sri Lanka as a fragile state with high risk of failure. This is not a situation about which the country can be happy and complacent.
Critics say that Fragile State Index is also fragile
The Fragile State Index has come under harsh criticism owing to its failure to predict conflicts in the countries covered by it and its obvious bias for western-type democracies and declared underrating of some of the poor countries especially in Africa. Lionel Beehner and Joseph Young writing to the Washington Post in July 2014 immediately after the Index for 2014 was released have summarised these criticisms and indicated the ways of rescuing the index from being a futile exercise (available at: http://www.washingtonpost.com/blogs/monkey-cage/wp/2014/07/14/is-ranking-failed-or-fragile-states-a-futile-business/).
The suggestions made are that the Index should be more transparent, it should measure what it has targeted to measure, it should define what is meant by ‘fragile’ precisely, it should dump such emotional statements like ‘Postcards from Hell’ which do not serve any purpose and it should improve its predictive powers. Without such improvements, the authors feel that the index on fragile states will remain fragile.
The message delivered by Fragile State Index should not be ignored
The index, like other such global indices, is not criticism-free. A country can castigate the index compilers on the ground that they are based on personalised perceptions which are far from reality. If the majority of people perceive the issues before them in that way, then, it is something that cannot be ignored at all.
(W.A. Wijewardena, a former Deputy Governor of the Central Bank of Sri Lanka, can be reached at [email protected])
