Thursday Dec 12, 2024
Thursday Dec 12, 2024
Monday, 3 January 2011 00:01 - - {{hitsCtrl.values.hits}}
A postscript to the presentation by World Bank Managing Director Dr. Ngozi Okonjo-Iweala
The Daily FT special reports highlighted the lecture titled ‘Becoming the Wonder of Asia: Accelerating Inclusive Growth in Sri Lanka,’ delivered on the occasion of the 60th Anniversary of the Central Bank of Sri Lanka by the World Bank Managing Director Dr. Ngozi Okonjo-Iweala during her recent visit to Sri Lanka. (See http://www.ft.lk/2010/12/25/world-bank%E2%80%99s-take-on-sri-lanka%E2%80%99s-quest-to-become-wonder-of-asia/)
The above presentation prompts civil society activists to ask, “Have the ‘Fundamental Governing Values’ of the World Bank, the IMF, and the ADB, in providing resources, sharing knowledge, building capacity and forging partnerships in the public and private sectors of their member countries changed over the last decade?”
Private sector chamber initiatives
The private sector chambers once forged close network partnerships and mutually supportive links with the International Financial Agencies (IFA). They jointly engaged in advocacy, in canvassing policy reforms, in realising national value adding resource allocations and in the effective implementation of key governance initiatives.
These initiatives targeted all areas of national governance and were built on a platform of mutually agreed set of values. These values were built on eight cornerstones, i.e. peace and harmony; mutually value adding international relations; democracy; rule of law and justice; transparency and anti corruption; equitability; sustainability and good governance linked to international best practices and norms, all of which were adapted to the socioeconomic-cultural base of Sri Lanka.
Through this mutually-supportive link, the chambers and the IFA worked towards a set of prioritised common national goals, which placed the long term needs and interests of all the citizens and the nation as its priority.
In the context of the above network partnership, both parties did not hesitate to openly advocate for, engage in open intellectual debate and bring forth national visions, plans, reform agendas and governance report cards. They collectively represented the key voice of the Sri Lankan society at large.
It will be interesting to research as to how and why, this nationally value adding societal voice network partnership gradually became so ineffective!
The chambers and the IFA led the way with multi-stakeholder intellectual debates in the development of national policies and in assuring economy/efficiency and effectiveness embedded governance. These included:
Assessment
A critical postscript review of the recent presentation by the Managing Director of the World Bank may provide a good assessment of the current status quo of the governing values in practice amongst IFA and provide a check whether Abraham Lincoln’s motto of “don’t worry when you are not recognised but strive to be worthy of recognition” is effectively practiced.
Does the Central Bank deserve a crown of glory for being the institution that drives economic growth and poverty reduction in Sri Lanka and fosters the well being of all Sri Lankans; especially when it:
Is the Central Bank a good example of an institution that makes collaborative partnerships in navigating in the emerging new environment to shape the economic fortunes of tomorrow of all Sri Lankans? Does the Central Bank foster an environment for effective public engagement? Does it always present transparent information supported by professionally presented statistics? Does it encourage intellectual debate, critical analysis, counter views and value adding suggestions? Many independent academics, business leaders, media and civil society activists will say “definitely no”.
Key questions
Are all Government development plans bold and ambitious? Will they all contribute to transform Sri Lanka to be the ‘Wonder of Asia’; a strategically important economic centre; an important link between the East and West; and support dynamic entrepreneurs to break in to international markets?
A critically important question not addressed is; how should Government development plans and national resource allocations be selected, prioritised, evaluated, risks mitigated, implemented, information shared transparently and post audited?
Is the track record and current way consistent with internationally-accepted best practices? For example, are the development plans involving the reclamation of the sea around Galle Face Green, Commonwealth Games infrastructure in Hambantota, the Mattala Airport, Hambantota Port linked investments and international racing tracks a part of these ambitious projects? In that context, is the track record and the way forward of Sri Lankan international relations supportive of the development of international trade, services, investments and technology transfers?
Should all Sri Lankans cheer and glorify the drive to achieve a per capita GDP of US$ 4,000 in six years, irrespective of the strategy adopted? Should they cheer when the Central Bank presents statistics that show GDP per capita doubled over the last five years, whilst it took from 1991 to 2004 for it to increase from US$ 520 to 1062; especially when these statistics are posted without any reference to the relative movement of the exchange rates and cumulative impact of inflation?
Should a bank like the World Bank with a “mission to fight poverty with passion and professionalism for lasting results” focus on an annual GDP growth rate of 8% per annum and GDP per capita, without any real reference to changes in results measured in terms of the equitable impact on the poor and marginalised segments of society?
Can the investments to GDP increase by 10 percentage points from 25% to 35% supported by private sector and foreign investments solely driven by reforms in tax policy, end of the conflict and ease of doing business? Can this be achieved irrespective of the track record of governance credibility?
Especially transparency; perceived corruption; international relations regime, rule of law; justice; democracy; human rights and freedoms; policies governing ease of transformation of work practices; competency of human resources pool; redundancy and holidays regime. Surely all of these negatively impact on productivity and in attracting FDIs?
How long will the peace dividends be available, if the issues that fundamentally led to the ethnic conflict and marginalisation of some communities and regions remain without due leadership attention? Can all development initiatives be implemented using the strategies and tactics that led to the War victory and be executed led by armed services personnel under the extended supervisory eye of the Defence Ministry?
Can a knowledge hub of Asia be created without a total overhaul of education policies, syllabuses, teacher competency and above all an extension of knowledge focused education system to incorporate skills enhancement, development of appropriate values and attitudes, sharpened networks for best practice technology to meet tomorrow’s needs of prospective employers? Can a healthy human resource base be developed sans focussed attention to malnutrition issues which today remain without leadership attention?
Will the initiatives to broaden the tax base and simplify tax structure as a part of recently introduced tax reforms make doing business easy and attract enhanced foreign investments? The two policy reforms announced of taking away the right of provincial councils to levy trade related taxes and doing away with some of the withholding taxes will certainly not encourage nor lead the way to a broadening of the tax base!
Will improvements in productivity and spurring of physical and human capital to work together be realised in the absence of leadership action to implement change management strategies aimed at improving the work ethic; reduce excessive holidays, and improving employer employee relations in collectively targeting productivity and quality improvements?
The lack of shared services, management focus on quality to six sigma levels, focus on best practices and technology transfer led competiveness gains and strategies motivating all stakeholders to share common goals for mutual benefit will be singular barriers to achieving this dream.
Innovation and change
The leading apparel industry entrepreneurs and some leading multinationals have shown the way with innovation, change management, shared services and profitable outsourcing. However many of the traditional businesses and all of the SMEs have failed to follow suit. SMEs remain a lot ignored by the Government as well as business entities. This is a significant deterrent to inclusive and sustained growth.
The export sector has immensely suffered from the exchange rate policy of the Government. This is clearly seen in the tea export business, where a comparative movement of local currency against USD, EU and GBP of the competing countries of 2010 end is compared with 2009. These key issues have been ignored in the presentation. (See http://www.ft.lk/2010/12/21/rupee-appreciation-a-concern-for-tea-industry/)
A long way to go
Though accountancy offices in Sri Lanka doing higher end work for global multinational clients is shown as an example of world class export services and the ICT Agency presents impressive statistics of ICT associated developments, Sri Lanka yet has a long way to go to equal the comparative level of service competiveness offered by the Indian and Eastern European competitors.
The competency in English, numeracy and the absence of embedded creative abilities in an adequately large pool of human resources are key obstacles to growth of this sector. Levels of inherent creative abilities, innovativeness, self motivation and personal development driven service excellence are below industry expectations.
The attitude of “getting output work right the first time and every time,” ensuring outputs meet stringent quality standards, independent trouble shooting capacity and original design capability levels fail to match standards in competing countries.
Risks ignored
Whilst highlighting trade and services growth options of Sri Lanka, especially linked with India, the attendant risks due to antagonistic and ill advised foreign policy, egoistic leadership actions and the failure to honour universally accepted norms and conventions in governance have been ignored in the presentation.
The presentation highlights the importance of macroeconomic stability and inclusive growth ensuring that none of the critical segments of society are marginalised. It also highlights risks associated with the high debt level with a short term profile, the continuing budget deficits and inflation.
The presentation does not specifically focus on management of State expenditure with economy, efficiency and effectiveness. Nor does it highlight the need for all significant spends to be pre commitment justified, prioritised on the basis of equitable needs, meet preset socio economic target returns and be subject to post audits.
Though the World Bank places a priority in its mission to share knowledge and best practices, the presentation fails to highlight the important need for fiscal responsibility targeting in budgeting, improved effective legislative control over budgets and the good governance measures recently introduced in Greece following the bail out.
‘Wonder of Asia’
The emphasis on uniting the nation with a nationally-shared identity and values, higher female participation with incentives for females to remain within Sri Lanka are hailed by civil society. However, it remains disappointed greater in depth reference to the need for democratic transparent rule of law and justice driven good governance, eliminating waste, nepotism and corruption are not adequately emphasised as essential checks during the current growth face.
The essential role that business, academia, professionals, media and civil society must play as effective network partners in the development process has also not been highlighted. Can Sri Lanka become the ‘Wonder of Asia’ if the IFA and chambers fail to create platforms for intellectual debate and fail to leverage collective economic and network power at their disposal in bringing forth critical issue in partnership with academia, professionals, media and civil society?
IFA and chambers will do well to turn a few pages back to the days when their collective initiatives led to multi stakeholder intellectual debates and the common voice of society was activated for good governance-led sustainable and equitable growth, touching all segments of society.
(The writer is a former Chairman of the Ceylon Chamber of Commerce.)
