The Cabinet is to discuss the possibility of donating a month’s salary to the President’s COVID-19 Fund, which is nearing Rs. 900 million, next week. This in itself may seem a small gesture, but if the practice of reporting each donation continues to be followed, the public may finally learn how much their Cabinet of Ministers is paid each month, which in itself would be a positive nod towards transparency.
For decades there has been concern that Sri Lanka’s public finances are simply not transparent enough. Whether it is the payment of parliamentarians’ salaries, the purchase of vehicles and other important procurement, the financial performance of State-Owned Enterprises (SOEs) or the structure of the budget, the reality is allocations are enthusiastically announced but little detail is given of the inner workings of how decisions are made and what outcomes are achieved.
It is precisely for this reason that many are concerned about the fate of the COVID-19 funds. Consultations of expenditure are at best kept among State bodies and involvement of the public, think tanks, media and other stakeholders is limited to the point of being virtually non-existent. This is additionally concerning given that a chunk of the donations are also from State entities or linked to the Government.
According to the daily updates the Ceylon Petroleum Corporation, Ceylon Petroleum Wholesale Storage Terminal, Sri Lanka Industrial Development Board, Lanka Mineral Sands, State Engineering Corporation of Sri Lanka, Sri Lanka Insurance Corporation, People’s Bank, National Savings Bank, Litro Gas, Bank of Ceylon, Land Reforms Commission, and National Lotteries Board are a few of these organisations.
Many experts agree that the bigger challenge will come once curfew is lifted. With the virus an ever-present threat, greater fiscal support will be needed to push forward economic growth. Most international agencies including the World Bank and local research entities have predicted that Sri Lanka may slip into recession this year. In order to stave off negative growth the Government will have to offer billions of rupees worth of stimulus, perhaps as much as 2% of GDP, as estimated by some quarters to limit economic contraction.
This will mean that transparency will need to be heightened and public finance even more carefully managed. It has already been announced that the Government will cut non-essential expenditure drastically but this is only one part of the equation. With almost every sector seeking some kind of relief there has to be details on how public funds are being allocated and used. Even though the public are prone to blaming their representatives for wastage of public funds the reality is that losses of State Owned Enterprises (SOEs) actually hit public funds worse. On Thursday the Transport Ministry in a statement said that in just one month the Sri Lanka Transport Board (SLTB) has incurred a loss of Rs. 2 billion, indicating how severe the crunch could become.
Facing elections the Government will clearly not want to engage in any SOE reforms. However, they are also facing an 8%-9% budget deficit for 2020, which will make it hard to maintain macroeconomic stability. It is the time for hard choices and if transparency is a part of this effort, then at least the public will know how their money is being spent.