Be loyal to governance

Tuesday, 26 April 2016 00:01 - - {{hitsCtrl.values.hits}}

Setting up a framework for the appointment of top officials for State-Owned Enterprises (SOEs) is a laudable step but one that is in danger of being undermined by politicians who appoint their unqualified loyalists, thereby making public enterprise reform a mockery.

Following a Cabinet decision, Prime Minister Ranil Wickremesinghe has appointed a four-member high-powered committee of public officials headed by Presidential Advisor W.J.S. Karunarathna to recommend criteria to be used as guidelines when appointments for the posts of Chairman, Board of Directors and CEOs of State-Owned Enterprises.

However, there have already been plenty of appointments of political loyalists made by the new Government since it came to power last year and it is unlikely that these positions will be changed with the establishment of the new guidelines. For the guidelines to be of any use, then the Government has to impartially reassess previous appointments and ensure these are also given to deserving individuals. Under the present system, even media secretaries to ministers are given plum positions at public enterprises without any qualifications and accountability for these appointments have been completely absent.

On paper the proposal makes much sense as public institutions are notorious for not holding their management accountable for mismanagement, wastage and corruption. Top officials of public institutions that have been making losses for decades are excused on the grounds that they are politically shackled and do not have the capacity to make decisions independently. Moreover, it is no secret that most are political appointments resulting in many offenders being given impunity and protected under a system that wastes public funds but provides control to politicians so that they in turn can be corrupt.

The attempt to professionalise the upper rungs of the public sector is welcome but it also has to come with tougher good governance and efficiency parameters often used by the private sector. Key performance indicators have to be implemented at the highest levels and directors and chairmen of public institutions must be held responsible for their losses. Only under such a system would every layer of the estimated 1.3 million strong public sector actually see reform.

A strong auditing and accountability system has to be in place where parliamentary bodies such as the Committee on Public Enterprises (COPE) and Committee on Public Accounts (COPA) are empowered to take these top officials to task. Despite much talk by the “Yahapalanaya” administration, little has been done beyond taking statements of top public officials who have incurred billions of losses. Take for example SriLankan and Mihin Lanka, which are nearly Rs. 1 billion in debt though top officials have not been held responsible for their actions at any level.

Another point is that when political appointments take place, they should do so only under specific and extreme circumstances that are clearly outlined and approved by the public service commission. In addition, once the appointments are made, politicians should refrain from protecting the appointees and allow them to be governed under a legal and transparent system. Without such sweeping changes significant economic development and public sector reform will remain a mirage.