Challenge corruption

Financial accountability is accompanied by a question mark in Sri Lanka. A host of challenges from the Golden Key scandal to improper auditing of State assets, including the transparent management of Employees Provident Fund (EPF), have regularly hit headlines for years. In addition, the latest data from Swiss banks have raised questions on how financial corruption is managed in the country.

It was reported over the weekend that assets of Sri Lankan individuals and companies/entities in secret Swiss accounts totalled more than 111 million Swiss francs (CHF) in 2010 (over Rs. 15 billion). This was published in the Annual Report by the Swiss National Bank (SNB) along with 200 other countries including Bangladesh.

The Swiss franc is higher or equal in value against the US dollar (1CHF = 1.048 US$). SNB is Switzerland’s central bank. However, it doesn’t provide details of who owns these assets or liabilities and has listed these data under each country. Swiss secrecy laws protect the identity of the investor/debtor, which is among a host of reasons why much black money or ‘dirty’ money is believed to be stashed by corrupt governments, individuals or businesspersons.

Many people believe that corrupt money from Sri Lanka is stashed in a host of investments around the world so the Swiss bank option will hardly come as a surprise.  In 2002, Sri Lanka’s assets in all Swiss banks totalled 22.9 million CHF, 2003 – 34.7 million, 2004 – 105.5 million, 2005 – 177.6 million, 2006 – 56.5 million, 2007 – 123.5 million, 2008 – 104.8 million, 2009 – 87.5 million and 2010 – 111.3 million. Under this category, most of the investments were made in savings accounts.

Liabilities were 2002 – 36.3 million, 2003 – 84 million, 2004 – 205.4 million, 2005 – 206.2 million, 2006 – 166.8 million, 2007 – 171.4 million, 2008 – 53.1 million, 2009 – 50.7 million and 2010 – 51.9 million. The figures also showed that Sri Lankan banks had invested CHF 12.3 million, 12.3, 24.2, 78.4, 41.5, 94.1, 60.6, 82.1, 85.7, and 77.7 from 2002 to 2011.

 In comparison, Bangladesh with a larger population (about 150 million) had lesser investments. According to the report, no disclosure was made on whether these investments were carried forward from the previous year or if they only represent the 2011 financial figures.

Nonetheless, there is little doubt that most of this money could be from ill-gotten gains, which the Central Bank's Financial Investigation Unit together with other authorities have to probe. Perhaps they are unaware of the existence of the Swiss National Bank report or have inadequate means to launch investigations in which case the legal support has to be in place.

Apart from big bucks in Swiss accounts, Sri Lanka also has vast sums of black money. The challenge is to bring the latter to the mainstream.

Overall there is much need for financial responsibility in Sri Lanka if the corruption is to be at least minimised. The challenge of arresting large-scale corruption has always been unaddressed with even the Bribery and Corruption Commission, which was established with much fanfare, failing to fulfil its mandate due to being disempowered.

The Swiss bank report is just the tip of the iceberg when it comes to corruption and if this cancer is not treated, it will kill every chance of development this country has.