Leading by example

Monday, 14 March 2016 00:00 - - {{hitsCtrl.values.hits}}

True leaders lead by example. Sri Lanka’s economic woes have pushed the Government to make some tough decisions. The increase in taxes, announced by the Prime Minister last week, while necessary to boost public revenue and simply tax collection will also increase goods and services for the public in crucial areas. For these changes to be accepted by the public and for the Government to still maintain its popularity, politicians also have to show they are willing to tighten their belts but so far the signs are indicating the opposite.

At a meeting on Wednesday, the Committee headed by Speaker Karu Jayasuriya had approved a proposal for hikes in allowances after considering requests from lawmakers who claimed they could then carry out their duties more “efficiently and effectively,” weekend newspapers reported.

The proposals will now be submitted to the Cabinet for final approval. The new facilities include each MP being granted Rs. 75,000 a month as a rental allowance for maintenance of an office in his/her constituency, allowance for attending the meetings of the Constitutional Assembly during non-sitting days at Rs. 2,500 a day and a daily allowance of Rs. 4,000 for attending meetings of Sectoral Oversight Committees with Rs. 5,000 for the chairperson of each committee.

The Committee also approved a proposal to pay Rs. 50,000 as an official telephone facility for each MP as the existing allowance does not provide for international calls and internet.It was also decided to grant an allowance of Rs. 50,000 each to the seven MPs who have been unable to obtain housing facilities at the MPs’ hostel at Madiwela. This is meant for them to rent a house close to Parliament.

Such a slew of costs may seem minute when compared with the money hemorrhaged by State Owned Enterprises (SoEs) but they provide jobs and services to the public so the expenses are tolerated.

Two ratings organisations downgraded Sri Lanka for failing to promote fiscal consolidation and the current changes are to rectify these oversights ahead of a possible $1.5 billion financing arrangement with the International Monetary Fund (IMF). On Friday India approved a $700 million currency swap of dollars for rupees to tide the country over until the IMF deal is finalised and Sri Lanka is likely to remain under pressure with an estimated $4 billion in debt payments earmarked for 2016.

The downgrade makes it harder for Sri Lanka to borrow at reasonable interest rates and with the worsening global situation along with a possible second rate hike by the US Federal Reserve the prognosis is not good. Colombo is enthusiastically promoting foreign direct investment but that is a more long term measure for development. Some economists have called for tough cuts to Government spending to reduce the Budget deficit but such steps would obviously make the Government unpopular.

In such a situation the Government has to reach out to the public and communicate issues clearly to build trust and confidence. Such engagement is severely lacking with people failing to understand the reasons for tax increases and other economic adjustments. In such an environment politicians should show the way by tightening their belts in consideration to public woes. Without such empathy politicians could well find themselves out of a job when the next election comes around.