Saturday, 21 March 2015 00:00
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The current Government’s move to investigate and recover stolen State assets amounting to an alleged $ 10 billion is certainly a welcome initiative which will go some way towards getting the anti-corruption drive on track.
The sum in question, as revealed by Cabinet Spokesman Rajitha Senaratne, is larger than our foreign reserves and, in that light, constitutes a very significant portion of the country’s assets – the significance of which cannot in any way be understated as these funds would have gone a long way in strengthening our economy and building a sustainable future. Even if the figure is an exaggeration on the part of the current regime, it is conceivable that even a more conservative estimate would be considerable in terms of our island’s economy.
According to Global Financial Integrity (GFI), close to $ 1 trillion in unrecorded funds left the developing economies back in 2012. This sum is considered to be a very conservative approximation as movements of bulk cash, mispricing of services and other types of money laundering are not easily detected. The report also revealed that as much 55% of these funds end up in the banks of developed nations while the rest is sent to offshore financial centres. The funds that were allegedly shipped offshore into the banks of other countries would no doubt be missed by a nation recovering from 30 years of war. With the appointment of a Special Presidential Task Force (SPTF), the Government will now look into shedding light on who was responsible for these crimes against the public and the State. It also affords the current regime the chance to make good on a number of promises made in its manifesto prior to the presidential elections.
The Cabinet Spokesman made some specific accusations without actually naming the suspected culprits. It is still unclear as to whether the decision to hint at certain individuals who held positions of power under the previous regime is an early election ploy or an aggressive signal of intent.
It is certainly a positive move by the Government to maintain a tough stance on the robbery of State assets, but concerns remain that the Government is setting itself up for possible failure. Out of a reported $ 1 trillion lost from developing economies, only a fraction has been retrieved even with the intervention of international authorities. This reveals the obvious complications in recovering funds once they have been sent offshore. Even with the help of the World Bank, the IMF and the US and Indian Central Banks, it is difficult to see a large portion of this $ 10 billion being recovered or accounted for. With certain members of the previous Government already challenging the current administration to reveal the names of those involved, in an attempt to delegitimise the accusations, the Government must not allow this initiative to work against it. Critics will be quick to pounce on any failure on the Government’s part to retrieve these assets.
President Maithripala Sirisena must make sure that the appointment of the SPTF to look into the issue is not merely an empty gesture but a sustainable drive towards change; not merely propaganda but a true morality check. Along with these investigations, the Government must look to improving financial transparency as well as strengthening anti-money laundering laws and practices.
Revealing the enormity of the problem may inadvertently set unrealistic expectations amongst the public in terms of recovery, but the initiative may usher in a new culture of checks and balances for future Sri Lankan governments and leaders.
