Time to take stock

Monday, 24 February 2014 00:00 -     - {{hitsCtrl.values.hits}}

‘Ask and you shall receive’ is the common idea behind most governments which wish to attract investment, particularly foreign investment, for development projects. But Sri Lanka’s Government has deviated from this policy somewhat by preferring to ‘accept what is given,’ and in doing so facing massive challenges of transparency and good governance as well as not getting the best deal possible. Sri Lanka’s archaic and cumbersome bureaucracy together with a politicised public service has created an environment where unsolicited proposals are grabbed with both hands. Perhaps one of the reasons for this is low Foreign Direct Investment (FDI) flowing in even after five years since the end of the conflict and failure to improve the business environment by strengthening relevant institutions. The latest World Bank rankings for Sri Lanka have seen it slip six places because reforms are not taking place fast enough, even though the Government had pledged to push it ahead significantly. Instead of having universal rules for investors, the Government has made it clear that certain parties can come, negotiate independently and get better deals including sizeable tax cuts. Yet on one hand such systems not only make international investors wary, they also cost much in terms of good governance. Given Sri Lanka’s top officials’ penchant for under the table dealings, more and more projects are coming through influential politicians rather than through institutions such as the Board of Investment (BOI) not only sidelining these entities but also giving an excuse to the Government to neglect the overall business environment. Under such circumstances it is understandable that Sri Lanka’s Opposition has demanded full disclosure of all unsolicited proposals accepted by the Government since 2009. Even though Parliament is entrusted with overseeing taxes collected by the citizens, there is a huge loophole when it comes to getting approval for loans, tax holidays and disclosure of unsolicited development projects to the House. Opposition politicians are left to scrounge up details independently and demand explanations from Government members rather than having an open discussion about what is the best way forward for the country. UNP Leader Ranil Wickremesinghe together with several other commentators took on the Government during the parliamentary sessions last week. They particularly focused on the Port City project and questioned as to why such proposals are not presented to Parliament. Wickremesinghe demanded the names of the projects that have been approved to date, the party making the proposals, the Ministry through which each proposal is to be implemented, the total cost of each project, the source of funds, the mode and period of payment, and also to table all relevant documents in relation of each project. Furthermore, he demanded the MPs inform the House as to the instances when the tenders was nominated for the contract and the terms of doing so, the instances when foreign companies were awarded projects on the basis that a bilateral export credit scheme would be supported by the Government. The questions alone show the massive amount of information unknown to Parliament and therefore the public. Yet there are a mindboggling number of projects in the port, aviation, hotel, tourism, road and railways sectors currently being rolled out under unsolicited proposals. The sheer cost of them add up to billions of dollars and have a direct impact on the eventual success of the entire economy. Obviously it is time to take stock.