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Thursday Dec 12, 2024
Wednesday, 18 October 2017 00:00 - - {{hitsCtrl.values.hits}}
Reviewed by Austin I. Pulle
Globalisation has altered the foreign investment landscape in dramatic ways. In former times, companies would invest in green-fields investments but they now outsource and instead spend their time on brand promotion and brand management.
Most of the i-things that Apple Inc. sells are made by Foxconn and other quasi-sweatshops in China. When companies choose to engage in foreign direct investment, it is usually because of the size of the markets, China, India, Indonesia, the opportunity for resource extraction – Indonesia, Myanmar, Malaysia, or in the service industry, Singapore.
The Sri Lankan Government is on the cusp of engaging in some bold foreign investment initiatives such as an FTA with Singapore, the ECTA with India, and the Colombo International Port City. What has Sri Lanka to offer potential foreign investors that does not require a regulatory race to the bottom? The garment industry has done Sri Lanka proud and has not engaged in such nasty practices that led to the dreadful Rana Plaza fire in Bangladesh.
The proposed investment treaties can be a double-edged sword. If the investor feels cheated and decides to resort to investor-state dispute resolution, the Government can be out of pocket for tens of millions of dollars. Moreover, if the national treatment obligation found in investment treaties is not restricted in some way, this could see investments by rich Indians, Chinese, and Gulf Arabs in real estate which will also drive up prices as in London and Sydney and cause political tremors in the country.
Sri Lankans are used to Europeans owning their land. Whether they would view with similar equanimity Arabs, Chinese and Indians owning their land remains to be seen. The fortunes of traditional exporters may also be threatened if Chinese and Indian companies that are better capitalised with superior technology challenge these exporters.
While a country with a large domestic market or exploitable natural resources could afford to score poorly in a rule of law index, a country like Sri Lanka without these advantages cannot afford to score poorly. Arbitral tribunals have interpreted the Fair & Equitable treatment obligations under some investment protection treaties as requiring compliance with rule of law criteria. Chapter 26 of the Trans Pacific Partnership Agreement, for example, establishes detailed transparency and anti-corruption criteria which could be a useful guidepost for officials in the country.
Sri Lanka would also have to be mindful of the risk exposure as a result of investment protection standards under the new generation of investment agreements. First, investor molestation could take place at the provincial government level but under the UN approved Articles of State Responsibility, it will be the central government that would be answerable in an investment dispute. Second, the delays in the court system and the charges of corrupt persons in the judiciary may give rise to claims of a denial of justice under international law.
Accounts of the debasement of the Sri Lankan Judiciary are many and well-known. Unfortunately, during the last few decades in Sri Lanka, in a twist of the famous dictum of Lord Hewart CJ, it can be asserted that “justice was not only not done, but injustice was manifestly and undoubtedly seen to have been done”. Hopefully, attacks, including physical attacks, on the Judiciary are things of the past, and that governments would acknowledge that a competent and honest Judiciary, recently much tarnished, must regain its place as the crown jewel of the Sri Lankan State. An efficient and properly functioning court system is essential for attracting foreign investment to countries such as Sri Lanka.
Too numerous to document are instances where police officials are transferred for enforcing the law. Two well-known instances are the punishment transfer of police officials who arrested criminals who attacked Muslims in Aluthgama and the official who arrested army officials involved in botched unlawful abduction. Police commissions are not the answer. These and other instances point to an urgent need to update the Penal Code with comprehensive obstruction of justice provisions and vest the courts with jurisdiction to punish those involved in the obstruction of justice.
In SFO v BAE, Moses LJ observed: “Threats to the administration of public justice within the UK are the concern primarily of the courts, not the executive.” He then quotes another decision: “One thread runs consistently through all the case law: the recognition that public authorities must beware of surrendering to the dictates of unlawful pressure groups. The implications of such surrender for the rule of law can hardly be exaggerated.”
Though overruled on another point by the House of Lords, the opinion of Moses LJ must be regarded as a part of Sri Lanka’s constitutional fabric inherited from the British constitutional law at the time the country became a dominion. This power may be usefully be enshrined in the new constitution and could serve as a useful prophylactic against politicians who order officials to ignore their duty.
A well-known example was the direction to Customs to release a consignment of cargo that included quantities of heroin that any drug lord would consider a gift from heaven. Another area is where law enforcement do not do their job. Unlawful assembly is unlawful assembly whether the miscreants are thugs or clergy. If particular sectors claim immunity from the operation of law and the state concedes such immunity, the country cannot claim to be governed by the rule of law.
In his essay on “Inept’ocracy”, Chari discusses the multitude of problems that beset public administration in the country. In the early days of the socialist paradise, applicants for government jobs were required to produce a letter of recommendation from their MP. Thus began the slide on the slippery slope to a highly-politicised government service with jobs for the boys (and girls) in government service and in State-Owned Enterprises.
The public seemed to accept patronage politics as the norm and the picture of a female minister prostrating herself before a former president, as if she was a Thai citizen and he was the late King of Thailand, epitomised the mindset. The self-abasement culture cultivated over decades incentivises politicians to sustain the poor economic status quo so that their supporters are made to depend on them for government jobs.
How sad is it that an eloquent but heart-breaking lesson in dignity and self-worth to all of us has to be provided by the grief stricken parents of Rizana Nafeek who live in a cattle shed but still declined in contempt the payment offered by the ambassador of the country that engaged in the bestial execution-murder of their child.
Human resource management and training is a feature among the better known companies but it should also be applied to government employees at all level including provincial councils and district councils. The Japanese concept of Kaizen seems to be applied only by larger corporate actors. To give a trivial but telling illustration, motorists are greeted by a board on the Kaduganawa Pass that welcomes “disciplinary drivers” instead of “disciplined drivers”. Apart from spreading a wrong use of English to hapless drivers, it is surprising that no person in authority was motivated to order a correction. Fortunately, at the airport, toilets that once had the command, “Disable Toilet” have had the message rectified with the sign that reads “Disabled Toilets”. Continuous improvement must be an implicit job specification of everyone.
In China, the ancient networking practice known as Guan Xi has degenerated as an excuse to corrupt officials. The Chinese Government bans the gift of mooncakes to officials after it was found that mini statues of gold of the Buddha were baked into the mooncakes given to officials. In Singapore, a largely Chinese society driven by Confucian ethics, Guan Xi gifts to officials are banned with the late Lee Kuan Yew declaring the Guan Xi has no place in a society governed by the rule of law.
When back in America, people tell me that government is the problem and not the solution, I tell them to visit Singapore. Singapore is one country that illustrates what an efficient and corruption free government can deliver. Two illustrations should suffice. Observant visitors to Singapore would have noticed the concrete bollards that are in front of bus stands. These were erected within a week after a bus driver, a Chinese national, ploughed into a bus stand killing waiting passengers. These bollards protect those waiting for a bus from a recurrence of such an accident. In the second instance, a healthy looking tree collapsed and killed a pedestrian. The next day, arborists were inspecting trees, and workers were cutting down trees. A government for the people at work.
The Nobel Prize winner and founding father of the Chicago School of Economics, Milton Friedman famously, or notoriously, observed that “there is one and only one responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.”
Most managers acknowledge that there is a compelling business case for CSR. Many agree that there is also a normative case because large chunks of public money devoted to developing and sustaining companies cannot be simply undertaken just to make the owners rich. ISO 26,000 recognises this fact and provides voluntary guidelines on engaging in CSR.
In the global South, some CSR initiatives could be directed to making a more responsible bureaucracy. For example, companies could allocate districts among themselves to conduct surveys to ascertain the most pressing problems among those communities, and then solicit solutions to them, with the selected ones being rewarded with cash prizes or vouchers. Such initiatives have the advantage of attacking the fatalism and resignation of the people and deliver the message of empowerment.
In his essay “New ‘asses,’ same ‘liquors,’ Chari ruminates on a subject that should be read by people in authority or power however high or low they might be in a hierarchy. “Power to flattery bows,” warned Kent to the senile Lear but like many who speak truth to power his reward was to be banished by a furious Lear. In Attorney General for HK v Reid, Lord Templemen delivering the advice of the Judicial Committee observed that “Bribery is an evil practice that threatens the foundation of any civilised society.”
How bribery has spurred the growth of crony capitalism in Sri Lanka as well as elsewhere and debased State institutions is visible for all to see. Despite the very public resignation of a former head of the Securities and Exchange Commission over shenanigans of share manipulation, the public as well as the professional class were neutered and could not do much. The human versions, both hagiographers and supplicants, of Drambuie and Grand Marnier continue to proliferate in the country servicing and keeping in bliss the posteriors of those who should be confined to Delft Island.
Chari alerts his readers to the importance of the Rule of Law, the content of which has been developed in accessible language by Lord Bingham and others. From the time of Bracegirdle, the rule of law has been a cornerstone of Sri Lankan jurisprudence. Unfortunately, in recent decades, the Rule of Law has been replaced by the Rule by Law as enshrined in prevention of terrorism legislation. Unfortunately, sometimes even a law is unnecessary. Chari describes the shocking case of a murder of a British tourist and the rape of his girlfriend. The scum who perpetrated this atrocity were protected because they were politically connected and they were brought to justice only because if they were not prosecuted, the Commonwealth Heads of Government would not have taken place and this would have meant the loss of photo ops with the heir to the British throne.
Chari provides useful material on second chambers and asks whether they are a sufficient safeguard for minority rights. We read about the House of Chiefs in Botswana and the second chamber in Malawi. Under the first constitution, Sri Lanka had a second chamber in the form of a senate. Some ministers were members of the Senate. He attacks a proposal in the Working Draft on National Policy on Reconciliation as a “colossal waste of time, intellectual energy, and money”. He proposes alternative representation of the non-political class in the second chamber, and that it be empowered to stall unacceptable legislation, and especially function as a trip wire for majoritarian legislation. Second chambers are rarely perfect as legislative units.
Tony Blair famously claimed that many in the unreformed House of Lords were the descendants of the progeny of Charles II’s mistresses. The US Senate, reflecting an eternity clause in the American constitution, allows each of the sparsely-populated Dakotas two senators while California, which if it were an independent country would be seventh largest economy in the world, is also limited to two senators.
I disagree with Chari on the selection criteria because I believe the spirit of the law would not be observed and the usual political hangers on will manage to be appointed. Our national list members in the current and previous Parliament were hardly national treasures. I think a second chamber composed by reference to Chari’s criteria will still lack democratic legitimacy. I think a second chamber could justify the costs if it is empowered with two main tasks. First, if ambassadors to foreign countries had to be approved by a majority of at least two of the stakeholder groups represented by the senators. This would at least prevent the appointment of persons barely literate in English to represent the country in Washington and Moscow. Second, the Senate must be empowered to hold televised hearings on the conduct of senior bureaucrats.
The outcome of the current constitutional reform process will affect the future of the country for decades to come. The last two constitutions created a Jurassic Park where the creations overwhelmed the creators. Like a tyrannosaurus, the executive president became the super-predator over the people who were supposed to be the owners of sovereignty and the progenitors of the constitution. Some sections of the clergy equated the special place given to Buddhism as a license to commit a slew of penal code offences.
Six years after the elimination of the Tamil Tigers, the Sri Lankan State has still to effectively claim a monopoly of violence over the unlawful use of force by law enforcement and armed forces, raggers at universities, and some members of the clergy who violate laws with impunity and get away with it. Accordingly, all of us can hope that the new constitution will not be a microwaved version of the previous two but actually deliver a platform for development and human dignity which can be actualised and do not remain mere parchment rights as most of them are at present.
Chari takes on the issues of happiness in the essay entitled ‘Are people happy?’ Ever since the American Declaration of Independence which posited the “pursuit of happiness” as an inherent right of human beings many persons have pondered the place of happiness in life. Milton in his Paradise Lost famously penned the lines: “The mind is its own place, and itself can make a heaven of hell, a hell of heaven.”
As Chari notes, the Kingdom of Bhutan has introduced the measurement of happiness as a more relevant rubric of governance than the GDP. The assumption of the kingdom that wealth does not equate with happiness is correct. Research has shown that after a particular annual income is reached, in the US about 70K, happiness does not increase in proportion to more wealth. Bill Gates is not several billion times happier than the ordinary Joe who has sufficient funds to live on. The Danes score high on the happiness index because their basic needs are taken care of. The great British utilitarians, Jeremy Bentham and John Stuart Mill, argued that the ethicality of any conduct should be measured by whether the consequences of such conduct resulted in net utility because happiness was all that mattered.
Oprah has famously claimed that happiness leads to success and not the other way around. Neuroscience appears to validate her argument and many studies show that pursuing happiness is a fruitless exercise because happiness is always a by-product of pursuing something else, usually meaningful work that promotes a flow state. In his book, ‘Why Buddhism is True,’ evolutionary psychologist, Robin Wright, argues that what natural selection wants, more than anything, is the transmission of genes to a succeeding generation and that human are programmed to seek pleasure but natural selection also makes sure that the pleasure is transient and short-lived because living in a blissed out state will not stimulate humans to continually seek out pleasure which is necessary for the survival of the species.
Happiness theorists also show that humans engage in hedonic adaptation and this is leveraged by advertising companies that successfully sell the latest smart phone and induce customers to ditch the perfectly adequate existing phone because camera of the new phone has more pixels. Perhaps, all what governments must and can do is provide the conditions for the satisfaction of Basic Needs of Maslow’s Hierarchy of Needs that include food, water, security and safety. The individual must be responsible for securing the psychological needs and self-fulfilment needs in the pyramid.
Inequality and its pernicious effects were brought into prominence by Thomas Piketty’s book on the subject. In ‘Spirit level’, the author demonstrates that where there is inequality in a society, many social indicators such as infant mortality and lifespans are negative while the converse is true where the gap is reduced. The Gini Index in Sri Lanka is 39.16 down from 40.96 in 2002. Chari observes that there “is no equality of opportunity when the playing field is not level”.
Education is a powerful driver of social mobility. Unfortunately, the switch to Sinhala in the late fifties was not accompanied by insisting that English be studied by all. In one stroke, the malignant seeds of inequality were sown because children of more privileged families who knew English got the keys to the kingdom of knowledge while the beneficiaries of the switch to the national language now have to learn Korean to find jobs abroad. The gap between the haves and the have-not will widen with the establishment of international schools which provide a hot house environment for privileged students carving a pathway to the best universities in the West, while brutal ragging at the local universities encourage students from privileged backgrounds to go abroad for their education and keep local students humiliated and deprived of learning opportunities caused by endless university strikes.
In Singapore and Indonesia, no citizen is allowed to enrol in international schools such as the United World College or the Jakarta International School, which many consider as the best international schools in Asia. At one time, the University of Ceylon was one of the best universities in Asia, but now the various universities don’t even make it to the list of the top 500 universities of the world. The capacity of Sri Lankans to shoot themselves in the foot appears to be endless!
Most of us who know Chari would concur with the opinion that he is the best Prime Minister or President that the country after it formally became Sri Lanka did not have. His distaste for entering the slough of filth that is Sri Lankan politics deprived the country of having a leader with the education and vision that could have moved the country forward. Be that it may, all of us must consider ourselves fortunate that he is still engaged in the public life of the country, always speaking truth to power, a trait so rare in a society where self-abasement and degradation of the national interest in the pursuit of the baubles and trinkets of the world are the norm.
In his novel ‘1984,’ George Orwell stated that “During times of universal deceit, telling the truth becomes a revolutionary act.” Let us hope that Chari will continue with his revolutionary conduct and expand its influence by translating his essays into Sinhalese and Tamil. The future of the country requires that politicians stop the condescending practice pulling the wool over the eyes of the people and stop treating them as credulous fools. The knowledge in the collection of essays is power to the people.
(Concluded)
(The writer is an Attorney.)
