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Saturday, 30 January 2016 00:00 -     - {{hitsCtrl.values.hits}}

DESPITE ambitious promises by the ‘Yahapalanaya’ Government, Sri Lanka has failed to climb up the Corruption Perception Index compiled by Transparency International, showing that leaders are falling short of the bold promises to reduce corruption. 

Sri Lanka improved two notches in the CPI and ranked at the 83rd place among 168 countries with a score of 37 points. Last year with a score of 38 points the island nation in South Asia ranked at the 85th place among 175 countries. Essentially the unchanged score shows Sri Lanka’s failure to strengthen its institutions to meter out justice and reduce corruption.

Some of the methods suggested to fight corruption are simple. One key measure is to pay civil servants well but in a country where the public service is over-populated and the fiscal deficit high, this would prove too costly. Higher wages to nearly 1.3 million public employees would also drive up inflation, push the Government into more debt and make the economy vulnerable. So what else can be done? 

Creating transparency and openness in government spending is a huge part of reducing corruption. Subsidies, tax exemptions, public procurement of goods and services, soft credits, extra-budgetary funds under the control of politicians—all are elements of the various ways in which governments manage public resources. 

Governments collect taxes, tap the capital markets to raise money, receive foreign aid and develop mechanisms to allocate these resources to satisfy a multiplicity of needs. Some countries do this in ways that are relatively transparent and make efforts to ensure that resources will be used in the public interest. 

The more open and transparent the process, the less opportunity it will provide for malfeasance and abuse. Countries where citizens are able to scrutinize government activities and debate the merits of various public policies also makes a difference. In this respect, press freedoms and levels of literacy will, likewise, shape in important ways the context for reforms. 

Whether the country has an active civil society, with a culture of participation could be an important ingredient supporting various strategies aimed at reducing corruption. The same system can also assist in reducing red tape. A huge amount of corruption happens at official levels where tender procedures, exports and imports take place. The main revenue collection agencies of the Government also tend to be the most corrupt. 

Subsidies are another example of how government policy can distort incentives and create opportunities for corruption. Sri Lanka’s fertiliser and electricity subsidies take a huge chunk of public revenue but do not give parallel economic returns. Much better to replace expensive, regressive subsidies with targeted cash transfers. 

But the simplest point of all is also the most effective, punishment. Despite rolling out extravagant promises the National Government has shown itself to be tolerant of corruption when political gain is the result. Such compromises mean leaders lose credibility fast and disillusioned people look elsewhere for representation. In Sri Lanka corruption is so deeply entrenched that it seeps into every aspect of governance, both private and public, making it impossible to cut out.

Leaders have to lead by example. If institutions are not strengthened and corrupt people are not punished, then the whole system will simply continue in its diseased state.