Sri Lanka’s public sector is not popular, except perhaps among those who work for it.
A onetime finance minister recently quipped that the bloated public sector was rampant with corruption and inefficiency that they almost equal rogue financial firms in their notoriety. Sri Lanka has a public sector of 6% of the population. In 2008 state workers took home 53.6% of tax revenues or Rs. 313.9 billion as salaries and wages.
Sri Lanka is regarded to have a unique development experience because with19 million people it has achieved a literacy rate above 80% and a life expectancy above 70 years (World Bank 2000). But this has come without a matched level of economic development. Despite its remarkable rating on the human development index, which was 0.759 in 2007, Sri Lanka has only just managed to shake off its “low income” image in exchange of a “lower middle income” status. Analysts say that government welfare services in food, education and health have been responsible for this pattern of human development. But for Sri Lanka to move ahead to become a developed nation, more changes are needed. This change has been happening slowly. The late ‘80s saw a shift in ideology with New Public Management (NPM) practices being adopted by the government. NPM techniques emphasize rationalism and private sector management practices. Since 1989 more than 75 government entities have been partially or fully privatized. Large numbers of their workers (mostly political appointees) were retrenched. These developments enabled the government to reduce part of public expenditure. Yet, overall, privatization has had only limited success.
The public sector of Sri Lankan has been functioning since the time of ancient kings. During British times, serious reforms were introduced, first in response to the Colebrooke and then through the Doughnomore Commissions. The Brits basically designed it as a system to to train natives to do their work. Therefore, after independence there was a need to change this objective to focus on development.
A semblance of reform began in the ‘70s in order to address unemployment and high poverty starting from the divisional development councils in 1971 and culminating in the provincial council system advocated by the 13th amendment. All these systems were focused on providing improved public service delivery, but failed in varying degrees due to several reasons. Policy implementation was poor and created a series of management problems like poor project choice, restrictive controls and a lack of commitment and political will. A major weakness has been the excessively piecemeal and often ad hoc character in policy implementation, meaning there has been no direction or long term strategic focus to measures implemented. A lack of coordination between levels of government, imbalances between political institutions and the bureaucracy and a high degree of political influence has also held back the smooth functioning of public sector reforms. A study carried out in 2000 (Ramanie Samaratunge & Lynne Bennington) said the system of parliamentary democracy with a multi-party political system has produced pressures on successive governments to focus on a “welfare first and growth later” approach. It argues that this welfare model proved unsustainable in the long run as neither the state nor the private sector performed effectively to produce necessary economic growth.
The current government, in its 2010 budget proposal put forward the following recommendations as part of its medium term strategy
“Reorient strategic public enterprises such as banks and utility services with modern managerial skills and best commercial practices; make all state enterprises commercially efficient and reduce their reliance on the state; strengthen line ministries and departments in their service delivery to ensure that the government machinery is at work; reduce bureaucratic controls & interventions and simplify outlived systems and procedures, etc.” Along with these changes it has also introduced higher salaries for public servants and has taken steps to further increase the number of public servants. The government is good at talking but will they deliver? Experts argue that creating a more efficient system of public service involves a change in fundamental attitudes more than anything else. Sri Lanka currently has a system that is more process oriented than result oriented. It is unlikely that politicization and corruption in public services can be stopped by the simple reform package said above. It’s also unlikely that it will change the self-serving attitudes of bureaucrats and public organizations. But given sufficient political will, it could be a start. But it remains to be seen how these changes will make up the government’s overall strategy towards moving to greater efficiency, it’s not immediately apparent if such a strategy exists.