Wrong Man In Presidency
How focused and efficacious are the current infrastructure investments in Sri Lanka, executed through a public investments programme (PIP)? Take for instance the Chinese funded Norochcholai coal fired power plant, built after obtaining a commercial loan from China, and its subsequent breakdowns resulting in power cuts that will stifle growth and earnings, on top of the public having to repay this commercial loan.
There are similar such capital investments undertaken by this Government on commercial loans taken from China, where there is also a question mark as to whether such projects are feasible? A few of those are the Hambantota harbour and the Mattala airport projects.
For that matter, not just China, even from India, or more precisely from an Indian line of credit as well (see The Sunday Leader business pages of 12.8.12.), that questions the prudence of such investments, or more precisely the gargantuan costs involved in such bilateral loans for infrastructure development projects.
In a scenario where demand is flagging due to the global economic crisis, a result of which is where the Colombo Port, arguably South Asia’s main transshipment hub, has seen a retardation in volumes (see The Sunday Leader business pages of 22.7.12.), one then wonders how feasible it’s to build a port in Hambantota (worse so on commercial terms) as well, where ultimately it will be the taxpayer who will be called upon to pocket out this expense in the form of repayment of this loan, among other dubious investments made in the Government’s present PIP, dubious, because under the current scenario, there is a question mark as to whether such investments would bring in justifiable and adequate returns to the country?
And, in this regard, the same argument may probably hold true in respect of Sri Lanka’s second international airport at Mattala.
It may be argued that these are long term investments. If that be so, the question is does Sri Lanka have the capacity to wait “long” until such time those projects start to give dividends?
Could not those projects have had been sacrificed for better investment programmes elsewhere which might have had given a quicker return, like investing to ease the traffic congestion in Colombo, Sri Lanka’s commercial capital, an investment that would also have had helped to reduce Sri Lanka’s large fuel bill, brought about in part due to traffic congestion in Colombo and its suburbs?
Power, self aggrandizement, political gain and corruption appear to come before public good.
Though, by law, there are systems that need to be adhered to when it comes to examining the viability of a state funded project, coupled with an accepted procurement process that needs to be followed, those have however been done away with in these instances for reasons best known to the powers that be, with no civic conscious political party or body or an individual for that matter, challenging such brazen acts involving the public purse in courts. These are but the tip of the ice berg..and when one considers the scandals currently raging in the Colombo stock market and in the Securities and Exchange Commission, again, being unchallenged at least up to now, it may not be wrong to believe that according to the dictionary of the incumbent President, Mahinda Rajapaksa and his government, they do believe that the meaning of “right” is “wrong,” and that of “wrong,” right!
Is the stock market making gains for the right reasons? Are those gains not fuelled by broker credit deemed illegal by most, if not all the countries that do operate stock exchanges in their respective jurisdictions?
Is this what the leaders of this country want? A bourse that is making gains due to illegal laws being operable, or, where the flouting of laws governing the conduct of the stock market go unchecked and the wrongdoers not taken to task or punished? (See also page 33).
What is Sri Lanka’s future in such a scenario? How will the rest of the world look at the island where laws, at least governing capital markets are flagrantly violated? Are they not a harbinger of worse things to come, if such have not already come home to roost?
Most of these ills, if not all, may be attributed to the 1978 Constitution, which bestows upon one man, namely the Executive President, in this instance Rajapaksa, tremendous power. Late President J.R. Jayewardene, the architect of the 1978 Constitution, giving an idea as to what sort of power the 1978 Constitution has had bestowed upon him said that the only thing he cannot do is to make a man a woman and a woman a man. A colleague of mine told me that Jayewardene, when once being interviewed by the BBC, was asked the question what would happen if the wrong person was elected as president of Sri Lanka under the present constitution? Jayewardene in his reply had said, “God help Sri Lanka.” Is Rajapaksa that wrong man? Only history will judge!
Investments Sri Lanka needs to score higher in the World Bank/International Finance Corporation (IFC) sponsored “Doing Business Indicator” if it is to attract more investments, according to IFC’s Country Manager in Sri Lanka Adam Sack (see The Sunday Leader business pages of 19.8.12.).
Sack in particular referred to the numerous approvals and permit systems needed by an investor if he wanted to start on a project in Sri Lanka. Virtually everyone knows that much of these white elephants (ie over and above the white elephant PIPs as elaborated above) have had their genesis due to the 13th amendment to the Constitution which resulted in the birth of the provincial council (PC) system as a result of the 1987 Indo-Lanka Peace Accord, a process to devolve more powers to the Northern and Eastern provinces, the hot bed of Tamil terrorism that virtually bled the island white for 26 years before its elimination in 2009, an amendment virtually thrust upon Sri Lanka by India. However, probably due to matters pertaining to equity, the 13th amendment was not only applicable to the North and East, but also to the remainder of the seven provinces in Sri Lanka as well, which has chiefly resulted in the situation that Sack referred to, in his speech, where investors also need to obtain approvals from PCs, or more precisely from institutions established under the PC system, if they are to go ahead with their projects.
There are also issues that speed money is demanded from investors from these various approval providing government agencies, not least the PCs and/or the institutions that have had been spawned as a result of the PC system, for projects to get off the ground.
One way of removing these bottlenecks is to bring the necessary amendments to the Constitution streamlining such approval processes, which Rajapaksa, if he does have the political will, could easily subscribe to, backed by a Parliament, in which he has a 2/3rd majority.
But then does politics precede the country’s economic good?