What Went Wrong for Lanka?
Dilrook Kannangara
The purpose of my earlier article was to address personal issues faced
by Lanka’s professionals who cannot wait till Lanka puts the house
in order. However, my advice cannot solve the problems that underlie
their grievances. Let me not be on a collision course with Ben. His
suggestions are valid as regards defence, but not so interesting on
the economic front. The most interesting question afloat today is ‘what
actually went wrong for Lanka’ and ‘how to overcome those
problems’. Many theories have been put forward and if twenty people
can agree on each of those theories, there are a million out there!
It must be a point of interest to sociologists and economists alike.
Corruption, lawlessness, terrorism, lack of direction, political instability
are major causes for its present state according to many. However, there
are other underlying causes as well.
Extreme population density
Sri Lanka is ranked 35th in the world in terms of population density
(number of people per square kilometer); however, given the actual concentration
of the population due to the 35 year old conflict, the correct rank
would be around the 21st. One third of the nation’s land belong
to the North-East, however its population is only approximately one
tenth of the national population. Among the other countries that rank
among us, they belong to two distinct groups. There are the ultra rich
countries and there are the extremely poor ones. This awakens us to
the danger that we may well join the nearest group pretty soon. High
population density means there is a huge demand for land, water, building
materials, food, fuels and energy, transport systems, etc. Imagine a
population of 18 million cramped in to a landmass of approx. 44,000
square kilometers which also includes essential forest reserves, internal
water bodies, inaccessible areas, roads, barren lands and the like.
This is the situation we are in and it is highly unsustainable.
Owing to this, very few can buy land from their earnings; building materials
cost a fortune and powercuts and water cuts are becoming increasingly
common. On top of that one third of the land and two thirds of the sea
front and beyond are not economically attractive due to the presence
of terrorists!
Immediate action is required to overcome this situation. North and the
East must be rid of terrorists soon and these areas must be put to economic
development; its resources should be used for the betterment of the
nation.
Subsequently, there got to be effective plans to manage the population
growth. Whenever such attempts were made (the only effective attempt
was made during JRJ’s administration) a section of the community
links it with race and racial issues and that is the end of it. What
is the point in having an unsustainable population may it be Sinhala,
Tamil or Muslim, if they do not have enough resources to go around?
One-child policy as in China must be seriously considered.
Corruption
Corruption needs to be arrested if we are to develop as a nation. However,
it should be redefined to suit the modern economic principles. Any spend
of money/resources that do not have a corresponding return for the spender
is corruption. Therefore, welfare schemes, free education, other subsidies,
brain drain, etc. are all part of corruption in addition to the ones
that everybody knows. Although no unbiased analysis has been done about
this, based on the numbers, Sri Lanka’s actual corruption ranking
may be put as follows. There are surely others as well.
· Tax evasion; not paying for utility; loan defaulting
Believe it or not 52% of water goes unpaid mostly thanks to large entities!
In addition, millions do not pay their taxes! Tax frauds were unearthed
even in relation to indirect taxes like VAT! However, the cream of this
is the attempts to grant tax amnesties to big time tax evaders at the
expense of the poor who has to pay taxes even for their petty purchases!
Defaulting bank loans also cost billions for the national economy.
· Free tertiary education
Even most developed countries cannot afford to provide free (non repayable)
tertiary education! To make matters worse, this free system has produced
a lot of unneeded graduates instead of what the market needs. What’s
more hilarious is the disruptive, subversive and worse forms of conduct
amply displayed by the recipients of this free education. But the best
form of corruption occurs when a disproportionately large number of
students of a particular race enjoy the fruits of free university education
at the expense of the others thanks to the war, do not make any value
addition to the country but finances the LTTE to further destroy the
very same nation that committed the crime of educating them!
· Welfare and subsidy schemes
This is well known; although it stimulated demand, lack of productive
output and the fact that productive earners have to pay for these makes
it nothing less than corruption. One may add the corruption inherent
in these schemes themselves.
· Public administration
This is nothing but pathetic and needs no description.
· Corruption of politicians and officers
Another pathetic issue and needs no description.
· Bribery and corruption at other levels
These evils have permeated the society. Although a bribe may give a
benefit for the payee of such bribe, it takes away a lot more from the
society and eventually paid by the sufferers and the general public.
Lack of direction
Are we a capitalist country, a socialist one or stuck in the middle?
Both socialist and stuck-in-the-middle countries have failed miserably.
A classic example is the Soviet Union that failed dramatically leaving
behind a large number of prostitutes! China and India, though boast
about socialism actually have more capitalist features than Sri Lanka
or even moderate capitalist countries like France. There is no easy
way out for Lanka, it must follow the capitalist system. In doing so,
it can look up to Malaysia and Singapore than learning from the West.
Substantial government ownership is a must for such a setting with private
management. Even the mighty Singapore Airlines has more government control
than Sri Lankan Airlines! This is the new breed of capitalism and the
one than suits us.
Elamists and the LTTE
They are responsible for destroying the biggest development projects
we had, namely the resettlement projects of the 1940-60 and the Mahaweli
project of 1970-80s. Although remnants of these projects still remain,
the bulk of planned development work did not take place thanks to the
LTTE and the other Elamists. Instead of rural capital creation that
was anticipated, the country spends billions on protecting the remaining
few settlements, granting usual welfare benefits and other unproductive
spending initiatives. Interestingly the new mega projects - oil drilling
(once explored) off Mannar and the Hambantota port project are also
threatened by them. Let the tigers survive, forget about long term development.
Maintaining hospitals, education and administrative facilities and providing
free food and medicines that are abused by the LTTE in the North and
the East is also part of the corruption-underdevelopment-misery equation.
However, once again it is very interesting to note that these Elamists
have become richer at the expense of the country. It is no secret that
the LTTE makes USD 300 million net a year only by destroying the country!
Add to this the colossal amount of money wasted on satisfying the ‘moderate’
Elamists by presenting to them unpopular ‘political solutions’.
Another waste of large amounts of time, money and resources is the endeavor
to teach Tamil to the Sinhalese in spite of clear public mandates (repeated)
as to what the national language must be. Teach them English instead
and it would be very much more productive.
We have been trying to gratify the Elamists instead of annihilating
them completely.
Lawlessness
Needs no detailed explanation how it has ruined this country. On one
hand penalties, some levies and other forms of monetary punishments
are ridiculously low to be effective; on the other, drugs, underworld,
financial scams, etc are bleeding the nation. Many would have forgotten
the IGP appointed after the 2001 general election was a close acquaintance
of a big time drug lord and he had to step down when it was revealed.
Even the Italian Mafia never had such a dramatic performance. The law
has been bent to serve the interests of the unscrupulous and the separatists.
What is funniest is the apparent concern of the UNP for the increasing
cost of living, corruption, human rights, good governance; they have
been the worst offender in this regard and of course they never retire!
Even the USD 150 million corruption found out by COPE relates to UNP
crimes committed during 2001-4; what is the point in closing the stables
after the horses have bolted?
How to have a good breed of politicos?
Many ideological and theoretical means could be suggested, but the one
that actually works is a moot point. If there isn’t a good system
in place, even the now clean JVP politicians could turn bad. Japan and
South Korea provide some guidance in this regard and given their Asian
connection, the lessons we could learn from them is immense. Many South
Korean presidents and Japanese PMs have been stripped of their positions
and some were even sent to prison for merely having cordial relationships
with the business community. For Sri Lanka, business and politics should
be strickly separated.
· All individuals with a history of engaging in business (other
than in a professional capacity) should be disallowed to enter politics.
· No politician should be allowed to engage in any form of business
· Businessmen and politicians should not be allowed to concert
for mutual benefit or for the benefit of either or a third party.
These measures will make politics unattractive and only those with a
genuine interest for the nation will enter the fray. Election wars and
bloodshed will be a thing of the past as it is ridiculous to fight each
other just to serve the people! One common thread that binds all COPE
crooks and other big time politico-crooks is that they had a history
of engaging in business and continued links with other like-minded businessmen.
These are by no means draconian; one South Korean President was charged
with corruption a few years ago only because he had played Golf with
a big businessman!!
There are reciprocal benefits for business; most importantly there will
be a level playing field for all business entities. It should be noted
that most blue-chip companies are conducting themselves in a praiseworthy
manner; they pay their taxes in time, disengage themselves from politics,
provide the backbone of Sri Lankan industry and exports without exploitation,
and support educational, recreational and sport activities. However,
they are at a disadvantage when unscrupulous ‘industrialists’
go after politicians and obtain unfair advantages like tax amnesties
(that essentially benefit only defaulters), government favours, loan
cancellations, etc.
Without taking away the cookie jar for good, there is no way to bring
about a good breed of politicians.
|
