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Rooting out corruption; a necessary step for Sri Lanka to prosper

18 Jul 2022 - {{hitsCtrl.values.hits}}      

 

 

Sri Lanka had moved several places down in the Transparency International Corruption Perception Index. In 2019 we were 93 out of 180 countries and in the last two years in 2021 we have been ranked 102 which means we have moved down nine places in just two years

 

 

Sri Lanka is facing a crisis which is essentially a crisis of governance. It is mainly due to political and financial mismanagement. It has led to an economic crisis and if we are to come out of it we should resolve the crisis of governance. In resolving the crisis of governance, everybody wants to have a government which he or she can trust and which is acceptable locally and to international markets. In actually doing so, the rule of law and having a clean government which is free of corruption becomes paramount. So here I am going to deal with the wider issue of combating corruption. 


We had recently discussed with the International Monetary Fund (IMF) and we are trying to address the budgetary deficit as one of the issues. In the previous instances we went for fiscal consolidation through revenue consolidation. This time in addition to that we will have to concentrate on rationalizing costs and minimizing wastage which will involve taking several measures. Amongst those, there are public sector reforms that have to be looked at, particularly capital expenditures and personnel costs. Then there are a huge number of loss-making state-owned enterprises which are not adding to the country’s GDP.

Need for combatting corruption

However, the focus of this article is that if we have to create the confidence locally and internationally, there has to be a government which is acceptable and trustworthy to the people and therefore Sri Lanka has to combat corruption. More than 25 years ago we created Commission to Investigate Allegations of Bribery or Corruption (CIABOC), but no significant individual, politician or high official has ever been convicted through it. 
Obviously, this law has many drawbacks and has to be strengthened and in 2019 a new law was drafted under the watch of the present Prime Minister and that is with Attorney General’s Department. This law needs to be brought in by the present government immediately. It will address a few issues that were there and one of the issues was when one entity was investigating that information could not be shared with a parallel investigating authority because of secrecy clauses which led to
unnecessary delays.


The other vital issue was investigating commission was not independent by the measure that it had to rely on the government of the day for providing it investigation officers who largely came from the police.  As a result, there is no independence because when the governments change sometimes all the investigation officers are withdrawn and new investigators are appointed which was a way of crippling an ongoing investigation. Therefore, an independent commission should have the right to recruit the investigators it needs directly without the intervention of the government of the day. 
They also need the investigators with special skills and typically when investigating financial crimes, you need different sets of skill and often even the government or the police department does not have the required skills to effectively investigate bribery and corruption. They will need forensic scientists, lawyers, bankers, accountants and all kinds of people who are familiar with financial frauds. 

Declaration of assets

Another important thing is the declaration of assets and liabilities by the parliamentarians, which also has a few hitches. For example, a minister has to submit his declaration to the President of the country while all other MPs submit it to the Speaker. Ideally, everybody should provide it to the Speaker who is a more independent person and not to the executive arm of the government. The other thing is, if you are a public officer or a public personality like a politician your assets and liabilities declaration must be made public and it does not happen now. The few people who have declared it have done so on a voluntary basis and only about 10 out of 225 members of parliament have done so, according to the Transparency International website. 
Then there is a strong need for introducing laws for recovery of stolen assets as Sri Lanka currently has no such legislation. The UN has a Stolen Asset Recovery Initiative and the government should link up with them and prioritize stolen assets recovery.  There is a huge cry in the country that they must be recouped because they are public assets.
There is also a code of conduct for MPs adopted by the last parliament before 2019 and if there is breach of conduct there is a mechanism stipulated in it on how the violation should be dealt with. I find that code of conduct or the mechanism to deal with breach of it not being pursued and the Speaker must take the responsibility in following up on that. 
Then there are a whole range of other laws which are important in this regard like Prevention of Money Laundering Act, Financial Transactions Act and also United Nations Conventions on Bribery and Corruption which should be looked at for gaps and relevant laws need to be updated. 

Business confidence

As you know Sri Lanka had moved several places down in the Transparency International Corruption Perception Index. In 2019 we were 93 out of 180 countries and in the last two years in 2021 we have been ranked 102 which means we have moved down nine places in just two years. And if we go on like this we will be considered the most corrupt country in a few more years. 
Then the other thing is the confidence issue which bribery and corruption creates and investors generally do not want to come into a country with rampant corruption.  Institutional frameworks for preventing corruption should be strengthened while also creating sufficient public awareness on things like conflict of interest, insider trading and private funding for public office.

Business personalities in politics

Then there is the tendency of business personalities coming into the parliament which can often lead to conflict of interest issues. Their entry into parliament as representatives of the people are fine, but problems crop up when they get into the cabinet and sit in executive office which will inevitably lead to conflict of interest because they are privy to inside information. 
They also influence tax policy if they are in the cabinet and that is a clear conflict of interest. If they are to sit in the cabinet, they should declare all their business interests publicly and not just in a hidden document.  Thereafter it has to be studied and then they will have to put all their interest in Trust so that they cannot have any connection to people running those businesses. 
Corruption is corrosive to the economy. It discourages investment, and leads to the misallocation of resources, whether it is foreign aid or foreign debt. Today in Sri Lanka bribery is considered a fact of life. Anecdotally, every family has at least one story about a corrupt politician or government official. If we are to move away from this situation we need to create a new political culture which discourages corruption and celebrates officials and politicians who stand out.

The author of this article is a former Vice President of CitiBank, Director/CEO of National Development Bank.