Mother Lanka on saline

As a country, we have been moving backwards politically, economically, socially and technically without any proper direction compared to similar Asian and African nations due to very short-sighted strategies and petty political gains – Pic by Shehan Gunasekara

Sri Lanka has been facing many constraints, experienced crucial times and gone through many cycles during the last three-four decades.

For instance, the successful completion of the humanitarian effort carried out by our brave soldiers to end the 30-year-old terrorism not only astonished the world but also demonstrated our competences and capabilities as a nation. The Tsunami was a natural catastrophe faced in 2004.

However, as a country, we have been moving backwards politically, economically, socially and technically without any proper direction compared to similar Asian and African nations due to very short-sighted strategies and petty political gains.

Every political ruler whether aristocratic or from a political dynasty, whether seasoned or ‘planted’ or from a new perspective, who ruled this country so far has failed to embrace and grab every opportunity they got to develop this country as they were either exploring personal gains or petty political gains to remain in power, thus compromising the development of the country, constitution and the general public.

The most disappointing aspect is that some having displayed the ‘worst’ political performances in the recent past, without having the basic knowledge and the cognisance about the challenges in the VUCA world, are still keeping a hawkish eye on attempting to grab the power.

Hence many opportunities granted by the people to take this country to greater heights have been ignored by these politicians and the loss of such opportunities cannot be measured in monetary, economic and social terms as we witness the development taking place in neighbouring countries such as Singapore, Myanmar, Vietnam and Bangladesh. All these politicians since independence are equally and collectively responsible for the present status of this wonderful country. Since ’70s the minor or simplified but effective measures we should have introduced to the system have now gone beyond re-designing stage which means some unprecedented radical and drastic changes are required not only to re-engineer the systems, processes, change the attitudes and minds of the people, but also to formulate meticulous strategies and to implement them effectively. However, despite all these setbacks, it is still firmly believed that Sri Lanka is not dead, but ‘on saline’; she can still be saved.

Leadership

A leader can make or break any country. In 320 BC Aristotle said, if one wants to be a ‘Leader’ he/she should possess ‘Logos’, ‘Ethos’ and ‘Pathos’, meaning Logic, Ethics and Empathy. The wisdom of such words stated 2,340 years ago can be applied even today. Based on these definitions, unfortunately, Sri Lanka has not so far witnessed true ‘Leaders’ in the political arena, as every political leader lacked at least one or two of these traits.

But transformational political leaders such as Nelson Mandela, Lee Kuan Yew and Narasimha Rao to a certain extent in the modern era were shining examples of true leadership. In addition, from the political arena, we also witnessed great transformational political leaders such as Abraham Lincoln, Sir Winston Churchill in yester era. Subsequently Sir Winston Churchill paved the way to form the European Commission (EC) backed by Anthony Eden.

India was in dire straits politically, economically, militarily and socially, for about five to six years after Rajiv Gandhi’s assassination in May 1991. During this period, the Indian economy was in utter chaos, the future of India looked very bleak with racial conflicts leading to issues such as the Ayodya riots. Foreign exchange reserves plummeted to $ 1.0 billion for a population of about 1.2 billion. About five Prime Ministers served and had to step down on many occasions; for instance, Athul Bihari Vajpai’s government survived only for 13 days indicating the precarious situation India was in.

But when the PM Narasimha Rao was re-elected for the second time, a three-member ‘professional committee’ was appointed under his leadership, not only to overcome the issues prevailed at that time but also to take Bharata Matha into the new millennium. During this period, Pakistan was developing a nuclear weapon, LTTE was sprouting as a terrorist organisation in Sri Lanka and China was about to be granted the Most Favoured Nation (MFN) status by WTO.

The three appointed professionals were Dr. Abdul Kalam, assigned the task of developing a nuclear weapon and to enhance the missile capability, top economist Dr. Manmohan Singh to revamp the awfully constrained Indian economy, and Narayan Murthy to transform India into the Silicon Valley of Asia. A critical factor in the success of these individuals was that they were genuine professionals and these appointments were completely apolitical.

Today India is the sixth largest economy in the world with a GDP of $ 2.8 trillion, and one of the BRICS nations. In South Korea too under President Park’s leadership, ‘Chaebol’, a concept centred around a powerful family owned mega conglomerates, was encouraged in the early ’60s to transform a poverty-stricken economy to a modern economy. This Chaebol played a central role in transforming what was once a humble agrarian market into one of the world’s largest economies. The relationship between politicians and the Chaebol in Korea is symbiotic. Hence apolitical professionals can transform a nation positively.

Another significant point is that genuine leaders with such noble traits will not seek the majority view. Even if the entire country is on one side, if the leader possesses such noble leadership traits, he/she will go against the entire community to accomplish it based on his vision as he/she knows the best for the country being a visionary leader. For instance, when Nelson Mandela was elected by 71% African majority as the president, with a hidden agenda of ‘taking the revenge’ from the so called ‘whites’ who tortured them during the apartheid, Mandela having spent 27 years as a political prisoner had his own determination of not taking the revenge.

But upon elections, when the majority people experienced that Mandela was not openly against the ‘white’ community, they were so upset and protested against Mandela, to which Mandela responded by saying “You elected me to lead you; let me lead you now”. Mandela did not change the key positions held at the time, such as the Police Chief, Presidential security, Springboks Captain, etc. and continued with them as he knew the important role played by the ‘whites’ at that time.

Similarly, when Lee Kuan Yu first made the decision to relocate Singapore’s up-and-coming airport from its original site in Paya Lebar to the Changi coast, virtually the entire population and the opposition in Singapore were up in arms. The Premier was further criticised as when twice the required land area was demarcated for the airport, but was unutilised at the time. However, being a visionary leader he knew that he cannot fetch another suitable plot of land elsewhere in Singapore if one day the national carrier needs an expansion.

Lee Kuan Yew made Changi his life’s work, even after stepping down as the leader of Singapore, and today the Changi Airport has over 480 accolades as the best airport in the world. This provides ample evidence that, while the majority of the population may not possess ‘Logos’ to see the bigger picture and the future vision, the leader must possess these traits. This is important for a country like Sri Lanka.

Vision beyond elections

Having a national vision and not formulating strategies is a daydream. But formulating strategies without a vision is a nightmare. Unfortunately, Sri Lanka is in the second situation. In rowing, all team members should pull in one direction to reach the winning line. But if the team members pull in different directions, the boat will never reach the finish line. The same is seen in Sri Lanka; the country does not have a long term vision beyond elections.

Nations such as Japan, Singapore, and Germany plan for the next 20 years, with strategies to take the nation forward despite the changes in Governments with each election. However, due to the short-sighted nature of politicians, any ‘planning’ is done only until the next General Elections, Pradeshiya Saba, Provincial Council and the Presidential elections. Hence, as a nation, all plans are tactical and not at all strategic.

A few simple changes to the governance structure would enable Sri Lanka to benefit greatly; firstly, to abolish the 19th amendment, secondly to avoid Member of Parliament from changing parties in an ad-hoc manner, and thirdly to abolish the unwanted Provincial Council (PC) system in Sri Lanka. Rationalisation for the first two are obvious and have been widely discussed by all and sundry. Justification for the third requirement is multidimensional.

The PC system was introduced way back in 1987 during J.R. Jayawardena’s era due to the circumstances that prevailed at that time. More than three decades have lapsed since then and the necessity for such a requirement now does not prevail. Further, the PC system is ideal for large countries such as Russia, India and Canada, which have large populations and large land areas, not tiny nations such as Sri Lanka; for instance, Tamil Nadu (TN) is five times bigger than Sri Lanka yet is just one state of India. Hence the purpose of having Provincial Council system for a tiny country like Sri Lanka with nine provinces is lost.

More importantly, when one considers the calibre of councillors who get elected to these PCs, we witness the crimes and corruption aided and abetted by them and the background they come from and the unacceptable level of knowledge and education, and the dividends Sri Lanka has received so far, any reasonable person with a logical mind will never endorse their election.

Fourthly the barriers they create for FDIs, garbage and waste management activities in their peripheries are not congruent with the wishes of the central government and the general public. Finally, the quantum of funds that the central government has to allocate for such PCs especially the Treasury is engulfed with many untold financial constraints. These are few radical changes that Sri Lanka should re-visit and introduce.

Long term policy formulation

Naturally, well thought and meticulously planned policies will take the country forward, not only beyond elections but also for next two decades. This is common with many developed nations. Unfortunately, Sri Lanka is a nation that does not have even the basic policies, such as an Agriculture policy, Education policy, Energy policy, Transport policy, Trade Policy, Health policy, Foreign policy and Tourism policy.

Since each ruling party mainly focuses on the current needs of its members, rather than the development policies of the country, each sector is inevitably plunged into chaos. Take, for instance, our education system from grade one admissions to graduation. We do not have a Qualification Assessment Authority (QAA) for private education (like the structure currently in place in the UK). Our primary, secondary and tertiary curricular are not congruent with the emerging global trends as well as the evolving world.

In Japan, up to grade three, students are taught manners, ethics, well-being, values, and behavioural aspects with very few time-based exams. However, in Sri Lanka, from grade one, students are pushed to pass the scholarship exam (regardless of whether they will be placed into better schools or not), ignoring all other values and ethics and destroying the childhood.

We witnessed even during Tsunami in Japan that people were waiting in the pedestrian crossing until ‘Green’ appears to cross the road. This shows the upbringing of the society. But in Sri Lanka pedestrians believe ‘Red’ only applies to vehicles.

Such short-sightedness when formulating policies ultimately results in even major developments becoming meaningless. For instance, during the last 8-10 years many highways were built. But did we amend the driving license issuing criteria? Do our drivers know the differences, road rules and guidelines to driving on a regular road and on a highway? It’s no wonder we have so many accidents on daily basis.

Another example is during the last 5-10 years the landscapes in the city limits in Colombo and suburbs have been re-demarcated with many sky-rises. But have we upgraded our fire-brigade infrastructure and capabilities? Still, the fire brigade only has the capability to extinguish any fire up to the 11th floor. Have we got the capability to be congruent with the evolving world at least internally? The answer is ‘No’. I believe, no one needs two-third majority for these changes.

A nation’s policies should be designed by apolitical professionals, with a view of up to 15-20 years, and formed after obtaining views from stakeholders impartially keeping only future of Sri Lanka in focus. Undoubtedly when designing such crucial policies, aligning with the local culture, needs of the society, keeping the vision and the objectives in mind also bench marking few similar countries, with many brain-storming sessions and professional arguments should be encapsulated. Once implemented, these policies will provide the direction for the country up to 2030 or 2040.

Irrespective of the political party in power, or whenever a cabinet re-shuffle takes place, policies should not be changed. Once a decade, policies can be reviewed and re-designed to be congruent with the evolving world. Formulation of such decisive policies should be entrusted and empowered to professionals who have the expertise and competences with strategic thinking. Having such long-term policies will naturally provide a steppingstone for FDIs in Sri Lanka.

Another important aspect is, once all these policies are enacted, strategies are designed, there should be an authority, with ‘Strategic Thinking’, knowledge or a genuine strategist, to amalgamate and integrate all these strategies in to a coherent and holistic activity for implementation, assigning tasks and targets. This has not happened so far in Sri Lanka.

For instance, once the strategies are designed to improve exports, the proposed strategist should coordinate with EDB, trade specialisation activities, different chambers of commerce, supply chains, strengthening the backward and double backward integration, quality, obtaining the international market intelligence from the ambassadors and high commissioners, funding through CBSL under qualitative and quantitative lending, understanding the different cultures in different countries, global advertising and demand creation for our exports should be looked into.

This is one of the key weaknesses where SL has failed as all divisions, departments work as per their own agendas with limited tunnel vision knowledge and with no integration.

Legal system

Harsha Fernando (Daily FT 5 Oct. 2016) once stated that “Lawyers and the Accountants are probably two of the worst when it comes to money laundering because if you look at the two professions including auditors, they are the ones that have manipulated the accounting and legal systems”. The author fully endorses the proposed action taken by Securities Exchange Commission (SEC) in the past to challenge the auditors for their audits carried out.

Though the envisaged steps are challenging, any system that does not change with the evolving world, will not survive as change is inevitable and is the only permanent aspect. This can be applied to our legal system as well. The legal mechanism should meet the expectations of the society with speed, especially with the process improvements and thinking beyond the tunnel vision. Legal cases in Sri Lanka tend to drag on for years, sometime generations (as is the case with land related matters); this is due to corruption in the system, bureaucracy and lack of infrastructure to facilitate quick and sound judgments.

These issues can be solved by re-engineering the legal system. As with anything, a solid foundation is key; this would be in the form of a database, based on identity and biometrics of all Sri Lankans, which can be used in crime analysis and can assist with legal cases to provide evidence. Cases related to taxes, customs, excise etc. should be solved within three to six months, and the gap between one hearing and the next date of hearing should be less than two weeks.

Similar process should be available for rape and drug cases as well. A technology based system began at the Inland Revenue Department (known as RAMIS), linking all other government databases maintained at the Department of Motor Vehicles, Department of Immigration and Emigration, Department for Registration of Persons, Land Registrar’s Office, etc. has not seen the light at the end of the tunnel. Although this was commenced few years ago, the process has been stalled, which naturally hinders revenue generation for the country.

It is estimated that Sri Lanka can even generate over Rs. 3 trillion if the proposed institutes (except for banks) are integrated and can have about 10 million tax files open, as opposed to the 1.3 million files at present. Similar to other countries, all citizens should be asked to open a tax file if they are between 18-60 years of age. Having a Tax File does not mean that you have to pay taxes. The need is to have transparency with your earnings. Tax percentages can be reduced if the tax base is huge.

If the legal system is not congruent with the needs of the society, vision and the evolving world, Sri Lanka cannot move forward. Hence while maintaining total independence, impartiality, dignity and the respect from the general public, process and the procedures within the legal fraternity should be re-engineered with specific time limits and major improvements with the introduction of technology.

In a speech made by the Polish Deputy Foreign Secretary, on the transformation of Poland from socialism to democracy under Lech Valence’s leadership, stated that almost 750 bills were passed within a year in the Polish Parliament, during that dramatic transition period and the support rendered by the independent judiciary there was commendable.

Interventions of the Government

The Government’s strategic, economic, technical, and the security interventions need a complete overhaul. For instance, due to lack of intervention on security, we witnessed the massacre in April 2019. Another is, the negative impact of security interventions has brought the Tourism Industry to a standstill and the losses cannot be measured in monetary terms. The Government’s interventions are a must on all four dimensions to improve our Exports, FDIs, and Tourism. But currently we hardly see such interventions. The South Korean government had all four continuously for about two decades up until they developed a solid export market for today’s leading companies such as KIA, Hyundai, LG, Samsung, etc. Sri Lanka does not focus on Trade specialisation.

Sri Lanka can expand the export basket for several products such as flora and fauna, fish, spices, cinnamon, genuine re-exports of many products with value additions, creating specified zones, rubber related products, and the list goes on. With the re-grant of GSP+ in March/April 2017, the author writing an article, stated Sri Lanka should target at least 1% of EU imports which is about Euro 75 b, (total EU imports are around Euros 7,500 b) targeting about 25 products out of 726 products available.

Systems and process should be integrated accordingly; for instance, banking support through qualitative lending, creating export management companies (EMCs), creating demand globally for our products, creating supporting and related industries, introducing export credit insurance companies, sponsoring them for trade exhibitions, and also obtaining global market intelligence through our Ambassadors and High Commissioners, creating domestic competition, improving local standards significantly and bringing such competition to global level.

Even our apparel industry earns basically the ‘sewing costs’ as we import about 85% of the required raw material. Sri Lanka has fully forgotten about Research and Development (R&D) and how R&D can be used to gain competitive advantage. Israel spends 6% of their GDP on R&D which is the simple reason to confirm 184 Nobel Laureates produced by them and own several patent rights across the world. R&D is embedded in their culture. R&D culture in Sri Lankan companies and the Government is pathetic.

From another perspective, the yield and the productivity for our agriculture sector is comparatively low. Kasertsart University in Thailand advices the Thai government on agriculture products, how they carry out R&D, how they educate the farmer community not only for paddy cultivation but also for grapes cultivation for Siam Winery, to gain competitive advantage in the global market. Does it happen in Sri Lanka? The present yield on rice in Sri Lanka is with the fertiliser subsidy provided by the government. Even with the fertiliser subsidy, productivity is low.

Another area of concern is that the extent of land where paddy and other crops are cultivated is drastically being reduced. Hence even if the yield is comparatively alright, the quantum of production is reduced substantially and the availability of unutilised land in Sri Lanka is on the increase. New Zealand being four times larger in land than Sri Lanka with only 4.2 million population, have utilised this enormous amount of free land to produce milk, wool, linen, meat, cheese and butter to the world with 36 million cattle and sheep and the balance land has been converted to ‘man-made’ forests to export timber to the world.

This is how Kiwis have improved their trade specialisation through absolute and comparative advantages to earn a humongous foreign exchange reserve. Does it happen in Sri Lanka? Improving the yield, and productivity are essential elements to gain comparative advantages in international trade to gain competitive advantage in the global market.

Social menaces

Three-wheeler menace, the issue of garbage disposal, drugs and dengue are four other major social issues. Although the three-wheeler concept was initially introduced as a self-employment scheme with low cost, today it has become a social menace as they have formed their own culture and have encroached every road, every junction and every bend, and involved with many ill-repute activities.

As three-wheelers directly and indirectly involve over two million (including families), naturally, taking drastic action towards changing this segment will lead to an erosion in the vote base of the politician. Hence, any constructive action such as introducing taxies or introducing a scheme from the entrepreneurial perspective for them by getting rid of three-wheelers, appear remote. To cure sicknesses, medicine, though bitter, should be taken. Similarly, though it represents about 8% of the vote base, this three-wheeler menace should be solved.

With regards to garbage disposal, if recycling and disposal of garbage is carried out correctly this can be a massive source of income; a so-called ‘Money Spring’. The Government can earn a tremendous amount of money simply by sorting and selling the recyclable/reusable garbage items to organisations that will be more than willing to pay for such disposables. Further, these processes create natural energy and gas that can be used to bridge the energy shortage of Sri Lanka to a certain extent.

However, the entire structure of garbage disposal in Sri Lanka, from the Urban Councils to the individuals collecting the garbage, has become so bureaucratic that this has become a menace in all aspects. Streamlining the segregation of garbage, garbage collection, garbage disposal, re-cycling process, generating power, etc. should be carried out similar to Australia, New Zealand and the USA.

Another social menace is the drug addicts and the drug importers. This is affecting many facets of our society; youth and education, well-being of the family, future generations, prisons etc. As stated above, the legal system should be stepped up to decide every drug case within three months and to destroy the seized drugs and to punish them without mercy. More than the drug addict, the drug importer is accountable and liable for punishment. When can our nation get rid of this menace?

Most of the activities that we can implement as a nation, do not need two third majority in Parliament. For instance, do we need a two third majority to charge a three-wheeler that cuts the strait line or overtakes from left? Do we need a two third majority to provide the maximum punishment for a drug importer? “Poverty is not an excuse to escape the law, and wealth is not a tool to manipulate the law.”

Non-economic sphere

In Sri Lanka, we pay too much attention for economic matters, sometimes ignoring the other important arenas. While acknowledging the importance of the economy and the economic matters, in Singapore, when Goh Chok Tong was appointed as the Senior State Minister of Finance in 1981, (by Lee Kwan Yu) some of the non-economic policy objectives such as reduction in corruption, highest meritocracy, regulatory efficiency and rule of law, Research and Development etc. were incorporated to their economic policy. This proves not only the economic matters but also inclusion of non-economic matters in policy making is essential.

State Owned Enterprises (SOE)

There is enormous potential in these sleeping giants. Most of these SOEs enjoy monopoly status in Sri Lanka and the employees do not have iota of knowledge about the global competition. But while emphasising the importance of managing these SOEs effectively, it is the duty of the Government to re-engineer these SOEs especially the loss making SOEs on following terms:

Policy decision not to recruit employees until they become profitable especially before any election.

To recruit employees purely on competences and not on connections or political affiliations.

Use at least 10% of the profits generated, to offer a Voluntary Retirement Scheme (VRS) and move towards ‘right scaling’ and ‘de-layering’ process. If funding is a constrained, VRS can be offered in SOEs, on yearly basis over a period of three years.

Curtail and reduce the bargaining power of the unionised labour especially the unions with political affiliations. No union should be allowed in SOEs with any political affiliation. This is the main reason for the downfall of SOEs. Union should exist to win the rights of the employees, but not to topple the governments, not to block roads, not to sleep on the road, or not to fulfil their own hidden agendas.

Create a ‘performance-oriented culture’ with specific KPIs in every SOE employee.

Role of ambassadors and high commissioners

This is another area that needs immediate re-engineering. Research reveals that the role and the duties of a ‘diplomat’ are multi-dimensional and their contribution to maintain the image of the country, gather global market intelligence, improve international trade are crucial. For instance, a diplomat’s duties and responsibilities are briefly stated below:

To represent his/her motherland in the host nation as the Head of the Diplomatic Mission

To promote and protect the image and the reputation of the home country in the host nation

To be responsible about the well-being of the countrymen living in the host nation

To work for the fundamental development of economic, cultural and scientific relations, to promote cooperation, and essentially to maintain and strengthen the friendly relations between the two States.

To promote trade, attract FDIs, attract tourists for the home country by being ‘ambassador extraordinary and plenipotentiary’. Definitely KPIs should be assigned for these areas.

To maintain, improve and enhance commercial and defence diplomacy including gathering trade intelligence

To gather other types of intelligence

Except for very few of our diplomats who are brilliant, majority of our diplomats contribute nothing to Sri Lankan economy or otherwise. One can witness, the way Malaysia and the UK are organising education exhibitions in Sri Lanka. This is to allure local students for their universities so that they earn foreign exchange from our students. This type of income is one of the key revenue sources for countries such as Australia, Malaysia, UK and USA. Such contributions from diplomats are vital for their success and also for their performance.

What about the Sri Lankan diplomats? When the entire world is moving towards a ‘performance-oriented culture’, it is high time to come up with a system to evaluate the performance of our diplomats on the above basis or on other accepted criteria. Also, the local systems and the organisations should be stepped up to meet such demands and challenges. This will be a tremendous boost not only for trade but also for FDIs, Tourism and improving the image of my country.

Punishment

Professor Sigmund Freud, the greatest psychoanalyst and father of modern psychiatry once said “human behaviour is primarily controlled by its consequences”. However, we hardly see punishment for wrong doers in Sri Lanka. A story popularly told is, when Lee Kuan Yu’s best friend got caught for stealing $ 10,000 in ’70s, he was sent to jail for six years. He pleaded from Lee being the best friend and the President, to pardon him, which he refused, as he would be setting a bad precedent. Today Singapore is the third least corrupt country in the world and many countries either have followed or benchmarked the Singaporean ‘anti-corruption strategy’.

Singapore’s success in minimising corruption is the result of its government’s strong political will and the adequate budget, personnel and operational autonomy given to the Corrupt Practices Investigation Bureau to enable it to enforce the anti-corruption laws impartially. Hence proper, appropriate and timely punishment is a must in every society. Definitely Sri Lanka can take a leaf from their anti-corruption strategy.

Finally, the above will undoubtedly prove that making minor changes to the above areas will not take Sri Lanka anywhere, but only the re-engineering of the strategies, structures, integration of systems, processes, legal system, along with assigning KPIs, imposing maximum punishment, and introduction of long term policies will help Sri Lanka to see the light at the end of the tunnel. But sheer determination, apolitical approach, tough decision making, facing challenges and long-term thinking are important ingredients for this journey.

(The writer is the Head of Academic Affairs of PIM. He is a strategist, consultant, banker and an academic with wealth of hands-on exposure. He has specialised in strategic affairs, international business, corporate governance, banking, tertiary education, and re-engineering of companies).

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