EDITORIAL: Cheque book Development work of Basil Rajapakse

" The government is able to secure funds by way of credits and aids internationally for specific projects and few of them are by dipping into the national budget. "

(October 18, New Delhi, Sri Lanka Guardian) The government of Sri Lanka (GoSL) is very adamant that economic development is the way forward to bring about socio-political cohesion in the country. The upbeat message of economic boom is spinned by the daily throw of new development stories through the government’s friendly media outlets.

Economic growth forecast of 8% and the upward index of the speculative Colombo stock market are the yardsticks to measure the economic growth of Sri Lanka.

Sky-rocketing cost of living, loosing international contracts such as the end of EU’s GSP+ concession, Saudi Arabia and another Arabian country banning employment opportunities for the Sri Lankans and ever escalating defence budget are not costed in economic terms yet.

Upbeat news is published in the Colombo media that denial of GSP + by the EU has not affected the export economy. Sri Lanka is heavily dependent on foreign remittances and money pouring from the middle-eastern countries is of significant proportion of the remittances received. According to Deputy Minister of Finance Dr. Sarath Amunugama: ‘there are about one million Sri Lankans working abroad and their remittances were approximately three billion dollars annually. Most of them are women’.

It will take time for Saudi Arabia’s ban on Sri Lankan workers to impact on the economy and even the long term consequences are still not economically measured. Thank God, the Saudi’s did not react aggressively by deporting all the Sri Lankans from its land. If this had happened, Sri Lanka would have suffered a heavy blow.

If not for the IMF credit of over $2 billion to streamline the countries balance of payment problem and international loans filtering through from other sources, Sri Lanka’s economy would have reached the rock bottom. The country’s economy is said to be in a dire state contrary to what the government claims. Bankruptcy of the state was only averted by the restructuring of the loans with help of the IMF.

The Central Bank officials will privately say there is very little to throw out, as its funds are depleting rapidly.

The government too is unable to promote a sustainable long term economic development plan. Knowing very well the dire circumstances of its finances, the government is unable to present a fully costed long term national economic development plan identifying the achievable targets. Such plan needs wider engagement of the government offices and input from experts. But unfortunately, such master plan is not in the agenda as the government knows the way forward is only had hoc cheque book management of the randomly selected development projects.

The government is able to secure funds by way of credits and aids internationally for specific projects and few of them are by dipping into the national budget.

The Asian Development Bank promised to provide around US$350 million of funding, much of it going for the war ravaged North and East and about 60% of ADB lending over three years will be targeted at the North and East, directly or indirectly.

‘Re-building Sri Lanka's war-ravaged north and east should be eventually driven by the private sector, rather than an unsustainable donor-financed state sector, a senior United Nations Development Agency (UNDP) official is quoted as saying during the peak of the war.

Sri Lanka has still not harnessed the private sector. Even its efforts are not rewarding much. With the unpredictable state of affairs in Sri Lanka, with the heavy presence of army and a disgruntled community in the north, any private finance is risk averse, unless a broad based political settlement to the crisis facing Sri Lanka.

You need one maverick to turn the table over for the highly promoted investments to crumble like a ton of bricks.

The government’s appeal to the Tamil Diaspora community to invest has not materialised, except for few jumping in a hurry to cash in on the confused state of affairs in the war torn areas. They too did not bring their own money, instead using the funds provided by the states BOI. Frustrated government is going on the venom and vengeance to avenge the Diaspora community by engaging international consultants at multi-million US $ cost in the USA, Canada, UK and the EU to beat them hard in its next stage of its war efforts.

There was much media glare when the President appointed his seventeen members Northern Development Committee. The committee included the President’s two siblings. This committee too has not prepared a long term plan for the north since its birth and is being sidelined by the one man efforts of the President’s brother Basil Rajapakse who is proceeding with his cheque book management of development projects in the north.

According to news reports, the Economic Development Minister Basil Rajapaksa accompanied by the paramilitary leader and the government minister Douglas Devananda attended a meeting with the Government Agent of Jaffna and approved all the proposals of development presented by the Jaffna GA and said he will muster the funding from all available sources. The seventeen member steering committee seems to have no say in this steamrolling agenda on northern development of Minister Basil Rajapakse.

It is the very same practice experienced in the South. Rupees 810.53 million was allocated by Basil Rajapakse at a stroke for development activities in the Kalutara District for the next three months on October 6, 2010. Unlike the northern budget, the southern budget was an open cheque book approach to cover the full cost of the minister proposed unlike the northern work needing pulling funds from the other departments.

The cheque book project management includes very underhand fraud of high percentage commissions paid to the vested interests. These commission payments erodes the efficiency and quality of the service delivery and the economic development spinning into vicious cycle of rapid deterioration of projects needing refurbishment and repair work that cost the nation for generations.