Investments and our Public Service

Wednesday, 17 May 2017

About 1,600 miles to the East of Colombo is a small island
called Singapore. In size, it is only about 720 sq. kms. (Sri
Lanka is 65,000). Its population is 5.5 million compared to
Sri Lankas 20 plus million. These are about the only areas
where we have a lead; in terms of GDP, Singapore is about
$ 295 billion while we are a modest $ 82 billion (app).
Where per capita income is concerned, Singapore is
among the richest countries, commanding a per capita
income of $ 53,000, while we in Sri Lanka have a per
capita income of only $ 3,870 (app)
Our governments preach untiringly the importance of foreign
businesses and investments for Sri Lanka. For a capital deficient
and technology poor country it is essential to attract both money
and knowhow. Whether it is direct investments in projects, foreign
businesses setting up office here or investments in real estate or
the stock market, we want them.

But try as hard as we may promotions, road shows, various

concessions to investors, constant visits to foreign countries by
our dignitaries, international agreements we havent got the
desired results. In comparison to neighbouring countries like
Thailand, Malaysia and Singapore, the volume of foreign
investments we have attracted are miniscule and that too mostly
in to low-tech and low return areas; not the kind industries or
ventures that can push a country rapidly towards a qualitative
jump in terms of development.

Despite nature having blessed this island generously and as

argued often, placed it strategically in terms of international trade
routes, we have not caught the attention of international business
nor attracted investments sufficient to make a decisive difference.
Like in many other things, we expect investors to flock in because
we have nice beaches. Believing in our own propaganda, we
ignore the reality.

Reality is an everyday experience. What millions of Sri Lankans

encounter when dealing with organs of the government is far from
doing business with ease or ease of doing business, as these
ideas are commonly understood. If the people of this country find
it so difficult to do their everyday business, surely we cannot
create another reality only for the foreign investors, by just
wishing for one. After the garlands, drummers and the dances,
the foreign investor must function in this reality. And that is
horrendous.
Here are experiences of two Sri Lankans which illustrate the
reality of our public service. Both are known to me well.
Dehiwala/Mt. Lavinia Municipality
 The first is a retired bank executive who owned a
commercial property in the Dehiwala/ Mt. Lavinia municipal area.
He had rented the property to a business for a number of years.
After a few years the tenant reneged and stopped paying his rent.
With great difficulty, including lengthy legal action and police
intervention, my friend persuaded the tenant to vacate the
property. The elderly landlord, emotionally and financially
exhausted by his desperate effort to regain his property, decided
to sell.

Naturally, the prospective buyer required title and other

documents. To obtain documents like the Non-Vesting Certificate,
my friend had to go to the Municipality Office. According to him
the Dehiwala/Mt. Lavinia Municipal Council office is a nightmare of
indiscipline, indecorous levity and when least expected, a
pompous officiousness.

The title office is a misnomer here, while the public wait: the
staff walks about casually, chat with each other loudly, eat at
their desks and have long conversations on their mobile phones.
After a lengthy bureaucratic process requiring several visits to the
Council office, when my friends file was eventually located, it was
in a shocking state, a dilapidated folder with several loose
documents tucked carelessly into it.

Then the bad news; apparently his former tenant whose business
required a Business License from the Municipality had not
obtained one for eight years. The Council will not give any
document to the landlord unless he made good the default of his
former tenant! Although shaken by this obvious injustice, my
friend decided that it will be meaningless to argue the rights and
wrongs of the rule with the slovenly municipal employees. So he
pleaded with the officer for some relief.

The officer had then directed him to another officer, obviously

more senior, sitting in a cubicle. This officer after listening to my
friend had advised him to pay just two years business license fee
and in a softer voice told him to just look after the officer who
directed you here.

My friend is a pragmatic man and understood the message. He

did as told and gave the first officer Rs. 10,000. The Non-Vesting
Certificate was immediately issued by the Municipality.

I am happy that I sold the land in the Dehiwala/Mt Lavinia

Municipality area. Going to that office is a degrading experience.
It feels good to escape from the clutches of a Municipal Council
like that.

Kotte UC
In the second case, a friend of mine who lives overseas decided to
develop an inherited property in Rajagiriya by building a
commercial cum residential building. He had friends who guided
him.

The first day he went to the Kotte Urban Council, the officers
there were bureaucratic, giving him a time frame of about three
months to approve the plans, and that too only if all his
documents were in order. They had told him, portentously, that a
committee has to approve his plans and that this committee
included representatives from the Urban Development Authority
and other Government officials. My friend could not wait that
long.

He had gone to the Council office with a contact and passed

money around lavishly. Some officers, particularly females, to
whom my friend felt uncomfortable giving direct financial
inducements, he had passed on boxes of foreign chocolates,
dresses and shirts. He had his approval within a week.
Contracts with

the Government
I can add to this an example of another aspect of the state of our
Public Service today. This is in relation to the offer of a long-term
lease of an agricultural land owned by a Government institution.
The bidder was a foreign company which had got into a
partnership with a local party. They wanted the land for a tourism-
related development. The draft contract provided by the
Government institution was in Sinhala; if the bidder wanted to
understand it, he had to get it translated.

One of the local partners showed the document to me. I did not
need a translation. It was a very poorly-drafted document with
many repetitions and irrelevancies. Obviously most of the clauses
in it were from a cut and paste exercise, with little relevance to
the subject matter. On the face of it, the contract was hardly a
balanced document; clause after clause was heavily loaded in
favour of the landlord (Government), with copious descriptions of
methods of payment and so on.

A person acquainted with international commercial agreements

would be taken aback by the crudeness of this one-sided
approach. But in the course of discussing the document we
discovered that there were many loopholes, irregularities and
contradictions which made the contract mostly meaningless. In
any event, the local partners were nonchalant about the
menacing nature some of the clauses, there is no seriousness
here, they assured me.

Our Public Service is manned completely by products of our

education system, perhaps even the best it can produce. Clearly,
the three Rs of old do not suffice today. At a very basic level; to
answer the phone politely, reply a letter within a reasonable time,
respond meaningfully to an inquiry or request, seems too much to
expect from the public servants of today.

Years of politicisation has diminished them, todays Public Service

is programed only to respond to the call of the politician. We need
an education system that can produce something different
altogether. If we are serious about competing effectively, we must
find men of integrity; dedicated, upright as well as capable; with
greater minds and a larger vision than what we now have. The
future of the country depends on our ability to produce such men.
Singapore
About 1,600 miles to the East of Colombo is a small island called
Singapore. In size, it is only about 720 sq. kms. (Sri Lanka is
65,000). Its population is 5.5 million compared to Sri Lankas 20
plus million. These are about the only areas where we have a
lead; in terms of GDP, Singapore is about $ 295 billion while we
are a modest $ 82 billion (app). Where per capita income is
concerned, Singapore is among the richest countries,
commanding a per capita income of $ 53,000, while we in Sri
Lanka have a per capita income of only $ 3,870 (app).

In the Transparency International Perception of Corruption Index

Singapore stands at an admirable number 7, better than even
countries like the Netherlands, Canada and Germany. Sri Lanka is
at a lowly 95, worse than Rwanda, Senegal, India and China.

For some of the reasons for this embarrassing gap between our
tiny neighbour and us, we could profit by referring to a recent
book The Fourth Revolution The Global Race to Reinvent the
State by John Micklethwait and Adrian Wooldridge.

I quote therefrom -

Lee has always made it clear that Singapore is open for business:
There are few places where it is easier for a big multinational to
set up shop, where tariff barriers are lower, where taxes are more
manageable. But at the same time the State guides the economy.
It chivvies local businesses up the value chain-betting first on
manufacturing, then on services and now on knowledge economy.

I do not believe that democracy necessarily leads to

development. The exuberance of democracy leads to
undisciplined and disorderly conditions. Having seen other
countries in the neighbourhood torn apart by ethnic strife, he has
no qualms about forcing people live in mixed neighbourhoods in
order to prevent ethnic polarisation.

Good government in turn relies on an educated elite of good

people running the country. No country works harder at
perfecting its civil servants than Singapore, nor follows such an
unabashedly elitist model. It spots talented youngsters early,
luring them with scholarships, and then spends a fortune training
them; those who reach the top are richly rewarded, with pay
packages of as much as $ 2 million a year, while those who falter
are thrown overboard.

Sitting around a table with a group of Singaporean mandarins is

more like meeting junior partners at Goldman Sachs or Mckinsey.
The person on your left is on secondment at a big oil company; on
your right sits a woman who between spells at the Finance and
Defence Ministries has picked up degrees from the London School
of Economics, Cambridge and Stanford. High-fliers pop in and out
of the Civil Service College for more training: The Prime Minister
has even written MBA-style case studies for them.

When looking for foreign investments, such is the field we

compete in.
Posted by Thavam