23 May, 2019

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Budget Of Hopes Amidst Achievement Deficits

By Ameer Ali

Dr. Ameer Ali

Every budget introduced in the parliament ushers in with plenty of hopes and promises but the record of achievements had always fallen short of initial promises. This had been the sad history of Sri Lankan government budgets at least until the demise of the most successful finance minister and budget critique, Dr. N.M. Perera. Minister Mangala Samaraweera’s 2019-20 budget will not be an exception to this historic reality. No one in the parliament keeps tracking the record of a budget’s achievements and hold the minister concerned accountable until the next budget is introduced.   

Captioned, “Enterprise Sri Lanka – Empowering People and Nurturing the Poor” with added resolve to “shift from a culture of handouts to a culture of empowerment and independence”, is, on the face of it, a carefully drawn out exercise in balancing the demands between international and institutional lenders, especially the IMF on the one hand, and a restless mass crying for relief from mounting economic pressures, especially the cost of living, on the other. Given the prevailing economic scenario of worsening trade and budget deficits, depreciating currency, interest burden on inherited and current debt with an inescapable need to fall into more debt, and falling resource productivity, all at a time when the nation is about to go to the polls at least twice if not thrice this year, the finance minister from a government on life support, is bold enough not to make his budget either emphatically growth focused or benevolently distribution oriented. In that sense, it is a balanced budget. How much of the budget is achievable is a daunting question to answer. The minister said that this budget was the “continuation of the thrust” of his previous budget, but he forgot to tell us how much of the previous budget was achieved, at least until the infamous October crisis. It is unfair to make the President a whipping boy for all failures of the government. Achievement deficit, like several other deficits in the country, is a perennial problem of national budgets in our blessed land.   

The strength of any budget should be measured not by its aspirations and accounting techniques but by its plan of implementation. How is this budget going to be implemented given the facts: (a) an running war between the Prime Minister and a President, in which the latter has determined to sabotage the government, (b) at least one part of the country and its population feel ignored and frustrated because of the government’s lacklustre response to its pre- and post- war grievances, (c) reign of rampant corruption and unchecked finance scandals, and (d) an incompetent public service? Even in a country without these problems there is a time lag between budgetary declarations and implementation because the bureaucracy takes time to process the minister’s intentions and policies. In the context of Sri Lanka, even if the current government were to come back after the next election, it is doubtful whether even fifty percent of the Minister’s policies and measures would have seen completion in practice. Administrative corruption and incompetency is the biggest challenge facing any government in this country.

The budget’s resolve to give incentives to private sector, by way of encouraging foreign direct investment, capital assistance to small and medium size enterprises, reforming educational curricula and teaching with a view to enhance skills suited to modern economies, and measures to bring in more females into workforce are commendable aspirations but depend on how the government is going to tackle the fundamental issues mentioned above. 

Although a budget is an economic document it has to be implemented within the ruling political and administrative climate. That climate can be either conducive to implement the budget fully or indifferent if not adversarial to slow down or halt its implementation. Given the overwhelmingly politicised public service and trade unions, and a president’s open declaration to bring down the government, full implementation of the budget proposals is not guaranteed.   

However, facilities like capital assistance to small and medium size enterprises are liable to be exploited by the corrupt and powerful unless there are strict guide lines for the selection of such enterprises. The rich and corrupt have ample ways of using government concessions and facilities to enrich themselves. Even the finance minister’s own parliamentary colleagues are subject to influence by lobbyists and charlatans. 

At least in a couple of my previous contributions to this journal, I have insisted that what Sri Lanka needs is a technocratic cabinet with an iron fist at the top. Meritocracy should rule public service and administrative malfeasance must be punished without fear or favour. To do that, rule of law must prevail and judiciary must be totally independent. This is a basic necessity to revolutionise our culture of governance, which is subject to all types of pulls and pushes. Without meritocracy, bureaucratic competence, rule of law and independence of judiciary, mal-administration will ruin all economic plans or national budgets, however much sound they are in theory and practice. Good governance is an absolute necessity to pull the economy out of its present rut. 

Managing an open economy is a complex task. Domestic upheavals can have international reverberations, as we witnessed in October last year, and international volatilities can have disastrous consequences to domestic economy. To provide certainty at home is to win confidence abroad, and winning confidence abroad is to ensure profitability and progress at home. 

The best asset any country can have are its people. Without the cooperation of the people no government can translate its plans into action. That applies even to a budget. Cooperation will come only if there is honesty and justice in governance.       

We are not ruled by robots and machines but by fellow humans. This is why we need rules and guidance to direct our behaviour. No amount of religious preaching and worshipping can guarantee good governance. Only rationally drawn out rules and regulations with humane face and strict separation of powers under democratic constitution can deliver good governance. It is the absence of this that will make Minister Samaraweera’s budget an instrument to empower the rich and corrupt.            

*Dr. Ameer Ali, School of Business and Governance, Murdoch University, Western Australia

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Latest comments

  • 1
    0

    Dr.Ameer Ali,

    Thanks for the succinct article summarizing the current ills in the governance, law and order, administration, corruption and productivity that work hand in hand toget to this stage today.

    One wonders has the mean national IQ of 79, was primarily responsible, along with the Para-Sinhala and Para-Tamil along with Para-Buddhism, Para-Hinduism, Para-Christianity and Para-Islam, all local versions,responsible?

    One Hope was that there was one successfull finance minist, Dr. N M Perera, but in 1977,they were defeated, leading to the JRJ Ececutive Presidency and all its ills and corruption.

    JVP is on a campaign to abolish to the current failed executive presidency that elects dictators and madmen. The people should support that.

    • 5
      0

      The Minister of Finance is Financially Illiterate.
      This is a further DEBT TRAP budget 2.4 billion worth of soveriegn bonds were issued last week and the rupee is again in free fall.
      That Bondscam Ranil has made a fashion designer, albeit a butterfly, Minister of Finance to run the country into the IMF-WB-soverign bond traders debt trap, so that USA can set up Military Bases in Trinomalee cheaply reflects the CONTEMPT with which Bondscam Ranil who should be impeached treats the CITIZENS and ECONOMY of Sri Lanka.

      • 3
        0

        Yes, having a finance Minister who simply presents budgets drafted in Washington by IMF and the neo-con Millennium Challenge Corporation (MCC), that also drafted Bondscam Ranil’s economic policies including Vision 2025 and the cute “Regaining Sri Lanka” , is a disgrace to the people and insults the intelligence Sri Lankan citizens.
        It is also a disgrace to the neoliberal ecnomists -Clown Harsha and slick Eran.
        Bondscam Ranil is the pits and should share a prison cell with Mahinda Jarapassa and US citizen Gota who has been protecting these last 4 years.

  • 3
    0

    the best laid plans of mice and men oft go astray
    so it is with this budget
    no attempt has been made to alter the 80/20 ratio between indirect a nd direct taxes to 60/40
    by taxing the rich by way of increasing the rates of direct taxes
    so i would like to say mangala show me the money if you want to fulfil your billion rupee promises

  • 1
    0

    Ameer Ali: Please consider changing the title to “Mirage Budget of Hopes. Ig-achievements are on the way”

  • 0
    0

    After the 51 day debacle, American financial rating agencies lowered the rating for Sri lanka. Now, american companies are ripping Sri lanka for loan, T-bill and bond interest rates. that is the name of the game. Mangala is enacting that Voters will pay. Ranil is just lieing and he doe snot know what he is talking.ALL Talk BUT NO ANY USEFUL RESULTS, SOME TIMES NO WORK TOO.

  • 1
    0

    I think Sri Lanka loses more money for corruption than any thing else. That is the fact about this government. CB issue is a classic one.

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