By Charitha Ratwatte –
The American author Mark Twain popularised this quote in his article ‘Chapters from My Autobiography,’ published in the magazine North American Review in 1906. Twain wrote: Figures often beguile me, particularly when I have the arranging of them myself; in which case the remark attributed to Disraeli would often apply with justice and force: ‘There are three kinds of lies: lies, damned lies and statistics.’
However, it must be pointed out that, the phrase is not found in any of the former British Prime Minister Benjamin Disraeli’s works and the earliest known appearances of the quotation were years after his death.
Economist Robert Giffen writing in the Economic Journal in 1892 noted that the phrase was a variation of an earlier phrase about three types of unreliable witnesses, a liar, a damned liar and an expert. Giffen, in a later public speech, said: “An old jest runs to the effect that there are three degrees of comparison among liars.
There are liars, there are outrageous liars, and there are scientific experts. This has been lately been adapted to throw dirt upon statistics. There are three degrees of comparison; it is said, in lying. There are lies, there are outrageous lies, and there are statistics.”
Questionable statistics in Sri Lanka
We in Sri Lanka have had the privilege of questionable statistics amounting to lies or damned lies brought home to us with some force recently for three reasons. The first is due to a senior officer of the Department of Census and Statistics, who alleges that he was ordered to alter the economic growth projections he had prepared on the basis of data collected by the department.
The second is that the Tourist officials have declared now, that in both 2012 and 2013, tourist arrival numbers were in fact higher than previously disclosed. The Tourism bean counters stated that before releasing the 2012 annual tourist arrival numbers, the data had been validated with the Department of Immigration tourist arrival figures collated using a new hitherto unpublicised computerised scanning system used by the Immigration Department, as against the Tourism bean counters archaic method of bagging the arrival cards and taking them to Colombo to count manually, which had shown an increase variation in arrival numbers ‘which was not huge’.
It is notable that this information was not placed in the public domain up to the time of this disclosure in 2014. However similar validation carried out in 2013, had disclosed ‘an overall variation of 8.5% of tourist arrivals between the computerised method and the manual method used in the collation of the data’. The tourism authorities state that ‘after comparing the validated data and previous manually collated data this cannot be considered as a huge discrepancy’.
At a meeting with businesspersons involved in tourism, the Sri Lanka Tourism authorities are reported to have explained in detail what the discrepancies were about, referring to the difference found between the manual count and the computerised count confessing to have ‘made a mistake’. It is of paramount importance to note here that the Tourism authorities were trumpeting a target figure of 1.25 million tourist arrivals for 2013.
As recently as in December 2013, there were doubts expressed that this figure could be reached , going on the monthly arrival figure up to that time, calculated without doubt by the manual system of counting arrival cards. But after the validation and comparison with computerised data the arrivals figure was reconfigured to reach 1.27 million, well over the target figure!
A spokesperson for the tourist trade has dismissed allegations that there was manipulation of data on arrivals to cross the targeted figure of 1.25 million for 2013 as ‘mere speculation’. The third reason being the International Monetary Fund has assessed, in May 2013, that the reasonable growth forecast on performance to date was 6.3% and for 2014 – 6.8%. However the Central Bank of Sri Lanka predicted growth forecasts 7.3% and 7.8% respectively. Exactly one percentage point higher than the IMF prediction.
This statistical conundrum has been noticed by interested parties across the board. The Joint Chambers of Commerce has issued a statement urging the Government to probe allegations that economic data has been tampered with and therefore may be inaccurate.
The Joint Chambers in a press release state: Recent newspaper reports have led to doubts being cast on the GDP growth rates published by the Department of Census and Statistics. If such doubts were to persist, it would lead to a lack of credibility on a range of published data and have serious implications on investor confidence and country ratings.
The Joint Chambers urged the authorities to investigate the relevant allegations ‘in a credible and transparent manner’ and to establish the integrity of the data published by all agencies as a matter of urgency. The Joint Chambers consist of the National Chamber of Commerce, COYLE, Ceylon National Chamber of Industries, National Chamber of Exporters and the Ceylon Chamber of Commerce.
‘We the Export Community’
In this context, it is intriguing that a few days ago a group branding itself grandly as ‘We the Export Community’ made a highly publicised commitment to achieve a US$ 20 billion turnover by 2020 through what they described, in their infinite wisdom, as a ‘Resolve to march towards Export Centric Growth’.
This ‘Export Community’ consists of the National Chamber of Exporters, Exporters Association of Sri Lanka, Tea Exporters Association of Sri Lanka, Sri Lanka Association of Manufacturers and Exporters of Rubber Products, Sea Foods Exporters Association of Sri Lanka, Floriculture Produce Exporters Association, Free Trade Zone Manufacturers Association, the Apparel Exporters Association 200GFP, the Fabric and Apparel Accessory Manufacturing Association, the Sri Lanka Chamber of Garment Exporters, the Sri Lanka Apparel Sourcing Association, and the Joint Apparel Association Forum.
This bold target which the ‘Export Community’ challenges itself to achieve by 2020 is intriguing because, there is a very close nexus between this ‘Export Community’ and the Joint Chambers of Commerce. The majority of both must be members of both groups. While one group is calling upon the Government to take steps to remove doubts which have been expressed on official statistics, the other is set to achieve a target of US$ 20 billion turnover by 2020, to be measured by these very same bean counters!
We may find that, after a couple of inspired recounts, maybe also a change from manual to computerised (computer ‘jilmart’ as the Sinhala slang so aptly puts it!), this humongous export target may be reached much sooner than 2020! Or even already achieved! It is noticeable that the exporters of labour are not a part of this ‘Export Community’. In some countries inbound tourism is also classified as an ‘Export’ industry. It’s all in the definition and the counting! But then, even in this thrice blessed ‘Wonder of Asia,’ anything is statistically possible, when we are dealing with lies, damned lies and statistics!
TISL call for PSC
The local chapter of Transparency International (TISL) has issued a statement calling for the appointment of a Parliamentary Select Committee to examine these allegations that the national economic data is inaccurate and being doctored. TISL says that this committee should examine the accuracy and genuineness of national socioeconomic data released by the two official agencies of the Government, the Department of Census and Statistics and the Central Bank of Sri Lanka.
In a letter to the Speaker of Parliament and the political party leaders, TISL has indicated that there is enough evidence in the public domain to believe that the Department of Census and Statistics has been manipulating national socioeconomic data. TISL points out that ‘national socioeconomic data of a country is indicative of a country’s destiny with international and national significance. They are important nationally as all policy decisions are based on such data. If the policies are made on the basis of concocted data, the country would be driven to a disastrous situation’.
TISL goes on to say: ‘When these official agencies release impressive socioeconomic data on Sri Lanka over the years, we are all happy, visualising that or country has been performing well after 30 long years of disastrous civil war. However, recent news reports and views expressed by some professionals have pushed us to a conundrum as to the accuracy of such official figures have been questioned on the ground that there appears to be a significant gap between figures like inflation, cost of living, etc., and the actual situation in the country. This suspicion has culminated when the revelation in Parliament by MP Anura Kumara Dissanayake on how senior officials of the Census and Statistics Department have manipulated data on national economic growth.
‘This incident cannot be simply disregarded or ignored limiting it to an isolated one. This incident raises doubts among us that the department has been massaging national data, tarnishing the longstanding credibility of the department for unbiased reporting of national data. It would be naive to think that the international community could be misled with such manipulated data. Most of the international agencies have their assessment of the socioeconomic situation of countries and even the genuine investors will rely on such information before making their investment decisions… People have lost faith in the accuracy of the data released by Government and this undesirable situation needs to be arrested to save the country’s image and integrity. The credibility of officials data should be re established in the best interest of the country and respecting the right of the people for accurate official information,’ TISL concludes.
A Sunday newspaper ran an online poll asking the question: ‘Are inflation, cost of living and growth numbers provided by the Government/Central Bank accurate?’ An astounding number as high as 90.5% of the respondents said ‘No’. A mere 5.6% said ‘Undecided’. While this is a limited sample, the opinion expressed is overwhelming.
Friday Forum stance
Another leading civil society group, the Friday Forum, has issued a statement entitled ‘Better Economic Statistics,’ expressing deep concern on the reliability of macroeconomic aggregates issued by the Government and related agencies:
‘The Friday Forum calls on the President to appoint a Committee of Experts to inquire into this question and propose solutions. A Committee of such a nature will require diverse expertise in a variety of disciplines. Someone rich in local experience in the use of these data in policy making can lead this Committee. Someone fully conversant with the System of National Accounts in its application in a developing country in the region and another with high expertise in the conduct of National Sample Surveys and the processing of survey data would be the key technical personnel. It would be forward looking to include two promising senior lecturers from two different universities in the country to further their expertise in the theory and the practice of estimating National Accounts and the principles of their application in policy making.’
The Friday Forum estimates that this task could be completed in 12 to 18 months.
‘Data Gimmicks and the Development Myth’
A leading trade union, the All Ceylon Bank Employees Union, organised a seminar of the subject of ‘Data Gimmicks and the Development Myth’ in Colombo recently. It was notable that the Government’s Deputy Minister of Finance who was invited to address the seminar failed to show up and thereby the defence of the Government position went by default.
The attack was so vehement and heated, that may be the decision that ‘Discretion is better than Valour’ was well-founded in that case of the missing politician. JVP Parliamentarian Anura Kumara Dissanayake addressing a full house gathering of attendees said: “The artificially inflated economy of Sri Lanka will collapse like a pack of cards without giving prior signals as the Government is trying to hide the true economic situation in the country from the whole world. But everything came to light after the revelation made by the MP in Parliament with documentary proof following a statement made by a senior official attached to Sri Lanka Census and Statistics Department. When they keep giving false statistics on economic growth and when the public is not actually enjoying the benefits of such high rate of growth, it is natural that people will start suspecting the figures so revealed, as well as the credibility of the institutions that declare that such data as being factual.”
“The JVP has in its possession credible evidence that the rate of economic growth in the first quarter of 2013, which was included in the Budget was increased to 5.5% from 5.4% over the telephone, and later it was further inflated to 6%, on an order given by the Director General of the Department of Census and Statistics to the Director of National Accounts Division in the same department. The country’s economic growth, a major indicator of the state of the economy, has been tampered with to attract investors and show the world that the island nation is in a sound economic footing. Foreign investors are studying the economic fundamentals of a country before taking a decision to make investments,” the JVP Parliamentarian stated.
UNP Parliamentarian Eran Wickremeratne, speaking at the same seminar said: “The Ministry of Finance, the Central Bank and the Department of Census and Statistics present a large amount of data and they try to show that the data they so present is transparent, but this was not so… According to the Budget Transparency Index, in 2010, Sri Lanka’s Budget was at 13th position. But by 2013, Sri Lanka’s Budget has come down to 53rd position in this same Budget transparency Index. This clearly shows that here was no transparency in the Budget and the data quoted in the Budget of the Government of Sri Lanka.”
Another commentator went so far as to suggest that those responsible for the national economic statistics in Sri Lanka should undergo an internalised purifying process and credibility exercise, monitored by an independent, autonomous authority, to restore their own credibility among the taxpayers, who pay their salaries. Also to restore their own self respect! And also maybe to sort out their facing up to divine or karmic retribution for their blatant lies!
Political lackeys and astounding data
A onetime senior official of the economic department of an international organisation once reminisced that political lackeys from African and Caribbean dictatorial ‘Banana Republics’ would come to London and present astounding economic data on their national economy’s performance. The official said he used to caution them confidentially that “if this data is for the consumption of others, it is okay, but please do not start believing it yourself and make those improbable numbers the basis of your national planning!”
He added that at the end of the day, these political lackeys were only fooling themselves, as all external agencies, international financial institutions, investors, donors and even international NGOs would as a matter of routine double-check the economic growth figures of any country they were intending to invest in, assist or support and false numbers were easily exposed on internationally available transparent comparative data.
This is the danger. If the ‘numbers are massaged’ to fool a credulous public, to fool investors, to fool other sundry interested parties only, it may pass muster. But at some point the politicians, the bureaucrats and assorted lackeys and ‘ass liquors’ tend to end up quoting the ‘massaged numbers’ as gospel truth themselves, after repeating it ‘ad nauseam’ to each and every one they meet! Then the excreta really hits the fan! Even the consumer will think twice when the ground situation at the market frontier he or she confronts every day does not reflect the rosy economic picture, the Government’s ‘massaged numbers’ show.
Allegations like those being made that foreign investment figures are inflated and that what are in fact massive expansions by large local corporates are classified as Foreign Direct Investment, even when such expansions are financed by local bank credit, then tend to gain credibility.
The Government has set itself a target of reaching middle income status for the country from the present low middle income status, with a per capita of $ 4,000 by 2016, there are allegations that all this ‘massaging’ is a build-up to concocting figures to build up to that target. The Government no doubt has a lot of explaining to do and to come up with replies which are believable. When the Deputy Minister of Finance ducks a seminar at which the response could have been well given, the thunderous silence or rather the absence, is revealing!
But as one analyst said, given the current environment, it would be indeed be ‘incredible’ if a credible and independent investigation is undertaken into these allegations of massaging of statistics and concluded to the satisfaction of all stakeholders. We await the future figures of the ‘Export Community’ with much anticipation and trepidation!