27 June, 2022

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Public Service: Treasury’s Dependency Burden

By Ameer Ali

Dr. Ameer Ali

“The public sector has expanded so rapidly that they have become an unbearable burden. … We must honestly accept, that this public sector is a burden to the country”, said Finance Minister, Basil Rajapaksa. On this point he was one hundred percent right. But how did this come about and how to make it slim and efficient are questions the minister did not care to answer. He made his comments while selling his maiden budget to a disgruntled public, which may not be the proper place to discuss such a major structural issue. However, the writing is on the wall. Either prune the public service, make it more productive and save government revenue or raise more taxes or beg borrow or steal to pay for this army of file pushers.

From a ratio of one public servant to every 113 people at the time of independence, public service has been bloated to a ratio of one for every 13. While office work is rapidly becoming computerised and the concept of an office within an enclosed space itself becoming redundant, employing millions of staff at public expense to maintain files and papers is a modern oddity. Official figures show that in 2020, almost 1.5 million state workers took home 86.47% of total tax revenue. The minister’s proposal to extend the retirement age and not to entertain any demand for salary increase form one year only postpones the day of reckoning to the treasury. With rising inflation, real income of salaried officials is falling by the day. Nearly one million public servants have already announced to go on strike shortly. Their demand is understandable, but what could a bankrupt treasury do? Public service imposes a heavy dependency burden on the treasury. How to reduce this burden?

There is an urgent need for a radical overhaul of the system of recruitment to public service, and that overhaul should be part of a wider reform agenda of the country’s education system. Basically, it was the exigencies of populist politics and not the need for economic development that created this dependency burden. When the treasury was fairly resourceful in the 1950s and 1960s politicians exploited public service employment to build up their vote banks. That tradition continued as the economy declined and the treasury started losing its financial resilience in the seventies and after. In fact, there was a time when parliamentarians were given quotas of jobs in public service to be offered to their supporters. Several parliamentarians used those quotas to make money. Corruption thus entered and became a plague in the public sector. At one stage, even the so-called socialist policy of nationalising the commanding heights of the economy like public transport for example was intended to provide jobs for the boys. There was a time when there were one driver and two conductors in each of the CTB buses.

On the education side, even SWRD’s Sinhala Only Bill followed by the introduction of swabasha education from kindergarten to university were short cut remedies to provide employment to a rising generation of Sinhala youth. There is nothing inherently wrong in swabasha education. But the progressive removal of English from educational curriculum led to a rapid decline in the standard of education. At the same time an increase in the number of state universities produced hordes of unemployable graduates who when passed out had no prospect of gaining employment in the competitive private sector. Equipped with knowledge in soft subjects like Sinhala, Tamil, Pali, Sanskrit and other social sciences, university graduates suffered from skill mismatch and public service became the last resort for those job seekers. With subtle and sometime open discrimination against minorities more than 92 percent of employees in public service today are Sinhalese. This is a burden deliberately created by politicians without realising its consequences in the long run. Chicken have finally come home to roost. A bankrupt treasury is finding it unbearable to carry this burden.

Free education was introduced to increase the literacy rate and produce a skilled workforce. That was a phenomenal success and Sri Lanka by 1970s achieved the highest literacy rate in Asia. However, free education does not mean that government also guarantees employment to all those who pass out of its education stream. This was never explained to the people by the politicians. Instead, they promise government jobs at every election. Didn’t President GR recently hire 53,000 graduates in the state sector and appoint a Multi-purpose Task Force to hire another 100,000 grade 8 qualified in order to reduce poverty? A government’s task is to develop the economy to create employment opportunities for different levels of skills and training. The state should compete with the private sector to hire its employees with appropriate remuneration packages as economies of East Asia and Singapore had done. Instead, when politicians appoint public sector employees based not on merit but on political grounds the deserving has no choice but to leave the country. That explains Sri Lanka’s brain drain. How to develop such an economy is a subject for another discussion.

It is a proven fact that as levels of education increases from primary, to secondary and tertiary, private benefits overtake social benefits. Therefore, employment of the qualified, skilled and trained should be sorted out by the market and not by the government. Employers must have flexibility to hire and fire and employees must enjoy some level of job security. Flexicurity is what needed in the job market and the economic structure should get attuned to that principle. Public service should compete with private sector in recruiting its employees and not become an asylum for unemployable job seekers.

Neither the government nor the opposition seem to have any agenda to introduce reforms along this line in the education system as well as in the job market. Without those reforms a bankrupt treasury has no option but to carry the public sector dependency burden.

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

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Latest comments

  • 15
    3

    It is not only public service is the burden of the treasury but the whole system of Governance is a burden of the country and treasury.Before putting the blame on the Public sector, the ruling family regime should assess themselves that whether they are a burden to this country’s economy. Finance Minister Basil Rajapaksa is well known for 15% commission, Bribe paid by Mahinda Rajapaksa to buy MPs and Gotabaya Rajapaksas MIC deals and investment on unproductive Mattala airport, Cricket stadium and Harbour are somme examples of how the country was managed this regime.

    • 1
      0

      Let this not be another “organic fertilizer” fiasco ………

      First things first ………

      Sure, the public-sector is bloated and needs to be trimmed down …….. but this is not the time ………


      Anyone still remember John Maynard Keynes ……. one group of people digging trenches ….. and another group coming behind and filling them ……. just to keep people “employed” …… to kick start an economy?

      Full or near-full employment keeps an economy churning …….. when the employed spend their earnings for essential – and to a lesser extent non-essential – goods and services.

      In the present Lankan economic-environment where there is no vibrant free and fair open competitive private-sector, devoid of government interference and corruption, generating alternate employment ………. it’ll be suicidal to trim the public-sector

      It’s better than a dole/unemployment-benefits/Samudhi ……… to distribute in small sums (a barely liveable wage, like now) in the form of wages to a semi-employed large public-sector. …….. It will keep the economy (whatever there is) still churning when those employees spend their wages on essential goods and services ………….

      • 1
        0

        continued

        What grinds an economy to halt is looting on the public wealth ……. how many essential goods and services can Basil have in Lanka with his stolen millions stashed in the USA ……. compared to a vast public-sector with a meagre wage?

        What ye great Lankan economists don’t see is, how diminishing-returns apply to vast chunks of public-wealth stolen by Good ol’ latter-day saint Basil, the Rajapakses and the rest of the crooks in parliament, public-administration, industry ……. and taken out of the economy and hoarded away in secret overseas bank accounts. ………. How many of one thing can a person have ….. before the rest becomes redundant? …….. How many Malawana mansions can Basil live in?

        How many Graff Diamonds Hallucination watches can Namal or Native Vedda wear on his wrists …. hands …..neck ….. ankles ….. legs?

    • 0
      0

      This comment was removed by a moderator because it didn’t abide by our Comment policy.

      For more detail see our Comment policy https://www.colombotelegraph.com/index.php/comments-policy-2

  • 3
    6

    Dr.A.A Public service burden is for a small percentage of elite but the rest of the country depends on free healthcare, free education, free road usage and many other state sponsored needed activities.The burden is deep when these are scrapped in addition to the already threatened and fearful exits of the population

    • 0
      0

      I do not know what Good there is about you David. If all of the the monies stolen and squandered by the Rajpakshe Family and their henchman get put back into the public coffers the country would be guaranteed of a Budget Surplus and certainly for sure, not a deficit.

  • 11
    2

    Keep them coming Prof. Ali.
    Sound ideas in good English.
    Thank you!

    • 4
      0

      “With subtle and sometime open discrimination against minorities more than 92 percent of employees in public service today are Sinhalese. “
      A damning indictment of the system, and an eye-opener for those “patriots” who keep asking what discrimination the minorities suffer from. This skewed selection process also results in totally unsuitable and inefficient persons ending up in important positions. Recently there was the case two state organizations delivering completely contradictory reports on the Chinese organic fertilizer. Then, there was the ex-chairman of the CAA declaring that the proportion of butane in LPG causes cylinders to explode. Shouldn’t such an official be aware that cheap plastic cigarette lighters (which don’t explode) also contain butane? Who gives these mono-ethnic idiots their jobs?
      As Dr. Ali mentions, the quality of education has degraded. Diplomas and degrees are handed out just to show an increase in “graduates”.
      To my mind, people should be given jobs on merit only, and no other reason. If that leads to most doctors , administrators, and engineers being non-Sinhalese, so be it. This was so in the past, and no one can deny we had a better country then.

      • 0
        0

        It’s interesting that the committee appointed by Gota to investigate gas leaks is composed entirely of Sinhalese, probably all Buddhists too. Are there really no non-Sinhalese who have expertise in the subject?

        • 0
          0

          Sorry, there is just one Tamil.

  • 6
    1

    India’s IAS is 6,500 strong
    Sri Lanka’s SLAS is 2500 strong

    • 1
      0

      “Family Maintenance” is Important factor in Siri Lanka Resplendent Isle

  • 0
    0

    The Public Service should not only be slim, but efficient and effective as well

  • 0
    0

    1:13 in private sector in 50s and 60s was because people still had their farms. Rest who were kicked out of their farms for plantation development were either beggars or servants in rich colonial-wealth households.

    Ok…..maybe 1:113 is too high a no. (should be 1:75). Agree the sector needs to be streamlined. But till farms are given back to them and/or private sector employs more workers and pays them honorable salaries and wages instead of keeping profits for themselves for e.g. education of their children in Western lands, 1:113 is a good way to balance out inflation – money rolls back to the economy through the purchase of essential items.

    Best is to Tax these monied elite. Tax the monied elite!
    And halt all the major highway, infrastructure, and race-track projects.

    • 0
      0

      1:13 was the 50s and 60 s ratio.

      1:113 is the present ratio.

  • 2
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    Whether my comment is relevant or not is for the readers to decide.
    .
    That the workforce is a major part of the financial burden is true. But, the main thrust is the unsuitability and inefficiency of the workforce.
    .
    I’ll begin my arguments with, Learning and Education. Our educational institutions – Schools and Universities – are not sufficiently modernised to cater for for the changes around the world. We are stagnant as a workforce.
    .
    The remedy should start with revamping Education from the grassroots.
    Our Universities are a multiplier of Professors, not ideas and methods.
    .
    The hurried and unhelpful language policy is partly to blame. Introducing vernacular education at the total expense of English Language learning caused the disaster. When you shut yourself to the outside world you turn yourself to be frog in the well.
    .
    Now, continue this line of explanation to the other ills as well.

  • 1
    0

    Withdraw the 225 limousines rent it for weddings celebrities hotels ….etc to encourage for local businesses create more jobs “pick me”
    The amount of mad man’s task forces,commissions brings back the retired forces to govt services side lines the qualified suitable candidates
    What an insult to the so.called Ranavirus build it by them sadly ,they couldn’t find true soldiers or sacrificed for the course to open white..these clowns has to do the opening ceremony.
    VP ……you gone but look at the wreckage…every house holds wakes up in the morning to goes to kitchen before anything to see the blue cylinder thinking another day pass by then blurring pirth …to gesture of

  • 0
    0

    We have known all the time that the public sector is corrupt, lethargic, inefficient & even incompetent & the short answer to this state of affairs is that our education system has failed totally in turning out generations of school leavers & graduates with integrity & a ’rounded’ knowledge base to meet the challenges of the world. We have a tuition culture that is focused on passing exams, rather than improving the knowledge & in this context, its all about getting a job & making money, the easier & faster, the better. Our much hyped high literacy rate is limited only to reading & writing, not critical thinking. A few years ago, while on my annual holiday in SL, I befriended a young man who served at my regular take away, whose ambition was to become a tuk tuk driver with his own taxi, despite being a graduate from Kalaniya Uni. Obviously, his subjects at Uni were useless in the competitive job market & being from a poor village background, had no political influence to get a govt. job but as a graduate, he was not expected to return to his village & engage in cultivation.

  • 0
    0

    Sri Lanka is fast becoming like Greece. One table for four employees. Every government that came to power has to take the blame for this. The stupidity of the political leaders, in order to give employment to graduates, especially when they did not create enough employment opportunities elsewhere, has resulted in this.

    When Gotabaya was voted in, I was under the impression that he would take a strong stand in bringing the country under control. However, during the last two years, the country has gone from bad to worst. This is mostly because the rogues who were under his brother Mahinda were re-appointed as ministers again. I also have a strong feeling that Mahinda did this to pull the rug under Gota so that Gota would resign or be forced out so that he can become the president and crown Baby Namal as the next President. Although the constitution has restrictions of Mahinda becoming the president again, observing the present actions of the Chief Justice (cases filed by him when he was the AG now being withdrawn when he is the CJ) I get the feeling he will give a favourable decision to keep Mahinda in the Presidential seat. Even if Mahinda does not become the President, the next would be the constitution violating speaker who is another slave of Mahinda.

  • 1
    0

    Public Service is an honorific reference to Government Employment. We tend to refer to the number of employees and the bill that footed in salaries etc. only blow air, like a situation when one eats very hot food. Then we plan to or axe the numbers and that too suddenly like the organic only fiasco with an upheaval only to reverse the decision or the intended decision. What should concern any paymaster, whether the government or the private sector, is what return does the employer get for every unit of currency paid as salaries. We have all sorts of mechanism stringently controlling the creation of new positions etc. but the productivity of the employee force is never measured. BE BOLD. Utilize the human power, blending with technology. Introduce artificial intelligence and other latest forms innovations and prepare the country for the fourth industrial revolution. The country must drive it and let not the changes drive you crazy only to make a crash landing.

  • 0
    0

    It is not the Public service which not the burden but the PARLIAMENT which is the burden for the country.just see INDIA such a big country which has only around 550 PARLIAMENT MEMBERS.And see our cabinet which is very big compare to other big nations in the world.ALSO THE MEMBERS OF PARLIAMENT ARE RESPONSIBLE FOR INCREASE IN THE PUBLIC SERVICE DUE TO UNWANTED POLITICAL APPOINTMENTS.

  • 1
    0

    AA,
    Morning,
    True as you say, “There was a time when there were one driver and two conductors in each of the CTB buses.”
    Pettah to Katubedda express takes near 50 minutes with 10 halts to access/egress the vehicle, when tickets had to be issued (most of the time the Double Decker is detained at the halt as the issuing of tickets continue – notwithstanding ‘Express’) the rest of the time the conductors are at the foot of the steps having a chat on home or village affairs and jokes.
    detention time at halts total 15 minutes and they are free after that. This was the case with the Leyland mega buses with *)+ single decker too. one on the exit and on at the rear entry point
    though understand the pressure to an extent in slow buses halting in 30 to 40 halting place for the same destination, the use of 1 +1 (upper and lower deck) was understandable, Express buses 2 conductors was a “no brainer’.

    • 0
      0

      2 conductors are for crowd control…..imagine the impossiblility of one conductor handling triple the standard sitting and standing passanger number especially during rush hour. The second conductor is paying for himself through the collection of fares. What a squashed job too…..should not be denied their employment…..great service to the struggling masses suffering in buses also.

  • 1
    0

    Apart from the over bloated number of Public Servants in Public Service today, the question is whether they are doing their assigned jobs honestly, diligently and efficiently?

    65 years back, when I was appointed as a clerk in a closed Government Department after sitting for an open competitive examination, I was trained and drilled to work hard and attend to and solve any verbal or written requests or complaints from Superiors or Subordinates or Members of Public, promptly with the least possible delay. Is it happening in any Government Department today?

    For many of us, Government Pensioners, in our seventies and eighties, and who have many issues with the Department of Pensions and have grievance that the Department is not taking any action on, or reply our letters. Who will solve our grievances?

    Vela
    Government Pensioner

  • 1
    0

    HI AA,
    Good morning.
    Basil having tough time, balancing the expenditure and Revenue!
    The country was mismanaged, visibly one matter I want to highlight
    1970, there was Commissioner, Controller, Director in charge of all government Departments may be 50 such departments. Average they had 4 deputies/assistants.
    Since then it became 7 0r 8 deputising or Assisting them.
    Since 2006 gradually, all of them became, WITH A SUFFIX ADDED ON AS ‘GENERAL’.
    Now SL has Commissioner General, Director General, Controller General, with 3 or 4 below them without the suffix General and the same complement of Deputy and Assistant directors! that is exponential growth and imagine the increase is at the top!!
    So if we had, 50 X 5 = 250 departmental top executives.
    Now another 50 X 4 = 200 “SUPRA” Chiefs and same complement of support .staff.
    450 are doing same managed, what 250 did, noticeably without computerisation & Mobiles.
    Question or appropriately the Conclusion is productivity has declined!!!!
    Top heavy and added Car, ‘chauffeur’, fuel expenses commensurately higher. Add to this elaborate party, all the Pay income is “Tax Free” too.
    CTB Conductor’s pay is chicken feed, compared to this gala rip off of the public purse!!

  • 2
    1

    Mrs. Bandaranayake made a blunder by appointing a guy who ruined the education system in this country as the Minister of Education.

    • 0
      0

      EE
      Do you suggest that Mrs B’s ministers tan their ministries like their private estates?
      It was cabinet government and we cannot shift the blame on one person.
      Was it an individual minister’s idea to take over assisted schools?
      Was it an individual minister’s idea to implement swabasha education?
      Was Standardization an individual minister’s idea?
      Was District Quota an individual minister’s idea?
      *
      “Not me sir” is not how members of a cabinet behave.

      • 0
        0

        “…run their ministries…”

  • 2
    1

    The problem is provincial councils.

    We have 10 ministries for most matters. A small island like SL cannot sustain such a ten fold public service than it requires.

    We never had these massive burdens before 1988.

    Get rid of provincial councils to stop this massive burden.

  • 1
    0

    “…public service has been bloated to a ratio of one for every 13.”
    We should be careful with public service employment figures.
    The above data includes important sectors including education health and public works.
    It will be helpful if administration, defence and police are separately identified.
    The most overstaffed today is the defence sector.
    *
    There is considerable shortage in state medical and educations sectors, especially in rural health and educational services, and we do not like to talk about it, because it hurts private sector profiteering.

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