Will impediments to development continue unabated ?

A few years back, (2003) several news papers carried a critique by this writer on the impediments to development as enunciated by Gunner Myrdhal (reputed development economist) who identified several impediments which caused economic stagnation in the developing world.

The critique inter alia was an attempt to examine the relevance of these findings to this country. Presently the writer attempts a reappraisal of the situation after a lapse of some years.

Gunner Myrdhal discovered some decades ago, that underdeveloped countries are all, in varying degrees ‘soft states’. He observed that this is a significant feature among other conditions that together make a country underdeveloped.

The term ‘soft state’ was defined by Myrdhal, to comprise all the various types of social indiscipline, which manifest themselves by deficiencies in legislation and in particular law observance and enforcement. He further observed that laxity and arbitrariness in a national community that can be characterised as a’ soft state’ can be, and are exploited for personal gain by people who have economic, social and political power. While the opportunities for large scale exploitation opened up by the ‘soft state’ are of course, only at the disposal of the upper class, even persons quite low on the social ladder often find such opportunities for petty gains.

The real and very serious dilemma Myrdhal concluded was that there is little hope in South Asia for rapid development without greater social discipline which will not appear without legislation and regulations enforced by compulsion. An examination of the socio – economic, political and juridical environment in terms of Myrdhal’s concept of ‘soft state’ indeed confirmed its relevance to this country.

Some of the factors highlighted then comprised the dismal character of the political leadership which for decades had been mediocre, short sighted and adventurous without a political vision or the will to fight bribery, corruption and wasteful state spending. It deplored the attitude of some state officials, professionals and academics for betraying their professional learning and sound principles merely to get political recognition for career advancement. It lamented the rapid deterioration of the state bureaucracy due to intense political interferences in appointments, promotions etc.

Examples of some wasteful state spending identified then comprised the maintenance of a white elephant in the form of Provincial Councils, sustenance of a disproportionately large Cabinet of ministers perhaps the largest in the world thus incurring heavy expenses for their upkeep, nurturing of an utterly unproductive public service the size of which had steadily expanded confirming the validity of the ‘Parkinson’s Law’ which states that work expands to occupy the available time, and the pursuance of lopsided fiscal and monetary policies which over the years had led to inflation and instability of the external and internal value of the currency. If the impediments to development identified then were critical, the prospects presently are simply disastrous. Let’s examine some of these impediments.

The Provincial council system continues to operate as a parallel structure of governance duplicating work of the state bureaucracy at a tremendous cost without any commensurate net social benefit. Further the Provincial councils are plagued with system inefficiencies causing concern for those who seek the limited services offered by these councils. The high cost of maintenance of the provincial administration and the low rate of growth of the provincial economies add to the inflation already created by the ethnic crisis and consequent war. Further the creation of the provincial structure of governance has not lead to a corresponding reduction in central government functions carried out by the ministries and their line departments.

These establishments have in fact been multiplied to accommodate an ever increasing Cabinet of ministers which has now risen to monstrous proportions. This has led to a further increase in government spending fuelling galloping inflation. This unusually large Cabinet has not only created confusion as regards the functions of ministries but has also led to serious problems of co-ordination and integration among these ministries. One glaring example is the tacit acknowledgement by a non cabinet minister at a recent television debate that the monthly rental of his ministry office which houses five to six officers to carry out three borrowed functions from another ministry is a colossal sum of Rs 1.1 million.

The sheer redundancy of government ministers has made some of them a public nuisance as was witnessed recently at a government television station.

Generally, some high state officials such as the Auditor General and the Governor of the Central Bank enjoy substantial autonomy in their spheres of activity.

This is to enable them to take rational decisions independent of political considerations and in the best interest of the country. Recently however, it has been observed that political nominees from outside have been appointed to some such high posts. A case in point is the appointment of the Governor of the Central Bank from outside the banking system. Such a move is unsatisfactory at least for two reasons. Firstly, millions of rupees are spent on foreign scholarships for Central Bank staff to acquire appropriate knowledge and expertise on Central Banking. In the circumstances it is indeed a sad state of affairs if the government cannot find one from among them to be the Governor. On the other hand, bringing one from outside has a demoralising effect on the senior bank staff whose co-operation and expertise are required to guide the economy. Secondly, political appointees will be incapable of taking independent decisions devoid of political considerations as demanded by the particular circumstance making a mockery of the autonomous status attached to such office. Already the growth rates pronounced by the Central Bank are disputed by many independent sources. Further the Governor’s repeated pledges to restrict inflation to a single digit is a far cry as annual average inflation has been running at 13.7% in 2006 and the figure for the month of December 2006 has been 19.3%. This trend continued in 2007 and the current inflation rate continues to be in the region of 19% despite the claim of an improved inflation index.

The expansionist monetary and fiscal policies pursued by the government with the concurrence of the Central Bank have contributed its share to the current inflation. Consequently trade unions are agitating for higher wages to compensate for the high cost of living. The plantation sector has already resorted to strike action and has won a salary increase although the increase granted has been below their expectations. Many other unions are contemplating strike action. The Parliament in the mean time unanimously approved a government proposal to grant a massive salary increase of over 100% to Parliamentarians with retrospective effect from January 2006. On the other hand, the salary increase proposed in the current budget to public servants is considered to be a mere pittance. The scenario that is emerging is pathetic if not chaotic which cannot be sustained by rhyme or reason.

The latest political calamity to befall this country is the callous efforts particularly of the elected opposition members of Parliament to join the government ranks not as a matter of policy or principle but merely to accept ministerial portfolios and enjoy the power associated therewith. The successful functioning of a democracy is based on a vibrant opposition which could not only expose corruption but also guide the government to work for the betterment of the country. One may wonder whether the people of this country are losing the services of a constructive and vibrant opposition which is a salient feature of democratic good governance.

Conclusion
The politicisation of the public service continues leaving much to be desired in terms of competence and efficiency. This in turn has led to a further deterioration of the services provided by the state agencies. Political considerations seem to far outweigh the need for sound management of the economy through appropriate monetary and fiscal policies. A larger Cabinet of ministers comprising 108 members will continue to heap more burdens on the Treasury and subsequently on the public. The privatisation efforts of succeeding governments have not produced the desired results. Public transport particularly has further deteriorated after privatisation causing much more inconvenience and harassment to the public. Lapses particularly in law enforcement have led to a deterioration of the law and order situation of the country.

The Government’s failure to act on the much publicised findings of the Parliamentary Committee on Public Enterprise (COPE) and the subsequent disclosure by COPE of financial misdemeanours concerning twenty state institutions display utter disregard to public accountability. These and other numerous instances ensure that the pervasive features of the socio-economic, political and juridical spheres will continue to dominate the affairs of the state unabated even in the New Year.

It is important that the government seriously think in terms of changing its course to be more accountable to the public which brought it into power. It should also take steps for the strengthening of political and social discipline because the major impediments for development are wide spread political and social indiscipline.

( The writer is the former Head of the Department of Town and Country Planning, University of Moratuwa, Director of Post Graduate Studies and Senior Professor of Town and Country Planning )