Rule of law key to foreign investment
We are not the only ones to keep knocking repeatedly on the doors of the authorities demanding the implementation of the rule of law, governance, transparency and accountability. That message came out clearly at this year’s economic summit organized by the Ceylon Chamber of Commerce (CCC) and furthermore from a foreign guest speaker whose message was simple; “Without law and order or governance, you simply cannot attract foreign investment.” In a nutshell, here are the critical points of the speech made by Gurcharan Das, Author, Columnist and Management Consultant, India at the conference:
- Investment will remain attractive depending on peace, the rule of law and good governance.
- Investors should feel that nobody is above the law.- Even though infrastructure is good, governance matters more than anything else. With free markets there should be good governance and reforms because with bad governance and no reforms, corruption tends to creep in.
- If governance is right, the private sector take-off in Sri Lanka would be smooth.
Opposition politicians who took part in a panel discussion at the same summit also strongly campaigned for the need for transparency, good governance and consistency in policies UNP MPs Dr. Harsha de Silva and Ruwan Wijewardene, were quoted as stressing the importance of law and order before achieving economic prosperity. JVP MP Sunil Handunnetti referred to the failed systems from the z-score fiasco to the university teachers strike saying the education system has virtually collapsed. So why isn’t the government listening? The other day when the Police Spokesperson Ajith Rohana himself acknowledged that the number of rape cases has increased, Minister Wimal Weerawansa, the government’s frontline defender on difficult causes, a few days later, lambasted the media for creating a ‘mountain out of a mole-hole’, saying crime was not rampant as portrayed by the media. Forget criticism that comes from interested parties, agenda-related groups, etc; even objective reports are dismissed without so much of a cursory glance by the government.
Governance issues are mounting by the day, and as made lucidly clear by the Indian speaker, the state cannot run away from its obligations if investment is to prosper. The main issue faced by ruling party politicians is the pressure from various funders and influential groups in a ‘you-scratch-my-back, I-scratch-yours’ system where ‘return’ favours is a prerequisite for election-time and ‘other’ funding needs. Over the past few weeks, the mainstream media (not website media which the government constantly frowns on), have been reporting on many rule of law, governance and accountability issues. And the government response? To deny or justify the issues raised with the main government defenders being Keheliya Rambukwella, Weerawansa and Mervyn Silva, to many who epitomises a rascal of the highest order.
In this midst comes the rumblings at the Securities and Exchange Commission (SEC) where pressure is mounting on its officers to go slow on regulation, investigations and the work it’s entrusted by law to do. It’s a continuation of the issues faced by the former chairperson Indrani Sugathadasa. For example powerful businessman Harry Jayawardena has no qualms for violating a promise as stated in courts. After given an undertaking to the SEC that he would withdraw an appeal case over the issue of a mandatory offer and after such undertaking was conveyed to court, that he would go by the SEC decision, the Distilleries chief resorted to fresh legal opinion and is going back on his word.
Apart from that, external influences are being brought to bear on the workings of the commission with attempts to replace acting Director General Hareendra Disa Bandara with SEC Investigations Director Dhammika Perera. SEC chairperson Thilak Karunaratne also came under pressure from higher authorities for filing a case against Harry Jayawardene, one of the reasons why the latter is now not sticking to his assurance given to the SEC. While Sri Lanka’s private sector is well aware of the issues relating to rule of law, etc and its impact not only on foreign investment but also local investments (like bribes demanded by politicians to operate in certain areas), companies and individuals are either lackadaisical, reluctant or fear losing government contracts and ‘friends’ if they raise these problems with the government and demand action.
The President is well aware that these issues are not doing the government and the country any good but is either uninterested or guided by a group advisors (many from the family) who believe the power of the vote (rural support) – when the time comes – will overcome corruption allegations and bad governance. Thus expect very little change in policy arising out of Gurcharan Das’ comments on the need for the rule of law being a sine qua non for incoming investments.
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