Public lashing of state officials by PBJ
View(s):Treasury Secretary Punchi Banda Jayasundera is perhaps Sri Lanka’s most powerful official. Barring the three brothers who are principal drivers of Sri Lanka’s development – Mahinda, Gotabaya and Basil (Chamal is not so influential in the circle of power) – Jayasundera is more influential than any minister (senior or junior) and has over time drawn the wrath of many ministers during the Rajapaksa regime and also during the Chandrika Kumaratunga era.
Understandably, his job is not easy; pandering to the whims and fancies of grandiose projects for which funding is getting more difficult. On the other hand, the Treasury Secretary’s arrogance and ‘I-am-the-boss” type of attitude is not winning him many friends at the portals of the Ministry of Finance and Planning either. Apart from a few loyalists (who do his bidding), there is a huge sense of frustration among others who have far more experience and skills to run a smoother and transparent administration.
That is why it was not surprising that the budget contained last-minute proposals not discussed with other Treasury officials. Many of which contained kindergarten-type errors as pointed out by P. Guruge, a tax specialist in an article published on this page.
Two simple examples he raises: 50,000 new teachers are to be paid Rs. 9500 per month. Accordingly, it will need Rs. 5700 million and not Rs. 4,000 million as estimated in the budget. In the second instance, an allowance of Rs. 8000 per month is to be paid for six months during the training period for 50,000 youth which means spending of Rs. 2400 million. The total requirement is Rs. 9900 million but the estimated allocation is only Rs. 7000 million!
The budget clearly is a hotchpotch of promises with an eye on elections, old proposals and new ones which are unworkable and unsustainable, as pointed out by many analysts. Guruge is not a politician; he has merely pointed out a simple arithmetic error in the budget which gives the impression that the estimates were dashed out without any proper cross-checking, or was a ‘devil-may-care’ attitude that the regime is known for when factual criticism emerges.
To many present, Jayasundera’s ‘talk’ looked like the President was delivering a political speech. The Treasury Secretary, as viewed by many present, spoke on the country’s development path in the past 10 years but didn’t clarify many of the issues in the budget. He also brushed aside the five questions (only five were allowed) with unconvincing responses, and didn’t take any more questions on the grounds that his doctor had advised him not to ‘talk too much’. Some businessmen walked out half-way saying that they had expected a speech on the budget and clarify on many issues. “Rather than speaking for two hours (against his doctor’s advice), he should have spoken for 30-45 minutes and opened the floor for questions,” one disappointed participant said, adding that there was a big ‘song-and-dance’ with full page ads announcing the meeting with free entrance to the public, but the outcome was far below expectations.
Another shocking statement – unbecoming of a senior public official – was Jayasundera’s perceived ‘threat’ to the new Commissioner-General. Pointing to her, he said that if she is unable to collect the tax arrears “she will have to leave her post”. The audience laughed, assuming it was a joke, but any official given this treatment in front of a public audience would have felt insulted. In another era – not so long ago – the official would have walked out and tendered his/her resignation and filed a fundamental rights complaint because the process of firing an official follows an official procedure. Unfortunately today’s officials don’t have the guts to stand up to arrogant bosses and furthermore fear their pensions would be affected, a reasonable concern. A few ‘honest’ and ‘straight forward’ officials at the Treasury in fact have been shoved into cold hibernation because they went by the book in their work ethics.
Such behaviour is tolerated by the President and his inner circle due to the lack of independent commissions governing the public service and the judiciary.
As discussed earlier, the budget had all kinds of issues and one such problem is the one faced by commercial banks after state banks were told to increase the rates on fixed deposits to 12 per cent senior citizens from a current 7-8 per cent.
The move will most likely see a flow of fixed deposits by senior citizens to state banks from private banks, or the latter would be forced to increase their rates. On the other hand, the move, while benefitting senior citizens who are struggling to make ends meet with low returns on their deposits, is also distorting the market. For example, the Central Bank (CB) policy in the past 12-18 months has been to reduce lending rates to drive investment and borrowings and reciprocally deposit rates have come down. The move has not seen any sharp increase in investment since business confidence levels are low.
Under a low interest regime, how can you increase borrowing (deposit) rates and keep lending rates lower that borrowing rates? Recently top economist Prof. S.S. Colombage said the economy is fast becoming a state-driven one instead of market-driven as espoused by governments present and past. The banking sector is also shifting gear to this path.
For instance, the Treasury is floating a US$30 billion bond at 12 per cent for state banks to invest to compensate for taking deposits from senior citizens at 12 per cent. Private commercial banks have asked the Central Bank to consider extending this to the entire banking sector otherwise the distortions could upset the market equilibrium.
While Sri Lanka’s “state-of-the- art economy” in which the Mahinda Chinthana is projected as a doctrine that is said to be followed by international lending agencies, the development path is more or less driven by the government with the private sector asked to grudgingly follow suit rather than the other way around – the state acting as a facilitator and guide.
And with the Treasury and Central Bank guided by political needs and aspirations, the people can only look up in wonderment and laugh at “I will fire you if you don’t perform’ type of comments at the expense of hard-working officials. If the Sri Lanka Administrative Officers’ Association has the guts, they should protest against the Treasury chief and particularly in the gender context. It is unfair to insult a state official in public. This is akin to Minister Mervyn Silva tying up an official and taking the law into his own hands. No different!