Financial Times

Wanted: Corporate whistle blowers ….

By Random Access Memory (RAM)

The dust on the Tokyo donor conference and the hype that followed is now settling down. Global and regional lenders and friends of Sri Lanka gave us the needed impetus and the opportunity to push peace and rebuild our motherland. We must indeed be grateful. We also must not forget that it is Sri Lanka and her people that got the support and not this political party or that. Undue antiques for short-term political gain will do us no good. It is true we will get deeper into debt and the repayment will squarely be in the hands of Sri Lankans of this generation and those yet to be born. What matters is what we (meaning WE Sri Lankans) do with these funds to make it a worthy investment with sound returns. If we together make it, we can expect to have benefits and even goodwill write offs from our friends. There are lessons to learn. How Japan rebuilt after the World War II with the help of the Marshall Plan, is but one.

No matter what the critics say, this indeed is an investment in peace. In much simpler terms it is another chance for little Sri Lanka to get out of the large mess we are in. The reality is that we needed the funds and needed it real bad. No matter what we do in the blame game, Sri Lanka's political economy was a sick business for quite some time.

Any business guru will tell you that infusion of capital into a sick business works only if the core issues are dealt with. The more fashionable term in use today is corporate reengineering. The symptoms of the illness of the body corporate need be identified and action set in place so they cannot be the spoilers for what could be achieved. The Sri Lankan economy badly needs a strategy of corporate reengineering. A semblance of it is now in place. There is a lot more that needs to be done.

If we were looking for a recipe, a good first ingredient will be to put an end to the network of business buddy buddies. Meritocracy must replace the 'you scratch my back, I scratch yours' culture.

Seeking loyalty in the old school club must be replaced with a team with a high degree of morality with courage, integrity and conviction to question the rights and wrongs. It is prudent for the government to take real, effective and non-partisan action on the rule of law, transparency and social equity fronts.

The reality of the past is that we could not spend even part of the funds we had got from lenders and friends. Even what was spent in most cases did not bring us rates of return to justify the investments. Remember the mega Mahaweli Project. We were told that the US $ half billion project will make us the granary of the east and our hydro-power generation woes will all be a thing of the past. Today we do have a dam with beautiful vistas, some good roads, some power generated, some well off farmers and some excellent accommodation facilities. There are also those who cut the deals from within the inner network club enjoying the riches.

There is no question that the Mahaweli and other similar projects of lesser magnitude benefited many. The issue however remains, if those benefits justified the investment made. The principle of the return on investment is simple. When a rupee is invested there needs be new wealth created within a given period of time of so much more than that rupee. The value of the new wealth must at least match what else we could have got from investing that rupee. There is a problem of capacity, effectiveness and efficiency. The new model is to cut through the red tape and have the private sector take the reins. The private sector business delegation that followed the government delegation to the Tokyo conference are busy convincing their potential overseas partner companies and agencies that they have the capacity to deliver on whatever tasks there is to be undertaken. The private sector which was always critical of the governments on the undue costs of doing business as a result of corruption and underhand activities, now have a golden opportunity to prove that they are 'purer than thou'. They must remember that they will be the new custodians of funds obtained for all Sri Lankans and not for a privileged few. There are the good, the bad and the ugly. We must ensure that the bad and ugly will not raise their heads. Those who are responsible must also be responsible to blow the whistle when needed.

Constructive whistle blowing will soon be part of good corporate cultural practice the world over. It is about integrity, caring and courage. Do we dare to care?