Governance and prosperity
Our regular columnist on corporate and macro-economic issues assesses
the importance of good governance in the development of the economies
of poor countries.
recent 50 percent price hike in railway fares, removal of VAT on
Liquid Petroleum Gas and diesel and threats by certain road users
against legislation to curb offences have given definite signals
on the key issues of governance. Sri Lanka Railways has been pathetically
deteriorating during the past few decades from the vantage positions
of technical competency and discipline it held earlier.
on revenue with little or no emphasis on eliminating wastage or
reducing unproductive expenditure resulted in leading indirect taxes
to a vicious circle of price hikes.
railway price hike is not welcome news every citizen will have a
natural expectation of a better service. Today large numbers of
workers who throng the city from the outstations are subject to
absolute misery due to the poor railway services. Govenments over
the years have failed to provide a good service through this convenient
mode of transport. Poor productivity and high costs are a foregone
conclusion in this scenario.
railway is still resourceful and owns good workshops and warehousing
facilities in key locations. Railway workers also showed their true
potential by reconstructing the tsunami damaged track in record
time A developed railway will take away much of the pressure from
road transport which now accounts for the bulk of the human and
a silent monument to this sad situation stands in the heart of Galle
Road, Colombo 3 where one could see the dilapidated remains of the
once proud possession of Shaw Wallace and Hedges, a leading agency
house of the pre-land reform era. These buildings vested under government
in the aftermath of the land reform euphoria today are a pathetic
sight with its frontage being occupied by beggars making it an eyesore.
example is the former Carson’s office complex at Vauxhall
Street, yet another plantation land mark now owned and occupied
by the JEDB. Though not in the same state as the former this too
reflects the poor governance which is today a major cause for most
of country’s unresolved issues. Similarly, the Kompanna Vidiya
railway station now renovated and cared for by a well-managed public
quoted company reflects a complete transformation from the neglect
it was in.
executive (state), legislature and the judiciary form the pillars
of the governance. Ever increasing cost of living, crisis in educational
institutions, poor healthcare, rising unemployment, poverty are
mostly the symptoms of the disease of bad governance which keeps
certain countries poor for ever leading to unrest.
theories have been put forward to explain the difference between
rich and poor countries. Some have argued that certain geographical
factors decide this fate and this has been supported by explaining
the fortunes or misfortunes of the countries around the equator,
while another theory uses the efficiency of institutions which are
characterized by guarantee of basic rights allowing individuals
to take part in economic life, limiting actions of elites, politicians
and other powerful groups to create and take advantage of uneven
arguments for governance as a principal factor determining the fortunes
of a nation now seems to be gaining more ground. With the introduction
of the “Concept of Corporate Governance” and the relevant
disclosures in financial statements it is abundantly clear that
companies with good governance policies are better managed and satisfy
the stakeholder aspirations better.
Good governance is not a magic word.
the sum product of its three main elements and a strong public sector
is a necessity. Growth must come from private enterprise, which
comprises every individual who could add value and not only the
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