The Sunday Times Economic Analysis

At the launch of two books by the Sri Lanka Economists Association (SLEA) last Tuesday, Dr. Sarath Amunugama, Minister of Public Administration and Home Affairs, said that Sri Lankan economists had failed to be a potent force in guiding and directing economic policy. His critique was in fact broader and included all academics and intellectuals. This may be so.

It may be that many academics have thought it fit to peddle the policy of one party or another in the hope that they would be favoured for positions such as Chairmen of State Corporations, state agencies or even as Vice-Chancellors of universities.This has robbed the country of objective, independent and informed criticism and comprehensive proposals.

The Minister, once a finance minister of the country, did also say that many academics are peddling and supporting eccentric causes rather than the middle of the path policies that the majority of people wish to pursue. The majority of academics are, as he pointed out, at best a silent community

These observations are no doubt most refreshing when they come from a minister of state. Nevertheless, there is another side to the story. Do Ministers and governments listen to the advice given by academics and reasonable men and women? Time and again when good advice is offered, Ministers, Prime Ministers and Presidents say it’s very good advice and do nothing about it. The most common reason for this inaction is that there are political reasons requiring governments to pander to these rather than do what they themselves feel is good.

Recently when a glaring inappropriateness of an important appointee to a state enterprise was brought to the powers that be, the response was that nothing could be done because the appointee was a nominee of a political leader that mattered to the government. How can the efficiency of state enterprises be ensured in such a political context?

The Minister of Public Administration himself quoted several obstacles he had to deal with when he was Finance Minister: The Ceylon Electricity Board, the Petroleum Corporation and the Railways, among others. Their inefficiencies and their monopolistic powers resulted not only in the state subsidising their operations but also preventing the government from taking reform measures and policy directions that would improve and enhance the country's economic efficiency and output. Progressive decision-making has been hampered by their trade union actions. The fact is that governments have often been responsible for creating inefficiencies in state bodies either willfully or by turning a blind eye to outrageous acts of governance by their political appointees.

A drama on this scenario is currently being enacted and illustrates the point made. We refer to the sudden change in recruitment policy, which among other actions may seriously undermine the efficiency of the country's premier bank. Against all odds, the Bank of Ceylon (BOC), has attempted to maintain its efficiency in a very competitive financial market. Needless to say the requirement to conform to state policies of employment, political interference and other aspects have not made the task one of complete success.

What we are now seeing is the adoption of a recruitment policy, based on the prejudices of a single person that would undermine the efficiency of the bank. The Bank has through its post independent history maintained a knowledge of English as a perquisite for recruitment. The new policy for recruitment appears to have deleted this provision of a compulsory requirement of English, which is no longer a compulsory requirement for recruitment to the bank's positions of staff trainee assistants.

This is indeed a strange course of action at a time when there is widespread recognition of the importance of English. Can the BOC maintain its efficiency in the financial market without its staff unequipped to handle business in English. Let us also remind policy makers that banking operations that are now computerised require a degree of functional proficiency in English. Dropping the requirement of English at this time is tantamount to sabotaging the Bank.

The other act of imprudence is the dropping of the qualification of Cost and Management Accounting (CIMA) from its list of acceptable qualifications. The reasons for this departure are well known; let us merely say it’s personal prejudice amounting to peddling a private ambition of a single person.

State owned Sri Lankan institutions have been seriously weakened over the years through irresponsible political interferences that appear to go hand in hand with public ownership. This then provides the rationale for privatisation of state enterprises. The relationship between the current erosion of capacity by its new recruitment policy and the role of the intellectual in our society is this. If governments are unable to act in simple cases of irresponsible acts by its political appointees to high office, then is there much point in intellectuals proffering their advice on more complex issues?

Let us illustrate this with a more important issue. When the power crisis occurred researchers were blamed for not apprising the powers that be of the impending crisis. Researchers pointed out that not only had they done a number of studies on the issue, but that they had even presented these to the government.

They had hung around unread. Intellectuals, particularly economists, certainly require undertaking policy relevant research, making these available to policy makers, developing awareness on economic issues and having advocacy efforts.

Yet the old adage that you can take a horse to water but cannot make it drink applies rather cogently because political expediency, not rational economic decision-making, is the bane of our polity. Admittedly intellectuals should exert greater influence on such policy issues. However the pertinent issue is would they be heeded?