World Bank and villagers’ of one voice!

Paul Wolfowitz, in his welcome address at the recent annual World Bank and IMF meeting held in Singapore had emphasized that he believed, corruption was a major impediment to development, and that poverty reduction could not take place without adequate governance and anti corruption safeguards.

A set of village leaders in Sri Lanka, who recently analyzed the impediments to surpassing the poverty related Millennium Development Goal by 2015 through equitable economic development, identified governance related issues as key. High levels of corruption, high indirect transaction costs due to corruption and service inefficiencies, changing focus and the abandonment of projects already initiated following changes in political regimes were also identified in surveys as key issues.

A large number of projects started by one regime investing national resources and abandoned by other regimes were shown as examples - the failure to effectively use or even total abandonment of Gam Udawa exhibition sites, housing projects and Youth Services training centres.

One village leader identified how corruption had its impact, despite new regimes starting with clean slates after new provincial elections. He outlined how the village leaders got all three parties (including the cleaner than clean red comrades!) together and agreed that the development priority for equitable village development was the improvement of a village road connecting the village to the national infrastructure. All parties together voted in the project with an allocation of Rs 3 million from the decentralized budget and inaugurated the project with commitment and enthusiasm. The contractor engaged had done a poor quality road way committing less than one third the voted sums, leaving the longer term connectivity value of the road in question. Despite the village leaders’ voice demonstrating the unfair and unjust outcome from the resource allocation, none of the three parties in council was interested in their voice or in the discharge of their collective governance responsibility.

Reports from the Singapore meeting states that the World Bank rapped politically hungry governments, saying short sighted policies fail to uplift the poor, keeping them at the 'bottom end of the pyramid', another key impediment to equitable economic growth identified by the village leaders in Sri Lanka.

The bank's chief economist for South Asia, Shantayaman Devarajan had ticked off businesses for not doing enough to increase market opportunities for the poor in Asia, in both formal and informal markets. The way out perhaps, he had said, “is for businesses to step in, using technology to create livelihoods, which integrate poor producers into the value chain. Businesses that open their wallets to help micro finance schemes also hit the bureaucratic brick wall”. "It's a bad cycle. When projects are scaled up, they bump against the governments which failed their people in the first place, which is quite unfortunate,” he said.

The village leaders’ plea was the same, seeking from the private sector transfer of appropriate technology and best practices and links to marketing and distribution channels supported by price stability and certainty, with financing mechanisms that are fair and readily available.

"When markets fail the poor, the government should speedily correct it. But governments also fail due to various short sighted policies," Devarajan said addressing businessmen, policymakers and civil society in Singapore. The village leaders identified that market failures were mostly due to government policy changes, inadequate governance and inefficiencies government authorities.

Devarajan had cited Sri Lanka's cash transfer programme, Samurdhi, as a classic example of a poorly targeted redistribution programme that is often misused as a political tool. "In my country, Sri Lanka, Samurdhi excludes 40 percent of the poor, while 44 percent of its beneficiaries are not poor," says Devarajan. Village leaders in Sri Lanka said the same; “Inequalities and inefficiencies in the Samurdhi scheme, with benefits not reaching the actual targets and also not being directed to those most deserving.”

What Devarajan did not say but stated loudly by village leaders was the negative impact of the narcotic drugs, illicit alcohol and gambling menace, sweeping the village life into misery on both economic and social levels and the much needed improvements in national infrastructure, education and health delivery on an equitable basis.

It is time now for business and civil society to put pressure upon the two major political parties for their common national agenda to include commitments that will assure, good governance, anti corruption, effectiveness of law, order and internal security, anti narcotics and illicit alcohol control policies, effective and efficient delivery of government services in accessing the national infrastructure, education and health services. These of course must be led by an agreement on the resolution of the ethnic crisis and the associated dawn of peace and having in place a macro economic policy that ensures national competitiveness within a transparent and open market policy regime.