Ceylon Today Editorial

Digital economy

23 September 2016

Digital poverty, digital government, uncollateralized loans and virtual businesses were four key takes delivered by the CEO of the State-owned Information and Communication Technology Agency, Muhunthan Canagey at a function organized by the National Chamber of Commerce, yesterday.

He claimed that digital poverty was worse than economic poverty, because the person who was tech. savvy was one step ahead of the pack, thereby racing ahead economically due to digital empowerment, leaving behind the digitally illiterate, virtual beggars, from an economic perspective.

While the time and tested definition of poverty is due to the difficulty of finding basic essentials such as food, shelter and clothing, leading to bloody revolutions, not least in Sri Lanka, which has thus far suffered three, two in the South and one in the North-East, 'digital poverty' is seemingly a new definition and it yet remains to be seen whether such poverty will also lead to bloody revolutions.

In respect of 'digital government', the opening at this seminar that Canagey gave was a digitized identity card (ID), seemingly replacing the current, plastic ID, in a project to be launched next year, thereby making the necessity of form filling when dealing with the Government of Sri Lanka (GoSL) and of its agents, an apparent thing of the past.

He also spoke of breaking silos, in a government within a government operation currently indulged in, by certain sections of those engaged in the public sector, and moving in to an era of transparency, knowledge sharing and openness in government.

While the electronic ID may become a thing of the past, soon, the breaking of silos in the State may, however, be a somewhat ambitious operation, going by the current work to rule campaign by Customs, arguably the largest revenue earner for the GoSL. The undercurrent behind this present trade union action being the move by the State to digitize the island's revenue authorities, where, according to Canagey's Minister (Minister of Telecommunication and Digital Infrastructure) Harin Fernando, non-digitization of revenue authorities is causing daily revenue leakages of US$ two million to the GoSL. (See Ceylon Today of 9 August 2016)

The underlying cause for these revenue leakages is under-valuation. And the reason behind under-valuation is corruption, where, broadly speaking, the importer makes an 'under the table' payment to the assessor in support of the under-valuation declared on the imported product in order to escape from paying the legal duty, by paying a lesser Customs duty.

Nonetheless, digitization minimizes face to face contact between the importer and the Customs officer, a major reason behind corruption at Customs. Less physical contact means that it may not be easy for the importer, to direct to which officer the 'under the table' payment should be made in order for the under-valuation to go through, unopposed and undetected.

The recent move by GoSL to counter this 'work to rule' campaign is to call-up retired Customs officers back for duty, because falling revenue, in the midst of rising expenditure is a burning issue and a condition which is unsustainable. Therefore, it may be interesting to see how successful GoSL will be in that aspect of digitizing, in order to breakdown government silos?

With reference to uncollateralized loans for tech. startups, Canagey said that GoSL is speaking to banks concerning this move. He said that the success of Silicon Valley is the uncollateralized funding of start-ups based on a business idea. Such funding is usually made by venture capitalists.

Sri Lanka experimented with venture capitalism, at least as way back in the 1990s, but this arm of the financial sector didn't takeoff, probably because there were more lucrative avenues for lending vis-à-vis collateralized loans.

Canagey said that the size of such lending may be as much as US$ 10 million or Rs 1.5 billion, which GoSL is unable to afford. These moneys need to come from the private sector, he said. But, it may be assured, that unless there is sizeable incentives to banks by GoSL to once more make a foray in to this area, non-collateralized lending for tech. start ups may never see the light of day.

Canagey also spoke of virtual businesses, giving the examples of Uber, which doesn't own a single taxi, but is now a $ 62 billion business, though only six years in operation and 'AirBnB,' a $ 24 billion business catering to the hotel and tourism services whilst not owning a single hotel bed. This technology company started just under 10 years ago in 2007.

He said this was the space which GoSL wants to create to make such tech. companies functional.

A possible start may be, as what a representative from a Canadian NGO, Ms. Esther McIntosh from the World University Service of Canada speaking on this occasion said, i.e. of first linking small tech. companies in the periphery which may have entrepreneurial ideas but which do not have the wherewithal to implement such, with larger tech. companies at the centre.

Daily News Editorial

Early Santa arrival for our MPs?

23 September 2016

It appears that Santa is knocking on the doors of our erstwhile peoples’ representatives, three months ahead, if what Prime Minister Ranil Wickremesinghe said is any indication. Premier Wickremesinghe speaking in Parliament on Wednesday said the government was mulling on a salary increase to all MPs.

Speaking on the debate on salary increase and revision of allowance given to the members of the Bribery Commission, the Premier said the matter of the MPs salaries will be taken up next. The PM, according to an English daily, has said that the MPs have been deprived of good salaries and that they were underpaid. Assuring that he would address members’ salary issue in the future he said that good persons cannot be appointed as members of the Independent Commissions without ensuring that they were paid well.

True. “good persons”, meaning professionals and technocrats, would have to be necessarily paid good salaries if they are to be attracted into government service. This is because these individuals will have to forgo their professional carriers and high emoluments to devote their time and energies to serve the state. In the process they may lose a sizable portion of their income which otherwise would have accrued to them if they had continued in their original professions. This is especially true with regard to the legal profession, where the official concerned has a lucrative practise. Hence nobody will object to the salary rise granted to the Bribery Commissioner and members of her staff.

However it is moot that the public will stand for any salary increase granted to MPs who are already a pampered lot, commanding huge salaries, in addition to other perks and privileges such as subsidized meals, duty free vehicles(which are invariably sold), unlimited fuel, free housing, telephone, foreign jaunts etc. This at a time they (public) has been forced to shoulder additional burdens by way of increase in the VAT and other levies that would have a direct impact on the cost of living and in the lifestyles of many.

True, the salary increase earmarked for Parliamentarians several months prior to this was shelved by the government as a result of the public outcry due to the government decision to increase VAT on a slew of consumer items. Nothing has changed since then and a pay hike to our MPs at this stage cannot be justified by any means.

Besides our MPs have not given any plausible reason to justify this salary increase, if in fact a salary increase in on the cards. Their general conduct in the August Assembly is still left mush to be desired although things have calmed down somewhat in recent times.

The late President J. R. Jayawardene openly declared in public that his MPs salaries should be increased. That way he said they would be out of temptation’s way. But the whole country knows what happened, with CBK going to town with her Dhooshanaya, Bheeshanaya slogans that brought an end to 17 years of UNP rule. Things did not get any better either with more of the same under CBK rule that ended with an exponential rise in bribery and corruption under the Rajapaksa dispensation that followed.

Hence enhanced emoluments to MPs will not see an end to corruption. In fact in most cases the salaries of MPs are mere tokens, as we saw during the last regime, when government Ministers engaged in their illegal businesses and rackets such as the illegal import of ethanol and the operation of private distilleries. Besides, the unity government will not endear itself to the public by doling out largesse to MPs at a time they are forced to pay additional taxes, knowing that their representatives will be sponging on them.

True, all MPs across the board stand to benefit, the one issue on which they all close ranks. But, going by the various corruption allegations against certain members of the Opposition who are said to have amassed billions, stashed away in foreign banks and many of them paraded before various commissions almost on a daily basis, the public would naturally want to know if these same crooks and swindlers are going to be rewarded, instead of punished, at their expense.

Be that as it may, the government should act with circumspection on the matter of salary increases to Parliamentarians. There is already a growing resentment over the multifarious privileges enjoyed by MPs at the expense of tax payer, and the opulent lifestyles they lead. This, while the estate workers are demanding a daily wage of Rs. 600 a day and teachers and minor employees in many a state institution are seen demonstrating on the roads almost on a daily basis demanding wage hikes for a couple of thousand rupees.

It is hoped that sanity will prevail and the proposed salary hike shelved, at least for the time being, until the economy sees a turn around, as promised by the government, in the near future.

The Island Editorial

Poachers and gamekeepers

23 September 2016

Politicians, in our book, are of two kinds—poachers and gamekeepers. When they are ensconced in power, enjoying legal immunity, they are poachers. They become gamekeepers upon being kicked out of office. The hapless game (read the general public) is left with no alternative but to repose their trust in the poachers turned gamekeepers, hoping against hope.

Those who pretended to be knights in shining armour on an anti-corruption crusade before the last presidential election have got badly exposed. They have not only failed to make good on their promises to clean the Augean Stables aka Sri Lankan politics and eliminate corruption but also drawn heavy flak for a host of corrupt deals on their watch. Promises are said to be like babies; they are easy to make but hard to deliver. Another unfulfilled pledge dogging the self-proclaimed messiahs is the restoration of the rule of law.

Time was when ancient Sri Lankan kings had their enemies trampled to death by elephants. Today, the rulers use a different modus operandi. They get the ass called the law to kick their foes and lick their friends so much so that courts are kept open well past midnight and even on Poya Day to remand Opposition activists and bail out government MPs and loyalists on the wrong side of the law. It looks as if paddy wagons were stationed round the clock near those courts to rush the enemies of the government to state pens.

The Joint Opposition (JO), consisting of former poachers, is now defending the rights of the public and has taken upon itself the task of battling bribery and corruption, of all things! Their integrity is like a Lothario’s fidelity, which is lack of opportunity.

The JO MPs fought quite a battle in Parliament the other day, demanding as they did that the government reveal the names of ruling party MPs who had been summoned by the Commission to Investigate Allegations of Bribery or Corruption (CIABOC). On seeing the JO stalwarts in action one wondered why they had not cared to put their own house in order while they were savouring power.

UPFA firebrand Vasudeva Nanayakkara led the charge from the Opposition ranks as the official Opposition is useless because it is controlled by two parties which, like the hefty wrestlers in fake wrestling matches shown on TV, play fight with the government for the consumption of the public. Nanayakkara, a seasoned political matador, stood his full height, taking on Deputy Minister Ranjan Ramanayake, who looked like a calf still wet behind the ears. The latter claimed that the CIABOC had two gates and one was used by Opposition MPs in full view of media personnel and the other by their government counterparts without much publicity. Hence, Ramanayake argued the public was not aware of the investigations against the ministers et al. (He seems to have taken people for suckers!) The JO’s questions as regards the government members summoned by the CIABOC went unanswered. The government was able to avoid those curve balls by using smoke and mirrors because the JO did not raise them formally.

The Supreme Court has recently directed the CIABOC to file a case against former President Mahinda Rajapaksa’s son and UPFA MP Namal, who did not answer the commission’s summons, for contempt. We believe all those summoned by the CIABOC must fully cooperate with the commission even if they think the allegations against them are baseless. Will the JO ask the government in Parliament to reveal the names of all government worthies who have been summoned by the CIABOC and tell the public whether all of them have answered the summons?

Meanwhile, it is incumbent upon the government which claims to champion good governance to ensure that both its friends and enemies are equally treated by the CIABOC without anyone being allowed to use different entrances or exits.