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by C. Narayanasuwami

There has been considerable discussion within Sri Lanka on the inadequacies of institutional capacities in the public sector to execute projects and programs and utilise foreign aid more effectively. The ongoing peace process has brought this into sharper focus in the context of foreign aid flows for relief, rehabilitation and reconstruction. The question has been raised as to why a country like Sri Lanka with vast development potential and a qualified and competent human resource base has failed to mobilise the kind of capacities required for effective and expeditious implementation of projects and programs. Some issues in this regard merit careful attention. It would also be necessary to understand the scope and meaning of capacity development to obtain a deeper understanding of the issues confronting the country today.

Expending labour in a factory : a site where productivity counts

Change management including institutional changes requires capacity; capacity of the individual and capacity of institutions. Capacity is the ability to anticipate and influence change; make informed decisions; and attract, utilise and manage resources to achieve sustainable development. Capacity is demonstrated through the presence of a combination of several factors such as viable institutions and functional organisations, commitment and vision by leadership, financial and material resources, skilled human resources and effective work practices and standards. Potential capacity exists when these elements are present partially or otherwise but are underutilised.

'Capacity building', 'institution building' and 'institutional strengthening' are terms that are generally used interchangeably. The term 'capacity development' is preferred because 'capacity building' may connote that capacity was formerly non-existent. Capacity development implies the strengthening of capacities that already exist. In general, capacity has to be addressed at two levels; at the level of the individual and at the level of the institutions.

At the level of the individual, capacities can be developed only through education, training and skills transfer. While education enhances the productivity base in the rural and urban sectors, unless there is a proper appreciation of the type of education and vocational/technical skills that should be provided, there could be underutilisation of capacities. Although there is high level of literacy and high rate of graduate output in Sri Lanka capacities that are required for a more diversified economic growth. It is therefore important that capacity development at the level of the individual is related to the macroeconomic framework and the overall socioeconomic development of a country.

The public sector capacity development dimensions in Sri Lanka are varied and complex. The public sector is largely focussed on broad based development administration with substantial importance attached to the planning and implementation of projects. About 40 to 50 percent of development projects have failed to achieve their intended objectives within the stipulated time frame or within the expected budgetary allocations, for lack of capacity to plan, implement and deliver in a coordinated and integrated manner. The factors that militate against optimal utilisation of resources have therefore to be seen in this light.

Some of the major factors that have impeded more effective public sector performance, including utilisation of foreign aid could be summarised as follows:-

* Organisations at central level do not adhere to a results-oriented management system, thereby lacking clear objectives and streamlined budget allocations.

* Existing policy structures do not lend themselves to change, resulting in archaic regulations irrelevant to modern concepts of management, remaining in the Statute books.

* Plurality of institutions and overlapping roles make decision-making a nightmare because of conflicts that have political undertones.

* Lack of a systematic performance measurement system including poor reporting and inadequate monitoring of development operations that have high foreign equity/funding support lead to wastage of valuable scarce resources.

* Public accountability and transparency issues are often raised by donors because of the emphasis given to inputs and activity management rather than to outputs and outcomes.

Overall complex administrative procedures, poor policy and institutional environment, weak procurement systems and inadequate counterpart budgetary provisions have contributed to slow absorption of resources.

Politicisation of the public service: It is significant that public sector capacity to deliver projects and services started declining in tandem with the declining discipline in the socio-political fabric of the society. The politicisation of the bureaucracy which started slowly in the sixties reached significantly higher levels in the eighties and thereafter leading to a drastic decline in the value systems and ethical principles that governed public sector performance in the fifties.

The politicisation of the public sector arose out of a felt need, largely driven by the desire to transform a highly elitist pro-Western bureaucracy to meet growing demands of a nation that had emerged from the shackles of colonialism. However when public servants made use of this opportunity to seek favours and ignore tradition-bound value systems and ethical conduct, a service that had built its reputation on its ability to withstand political pressures, maintain impartiality, objectivity and transparency in its dealings since the time of the British rule, began to crumble. Loyalty was linked to political parties and individuals rather than to institutions and programs. Capacities were determined not on the basis of performance appraisals but on the basis of a public servant's political affiliations and beliefs. Although these tendencies have varied according to the level of transparent policies adopted by politicians, an overall change had already set in corrupting the approach and attitudes to delivery of public sector services and facilities.

Lack of an enabling environment for performance: Approaches to building trust, confidence, efficiency, effectiveness and transparency in the delivery of public services also changed over the years with little or no weight given to performance levels of public servants. Public servants began to expect annual increments in salaries as a matter of right rather than as payments for diligent service and performance. No critical performance appraisal systems were applied or enforced to determine capacities for enhanced productivity although performance appraisal mechanisms had been the subject to discussion for several years. Similarly the lack of a reward system resulted in the creation of a lacklustre public service that had no incentives to look forward to for redoubling its performance. Overall the lack of an enabling environment served as a disincentive for enhanced performance.

Inadequate punitive strategies: In as much as there were no reward systems based on performance there had also been no systematised approaches to adopting punitive measures against those who under performed. Except when issues became complex and serious irregularities were reported public servants got away with indiscipline and poor performance, largely unnoticed or ignored. The inadequacies in the disciplinary framework seriously impaired the efficient functioning of the public sector. Punctuality, discipline and commitment to work became a rare commodity, partly because public servants did not have the opportunity to look up to any improvements in their career prospects. Irregularities in promotions and transfer, including political patronage in these areas brought about some level of demoralisation and frustration among those who had hoped to build a career within their service.

Lack of consistent standards of recruitment to the public services: The varying standards applied to recruitment to public sector positions also contributed to some quality deterioration. Consequent to the replacement of the Ceylon Civil Service with the Sri Lanka Administrative Service, for example, large scale recruitment took place for higher level positions at relatively less onerous requirements, ostensibly on the premise that large numbers were required to fill in vacancies that had multiplied consequent to increased public sector involvement in diverse activities, including statutory undertakings.

While the quality of public servants that entered the work force was not in anyway inferior to those who were admitted earlier, the level of requirements and the kind of in-house training provided before they were posted to responsible positions were reported to be less intensive and inadequate to meet the levels of leadership required for discharging their functions. In-house training before substantive postings became less and less emphasised also because of the compelling need to fill public sector vacancies in government institutions. Although the situation has shown signs of improvement in recent years, the backlog of qualitative deficiencies added to declining performance levels.

Change of medium of instruction: Added to the above factors was the change of medium of instruction from English to Sinhala/Tamil in the sixties that had a qualitative impact on the output of the new entrants. Inadequate English language skills of a majority of the new entrants to the public sector closed the door to a better understanding of the sophisticated tools and techniques of management that were transforming economies such as Singapore and Malaysia to much higher levels of economic performance.

While it is recognised that increased proficiency in the local languages was essential to take public service closer to the people, the propensity to ignore the pivotal role that English played in the international arena deprived the new comers of a facility that could have enhanced their ability to interact with their peers in the private sector and in the neighbouring countries. Recognition of the need to provide English language training came late and the impact is yet to be realised.

Inadequacies in the compensation and benefit packages: Inadequate salaries and poor working conditions have also had deleterious effects on productivity. Salaries however, remained a thorny issue because of budgetary constraints. Poor salaries could have been compensated by appropriate reward and incentive systems, but lack of such systems resulted in weakened morale and reduced commitment to perform. This had also other consequences on the code of conduct of public servants who wittingly or unwittingly subscribed to questionable ethical practices.

(The writer is formerly of the Ceylon Civil Service; Retired Senior Professional of the Asian Development Bank, Manila and currently Development Consultant to the World Bank, ADB, UNDP and AusAID). (To be continued)

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