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Public sector accountability

The crucial importance of financial accountability on the part of State-owned enterprises or those institutions where the State has a financial stake, has been highlighted by the World Bank in a report titled: 'The Country Financial Accountability Assessment'. This report has also focused on difficulties encountered in making those organisations whose management is in the hands of "third parties", such as Sri Lanka Telecom and Sri Lankan Airlines Ltd, more accountable to the public.

These disclosures we regard as very timely and thought-provoking because of the misleading notion entertained by successive governments that merely privatizing loss-incurring government enterprises or diluting State ownership of such ventures, is the ideal solution to some of their financial woes. Referred to bitingly as "selling the family silver", this process of governments completely or partly divesting ownership of enterprises which are seen as loss-incurring, is almost here to stay. The World Bank report could be considered an important corrective to this largely counterproductive trend. It could be even seen that privatization is no panacea for our financial constraints in the absence of transparency and accountability in divestiture proceedings and in the subsequent running of these enterprises.

The bottom line is that in the absence of firm procedures of accountability on the part of State and semi-State enterprises, the public interest runs the risk of being compromised.

As pointed out by the World Bank report, "government or legislative control" over some of these institutions is weak. Apparently, the seemingly perennial ills of over-staffing, inefficiency, mismanagement, politicization etc, are continuing apace at a considerable number of these enterprises. However, resorting to privatization measures too are proving counterproductive on account of the lack of transparency and accountability in the post-divestiture scenario.

The Government's financial reforms package is now being implemented and we hope that these issues are being taken into consideration by the decision-makers. The Parliament watch dog committees, such as COPE, which were expected to keep a close tab on State enterprises, would now need to tighten the screws on the public sector. Procedures of accountability in relation to State enterprises should be further tightened and loss-incurring organisations called to account without further delay.

However, it is always advisable to remember that privatization is no panacea for all these problems. Apparently, privatization deals also need to be carefully monitored and regulated lest private interests unfairly gain at the expense of the public.

As for the nurturing of the necessary management expertise at State institutions, we wonder why the services of the Management Faculties of local universities and those of other tertiary educational institutions cannot be availed of to alleviate our difficulties in this respect. We see the need for continual training of our State sector managers.

However, all will be lost if these personnel are Government stooges and 'yes' men.

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