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by S. B. Karalliyadde

The pledged foreign assistance to the tune of US $ 4.5 billion will be received within the next few months from the donor agencies and the international community. Whether it be in the form of donations, outright grants of soft loans is debateable and to spend time on such debates is not the need of the hour.

The war that cost us Rs. 4.9 billion a year is stopped for the last one and half years giving us much relief. It is left for those mandated to stop the war and find an acceptable solution to all communities living in Sri Lanka to go ahead with the negotiations with the LTTE.

Living on the margins in Sri Lanka

We have achieved the best atmosphere for talks with the help of the international community who are for upholding human rights and equality. They all condemn war and destruction in one voice. Under these circumstances we must make hay while the sun shines and not debate and waste time on trivial things. The fact is that we have received aid for the development and the poverty reduction programme of our country. As to be expected the donors also lay down their own conditions. The US for instance may insist that whatever machinery/vehicles procured should be from EU countries. Similarly Britain may want their experts/consultants engaged in our development projects from the EU countries.

The end result is that a portion of their commitments will go back to them while we finance the rupee component. This is the usual procedure when aid is given by a donor country. We saw this happening in our multi-purpose river basin development project Mahaweli.

At the time we received Skr 1651 for Kotmale in the form of grants and loans. We had Swedish engineers working for us. When UK granted US Sterling Pounds 137.30 million it included as a loan an amount of Sterling Pounds 20 million and the services of their engineers and scientists were made available to us. However, a massive development project planned for thirty years was completed within five years giving the benefits to the generations who were partners in the exercise. Thus our investments were profitably and productively utilised for the following projects.

Maduru Oya - Rs. 2,530m

Kotmale - Rs. 8,075m

Victoria - Rs. 6,610m

Randenigala - Rs. 4,590m

This was immediately after the recession of 1970-1977 where the Treasury placed an embargo on all our expenditure. The Katunayake International Airport, Ruhunu Campus, Lunugamvehera, Kirindi Oya Development etc. would have ended in dreams if not for foreign aid.

Utilisation of funds

According to the World Bank our disbursement rate is 11 per cent of the funds which will result in a minimum time period of eight years to complete a project. If we can achieve a rate of over 20 per cent the World Bank interprets in terms of our ability to implement more projects which results in more funds being released for development projects. The President of the Chamber of Construction Industry in Sri Lanka pointed out in his statement to the Daily News on 16th instant, that during the period of 1981 to 2002 utilisation of funds range from 18-21 per cent. The Finance Minister hopes to increase utilisation up to 45 per cent by 2004.

It is a well-known fact that even equipment given by various donor agencies are not utilised properly at our end. It was not long ago that media brought to light an instance of science equipment given to the Education Ministry lying idle in the stores for years. I am personally aware of an instance where equipment given to a technical college was still unopened in sealed boxes until the ADB review mission visited the institute for follow-up and review years later.

Such is the way that some of us handle foreign funds/equipment. I think each one of the general public who is already indebted to a sum of Rs. 77,500 and whose debt rate will increase with the flow of pledged aid should be made aware of the spending and utilisation of aid by the departments/authorities. Ultimately it is the poor village Appuhamys, Bandas and Alice Nonas who reimburse these colossal borrowings.

It is estimated that only less than two million of our population are paying income tax. Hence the burden of loan repayments is shared equally by all. We have seen in recent times how public funds are squandered and no one held responsible for such misappropriation.

The much talked of AirLanka deal, the rubber factory project in Horana, the import of bullet proof vehicles, the golf course project etc. are some such deals where the tax payer is kept in the dark and no one was held accountable. Also we have experience of recently reported misappropriation of ADB funds given for teacher education, computer education etc. to Provincial Councils where some such cases of fraud are before the courts of law. So we have enough precedents to take precautions to be transparent and accountable in doling out massive funds for various development programmes.

Disbursement of funds

The normal procedures adopted hitherto in the disbursement of public funds have been questionable. The Secretary of a ministry is the chief accounting officer and answerable for public funds. But, the past experiences have shown us both at Central and Provincial levels that this system adopted as a legacy of the colonial rule has miserably failed. Needless to mention instances where government boards and corporations with very sound financial base ran into bank overdrafts to provide day to day services to the public and even to pay the salaries of employees. Ultimately no one was held responsible and accountable. These happened under a regime that vociferously vowed transparency and accountability. It was not even a fortnight ago that the media exposed an instance of a fraud running into millions from the funds allocated to give free spectacles to the poor schoolchildren.

All these point to the fact that strong anti-corruption measures are needed to manage public funds. If the existing machinery cannot fulfil these requirements some innovative measures should be adopted. A process of recurrent and concurrent evaluation should be implemented from the inauguration to the completion of a project. People's participation for over seeing the effective utilisation of public funds could be obtained.

When a programme for the benefit of the people is planned they could be made aware of the financial commitments, executing agency, the contractor etc. by public notice in the Divisional Secretariat/Pradeshiya Sabha Notice Boards and such other places. This system will minimise overexpenditure and fraud thus keeping a taboo. These methods could be augmented with the existing government audit and other anti-corruption rules and regulations. Here too the services of available resource personnel in the area such as retired accountants, audit officers, senior retired government servants etc. could be solicited.

This system could be innovated at the Divisional Secretaries and Pradeshiya Saba levels on an experimental basis. Let the budget for a particular development item be published and known to the people. Interested members of the public may have constructive comments to make. This will help to enhance the credibility of the officials concerned.

Ground level delivery

Apart from these foreign donations the Government has for the first time in our history released Rs. 5 million a year for each MP from the decentralised budget for district development. This type of massive financial provision was never made available before. Kandy district for instance will receive Rs. 60 million from the DCB alone to be utilised within the next twelve months.

The district development programmes along with other programmes independently undertaken by various ministries and departments with their own budgetary allocations will see a massive on going development process in the coming years throughout the whole country. This will awaken our rural village life and make everybody a partner in the development process. the village carpenter, mason, electrician, the semi-skilled and skilled labourers as well as the small-scale businessman, supplier will embrace this development exercise. It is therefore incumbent on the part of government, the officials, the representatives of the people to get involved in these development efforts to ensure transparency, accountability and efficiency to deliver the benefits to the grassroot levels.

The administrative delays in the release of funds to Provincial Councils by the Finance Commission should be minimised. The financial committees in the local councils will have to minimise bureaucratic intervention to expedite action. Can the existing government machinery cope with the new trends? The Prime Minister in his new vision has brought the entire country under Regional Development Ministries. These Regional Development Ministries can play an effective role to develop the areas coming under them and each Regional Development Ministry will have its own priority. The priority for Central Regional Development may be roads and industries. It is assumed that financial resources are available but human resources, machinery and equipment are far from reach at the district levels.

In the existing procedures if a concrete slab is to be laid for a building or a culvert/bridge has to be laid across a river/stream, an engineer or a technical officer should be present to supervise the work. But in actual practice even in the Executive Engineers' offices established under the Provincial Councils there is a dearth of such qualified technical personal.

At the moment Treasury has stopped all recruitment to public service so that the existing vacancies cannot be filled. This will be a snag in the designing of projects, preparation of estimates, tender documents, awards of tenders etc. seriously hampering the progress at grassroot levels. The World Bank suggests the encouragement of local contractors to participate in the development process. The Government has an option to get the participation of qualified retired public servants living in the targeted areas. The universities established throughout the country could be brought into this exercise.

The senior staff of the Faculties of Engineering Science and other disciplines could be co-opted to work with the existing government bureaucrats. Details of a scheme for such nation-building exercise should be worked out by the authorities handling these programmes. Such a programme could be a part of the inplant training for the undergraduates. Perhaps they could be paid a stipend to meet their out of pocket expenses.

These professionals from outside may be involved from the planning stages so that there will be transparency and accountability. The present system of doling out public funds through the DCB and Provincial Councils is more for sentimental reasons than need based which finally ends up with less returns and few beneficiaries. There are several instances of roads built to benefit a few individuals using public funds.

There are several buildings that have been built for various reasons and abandoned after a short period. Machinery and equipment is another scarce commodity not found at the level of the Pradeshiya Sabhas.

The road rollers, earth cutting equipment, tractors etc. which are assets in the development process in the area are not readily available in the Pradeshiya Sabha. How can we overcome these hazards in an accelerated development programme launched at poverty reduction? The ultimate aim of all development should be poverty reduction and sustainability. Cannot a part of aid be utilised to procure machinery and equipment? It will be a wise investment in the long-run.

It is doubtful whether this machinery and equipment is readily available in the country for hire. Even so their demand will be high in the present context. These are the practical situations where solutions are required. The planners, politicians, bureaucrats will have to find practical solutions to these problems. The rural masses are not going to be taken away by economic jargon, but they want tangible results delivered during their life time, not waiting till the kitul tree gives them honey in a quarter century.

(The writer is a former Member of Parliament)

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