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by Basil Fernando(June 15, Hong Kong, Sri Lanka Guardian) A BBC news report has revealed that over 99% percent of the Chinese contributions to the Sri Lankan economy are loans. These are loans either given by the government or by the Chinese banks. Then there are loans taken from other countries, and also from commercial banks. The country today is run entirely on the basis of loans. Investments from outside are small and negligible.
There is a vast difference between of development models based on borrowing and those that rely on investments. Southeast Asian development, which is talked about a lot these days, was based on creating climate to bring in foreign investments. Malaysia and Singapore are usually spoken of as investment based models . In both countries with a proper policy of investment and certain grantees to the investors the new investment came in. This improved the economy, provided greater employment and also improved the condition of people as a whole. Creating conditions for investment in this manner requires a sophisticated understanding of international business as well as a capacity to develop local policies in order to consolidate an economy to answer the problems that the economy is faced with at a given time.
One of the requirement for bringing in investments is a stable social condition within the country. That is possible only when the rule of law institutions in the country are strong. Where the rule of law situation is as chaotic as Sri Lanka’s situation is today, the most basic conditions for investment are absent. For the investor to feel that his investment is safe, the working environment need to be safe. The managing staff and the employees must be able to live safely.
Recent stories from Sri Lanka show that many people who have come to work face demands for bribes and threats which are associated with such demands. Several persons have who have come with Sri Lanka with the idea of staying in the country for a long period have left suddenly because of various demands that have been made. Such stories spread very quickly within the international business community.
Today the rule of law situation in the country has reached the lowest end. This is not something that needs to be restated. This collapse happened some time back. Instead of doing anything to improve it, even small attempts to get over the situation have been to undermined. Today, neither locals nor the outsiders with any knowledge, trust the the public institutions of the country.
Sri Lanka’s police system cannot even deal with crimes like rape, murder and theft. It is corrupt to the core.
There is no corruption control agency. In fact corruption is encouraged.
The political system today is based on lawlessness. The executive presidential system of the type that exists Sri Lanka cannot exist in a country which respects the principle of constitutional law. To have a head of the state above the law is to return to primitive times.
None of the public institutions are functioning. Even the minimum attempt that was made to re-establish functioning of of these, was discarded, when the 17th amendment to the constitution was discarded
Bribery and corruption is everywhere. Instead of making an attempt to stop it, everything have been done to encourage it. Absence of effective machinery for control of corruption is the biggest obstruction for investment.
No one wants to invest in totally corrupt country.
The claim by the president that the government is following a policy of development is utterly false. The country is following the path of indebtedness with increasing lawlessness. This will distance investors from the country. This is the problem of development that government shows no inclination to address.
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