“Whenever we send our papers for approval, the authorities first look at how to stop it. The only way you can activate it is if you give something and because we don’t have to budget 12-18 months - wait 12-18 months where they (authorities) find different excuses not to give approval.”
Many businessmen are disgusted by the state of the government, rules are uncertain and nothing ever seems to get done. Many will also claim that things have got more difficult under the Yahapalanaya regime.
Is this perception true?
The machinery government has two components, elected representatives (politicians) and non elected bureaucrats. Policies are normally the result of both political and bureaucratic intervention. There is no question that Sri Lanka’s bureaucracy, has been decaying for decades but it now seems to have almost ground to a halt. It is difficult to judge if the bureaucracy has got a lot worse in the past few years-there have been few obvious changes to the system that prevailed before.
What has changed is the politicians and particularly, a change in the structure of power. What typically used to happen in the past was that when businesses encountered obstacles in the bureaucracy they would simply approach a politician. Under the previous regime, power was centralised and resided in a few positions.
If a businessman complained to the right channel, a quick response and a firm decision could be expected. These decisions simply cut through all the red tape and regulations which meant that the bureaucracy was simply bypassed. The inefficiencies of the bureaucracy thus remained hidden from view.
Under the Yahapalanaya, power is diffused and split among warring factions which also contributes to an uncertain policy framework. Lacking an overarching vision, few have a clear idea of policy and even fewer are willing to take the bold decision that cuts through the bureaucracy. When businesses approach politicians for solutions, they are directed into the maze of the bureaucracy, where they experience the grim decline of decades.
This may explain the dilemma, but not the solution?
Investors shy away from countries where rules are unclear or constantly changing and where approvals are dependent on ad-hoc decisions. What is needed are simple, clear rules and standardised processes that deliver predictable outcomes. If X paperwork is submitted, an approval should be received within Y time with no further intervention.
The solution is not to allow politicians to bypass laws and regulations, but to fix the processes. This will not just help investors and businesses; it helps ordinary people and small businesses who must get approval for many things, from cutting a tree to digging a well, to obtaining an electricity connection. Migrant women, they have to submit myriad documents beyond those specified in the Circular and make multiple visits to the DS office in order to obtain the Family Background Report.
Small businesses struggle with taxes, the Inland Revenue refuses to issue VAT registration to a new business, unless they can show that they have reached the threshold (Rs. 3m per quarter) forcing them to incur the additional cost of VAT. Once registered, even if the business later falls below the threshold they are harassed for payment, even though they are technically no longer liable.
Small businesses and individuals who lacked any access to politicians have been dealing with these issues all the time. Fixing the processes should be a priority, but it is an enormous task. It can only be approached by multiple task forces working together.
At the apex there needs to be a central “Administrative Simplification Agency” – promoting administrative simplification “across the board” for businesses, citizens and the public sector. The central bureau must be supported by smaller teams working in all departments, cutting and simplifying paperwork. Outside taskforces perhaps supported by external consultants can help with co-ordination and keeping up the pace of reforms. All relevant partners and affected parties should be able to be involved in the administrative simplification reforms which will contribute to gaining constituency.
The agency must have the highest level of political backing. The approach is to re-engineer processes, cutting redundant regulations, approvals or documents.
The challenge is to balance the need to use administrative procedures, as a tool for implementing public policies, and on the other hand, to minimise the interferences these requirements imply in terms of the resources demanded to comply with them.
All this is back office work that is dull, dreary, difficult and lacks political visibility. No politician will back such a venture, as they will get no political mileage from this.
What is needed is to bring visibility to the process of cutting red tape which brings public support, builds political capital and will sustain reform.
There is a useful model in Peru which set up a tribunal to gather and evaluate proposals from citizens for deregulation and to check up on how various bureaucracies were responding to the dictates of the law. To facilitate public participation, bright yellow boxes were placed in the agency, government offices as well as at all radio, television and newspaper outlets to make it as convenient as possible for people to deposit their grievances. The media were encouraged to review the grievances they received, and when they saw an astonishing or outrageous story they took up the cause, creating the kind of public pressure that politicians found impossible to ignore.
The tribunal did not cut the red tape, what it did was bring the problems to public view-and involved the public in the process. The body that cut the red tape worked after the tribunal but in Sri Lanka the mechanism to cut the red tape must be set up beforehand-if not after much fanfare the public will once again witness the delays in setting up such a body. Ideally, some preliminary analysis should be done beforehand and several solutions much be kept ready for immediate implementation once the publicity campaign is launched. People should experience real results.
The process must also include evaluation and measurement of changes so further improvements can be done. The principle is to first organise and once this is done, as far as possible to securely digitise. (Current government efforts to digitise are rickety, intrusive-requiring registration via social media accounts and prone to failure).
In Peru, over the year the Tribunal was in operation —with the President, by law, in attendance— more than 200 bureaucratic knots were untied. The time previously required to fulfill hundreds of different kinds of official procedures, including obtaining a passport, applying to university and getting a marriage license, was cut across the board at least 75 percent.
At the end of President Garcia’s term in July 1990, 79 percent of the population (and 84 percent of the poorest among them) rated the Law of Administrative Simplification as the best law enacted during the 1985-1990 legislative period.
If the government is willing to take this approach, it could result in a win-win situation for politicians and the country.
The writer is an independent consultant
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