Time to get out of the ruts
In a short while, we will receive the annual report of the Director of Audit. As usual, he will list down the shortcomings of administrations which did not comply with laid-down run rules. He will also bring into limelight the inefficiency of certain practices in the public sector. This year, though, he intends to add to his report a list showing areas where remedial actions have been taken pertaining to adverse audit findings last year. It is for him to form an opinion whether those actions are comprehensive enough to tackle the fundamental flaw to which he had drawn attention earlier leading to wastage of public funds year-in-year-out. The more he addresses systemic, rather than incidental, factors in this assessment, the more to the point this exercise will be. If this process saves the country some wasted millions and lays down standards of better conduct for the future so that those in charge of the public purse are more circumspect about spending taxpayers’ money un-wastefully, some good will be achieved.
Preventive action of the sort is no doubt useful to ensure that the country gets value-for-money for the amount of the country’s tax collection money spent on each item of public expenditure. It is important. But beyond this, there are long term objectives to be addressed. The latter lay down the foundation on which the country is to produce goods and services to keep optimally employed its resources and workers now and in the future. This involves coordinated decision-taking in both the public and the private sectors. The job of the public sector in this long-term context is to ensure the maintenance and growth of a sound and efficient business “platform” in the country, acting as facilitator by opening up avenues and removing perceived difficulties. The job of the private sector is to invest in projects so as to make full use of the platform provided by the public sector. Removal of obstacles standing in the way of efficient project “implementation” by the private sector in this context is referred to as “reforms”. The reforms are part of the policy package which helps businessmen start new or consolidate existing business activities.
Thus, in 2003, after the so-called “Illovo Deal”, the government decided that the area around Ebene forming part of the lands belonging to the erstwhile Illovo estate, will be dedicated to the development of an Information Communications and Technology (ICT) sector. In that context, the government was to provide the basic infrastructure (legal framework, roads, electricity, water supply and building) to help launch the contemplated new area of activity. The policy thinking on the part of government and the basic infrastructure provided consisted, in this example, of the “platform” provided by the public sector. Thereafter, in the “implementation” phase, the private sector moved in with the development of activities spanning across call centres, business process outsourcing, software development and related technological services to move forward the new activity, despite certain problems of bandwidth speed and excessive communication costs imposed by the local telecom monopoly. Today, ICT has grown into the third sector of importance in the economy, employing 15,000 mostly young persons. This kind of development forms part of the long-term objectives that a country is bound to pursue.
Any sensible person would encourage changes going into this direction, which is usually referred as long-term planning. It does not come in the way of identifying and tackling day-to-day problems such as those pointed out each year by the Director of Audit. Both can be attended to at the same time. But “reforms” or new government/private sector initiatives are different in that they change the very profile of production of goods and services. Countries which keep innovating, adapting and adjusting are not easily beaten but those that don’t stay behind and even lose their momentum of growth.
One has the impression these days that we have been losing sight of the necessary focus we should have had on marshalling long-term objectives. Attention is focussed on several short-term issues. It is as if we are waiting with bated breath for the next scandal to erupt to keep our minds occupied. We have been giving a considerable amount of our time and thinking to matters of day-to-day relevance not having a direct bearing on developmental issues that the government and private stakeholders should actually be looking into so as to modernize the country’s production framework.
For example, after extensive discussions about the floods of March 30th (not over yet), attention has gone to the serious bus accident of Friday last in Sorèze which resulted in 10 unfortunate deaths which everyone naturally deplores. The collective mind is caught up in yet another scandal at the same time: the various Ponzi schemes that have been operating for some time, skinning off the money of certain honest and not-so-honest citizens. Earlier public discussion was about SICOM’s deal with a property developer. Not long ago, the whole of last year and part of the year before were devoted to discussing about “electoral reforms”. It appears this issue has not been shelved yet. One has to reckon that all this discussion is non-GDP producing and is, in fact, a serious distraction from other long-term priorities of the country. It concerns devices that can be employed to bring about a power shift; that’s all. A mere vacuous play compared to promoting GDP and employment growth.
On the other hand, our economic growth has been going down. It is undisputable that this is due to the downturn of our principal export markets for goods and services. When this sort of thing starts happening, an earnest policy maker quickly does his calculations there and then to decide what else can be done, how to make good the shortfall from depression in traditional markets and what tools to employ to re-orient our activities so that we stop suffering the consequences of having put all our eggs in a single basket. One cannot sit back and discuss things such as the consequences of Minister Sik Yuen falling out of favour with his party political leader. This is a non-priority and a luxury we can ill afford when markets are threatening to slip out of our fingers and are actually slipping. Nor can the private sector wait for this kind of unproductive engagement to come to an end to start new initiatives or keep on saying that external economic conditions are tough so that we have to make do with what we get. If they had what Keynes called “animal spirits”, they would have come over to the government with new proposals on how they can change course by taking risks on new economic fronts, not carry on earning “rents” along established falling lines of business.
There are some fortunate countries whose political and economic leaderships join efforts to use a difficult economic situation to launch themselves on better and more rewarding economic ventures. We have done that on several occasions since independence, beginning with the set-up of the export processing zone. The emerging constraints were sufficient to motivate the Civil Service as well as the political and economic leaderships of the country to overhaul and come up with the necessary ideas on how to break the emerging bottlenecks.
Our Civil Service of those days would not tolerate dereliction of duties by those in charge or itself become the butt-end of criticism for being not up to the mark or, even less, allegedly corrupt in certain places. The civil servants of that time knew that there were sanctions for not doing one’s assigned work dutifully and they even had a call of conscience where things did not get along quite exactly as it would have been best. Once, they set their mind on doing some transformational work, they became hell bent to get to the results. They had no time to dither in spin doctoring. They put the most competent guys in the right places in public departments and parastatal bodies. There was real committed leadership at the top, not opportunists filling up positions from specific vantage points. There were tangible results from all they undertook.
We can still get out of the ruts by re-inventing both the public sector and the private sector so that quality time gets devoted to urgent long-term concerns. The greatness of a country is judged by the keen application of mind by which it emerges successful from the most difficult of passes. Such a place not only has a plan of work in its hands at all times. It also implements it ruthlessly.