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Sunday, June 5, 2011

Sri Lankan Economic Development in absentia of Higher Education

Sri Lanka Guardian

The government and the high profile political leadership must understand that corruption undermines revenue collection capacity, contributing to fiscal weaknesses and macro economic difficulties. As a result now Sri Lanka has reached the level of Rs 5 trillion worth of massive outstanding loans by the government. Bribe taking is common by politicians, public officers specially highlighted in Controversial Hedging deal but no action had been taken instead supreme court decision was reversed and retained discredited secretary in the treasury.

by Devaka J. Punchihewa

(June 05, Colombo, Sri Lanka Guradian) Prospects of peace has given the country an opportunity with new economic development. Good potential for tourism industry, growth sectors like BPO, foreign direct investments. Massive drive for infrastructure development, country wide agricultural sector including North and East farmers, Sri Lanka and the ruling government could have seized the opportunity to become more productive and more competitive in the global economy. In the aftermath of of 30 years of brutal LTTE terrorism arises historical opportunity to develop this tiny island into a well developed advanced society in modern age. In 1960's when Singapore separated from Malaysia, they were facing no less challenges than post war Sri Lanka is facing now massive unemployment, low-skilled workforce, shortage of industrial entrepreneurs, lack of domestic savings, strong labour unions and racial riots. However, it has taken only 10 years from 1965-1975 to reverse Singapore into a country with highest per capital income in the world. What was the secret of Singapore's success? As Lee Kuan Yue mentioned, “There was no secret; we had no choice but to take a chance and sail into rough waters”. Political stability and good governance were implemented as prioritized concerns. But in Sri Lanka our political leaders ruined growth prospects simply by wasting foreign exchange on useless expenses as world renowned economist Joan Robinson (1959) commented “Ceylon has tasted the fruit before she has planted the tree”.

In contrast to Sri Lanka, Singapore adopted development strategy of growth driven, purely pragmatic and adoptable to changing circumstances. Mr. Lee selected highly skilled professionals from various sectors as his cabinet. They were paid handsomely to make politics attractive to such professionals. And political leadership remained non-corrupt and so does the rest of the country. Apart from that Singapore heavily invested on its only resource at that time “Human resource” and focuses on providing “efficient infrastructure” for the country. Apparently post war situation in Sri Lanka, is crying hard for that kind of attention by the government. It is quite evident that university struggle for the protection of higher education in the country with FUTA will have positive impact on this domain. If these union actions were continued it will deteriorate the whole spectrum of development dream put forwarded by “Mahinda Chintanaya”. It should be noted that the government, at large ministry of higher education is going to mess up all these growth prospects in the wake of widespread controversy generated by Trade union action by FUTA. Therefore amicable solution must be reached if they want to save not only higher education but also peoples franchised government.

As we all aware poor governance and corruption are major constrains to the economic development in Sri Lanka for last sixty years. Therefore corruption must be eradicated while good governance should be implemented without any delay. ‘Good Governance’ connotes the widest meaning but politicians in our country seems abusing it very often for political advantage. It encompasses the entire process of public administration, the processes underlying the formulation of public policies, the HRD efforts required for re-skilling the government machinery, prioritization, efficient management of public resources and above all re-designing the various instruments used to realize the concept of a welfare state.

As bribery increases the cost of government development programs and spawns projects of little economic merit. Hence ordinary people face with unimaginable difficulties, for instance mother thrown her own child into a river as she could not find proper means of living. More and more migratory mothers reach the country in their coffins. Therefore, as government still trapped in World Bank and IMF bogus economic advices people are very suspicious on government ability to find solution for burning issues in the country. Considering recent governments behavior it is sad to note that their track record was not shown any positive improvement in these aspects.

• High local and foreign debts exceeding 4.7 trillion, very high growth in last few years

• High budget deficit more than 8% of the GDP amids staggering expenses on politics

• High debt servicing cost as a result US $ 1 billion sovereign bond issue in every quarter

• Low productivity due to low wages as a result domestic investment at rock bottom level

• Unwanted bureaucracy, Political patronage can be seen every aspect of governance

• Weak public sector management cost billions for the country e.g. Hedging deal

• High cost of living, continuous rise of prices of commodities contrasted to figures of CB.

• Poor infrastructure facilities as a result very few investors willing to come to Sri Lanka.

• Mismatch of economy needs with youth talents, 3000 of arts graduates still recruited by Govt.

• Political mismanagement of economy, no national policies but everything depends on individual politicians who holds the power tend to change after every major election.

• Human right violations, killing and attacking journalists, trade unions and even judges

• Inappropriate usage of funding on development, road development by local politicians in debris

• Entertaining commercial loans on development projects as a result huge increase of indebtedness in the country which increase Rs. 428,823 millions from 2009 to 2010.

• Rs 900 million Mihin air saga, VAT scandals cost billions, Petroleum Hedging cost billions

• IDPs problem still prevails now India is interfering as a result of inefficient handling of matters

• Under-paid public sector employees including academia may decremental on economy

The government and the high profile political leadership must understand that corruption undermines revenue collection capacity, contributing to fiscal weaknesses and macro economic difficulties. As a result now Sri Lanka has reached the level of Rs 5 trillion worth of massive outstanding loans by the government. Bribe taking is common by politicians, public officers specially highlighted in Controversial Hedging deal but no action had been taken instead supreme court decision was reversed and retained discredited secretary in the treasury. These malpractices must not be tolerated or repeated by any political leader who really loves this tiny nation.

As Prof. Liyanage mentioned (The Island) “Nonetheless, unlike the previous governments, the present government appears to deal with this issue following the mechanisms and methods that it deployed in countering the LTTE threat. Defeating collective actions through militarised means (not necessarily using arms and ammunition) would force the individual members of the community to resort to individual actions”. It is unfortunate that Sri Lanka is very rapidly resorting to military means without addressing burning issues with negotiated settlement. The latest victim was Roshen Shanaka who was shot dead by police and political thugs. On another front university dons are now on trade union action and thousands of valuable work hours on waste while university students right to education is neglected by the democratically elected government. The mismanagement in the government that cost not only billions of dollars but also created eminent anger on government which could easily lead to an unwanted fallen apart of the regime if it does not provide amicable solutions for burning issues face by people of Sri Lanka.

Recommendation for Development of the country

• Ensure an open, fair, and competitive environment that supports and protects all types of citizenry but not political stooges. Therefore, university dons legitimate struggle for decent salary hike should be entertained. To that end there must be a productive dialog between FUTA and Government avoiding deepen crises that may jeopardize higher education in the country.

• Continued economic advantage will be sustained by a vigorous investment in higher education at least 5% of GDP as many other countries in Asia, to provides Human Resources Development, knowledge workers, quality of life and to provide access to services in lifelong learning, health, recreation, and business.

As (Twigg, 2002) mentioned the new economy requires a workforce capable of handling and exploiting knowledge base and industries are looking to educational institutions to provide the necessary education and training. Therefore if Sri Lanka is going to be the center of knowledge in Asia, it is quite vital to allocate substantial investment in higher education. As economic theory explains there are three factors that can lead to increase productivity in a country namely:

1. High quality of labour ; More productive and knowledgeable workforce

2. Technological innovations; Creation, distribution and use of new knowledge

3. Capital deepning; Equipment that is more productive than earlier versions

As many other Asian giants like Singapore, Malaysia, Thailand and Hong Kong have heavily invested on higher education as their means of Development. But present Sri Lankan strategy on higher education is quite weak and troublesome one as it has been mainly concentrated on establishing private sector universities. It is hard to understand how they are going to achieve what they have put forwarded with “Mahinda Chinthanaya” with this kind of a contradictory policy. In Sri Lanka we educate only 2% of total student population in the universities. “However, only about 17% of students who get qualified to enter universities get admitted. For example in the year 2009, 125,000 students who sat for GCE (A level) qualified but only 21,500 (17.2 %) were admitted. ( Dr. C.S. Weeraratna, The Island)”. Even so government does not have meaningful way of absorbing these best bunch of students into labor market. If private universities come into established, existing public sector universities problems will become much deeper. And social unrest will be created in grand scale as there won't be any jobs left for the graduates without political patronage. Therefore public university system must be strengthened while taking measures to absorb more students into labour market. At present majority of arts graduates numbering 3000 annually absorbed into public service for unproductive, lethargic work putting more pressure treasury. Why ministry of higher education can't take meaningful steps to make this young talent to suited for country's economic requirements? Very simple means of solution would be to start interdisciplinary degrees for example Archeology, foreign languages and History combined degree can create very potential employee in travel industry but unfortunately however country has never thought of. Specially in the Arts Faculties more productive curriculum revision is needed to solve problems in higher education with very low salaries, not enough facilities for students, lecturers, and non academics, no proper research culture, not qualified lecturers etc. “Most of them have to work under very trying conditions. Some of the basic facilities necessary for the staff to carry out their work satisfactorily are not available to them. Although staff quarters available for the academic staff of Peradeniya University, most of the staff in regional universities such as Wayamba, Rajarata etc. do not have proper places to stay and they have to pay a considerable portion of their salaries on accommodation”(Dr. Weeraratna, The Island).

As a result no economic development can be achieve without proper and meaningful development of public sector universities. For that end it is vital to place academia in a competitive salary scale and make them work more in terms of teaching and conducting proper researches for the country development.