AG reveals shocking truth

February 12, 2018 at 9:06 pm

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The recent remarks by the Auditor-General on Sri Lanka’s debt situation are both alarming and revealing. Helpful statements by such frank and outspoken officers should be welcomed, and taken very seriously. Any inclination instead, to “shoot the messenger” must be resolutely dismissed.

The direct consequences to Sri Lanka in the form of punitive Interest and Insurance rates are obvious. There is also the real risk that we will be denied low interest, preferential loans and compelled to borrow from private banks at high commercial rates.

This has perhaps already happened, as respectable Governments and International Lending Agencies will not support unpromising projects. Unscrupulous Governments find these more accommodating sources, infinitely more attractive and less troubled by fraud.

It may be a mixed blessing if by our fiscal mismanagement, we reach a point at which we cease being credit worthy. We need to learn to live within our means as any prudent individual or nation should.

 

Both external and local indebtedness are in dire straits. In the case of the latter, reckless increases of State Employees’ salaries by Rupees 10,000/= monthly (with predictable “ripple” effects) and the ridiculous increase by 100,000/= monthly for MP’s, supposedly for “Electoral work”, are utterly indefensible and irresponsible strains on the exchequer.

 

There is yet another serious concern. This is the loss of credibility of Government statistics and forecasts. We are constantly treated to official figures misleadingly pretending to be accurate. Examples, are “Growth” and “Inflation” figures.

These are too often presented to the second place of decimals despite their crudity! Bad data irrespective of being subjected to complicated (and obscure) mathematical manipulations continue to be bad.

Inaccurate data can never be transformed into good, however heavily massaged. Such statements as “Inflation data for February mark a decline of 0.03 % from the figure for January” are patently nonsensical.

To base planning on data of doubtful accuracy is dangerous. There is also a great difference between “data” and “statistics” and the distinction deserves to be always respected.

 

When different Institutions use different calculations of even the same raw figures, different inferences may be drawn. In our situation, there are commonly divergences between the figures presented by the Department of Census and Statistics and the Central Bank, which are two State Institutions, charged with the function of dealing with national data. There is a danger that such figures may be uncritically quoted for very important purposes.

 

The revelations of the Auditor-General show that concealment or disguising of damaging information is very real. It is to be hoped that those responsible for these distortions, which are no less than national crimes, should be exposed and punished. Unfortunately, past experience does not afford much reason for optimism!

 

Our Economy seems to have taken the shape of a leaking boat – with many points letting in water – unknown to the blissfully indulgent navigators.

 

DR. UPATISSA PETHIYAGODA

 

 island.lk