Fears voiced over special development agency becoming fertile ground for cronies

The special agency proposed to be set up through the Development (Special Provisions) draft bill with the objective of fast-tracking foreign investments could become another state agency, which fast-tracks deals for government cronies, unless it runs free from political interference, a top economist opined.  

While a fast-tracked approach to investments could become effective during the catch-up phase of development of a country as seen from examples in East Asia and elsewhere, Razeen Sally, an Associate Professor at Lee Kuan Yew School of Public Policy at National University of Singapore expressed his skepticism that the same would occur in Sri Lanka considering the country’s highly politicized institutional system. “Here one has to be careful. Back to the successful examples, they succeeded because these institutions have been insulated from normal politics. Good people have been hired to run these agencies, they have been paid well, the incentives have been structured for them not to be corrupt and not to always say, ‘yes’ to phone calls from politicians who want special deals for their cronies. 

If an agency like this works along these lines, yes, then it makes sense. But if an agency like this turns out to be just another Sri Lankan agency, that would provide a fast track for cronies and override all kinds of due process in the process, then obviously it’s a bad idea”, Professor Sally told a public seminar in Colombo organized by Advocata Institute, an independent public policy think tank, jointly with the business magazine, Echelon recently.

The Development (Special Provisions) draft bill is believed to pave the way for a ‘super minister’ superseding all other branches of the government, an allegation denied by Malik Samarawickrama, the Minister of Development Strategies and International Trade. 

However, Professor Sally, who is also the Chairman of Sri Lanka’s Institute of Policy Studies, a state-funded policy think tank, empathized with the Prime Minister, who has sought to set up this special agency as a measure to lure significant foreign investments, which Sri Lanka has been lacking due to policy inconsistency, bureaucracy and corruption. 

“You need, ‘one-stop-shop’ to jump-start things, specially big ticket foreign investments. And that’s the rationale behind this development agency which is yet to be legalised. And as a short-term measure, this agency makes sense in outline,” Sally noted.  

The draft bill is expected to be presented to the Parliament next February with amendments, as the bill met with severe resistance at provincial council level and also from some partners of the coalition government.

 
Last week, the draft bill was defeated by a majority in provincial councils in Uva, Northern and North Central provinces. 

A similar bill with concentrated powers to a single minister was mooted under the previous Rajapaksa regime through the Divineguma bill. It was passed in Parliament with amendments that diluted the powers that were earlier sought through the bill.