TREASURY OFFICIAL SAYS: Too much transparency
There is too much information divulged to the public, which makes it harder for government authorities to carry out development programmes in the country, Deputy Secretary to the Treasury at the Ministry of Finance and Planning, Dr. B. M. S. Batagoda stated.
Addressing a forum and panel discussion on the topic of ‘Capital Markets, Integrity and Development’ organized by the European Chamber of Commerce of Sri Lanka, Dr Batagoda voiced his opinion on the right of information in Sri Lanka.
“In my view there is too much information available to the public. Whenever any information is necessitated it is available for public scrutiny.
However when the government is in the midst of carrying out development projects for the betterment of the country as a whole, it cannot answer all the questions the public raises. Inefficiencies are created, which leads to delays in project implementation. In my opinion there is too much democracy in Sri Lanka. In fact Sri Lanka is the most transparent country in the region and it is unfair to say otherwise,” Batagoda added.
Besides these highly critical remarks, the Deputy Secretary warned that the deteriorating savings gap and the crowding out of SME’s and small-scale investors (entrepreneurs) will deter long term growth prospects of the country.
“Big corporates are discouraged from entering the capital market as they can raise funds more sustainably from banks. Primarily owing to the favourable relations big corporates have with the banking sector, moderate funds for the SME’s that ultimately deters higher level of economic development. Corporates can borrow funds at low interest that is similar to Treasury bonds,” Batagoda said.
Though these developments were expressed, Batagoda added that the Treasury was oblivious of the policies that should be implemented in encouraging companies to list in the stock exchange. UNP Parliamentarian and Economist Dr. Harsha de Sivla speaking at the forum alleged that it was the unfavourable and manipulated market environment that deters companies and investors to approach the capital market.
“A regulator is put into place so that inefficiencies and malpractice can be overcome –in other words, to perturb effects of market failure. However the regulator has been captured by the so called mafia and the market is manipulated according to the latter’s whims and fancies. This represents government failure and not market failure. The SEC has lost its independence in governing and thus results in loss of confidence among investors,” Dr. Harsha added.
While scrutinizing the latest appointments within the SEC, he further stipulated how the regulating body is more in line with vested interests of a few while leaving thousands of small and medium investors in dire straits.
.“Confidence is not a tangible thing. Feelings people have and perceptions matter. So when persons with strong corporate ties are appointed within the regulating body, loss of confidence is compounded. Due to this, majority of the retailers will pull out, and compromise the vibrancy and legitimacy of the Colombo Stock Exchange,” Dr. Harsha pointed out.
He concluded the proceedings urging Dr. Batagoda to name and shame the 11 individuals and companies that were linked with securities fraud last year, without keeping them confidential.