IMF puts the shoe on Govt’s foot: demands, ‘get your act together’

Holds second tranche in suspense till ‘good governance’ gets underway

After 12 months of piling taxes on the public with impunity on the supposed ground that IMF conditions required financial discipline be introduced to the economy, the Government awoke last week to find the IMF had placed the shoe on its own foot, and put the clamp on its footloose and fancy-free revelling style of governance.

For months on end, the Government, repeating the ‘economy, economy, economy’ mantra ad nauseam, heaped taxes after taxes on a down-and-out despairing people who hardly could endure another back-breaking feather of increase. It was done with almost a gloat as if the people were responsible for the economic sins they were suffering from and were getting what they deserved, when, in actual fact, it was due to successive government failures to keep a tight reign on its own spending spree while pouring tax earnings into their own corruption drains.

Now the government has been asked to tighten its belt on corruption, to crack down the indiscipline in public expenditure and told to make the necessary sacrifice -- as the people have been told so often -- for the sake of the country. Sixteen commands have been made, each with a deadline set which must be met. All of them are aimed towards strengthening accountability and the rule of law. And to enhance transparency.

The mantra that will now appease IMF gods and make them cast their monetary blessings for Lanka to rise from its nadir is not ‘economy, economy, economy’ recited ad nauseam but ‘accountability and rule of law’ said 16 times on the IMF rosary.

For starters, the IMF insists that before November 23 of this year the Government must set up an Advisory Committee composed of independent experts on anticorruption to assist in the nomination of CIABOC Commissioners -- the Bribery and Anti-corruption Commission --and the Director General.

It has called upon the Government to ‘finalise and implement to support the provision of beneficial ownership information as required by the Companies Act and to establish a public beneficial ownership registry by April next year.’ This is aimed at exposing the black money that’s behind the share certificates and to prevent the use of corruption’s spoils being laundered and turned clean.

Among the 16 conditions set for the Government to meet is the requirement to enact a Public Procurement Law that reflects international good practice by December next year, and to publish in December 2024, a report on ‘progress in increasing the proportion of tendered competitive procurement contracts in the 10 agencies determined to have the lowest level of competitive tenders in 2022’. Another condition is to ‘institute short-term measures within each revenue department to strengthen internal oversight and sanctioning processes and linkages with CIABOC and related criminal investigation and enforcement processes by December 2023 and issue a public report on steps taken and results obtained by December 2024.’

But the condition that will be understood most by 213 out of 225 members in Parliament and worry them most and give rise to sleepless nights and make the cabinet shiver, is IMF’s second demand, ‘Publication of Asset Declaration for senior officials (President, Prime Minister, Minister) on a designated website in line with Anticorruption Law by July 2024.

Hitherto under the Declaration of Assets and Liabilities Law, first enacted in 1978, they are required to declare their assets to the Speaker who keeps it stored in his safe, with the Attorney General, Bribery Commissioner, the Commissioner of Inland Revenue and a few other designated officials having the right to call for and refer to it. The Act also allows any person to refer and take certified copies on the payment of a few.

The snag is that only 12 MPs in this Parliament have made the statutory declaration with the rest of the 213 turning a blind eye to the need.

This was revealed by SJB MP Harsha de Silva who told Parliament last Thursday that only 12 out of the 225 members of Parliament have published their assets and liabilities to date. He said that ‘members declining to publish their assets and liabilities could be disturbing in the aftermath of the IMF focusing on corruption in its governance diagnostic assessment on Sri Lanka’.

But now MPs face the prospect of their declared wealth and debt available on the web for any Tom, Dick or Harriet to freely read at the press of a digit on their smartphones. The MPs may now demand the proposed damning ‘online safety’ bill to be made far worse.

Although Peter Breuer, Senior Mission Chief for Sri Lanka at the IMF’s Asia and Pacific Department, was careful to say ‘there are no fixed timelines’ he focused on two areas which he said must be satisfied. One was targets, policies and reforms, the other was debt.

He said: ‘We need to reach agreement on set targets, policies, and reforms that will allow us to go forward… with the understanding that the objective of the programme can be reached. So, now we have discovered there was a little bit of shortfall on one area during this year. So, we are looking to try and find ways to address that shortfall and compensate’. On the debt issue, he said that ‘reaching agreement with creditors will help restore debt sustainability in Sri Lanka’. He said the final decision will lie with the Executive Board.

Another IMF team is expected to visit Sri Lanka this week. Minister Rajapakshe told the media that the team would hold extensive discussions on the second tranche presently held in suspense.

With the IMF shoe now on the Government’s foot and the onus on its head, it behoves the nation’s leaders to get cracking with the Herculean task of cleaning the Aegean Stables.