(This article was originally published in DailyFT on 23rd May 2014)

By Ashwin Hemmathagama Our Lobby Correspondent

Lawmakers yesterday clashed over eight resolutions which were moved under the Appropriation Act of 2012, seeking Parliamentary approval to establish and to change the limits of the advance accounts for several Government institutions including the Bribery Commission.

The Chamber. A file photo

The Chamber. A file photo

The Government said that it would seek to fast-track the rewards due to bribery and corruption informants by using the funds in these accounts. Moving the motion, Minister of International Monetary Co-operation and Deputy Minister of Finance and Planning Dr. Sarath Amunugama compared the provisions in the Budget and the proposed advance accounts.

“The allocations are spent and the settlement is shown separately to the Treasury at the end of each year. In other words, the money to spend is provided by the Budget and the income generated is settled to the Treasury. But with the advanced accounts these institutions will be capable of handling their own finances according to targets set. However, these independent spending will not have an impact on the final balance sheet as long the operations are within the parameters,” explained Minister Amunugama.

The Government is also seeking to change the advance funding limits for the Department of Education Publications, Government Factory, Department of Agriculture, Department of Sri Lanka Railways, Ministry of Finance and Planning, and the Department of Sri Lanka Customs.

Using the funds in these advance accounts Government expects to fast track the rewards due for bribery and corruption informants, enhance marketing of publications, and increase productivity while helping them to be commercialised.

Introducing the changes and the purposes, the Minister stated the advance accounts for the Commission to Investigate Allegations of Bribery or Corruption would mainly provide the money to be used as bribes to trap wrongdoers.

“The funds in the advance account will also be used as rewards for the informants provided the information is correct. With the account in place the time delay will be eliminated where the informant has to wait until the legal proceedings come to an end,” he said.

“With litigations dragging for a considerable period, we found it difficult to handle the past payments. Now the ceiling is increased, enabling us to pay the informants without a delay.”

“Printing, publicity, and sales of course is another area, which requires an advance account. The reason is that Government fails to receive the money due for printing in the same year, especially with regard to school textbooks. Then again, the ceiling is enhanced. We plan to operate the Government factory and the Department of Sri Lanka Railways commercially. All these departments and institutions have commercial aspects, which guarantee the income after sales.  We always try to bridge the budget deficit. The Government was capable of reducing it and was able to bring it to the internationally-accepted level of 5%. I assure you that this move will not widen the gap but will continue to be within the set goals of the Government,” added Amunugama.
Opening the debate, United National Party strongman MP Lakshman Kiriella raised his concerns about the bank interest rate remaining low for deposits.

“Today the banks pay 6% but last year it was 14% during the same period. Pensioners depend on the interest. Certain institutions don’t even accept deposits, having failed to find trustworthy opportunities to reinvest. This shows the decline of Government income. Some in the Kandy District have received letters to pay estimated taxes for 2015. Over 50%-60% of the bank deposits are borrowed by the Government. You don’t even have decent investors. What you could bring was a street fighter. In the absence of rule of law, Fortune 500 companies will not come,” said MP Kiriella.

Deputy Minister of Industry and Commerce Lakshman Wasantha Perera joining the debate praised the Government and the Rajapaksa regime for its foresight. “We have to deposit the money which was given to the suspect as a bribe until the litigation concludes. Current limit of the advance account is Rs. 4 million. It is insufficient to curb bribery and corruption taking place in the island. Now this will be increased to Rs. 12 million.”

However, Opposition lawmaker Sunil Handunnetti had his reservations about the Commission to Investigate Allegations of Bribery or Corruption, which he said was “nothing more than a place where the ordinary get penalised and the high and mighty get away with ease”.

“You are proposing to increase the advances paid for bribery information provided. In other words, this proposes to increase the amount of money used for the bribes. First you need to establish public trust. The Bribery Commission has failed to conduct investigations on a majority of the complaints, especially on the complaint I have made against the Head of the Bribery Commission itself. Name one big scandal revealed by the Bribery Commission in the past. It is only capable of investigating those who took a bribe amounting to Rs.750. What happened to the complaints Minister Mahindananda Aluthgamage, UNP PM Sujeewa Senasinghe and I have lodged? I challenge the House to investigate the Bribery Commission itself and its staff, the revelations in the COPE report, and the corrupt politicians,” said MP Handunnetti.

Joining the debate, MP Eran Wickramaratne said corruption had increased in the country. He said Sri Lanka, with a score of 37 points out of 100, had been ranked at 91st place among 177 countries in 2013 in Transparency International’s annual global Corruption Perception Index.

“It is not matter to be proud of. Sri Lanka has become more corrupt this year, dropping 12 notches from last year’s 79th place rank. The Bribery Commission is no longer an independent body and its Chairman is under question. Other than the few Police officers assigned on secondment, there are no fulltime officers working at the Commission to Investigate Allegations of Bribery or Corruption. How can you take action without trained officers who are educated on white collar crimes, especially in the stock exchange?”

Wickremaratne said it was important to understand the conflict of interest. “A recent research paper authored by Professor Indraratne points out that 9% of the GDP accounts for bribery and corruption,” said MP Wickramaratne, stressing the fact that 1% increase in the GDP would help provide 100% medical care free of charge to the entire nation.

Dr. Harsha de Silva joining the debate said that the Government should have a clear idea about its priorities. “In 2013, Rs. 7.5 billion was allocated to Ministry of Education for capital expenses. Then again a request was made to increase it to Rs. 13 billion. In 2012 the Ports and Highways Ministry was allocated Rs. 131 billion. We have nothing against development but in comparison, road construction is given priority by this Government. What should our priorities be? Education should come first in that list.”

“The Mahinda Chinthana identifies SMEs as the backbone of the nation. It also proposes to establish Lankaputhra Bank and also to give tax concessions. It also proposes to migrate 5,000 small businesses to the next level. But non-performing loans at Lankaputhra Bank exceed 46% today compared to 18% in 2008. The reason is that the bank funded fraudulent projects, leading it belly up. It is true that tourism is a key aspect for development. There are different levels of tourist hotels and the industry involvements. If you take Unawatuna, almost every house is now converted into a small hotel. To develop them, the Ministry of Finance applied for a $ 16 million loan from the World Bank, rated as a matching grant. Thousand of applications were received. Now, People’s Bank is not disbursing the money. The bank says the Government has instructed it to hold the money for some other project. This is how the Government breaks promises,” he added.