Cabinet Taking Over Public Institutions Is Not Yahapālanaya
Chandra Jayaratne
An Open letter to the Prime Minister and Copied to the President
Dear Mr. Prime Minister,
“Yahapalanaya” is not Taking Away Accountabilities of Independent Public Institutions and Vesting them in Cabinet Ministers
In order to assure Good Governance -“Yahapalanaya”, as the Chairman of the Parliamentary Steering Committee on Constitutional Affairs, You are vested with the leadership accountability to ensure that the recommendations linked to the reform of article 52(2) of the Constitution dealing with Secretaries to Ministries, as duly endorsed by the Sub Committee on Public Finance, is steered through the Constitutional Reforms process and embodied in the new Constitution. This single move will make a significant difference to assuring Yahapalanaya – Good Governance.
The Ceylon Constitution Order in Council 1946, endowed on Ministers only general powers of direction and control, with the relevant provision reading as “Each Permanent Secretary shall, subject to the general direction and control of his Minister, exercise supervision over the department or departments of Government in the charge of his Minister.
All stakeholders of society, having experienced the ill effects of endowing power on the Ministers to issue not only policy directions to Ministry Secretaries, but in addition to have power to direct and control them in the exercise of supervision of the Departments and Institutions under the Ministry, would certainly endorse the above reform of limiting the administrative and control power of Ministers.
In the above context, it is most surprising that the Foreign Exchange Act No; 12 of 2017certified on 28th July 2017 is to be brought in to effect from November 2017, in a form which is mostly unchanged from its original draft. This enactment is despite the serious concerns expressed by the civil society before the enactment. It is sad that the assurances the civil society had from those in governance that the issues of priority concern of civil society will be addressed by Committee Stage amendments in Parliament have not been delivered by the Government.
Outside of the short periods of the recent past, when politically driven persons and cronies of those in the apex of power and governance headed the Central Bank, the top tier leaders of the Central Bank have upheld and implemented best practices and principles of Central Banking. The best of talent available in the country is attracted to the Central Bank and key staff members are amongst the most competent professionals in the market. Resources for references and networking and exposure through best available training options enrich the capability of staff of the Central Bank. As a Public Institution engaged in regulatory governance, the Central Bank has unquestioned integrity and capability, so long as political interference and influence do not taint such core values. The Monetary Board, when properly constituted with persons of integrity and professionalism, provides an apex structure of leadership and effective decision making for best practices driven good governance.
In the above context it is difficult to neither to understand nor accept, the rationale for taking away the powers and accountability hitherto vested in the Central Bank and its affiliated agencies, in exercising best judgment and professionalism based regulatory enforcements concerning the management of foreign exchange. It is even more difficult to justify how these accountability transfers can be made to a Minister and not to an Independent Public Institution, especially in the light of the unanimous agreement of the Parliamentary Sub Committee that Article 52(2) should revert to the pre 1972 Constitutional provisions.
Even at this late stage, the Civil Society urges you, in the context of your commitment to Yahapalanaya-Good Governance, to reconsider the likely negative implications and the potential future impact on good governance and monetary management, arising from the following issues, risks, unprofessional practices and financial crimes, by enforcing the new law as presently enacted :
- Bringing in to force the new law effective November 2017, in the absence of essential regulations and guidelines, especially when such regulations and guidelines have not been transparently reviewed with civil society;
- The key decision making functions with the highest levels of authority and empowerment in the management and governance have been shifted from
- the expertise and experience enriched,
- citizen recognized independent public institution of the Central Bank,
to a politically elected individual minister, leaving the Monetary Board and the Central Bank accountable for monetary stability assurance under the Monetary Law, being vested with only the agency functions of implementation, which latter function also as per Ministerial directions, and thus violates the accepted best practice principles of management and control by an Independent Public Regulatory Institution
