Sri Lanka needs radical civil service consolidation and training blitz: Samarajiva

ECONOMYNEXT – Sri Lanka should cut the bloated civil service and step up training and rewards to the most productive to make it more efficient, policy scholar said as unemployed graduates join civil servants who have not been affected by the coronavirus pandemic.

Sri Lankan informal workers have been hit hardest by the coronavirus pandemic and many small businesses have been attacked with closures and import controls and permits have been destroyed. Big companies were doing better.

“Now remember, people in the formal private sector have taken a hit,” Rohan Samarajiva, director of LirneAsia, a regional think tank, said at a forum hosted by the Advocata Institute, a think tank based in Colombo.

“The unions and the employers got together and they decided they were going to be paid 50 percent of their earnings.

“So everyone took a hit except the government or the public sector employees.”

Samarajiva’s comments are few spending-based consolidation measures since the start of a government expansion campaign as part of “revenue-based fiscal consolidation” under an anti-austerity ideology of the state in 2015.


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Sri Lanka abandoned expenditure-based consolidation in 2015 as part of the “income-based fiscal consolidation” peddled by Washington-based lending agencies as part of a US Treasury’s global crusade to eliminate exemptions tax.

In December 2019, Sri Lanka took the opposite path, cutting taxes for ‘tax incentives’, while entering another period of ‘monetary stimulus’ that already sparked currency crises in 2015/2016 and 2018 , lowering growth.

As part of the revenue-based fiscal consolidation, the central government workforce increased from 1.35 million in 2014 to 1.52 million in 2020, largely due to the provision of jobs at a lower level. large proportion of unemployed graduates.

In 2020, in the midst of a coronavirus pandemic, 53,000 got jobs thanks to non-existent tax money. At the end of the year, the salary and pension bill amounted to 86% of tax revenue.

Amid the closures as private companies shut down, depriving the state of taxes, the government was operating with a small number of employees, many at home.

Many had been home for over a year. The pandemic would also show which workers were really needed to do the job, Samarajiva said.

They can enjoy voluntary retirement or a lower salary like private sector workers, he said.

“So what I would suggest is the following,” Samarajiva said. “That is, we discuss how everyone is suffering and we offer some of these people – in particular, we look at the backgrounds of who has been called to the office and has not been called to the office. office and we allow them to work from home possibly without duration for half of their wages.

“It is that there is no hope that they will be brought back. They receive half of their salary for the next five years. If necessary, we can even talk about some kind of voluntary package for them to start a new business or something like that.

Samarajiva said essential workers should receive training to be effective.

“The others that experience has shown for a year and a half are essential to the functioning of government, we tell them that there will be additional training modules and so on to make them more productive.

“Although we have a large public sector with many employees, we don’t spend money on what they need to be productive. “

“So we really need to increase that. Because then we have to give these people KPIs and tell them that if they don’t increase their productivity, they will join their siblings at home with half the salary.

“I think this is an opportunity that the Covid situation has given us in terms of public sector reform.”

Instead of serving the public, state agencies primarily tackle internal issues.

“The last problem is the one for which I don’t really have an answer, and at the top of it all are 22 kinds of services headed mainly by the administrative service of Sri Lanka.

“And they will of course define themselves as indispensable and essential and they will protect themselves from all the cuts that we will propose. But in fact, they are a serious obstacle to reform.

“I’ve been involved in a few efforts to try to reform the back office, but it’s a problem I’m not sure how to fix.”

A study in the mid-1990s found the government to be 30 percent over-staffed. In 1995, central government employees were only 738,000 when overstaffing was assessed. By 2020, central government employees had grown to 1.29 million, in part due to a civil war.

Under “income-based fiscal consolidation” alone, state workers were increased by 183,000.

Revenue-based fiscal consolidation gradually reversed the expenditure-based consolidation achieved from the end of the war until 2014. (Colombo / October 28/2021)

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