Sri Lanka scored a mere 15 out of 100 for its public participation in the Budget process and has gone from bad to worse from 2010 to 2015, a new study by Verité Research, a multidisciplinary think-tank providing strategic analysis and advice for decision-makers and opinion-formers, said. According to the Open Budget Survey published in September 2015 (OBS), Sri Lanka gets a low score of 39 where the island is the second to last performer on Budget Transparency in South Asia though it had the capacity to do better.
“When Budget transparency declines, country risks are perceived to be higher and this affects the investment flow into the country. Sri Lanka was ranked 13 out of 94 countries in 2010 – and is currently ranked 69th out of 102 countries,” Executive Director and Head of Research at Verité Research, Dr. Nishan De Mel said.
Noting that this is significant decline from the 46 that Sri Lanka scored in 2012 and well below the present global average of 45, De Mel said the low score resulted in Sri Lanka being ranked 69 among 102 countries. The survey evaluated the Budget that was implemented for the year 2014.
“Sri Lanka’s budget transparency has been in decline over the term of the previous parliament. In 2008 and 2010 Sri Lanka ranked first in South Asia. But at present Sri Lanka is ranked almost at the very bottom in South Asia – only Nepal gets a lower score than Sri Lanka,” Verité Research said in a statement.
The statement added that the decline in score means that over the last few years, there has been a marked reduction in the ability of citizens and interested stakeholders to properly scrutinize and evaluate financial management of the country. It also indicates a decline in the credibility of budget reporting in Sri Lanka.
“When budget transparency declines, country risks are perceived to be higher and this affects the investment flow into the country. Sri Lanka is the second to last performer on Budget Transparency in South Asia – but we have the capacity to do better. Budget must represent the will of the people and reflect the needs of the society- on discussing OBS 2015 results,” De Mel emphasized.
The OBS report states that Sri Lanka’s citizens have “minimal budget information”. In addition, the survey finds “the legislature provides limited oversight during the planning stage of the budget cycle and weak oversight during implementation stage”. On the positive side the OBS report finds that there is adequate supervision of the budget from the Auditor General’s department in Sri Lanka.
However, the study said the election of a new government has provided a fresh opportunity for Sri Lanka to correct some of its past lapses in the functioning of its institutions where many of existing issues involve proper management of public finances, and are connected to weakness in the process of budgeting. “Sri Lanka now has an opportunity to arrest and correct this decline in budget transparency and thereby to also improve Sri Lanka’s ranking next year. This requires immediate corrective measures with regard to past lapses that have become habituated. Creating more meaningful public participation, timeliness in the publications of information, and tightening parliamentary oversight are key factors in improving the process of budgeting.”
A better process of budgeting helps better decision making and better management of public priorities. Making these corrections would also translate into greater confidence in the government’s financial management, not just among tax payers but also amongst investors. Attention to budget transparency is not just good for democracy, it is also good for the economy.”