When it comes to the salaries of MPs and corruption is it true that less is more? That seems the loaded question of the month in our neck of the woods. One argument is that lower wages encourage corruption by making MPs reliant on outside sources of money. But it has also been argued that higher wages can lead to even higher unscrupulous dealings. Which way does the evidence point?
It is true that our legislators may feel a bit short-changed when comparing their earnings to some of those of their regional counterparts.Still, those numbers don’t mean much without some kind of socio-economic context. For example, GDP per capita might suggest how legislators’ economic well-being compares to the national standard of living.
Senior Sri Lankan economist and former Central Bank Deputy Governor W. A.
Wijewardena recently advocated that parliamentarians should be given a “decent salary” of Rs. 1 million, pointing out that the present perk system of giving a host of allowances cost the public much more, possibly up to Rs. 6 million per minister.
In case the public ruction rises and the parliamentarians jump to conclusions and imagine they have a new champion backing their ‘more pay’ argument let me elaborate while quoting Mr Wijewardena further: “At present the salary of a Minister is at Rs. 75,000 and they portray that they are doing an honorary service to the citizens of this country. However, unknown to us, there are all kinds of hidden benefits which ministers are enjoying. We are in serious trouble if we don’t cut down these perks of the Ministers.”
Wijewardena’s contention: Paying Rs. 1 million per month would always be better than spending Rs. 6 million per minister per month. According to Wijewardena’s calculations, the monthly cost of a minister to the Sri Lankan taxpayers was around Rs. 6 million, which comes to around Rs. 72 million per annum.
“If there are 100 ministers the amount will come to Rs. 720 million. The larger the cabinet, the larger the money the citizens will have to pay. It is a crucial issue.”
In some of Asia’s richest economies heads of government, ministers and top bureaucrats are showered with high salaries and lavish perks to draw top-calibre talent and deter corruption. In Singapore, Hong Kong and Japan, top officials earn more than their US or European counterparts, and analysts say it is no accident that they are also reputed to have Asia’s cleanest and most efficient governments.
Singapore’s government salaries are higher than most as attempts to ward off potential corruption. However, these emoluments, have received backlash, mostly from Singaporeans unable to handle rising prices and who do not believe such high salaries are necessary to prevent corruption. As a result, the salaries of government officials are being cut by up to 51 per cent.
In Singapore, for instance, the reasoning for higher salaries goes slightly beyond an anti-corruption measure. It is meant to serve as a draw for individuals in the private sector and as a competitive salary as well. However, the new reform ties government officials’ salaries to the well-being of Singaporeans themselves and is based on meeting specific socio-economic targets. Using a new mathematical formula that draws from 1,000 people’s salaries instead of 48 to get a more accurate median, government attempting officials have even more of an incentive to stay clean and promote national growth.
In addition, the problem with Singapore’s model is that while successful it would not be scalable in developing countries just yet. Singapore’s efficient government aims to maximize the country’s output and growth, while attempting to stem the flow of the brain drain.
Unfortunately, some developing countries such as ours suffer from a significant brain drain and are unable to lure those people back. Intended to attract private sector personnel to work for the government, Singapore’s system is efficacious partly because even using an adjusted salary calculation leaves its government officials far wealthier than most. While using the same formula may still provide leaders in developing countries with salaries higher than the average citizen, it may not be enough to deter the potential profits from corruption.
As in Singapore, there is certain to be a huge public outcry for any salary increase granted to our local MPs.Ordinary citizens view them asan already indulged lot raking in princely wagesby local standards. In addition they are showered with other perks and privileges such as subsidized meals, duty free vehicles – which are customarily sold – unlimited fuel, free housing, telephone facilities, and foreign junkets among other benefits. And all this when we are forced to shoulder additional economic burdens by way of increase in the VAT and other levies that would have a direct impact on the cost of living and in the lifestyles of many.
Fortunately, wiser legislative heads have prevailed in that the Cabinet has decided to suspend the 30 percent water tariff hike mentioned in the Budget 2017. Already water tariffs are unaffordable to most and today water cuts are the norm. Water is not only the most essential substance next to oxygen for human life. And the authorities who handle this life-giving resource are messing with it. It is not any ordinary commodity and is too precious to be left in the hands of idiots.
The salary increase reserved for parliamentarians several months prior to this was shelved by the government as a result of the public outcry because of the government decision to increase VAT on a heck of a lot of consumer items and services. In the present context would a pay hike to our MPs be justified?
The problem in most developing countries is the presence of governments with oversized and overpaid Cabinets but an underpaid civil service.
True satisfactory remuneration is a prerequisite to combat corruption. If you can’t make ends meet then the temptation to receive bribes is high. Paying huge salaries does not necessarily stop corruption but certainly would be an incentive for politicians not to indulge in corruption. To totally eradicate the kickbacks factor legal and institutional deterrents must also be in place.
As for the quality of luring quality personnel to politics and the bureaucracy, the old saying that if you pay peanuts you get monkeys is true everywhere, including Sri Lanka. Besides, monkeys have never known to be good decision-makers.