Azusa Kubota

Resident Representative UNDP in Sri Lanka

Q: What are the most critical issues facing Sri Lankan in terms of governance?

A: In terms of governance, steps must be taken to rebuild and strengthen the social contract, and people’s trust in institutions.

With COVID-19, mistrust between people and institutions have grown globally; and in Sri Lanka, following the country’s worst economic crisis, we see a similar trend.

Even in addressing perhaps the world’s most acute crisis, climate change, people are demanding stronger climate action from their leaders.

The UNDP recently published the results from the People’s Climate Vote 2024; and in Sri Lanka, 97 percent of respondents feel that the government should strengthen its commitments to address climate change.

Honouring commitments and meeting people’s needs through accountable, inclusive and transparent processes must be at the heart of the reform agenda. As evident from the IMF governance diagnostic report, the root causes of some of the most critical development challenges can be traced to weaknesses in economic governance systems.

Fiscal policy decisions have resulted in low tax revenues, high public spending, a narrow export base and unsustainable public debt, leaving the country vulnerable to external shocks.

To help Sri Lanka avoid falling back into a perpetual cycle of indebtedness, several governance challenges require attention, focussing on improving transparency and accountability, and enhancing people’s engagement in all processes.

This is fundamentally tied to people’s willingness to comply with tax obligations.

The recent Tax Perception Survey notes that people are willing to pay taxes as long as they value what they gain from it. This firmly underscores the importance of addressing perceptions, structural deficiencies, misinformation and misconduct to boost tax morale.

UNDP strongly advocates strengthening institutions and systems of economic governance, and supports an economic governance approach that refers to the policies, frameworks, systems, institutions and capacities that support a country’s economic objectives.

Key elements of economic governance systems include fiscal, monetary and trade policies; regulations related to business and investments; oversight systems that ensure citizen participation and government accountability over relevant decisions and actions; and judicial frameworks that ensure enforcement of relevant laws and policies.

Addressing governance deficiencies is essential to creating a society where people have hope for their future, linked with the outward migration issue.