Good governance is an essential foundation on which countries develop and grow. According to Verité Research’s Head of Governance and Anti-Corruption Sankhitha Gunaratne, the important elements include transparency, accountability to the public, space for public participation, equitable use of resources in the public interest and the rule of law.

“In Sri Lanka’s context, there are certain key issues – one being the politicisation of public services and almost anything,” she said in an LMDtv interview, adding that this runs counter to good governance.

Gunaratne asserted: “We need to enable processes to run in a decentralised manner that allows effective monitoring, questioning and answerability. A critical issue in Sri Lanka is the centralisation of power in the executive and executive presidency. Another key part of the governance problem is corruption.”

Good governance, she believes, is sometimes seen as the antithesis of corruption.

“When coming to Sri Lanka with the Extended Fund Facility (EFF), the IMF decided to conduct a governance diagnostic assessment, which is the first it has conducted in Asia,” she noted, adding: “The report, which came out in September last year, shows a stark picture of how corruption in Sri Lanka has macroeconomic consequences.”

She averred: “We’re in the midst of an economic crisis and everyone understands that it has an impact on our daily lives. What we don’t often realise is that the economic crisis is born of a governance crisis.”

Gunaratne cited an example of an initiative to promote good governance in Thailand – a country that experiences corruption on a day-to-day basis. She noted that companies in that country often encounter extortive corruption when interacting with the public sector while some work hand in hand with the political sector to garner advantages.

She explained: “We’ve seen Thailand’s private sector take great strides in fighting corruption through collective action. A group of large companies across various sectors came together and created the Collective Action Against Corruption. When this group collectively said that they will not engage in corruption, those who extort bribes lost their power.”

Corruption can be countered by “simple fixes,” she said, pointing out that “it doesn’t necessarily have to have regulatory intervention; it almost comes down to a decision to do something about it.”

Discussing corporate governance, Gunaratne asserted that one of the main challenges businesses face in Sri Lanka is that “they often tend to feel or at least propagate a narrative of being stuck in the middle of a really corrupt context.”

However, businesses aren’t necessarily innocent victims. “There’s a lot they can do to resist and be resilient in the face of corruption, yet we often find corporates taking advantage of the situation,” she said.

She asserted that corruption in the private sector comes in three main forms with one being “private to public corruption.”

“For instance, when engaging in government tender processes, a private sector company might be extorted for a bribe. So there’s an element of coercion where you choose to pay the bribe to get ahead of the competition – [but] then you’re as complicit in the problem,” Gunaratne elaborated.

And the second category is private to private corruption, which she described as “engaging in insider dealing or paying bribes when you engage with other private sector companies.”

“The third element is that the private sector is the main enabler of corruption,” she said, noting that professionals, companies and industries in general tend to facilitate corruption “when they accept transactions with individuals or organisations they know are politically exposed.”

Since businesses can be involved in corruption in these ways, Gunaratne asserted in conclusion that they “have a responsibility to not merely be the victim but also act as a bulwark against corruption.”