Takafumi Kadono

Country Director for Sri Lanka Asian Development Bank

Q: How would you define ‘good governance’ – and how does Sri Lanka measure up to it, in your opinion?

A: While there were external and internal shocks, it is the series of policy missteps that led to a deep economic crisis in Sri Lanka. Policy missteps were a result of weak governance and limited fiscal discipline and transparency.

Sri Lanka continued declining in Transparency International’s Corruption Perceptions Index (CPI) – from a score of 40 in 2012 to 34 in 2023. The World Bank’s Worldwide Governance Indicators show that the control of corruption, rule of law and regulatory quality have deteriorated over 2018-22 compared to 2000-05.

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

A: Given that the governance weaknesses in government functions and state-owned enterprises (SOEs) contributed to the economic crisis, it is fundamental to implement comprehensive governance and public financial management reforms.

The judicial system also needs to be strengthened, and the Commission to Investigate Allegations of Bribery or Corruption (CIABOC) has a tremendous role to play. And of course, civil society needs to be empowered.

Q: In your view, what steps can we take to combat bribery and corruption – and ensure that public resources are used for the benefit of all citizens?

A: The anti-corruption system is based on legislation directly relevant to bribery and corruption; legislation that tracks asset accumulation by public and elected officials; an independent institution for investigation and prosecution; and corruption prevention, administrative and financial regulations applicable to the public sector.

The Declaration of Assets and Liabilities Law enacted in 1975, establishment of CIABOC and the Financial Intelligence Unit, and recent adoption of the Anti-Corruption Act demonstrate that the country has long recognised the need to strengthen governance.

However, these legal and organisational frameworks established to fight corruption have struggled to fulfil their functions and legislation has lacked enforcement. Timely and stringent implementation of the IMF’s Governance Diagnostic Assessment recommendations is an important first step.

Prosperity for the citizens of Sri Lanka is not possible without governance and transparency.