Strengthening the management and control process of the government
Wednesday, 24 November 2010
Sayed Javed Ahmad
A small government is a better government, big government -- a burden. In every country, the government is the biggest employer and a business partner. A government is in a position to control and maintain the resources of the country and has thus the ability to manage large projects and activities utilising its resources and support organisations.
It is difficult for a government to implement any project without harmony among its supporting wings. Then the question arises, if its departments have the abilities and capabilities of materialising the projects.
The government may consider the following suggestions for strengthening its management and control process.
The concept of nationalisation: Nationalisation is a mechanism through which the government takes over an industry or resource for national benefit. We have seen this happening in the past where the government took over management and control of an industry.
The lesson we have learnt from this experimentation is that our government is not competent enough to run and manage an industry. As a result, we are witnessing introduction of new concepts like Public-Private Partnership (PPP) for a joint management effort.
The government employees cannot act like a businessman with 'regulations' mindset. It is better for the government to allow the private management to run enterprises on a profit-sharing basis. Take Central Depository Bangladesh Ltd (CDBL), for instance, it is basically a private company run and managed by a private management team. If the company were managed well and successfully then this would result in tax income for the government as well as some revenue streams going to its other entity, the Securities and Exchange Commission (SEC). If the opposite happens then everyone suffers.
Controlling the national resources: In general, the industries that are directly linked to natural resources in the country are nationalised. But this nationalisation would not be any good if the government fails to run and manage it profitably and successfully. Instead, if the government allows independent management team to manage the affairs of the resources where the government would remain as a regulating watchdog then chances are the resources concerned would be better utilised for national interests. Only recently, Bangladesh Telephone and Telegraph Board (BTTB) has been handed over to a private management called Bangladesh Telecommunications Company Ltd (BTCL). Oil and gas exploration opportunities could also be given to private enterprises in a similar arrangement. The idea is to better manage for profitability and sustainability, while creating employment opportunities for competent workforce and for proper utilisation of our natural resources.
Controlling food supply chain management: Considering the contamination and poisoning of our food chain and supply, it is imperative that our government takes a serious measure to protect public health by ensuring a proper food supply chain management system. An idea was floated recently to take control of the national food supply management where it was suggested that the government get fully involved in the managing of food quality and supply chain management (SCM).
Controlling imports as a foreign exchange (Forex) management effort: Our economic condition in comparison to global economy makes it undesirable for us to lead a luxurious lifestyle. But we find that much of our national resources and forex are utilised for luxury purposes. The government should put a lid or control on this behaviour by imposing higher taxes on such imports. We are already witnessing a sharp decline in our Forex earnings and reserves as the world economy is tanking affecting our exports and wage earnings by our expatriates in foreign countries. Our Central Bank should also look seriously into currency hedging in this worldwide economic turmoil where we do not know which foreign currency would sustain and which one will collapse. Staying with just US dollars (USD) is no longer safe when many countries are switching to Euro or other currencies reducing their dependence on USD.
Identifying and promoting exports areas: There was a time when the Export Promotion Bureau (EPB) used to play a major role in creating markets for exportable goods and services from Bangladesh. Now it seems like the effort has gone to private businesses to seek out the opportunities themselves. But still the EPB could play a major role in negotiating with foreign countries to convince and create opportunities through inter-governmental initiatives using our embassies and high commissions as communication bases for easy follow-up and to expedite the matter.
Control and management of national financial instruments: The government should roll out different saving schemes (education, retirement, marriage, hajj, vacation, etc) and encourage the public to utilise them as a part of social safety nets. Subsidised programmes, like the life insurance, health insurance and professional insurances, should be promoted to keep our financial instruments active and rolling. Businesses (private and public alike) should be mandated to adopt group insurance policies (life, health, accidental, professional, etc) as a measure of safety and protection of their employees reducing pressure on the government.
Taking advantage of Public-Private Partnership (PPP or P3) concept: PPP involves a contract between a public sector authority and a private party, in which the private party provides a public service or project and assumes substantial financial, technical and operational risk in the project. There are different ways to form this partnership. The government could take advantage of this concept to develop and expand on public services under private management, reducing the size of the government considerably yet profiting from a regular income from the arrangement.
Funding social programmes: It is good to see that the government is allocating considerable amount of money in budget and funding for social programmes in the country. If implementation is possible then the services should reach all citizens concerned without fail. One of the most important programmes that the government should try to initiate is the unemployment insurance.
Encouraging joint-ventures on turn-key basis for technology transfer: Through joint-management programmes and projects we could learn the management and administrative approach from the foreigners thus enriching our understanding of the global business management styles. For instance, many local businesses operate on Japanese management philosophy considering it better than the Western or local models.
Discouraging copying of businesses to avoid saturation: In Bangladesh there is no control on establishing business. Anyone can start any business, even if, there are plenty of them around doing the same business. Although it is the primary responsibility of the business planners to look into the prospects of one's own business success despite competition, yet the government could play a role in disallowing similar businesses if there is a chance of the other similar businesses being negatively affected. Avoiding business saturation could also be a goal for not allowing a copy business. There is no point in letting a business come and operate to destroy other businesses and then destroy itself incurring losses and waste of resources and efforts.
Focus on skilled human resource (HR) exports and local economic growth and development: Bangladesh is an over-populated country with the possibility of exporting skilled human resources that would bring in wage remittances in the country in large numbers. The Ministry of Education (MoE), along with the University Grants Commission (UGC) and other professional bodies, should form accreditation councils for strict monitoring to uplift education and training of international quality and standards in the interest of producing skilled manpower.
Reducing bureaucratic controls: Lesser the governmental control, the better for businesses. Too much control means too much mess. The government should focus on smaller workforce with less bureaucratic controls ensuring good governance. All business processes should be re-engineered according to new methods and principles simplifying the processes reducing controls while increasing transparency and accountability.
Implementation of Information and Communication Technology (ICT): Much of our process systems could be modernised by using ICT. The present government is attempting to introduce some ICT-based services into some sectors on an experimental basis. But they should know that use of ICT is way beyond the 'testing phase' and has been successfully implemented and in use in many different countries. Instead of 'trial and error' and 'reinventing the wheel', all we need to do is to introduce the system in all sectors and departments. Introduction of ICT would allow the government to shrink its workforce, while improving its services to the citizens resulting in good governance.
Reducing system loss: In most cases, 'system losses', which is equated to 'stealing or looting', is the result of poor accountability and lack of transparency. Reduction of system losses in all sectors in the government is something the government should look into seriously. Many of these losses would automatically be addressed if and when an ICT-based system process was introduced through proper business process re-engineering (BPR).
Black money vs. white money: It is often heard in the business community that "corruption is the lubricant of the economy", indicating that it is okay to have corruption in the society. In a corrupt society incompetent businesses flourish through corrupt dealings and the genuine competent businesses suffer. If the government wants to uphold fair competition of businesses and professionals then it must be strict with crime and corruption. Similarly, there is 'black money', meaning an income that came illegally. Ideally, all illegal income should be confiscated and the holder of such money should be sent to the court for trial and punishment. But in reality we are witnessing a different scenario. The government instead of doing what is right thing to do is giving them a chance to 'legalise' all illegal incomes by imposing taxes on them. Does taxing make an ill act legal and acceptable? Thus comes the other con called the 'white money'. Because of whitening of 'black money' con the economy is suffering a huge imbalance contributing to inflation and misdeeds.
Conclusion: The government should learn to 'earn' instead of forcing its citizens to 'pay' in taxes like the old zamindar days for revenues to operate. In a poor country like Bangladesh, imposing taxes on people is tantamount to imposing financial burden. People would happily pay the government if the government pays something back to them in products or services that ease their lives. The give and take should be a reciprocal process between the government and its people.
The present government is making efforts to bring positive changes in the country with a new team of ministers working with the old bureaucracy. Therefore, there is a tug of war between them demanding adjustments and change. Many important decisions have already been made that await materialisation. How many of them will actually materialize, that only time will tell. The people are watching with anticipation.
(The article is an abridged version of the writer's paper titled "The economics of state: Exampling Bangladesh". Email: javedahmad@yahoo.com)
A small government is a better government, big government -- a burden. In every country, the government is the biggest employer and a business partner. A government is in a position to control and maintain the resources of the country and has thus the ability to manage large projects and activities utilising its resources and support organisations.
It is difficult for a government to implement any project without harmony among its supporting wings. Then the question arises, if its departments have the abilities and capabilities of materialising the projects.
The government may consider the following suggestions for strengthening its management and control process.
The concept of nationalisation: Nationalisation is a mechanism through which the government takes over an industry or resource for national benefit. We have seen this happening in the past where the government took over management and control of an industry.
The lesson we have learnt from this experimentation is that our government is not competent enough to run and manage an industry. As a result, we are witnessing introduction of new concepts like Public-Private Partnership (PPP) for a joint management effort.
The government employees cannot act like a businessman with 'regulations' mindset. It is better for the government to allow the private management to run enterprises on a profit-sharing basis. Take Central Depository Bangladesh Ltd (CDBL), for instance, it is basically a private company run and managed by a private management team. If the company were managed well and successfully then this would result in tax income for the government as well as some revenue streams going to its other entity, the Securities and Exchange Commission (SEC). If the opposite happens then everyone suffers.
Controlling the national resources: In general, the industries that are directly linked to natural resources in the country are nationalised. But this nationalisation would not be any good if the government fails to run and manage it profitably and successfully. Instead, if the government allows independent management team to manage the affairs of the resources where the government would remain as a regulating watchdog then chances are the resources concerned would be better utilised for national interests. Only recently, Bangladesh Telephone and Telegraph Board (BTTB) has been handed over to a private management called Bangladesh Telecommunications Company Ltd (BTCL). Oil and gas exploration opportunities could also be given to private enterprises in a similar arrangement. The idea is to better manage for profitability and sustainability, while creating employment opportunities for competent workforce and for proper utilisation of our natural resources.
Controlling food supply chain management: Considering the contamination and poisoning of our food chain and supply, it is imperative that our government takes a serious measure to protect public health by ensuring a proper food supply chain management system. An idea was floated recently to take control of the national food supply management where it was suggested that the government get fully involved in the managing of food quality and supply chain management (SCM).
Controlling imports as a foreign exchange (Forex) management effort: Our economic condition in comparison to global economy makes it undesirable for us to lead a luxurious lifestyle. But we find that much of our national resources and forex are utilised for luxury purposes. The government should put a lid or control on this behaviour by imposing higher taxes on such imports. We are already witnessing a sharp decline in our Forex earnings and reserves as the world economy is tanking affecting our exports and wage earnings by our expatriates in foreign countries. Our Central Bank should also look seriously into currency hedging in this worldwide economic turmoil where we do not know which foreign currency would sustain and which one will collapse. Staying with just US dollars (USD) is no longer safe when many countries are switching to Euro or other currencies reducing their dependence on USD.
Identifying and promoting exports areas: There was a time when the Export Promotion Bureau (EPB) used to play a major role in creating markets for exportable goods and services from Bangladesh. Now it seems like the effort has gone to private businesses to seek out the opportunities themselves. But still the EPB could play a major role in negotiating with foreign countries to convince and create opportunities through inter-governmental initiatives using our embassies and high commissions as communication bases for easy follow-up and to expedite the matter.
Control and management of national financial instruments: The government should roll out different saving schemes (education, retirement, marriage, hajj, vacation, etc) and encourage the public to utilise them as a part of social safety nets. Subsidised programmes, like the life insurance, health insurance and professional insurances, should be promoted to keep our financial instruments active and rolling. Businesses (private and public alike) should be mandated to adopt group insurance policies (life, health, accidental, professional, etc) as a measure of safety and protection of their employees reducing pressure on the government.
Taking advantage of Public-Private Partnership (PPP or P3) concept: PPP involves a contract between a public sector authority and a private party, in which the private party provides a public service or project and assumes substantial financial, technical and operational risk in the project. There are different ways to form this partnership. The government could take advantage of this concept to develop and expand on public services under private management, reducing the size of the government considerably yet profiting from a regular income from the arrangement.
Funding social programmes: It is good to see that the government is allocating considerable amount of money in budget and funding for social programmes in the country. If implementation is possible then the services should reach all citizens concerned without fail. One of the most important programmes that the government should try to initiate is the unemployment insurance.
Encouraging joint-ventures on turn-key basis for technology transfer: Through joint-management programmes and projects we could learn the management and administrative approach from the foreigners thus enriching our understanding of the global business management styles. For instance, many local businesses operate on Japanese management philosophy considering it better than the Western or local models.
Discouraging copying of businesses to avoid saturation: In Bangladesh there is no control on establishing business. Anyone can start any business, even if, there are plenty of them around doing the same business. Although it is the primary responsibility of the business planners to look into the prospects of one's own business success despite competition, yet the government could play a role in disallowing similar businesses if there is a chance of the other similar businesses being negatively affected. Avoiding business saturation could also be a goal for not allowing a copy business. There is no point in letting a business come and operate to destroy other businesses and then destroy itself incurring losses and waste of resources and efforts.
Focus on skilled human resource (HR) exports and local economic growth and development: Bangladesh is an over-populated country with the possibility of exporting skilled human resources that would bring in wage remittances in the country in large numbers. The Ministry of Education (MoE), along with the University Grants Commission (UGC) and other professional bodies, should form accreditation councils for strict monitoring to uplift education and training of international quality and standards in the interest of producing skilled manpower.
Reducing bureaucratic controls: Lesser the governmental control, the better for businesses. Too much control means too much mess. The government should focus on smaller workforce with less bureaucratic controls ensuring good governance. All business processes should be re-engineered according to new methods and principles simplifying the processes reducing controls while increasing transparency and accountability.
Implementation of Information and Communication Technology (ICT): Much of our process systems could be modernised by using ICT. The present government is attempting to introduce some ICT-based services into some sectors on an experimental basis. But they should know that use of ICT is way beyond the 'testing phase' and has been successfully implemented and in use in many different countries. Instead of 'trial and error' and 'reinventing the wheel', all we need to do is to introduce the system in all sectors and departments. Introduction of ICT would allow the government to shrink its workforce, while improving its services to the citizens resulting in good governance.
Reducing system loss: In most cases, 'system losses', which is equated to 'stealing or looting', is the result of poor accountability and lack of transparency. Reduction of system losses in all sectors in the government is something the government should look into seriously. Many of these losses would automatically be addressed if and when an ICT-based system process was introduced through proper business process re-engineering (BPR).
Black money vs. white money: It is often heard in the business community that "corruption is the lubricant of the economy", indicating that it is okay to have corruption in the society. In a corrupt society incompetent businesses flourish through corrupt dealings and the genuine competent businesses suffer. If the government wants to uphold fair competition of businesses and professionals then it must be strict with crime and corruption. Similarly, there is 'black money', meaning an income that came illegally. Ideally, all illegal income should be confiscated and the holder of such money should be sent to the court for trial and punishment. But in reality we are witnessing a different scenario. The government instead of doing what is right thing to do is giving them a chance to 'legalise' all illegal incomes by imposing taxes on them. Does taxing make an ill act legal and acceptable? Thus comes the other con called the 'white money'. Because of whitening of 'black money' con the economy is suffering a huge imbalance contributing to inflation and misdeeds.
Conclusion: The government should learn to 'earn' instead of forcing its citizens to 'pay' in taxes like the old zamindar days for revenues to operate. In a poor country like Bangladesh, imposing taxes on people is tantamount to imposing financial burden. People would happily pay the government if the government pays something back to them in products or services that ease their lives. The give and take should be a reciprocal process between the government and its people.
The present government is making efforts to bring positive changes in the country with a new team of ministers working with the old bureaucracy. Therefore, there is a tug of war between them demanding adjustments and change. Many important decisions have already been made that await materialisation. How many of them will actually materialize, that only time will tell. The people are watching with anticipation.
(The article is an abridged version of the writer's paper titled "The economics of state: Exampling Bangladesh". Email: javedahmad@yahoo.com)