20th Amendment

Birth of the 20th Amendment and death of a basketball legend

Originally appeared on The Morning

By Dhananath Fernando

Why planes must have two pilots and warning systems

After much elaborate drama, vehement opposition, and toing and froing, the 20th Amendment to the Constitution has been passed with a resounding majority in Parliament. The contents of this amendment and the seismic shift it creates to our governance system reminds me of a story from early this year before global headlines had begun to be dominated by Covid-19 – namely, the tragic helicopter crash on 26 January in Los Angeles which caused the death of basketball legend Kobe Bryant and his daughter.

The National Transport Safety Board (NTSB) of the US has come up with a 1,700-page report on the crash. While it provides no final conclusion, many aviation experts believe the pilot got disoriented, confused the pitch altitude, and though he was ascending when he was descending. This is not a novel phenomenon in the field of aviation and is always a possibility as you are in the air without visual references. At least, that was the reasoning at surface level. But when we go a little in-depth, there are two main factors highlighted by experts and the report (1).

  1. The helicopter Kobe Bryant flew (Sikorsky-S76B) is operationally a hi-tech machine with a sophisticated flight-deck for two pilots. However, on this unfortunate day, it was operated by only one pilot. According to NTSB guidelines, any helicopter that carries more than five passengers must be a dual pilot operation, but in this case, nine innocent passengers died in the crash. A guideline for dual pilot operations was imposed post the investigations of a similar crash in the Gulf of Mexico in 2004. The simple reason to have a dual pilot operation is simply a check and balance mechanism to minimise the probability of human error in decision-making in flight.

  2. The second reason was that the helicopter that hit the ground did not have a Terrain Avoidance and Warning System (TAWS) installed.

A dual pilot operation and installing a TAWS are simply just guidelines. Operating a flight without following those guidelines were not illegal, but the cost of not following the guidelines was proven to be human life.

When I think about Sri Lanka’s Constitution and the proposed constitutional reforms which affect the economy and our structure of governance, I think of a helicopter operation and the tragic crash Kobe Bryant had to face.

Checks and balances and processes are in place for a reason, and till things go wrong, we may not see the importance of their presence. In Sri Lanka’s context, our pilot is the policymaking unit and the 21 million population are the passengers who have to be safe onboard and flown to the destination of prosperity in their own lives. So we have to have systems in place where the aeroplane can be landed safely, even if key decision-makers in the cockpit get disoriented.

The discussion on the 20th Amendment has been evaluated in that spirit, in particular from an economic perspective. That is why the checks and balances are vital and a mechanism has to be established to minimise the probability of human error, similar to the dual pilot model and the TAWS system. Otherwise, it is natural that in a cloud of “political power”, individuals may disconnect with the ground reality and make decisions to accelerate the momentum in the wrong direction.

Our economy is already at a critical stage where we can’t afford to make any miscalculations. For example, there has been a rise in bond yields in secondary market bonds of Sri Lanka following the announcement of the changes in the 20th Amendment. One possibility for this could be the uncertainties created by the 20th Amendment with regard to checks and balances for the broader economy.

The executive powers vested with the President have to be looked at in the spirit of “responsibility”. Political power provides the decision-making ability, and yet we should not underestimate the “responsibility” factor that is interconnected with power, which may impact millions of lives. What do we do with political power franchised by the people to develop their economies? This is the vital question. The three arms of the executive, legislature, and judiciary are the governance equivalents of a dual pilot and the TAWS safety net: The “executive” as the chief pilot and “legislature”, lead by the Prime Minister, as the core pilot have to work hand in hand in ensuring that there are measures to recheck whether we do the right thing. Then there has to be an independent judiciary to resolve any conflict. If Sri Lanka is to prosper, it is essential that we protect these checks and balances.

It has been proven multiple times in Sri Lanka and across the world that when citizens are empowered to make their own decisions and choices, the chances for success and prosperity are greater. A single government trying to understand the needs and aspirations, motivations, behaviours, lifestyles, etc. of 21 million people is simply impossible. That is why the structure has to be organised in a way where people are empowered to make their own economic decisions and competition has to be in place along with a level playing field in order to ensure that hard work is incentivised and rewarded.

All constitutional reforms have to be in the view of what is in it for people to make their own choices and how it affects the creation of a level playing field.

As highlighted in this column less than a month ago on 27 September, the importance of the Auditor General having the ability to audit state-owned enterprises (SOEs) has to be appreciated. However, just the powers for the Auditor General will not ensure SOE governance as the corruption in SOEs is systemic and incredibly pervasive. The Government has to consider greater reform and should consider steps such as listing strategic SOEs at the Colombo Stock Exchange (CSE) and establishing a “Temasek model” for the governance of all SOEs.

The general Sri Lankan sentiment is that merely appointing a political leader or moving a constitutional reform would provide solutions to all problems. When the amendments were brought to increase female representation at local government level, many were of the opinion that it would solve the problem of female underrepresentation. Unfortunately, what happened in reality was far different, with some women contesting elections simply to enable their husbands to effectively take over once elected. It is required that Sri Lankan political leadership initiates a comprehensive economic reform plan if we are to have any hope of development.

What we do with the “powers” we have in hand is more important than what “powers” we install in one single position. In exercising power, we need a system to make sure we exercise it in the right way.

Sri Lankans’ experience in the economic context over time is that the powers granted by people have not been utilised for the right objectives, and in many cases, the same power they have provided have limited people’s own right and freedom to enjoy a prosperous economic life.

After the 20th Amendment, with new powers installed, “economic freedom” is a concept that we can start building into our country. It has been shown that countries with higher economic freedom, where people are provided with the independence and opportunity to earn higher incomes, generally experience a higher quality of life. Poverty levels reduce and the most vulnerable sections of society are able to have economic security.

Per capita income and economic freedom quartile

Sri Lanka has been ranked 83rd on the Economic Freedom Index and we have a long way to go. Let’s hope that with checks and balances and executive powers, Sri Lanka will establish systems and guidelines such as dual pilot systems in aviation and TAWS in the form of institutions to incentivise people to work harder and become prosperous, so that we can prosper as a country.


The opinions expressed are the author’s own views. They may not necessarily reflect the views of the Advocata Institute or anyone affiliated with the institute.

Sri Lanka’s Auditor General and Steve Jobs’ Garden Fence

The+Coordination+Problem+Logo.jpg

In this weekly column on The Sunday Morning Business titled “The Coordination Problem”, the scholars and fellows associated with Advocata attempt to explore issues around economics, public policy, the institutions that govern them and their impact on our lives and society.

Originally appeared on The Morning


By Dhananath Fernando

A few days ago, I read up on an interesting anecdote from the life of Steve Jobs. When Steve was a child, his father had asked him to paint the fence around his house. Steve took the task up and painted the outside of the fence. When he proudly presented his hard work to his father, the father questioned why only the outside of the fence was painted. Steve replied: “Dad, no one sees the other side of the fence!”

To that, his dad responded: “Steve, but we will see it.” Many years later, when Steve briefed his engineering team on the deliverables of the Macintosh computer, he said to them: “I want the outside of the computer’s aesthetics and design to be outstanding. But I also want the inside of the computer to be more outstanding than the outside.” To that, his team responded: “Why do we need to spend so much time, effort, and money on the inside of the computer? No one really sees the inside!”

Steve replied: “But we will see it.”

The ongoing debate on the dilution of the Auditor General’s powers has reminded us of the need to paint both sides of our fence if we want to see a developed and prosperous Sri Lanka.

The development, prosperity, and progress we see in any society or institution are a result of structural changes, self-discipline, and systematic advances of working on an in-depth value system. That is why self-control is always better than state control.

Audits and checks and balances are unseen on the inside. What we see on the outside is a reflection of our society on the inside. Therefore, Sri Lankans not reaching our full potential is interconnected to the absence of many systems of accountability and transparency. Audits and checks and balances should come from within. What we see outside is merely a reflection of who we truly are on the inside. Sri Lankan society lags behind for this very reason, as we lack the many systems of accountability and transparency necessary for growth.

Systematic misgovernance

If you ask any Sri Lankan why their country is still developing, they will give you three reasons: corruption, waste, and misgovernance. What we see on the outside as low productivity, inefficiency, and delays are a result of a lack of accountability, transparency, audits, and checks and balances. This is not only valid for our public sector but also for our private sector.

In the context of the 20th Amendment, the proposed Clause 31 repeals article 153 (1) of the Constitution which mandated that the Auditor General be a qualified auditor subject to the approval of the Constitutional Council (CC), following which, s/he would be appointed by the President. The removal of this by the 20th Amendment opens the risk of appointing an Auditor General who wouldn’t possess the qualifications required for the position.

The risk of providing constitutional leeway in appointing an unqualified Auditor General is multidimensional. A greater degree of Sri Lanka’s corruption and crime is white-collar crime, and given the legal structure of Sri Lanka, even qualified auditors are finding it difficult to audit.

The VAT (value-added tax) scandal reported many years ago and the more recent Central Bank bond fiasco all indicate the enormous cost of ignoring simple processes, which when multiplied can cripple our entire economy. Unfortunately, the need for such processes only come into the limelight when things go wrong, while the positive results of having due process usually don’t make it to newspaper headlines.

Accountability is key

Even under the 19th Amendment, the Auditor General’s powers did not include the ability to audit state-owned enterprises (SOEs) incorporated through the Companies Act in which the government has a stake of less than 50%. Maintaining accountability in most of our gigantic SOEs that the Treasury has supported with taxpayer money has failed! Most SOEs have failed to produce even a basic annual report over the years for the benefit of the public, even though the revenue of some public enterprises is nearly half a trillion.

There are more than 500 SOEs of different scales which waste a colossal amount of taxpayer money, and there is no excuse that can be provided for not producing annual accounts when earning half a trillion rupees in revenue.

The space created by the 20th Amendment for SOEs to not get audited by the Auditor General will set a bad example for all businesses. The collective losses of only 16 strategic SOEs in 2018 amounted to Rs. 156.73 billion, which is equivalent to more than thrice (Rs. 47 billion in 2017) the expenditure of the Samurdhi Programme.

One may ask why corruption levels were still high with the Auditor General having the power to audit under the 19th Amendment, and when there were additional checks such as having an Opposition member heading the Committee on Public Enterprises (COPE) and opening COPE meetings to the media; it is true that neither the Auditor General nor opening COPE meetings to the media will solve all corruption problems within SOEs.

If the level of corruption and misgovernance was high even with the Auditor General’s powers under the 19th Amendment, imagine how the situation would be without such supervision. We sincerely hope that at the committee stage, matters pertaining to the transparency and accountability of SOEs will be taken seriously.

Improving systems and doing things better than we did in the past must be the way forward if we are serious about a “system change”. In order to strengthen governance, we should at least list strategic SOEs at the Colombo Stock Exchange (CSE) so that these institutions will have no choice but to adhere to the governance structure of the CSE. One other measure is to provide the Auditor General with more power to investigate SOEs incorporated through the Companies Act in which the government has less than 50% stake, as most SOEs have the practice of incorporating subsidiaries and sub-subsidiaries under the main SOE with different stakeholder arrangements.

In public policy, dismantling an existing accountability measure without an alternative could be highly problematic, given the level of corruption rooted in Sri Lankan society. Sri Lanka has dropped from 89th to 93rd in the Corruption Perception Index for 2019 by Transparency International.

If you observe any successful private company or society, there are systems and procedures that have been refined over the years with the advancement of technology to reach where they are today. Our attitude towards accountability measures has to change as a way of painting the fence on the inside even though no one sees it. Ultimately, what we see on the outside is what we build inside.


The opinions expressed are the author’s own views. They may not necessarily reflect the views of the Advocata Institute or anyone affiliated with the institute.