Be Alert!

The mandate of the External Resources Department

Augus
t 12, 2014
Fast on the heels of the National ecretariat for N!"s issuing a circular
purporting to limit the acti#ities to their legitimate mandate, $hich has
%een discussed in this column earlier, the Director !eneral of the
Department of External Resources has placed a notice in the ne$spapers &
under the alarmist caption '(e Alert)* and su%titled 'Notice to all
!o#ernment o+cials, ci#il societ, organisations and general pu%lic*-
This ad#isor, on alertness comprises nine paragraphs- The .rst starts as
follo$s/ 'Due diligence on the utilisation of funds recei#ed from foreign
funding agencies, 0N!"s and an, other sources to all !o#ernment agencies,
local institutions, ci#il societ, organisations and general pu%lic-*
Functions and duties of External Resources Dept-
1hen considering the implications of this .rst paragraph of this '(e Alert*
notice, it is $orth$hile to fortif, oursel#es on the nature of the functions
and duties of the Department of External Resources- The Department is a
su%2ect and function assigned to the 3inistr, of Finance and 4lanning, of
$hich the 3inister is the 4resident- The ecretar, to the 3inistr, is the
5hief Accounting "+cer and responsi%le to 4arliament and the people for
the pu%lic funds #oted %, 4arliament and expended %, the 3inister-
The $e%site of the Department of External Resources 6ERD7 sa,s that the
ERD is responsi%le for mo%ilising and coordinating foreign assistance to ri
8an9a- The :ision of the ERD is 'to %e $ell;e<uipped $ith 9no$ledge and
expertise re<uired to mo%ilise and manage external .nances for
accelerated economic gro$th of 8an9 as the countr, ele#ates to higher
middle income status-* The 3ission/ '3o%ilise external .nancing at least
possi%le cost in support of ri 8an9a & the Emerging 1onder of Asia=
De#elopment 4olic, Frame$or9 of the !o#ernment of ri 8an9a* $hile
maintaining the long;term de%t sustaina%ilit, of the countr,-*
>nder a caption of '1hat $e do and our !oals,* a series of %ullet points are
pro#ided among them & conduct consultations $ith donors to identif,
de#elopment strategies and priorities, coordinate annual countr, aid
programming acti#ities $ith donors, prepare pro2ect pipelines for donor
funding, coordinate formulation of pro2ects proposed for donor funding %,
facilitating the conduct of feasi%ilit, studies) and coordinator of acti#ities
of donor missions from the fact;.nding stage to the appraisal stage,
negotiate foreign aid and ma9e arrangements for the signing of loan?grant
agreements and ma9e them e@ecti#e- All these tas9s are to %e done in
consultation $ith line ministries agencies, the National 4lanning
Department and to $hat is referred to %ut not further de.ned as an
'Ad#isor, 5ommittee*-
The $e%site of ERD also goes on to specif, the 'Acti#ities in#ol#ed*/
5oordinate ful.lment of an, conditions connected to $ith the negotiation
and signing loan agreements, conduct loan negotiations $ith donors, o%tain
go#ernment appro#al and authorit, for signing agreements, ful.l conditions
prior to e@ecti#eness of the loan agreements, conclude %an9ing
arrangement and arrange ad#ance procurement acti#ities, initiate action on
setting up of 43>s, o%taining donor concurrence for procurement and
su%mission of reim%ursement claims to donors-
"#erseen %, non;existent ministr,A
The ERD $e%site also states that the department o#ersees implementation
of donor;funded pro2ects %, & coordinating acti#ities connected to re#ie$
missions .elded %, donors, maintaining a data%ase on monitoring of donor;
funded pro2ects, participating in steering committees set up %, line
ministries to monitor implementation of donor;funded pro2ects, re#ie$ing
implementation of pro2ects 2ointl, $ith donors and participating in
monitoring meetings conducted %, the 3inistr, of 4olic, De#elopment and
0mplementation- This is a curiosit, as such a ministr, %, that name does
not exist as far as the information currentl, pro#ided %, the !o#ernment of
8an9a in a#aila%le pu%lic documents sho$sB o the ERD has to attend
meetings conducted %, a non;existing ministr,, according to its o$n
$e%siteB
The $e%site goes on to pro#ide for #arious methods of o#erseeing
implementation of donor funded pro2ects %,; managing foreign training
opportunities pro#ided %, donors under Technical 5ooperation agreements,
6this is an interesting po$er & as the standing 2o9e in the pu%lic ser#ice is
that an, training o@ered to the countr, is o@ered to an, on outside the
ERD, onl, and onl, if & there is no one $ithin the ERD, $ho is interested on
a priorit, %asisBB
0mplementation of donor funded pro2ects is further o#erseen %, the ERD %,
managing foreign experts and o#erseas #olunteers pro#ided %, donors,
administer the %udget on donor funds re lent to the pri#ate sector through
the %an9ing s,stem-
The ERD further manages the !o#ernments External de%t data%ase %,;
maintaining a data %ase on foreign loan? grant commitments,
dis%ursements and repa,ments for #arious users, pro#iding information on
ser#icing of foreign de%t and pu%lishing information on foreign aid and
foreign training placements pro#ided %, donors-
This description, summarised from the ERD $e%site is <uite exhausti#e and
complete- "ther than the o%#ious errors and mista9es pointed out, one
salient feature $hich this list %rings out is that the ERD is at the interface
%et$een donors, the !o#ernment of ri 8an9a and implementing
!o#ernment agencies- The onl, reference to a non;go#ernment institution
is $here the ERD empo$ers itself to 'Administer the %udget on donor funds
re;lent to the pri#ate sector through the %an9ing s,stem*-
This is the onl, exception to a total commitment of the ERD %, the $ording
of its o$n mandate on its o$n $e%site & to donor, "+cial De#elopment
Assistance 6"DA7 funds channelled to !o#ernment and !o#ernmental
implementing agencies- Therefore the inclusion of the general pu%lic in the
'(e Alert* su% title can %e 2usti.ed onl, on the %asis of a caution to the
pu%lic not to participate in an, scheme %, $hich "DA is %eing utilised
$ithout %eing channelled through o+cial channels- 4ri#ate remittances %,
indi#iduals to their families or friends do not %, an, stretch of imagination
come $ithin the remit of the ERD-
0n paragraph 2 of the (e Alert notice, the ERD sa,s that it 'ta9es its %est
e@orts to ensure optimum use of foreign aid?grants recei#ed from foreign
parties* & surel, this must %e restricted to "DA from foreign go#ernments or
0F0F or 0N!"s and again cannot catch pri#ate remittancesA
Duplicit,, confusions and complexities
0n paragraph C of the (e Alert notice, there is an interesting spin & the
necessit, of implementing all de#elopment programs aligning $ith national
de#elopment programs to ensure consistenc,, continuit, and transparenc,
$hile a#oiding duplicit,*- The dictionar, meaning of the $ord 'Duplicit,* is &
dishonest %eha#iour that is intended to ma9e people %elie#e that $hich is
not true*- The ERD seems to %e admitting that ma, %e historicall, or e#en
currentl,, & there is or has %een 'duplicit,* in the 'implementation of
national de#elopment programs*- This is some confessionB
As (ritain*s $ar time 4rime 3inister 1inston 5hurchill famousl, told the >
5ongress/ DEitler sa,s he $ill $ring (ritain li9e a chic9en %, its nec9- ome
chic9en, some nec9BF "r ma,%e the $ord intended to %e used is
'duplication*A This gi#es the sentence a $hole ne$ meaningB
4aragraph 4 & refers to pro2ects funded %, foreign agencies 6again not
indi#iduals7 'adopting their o$n procurement procedures, go#ernance
structures, accounta%ilit, mechanisms, etc-, creating confusions 6sic7 and
complexities-*
The ERD ends the paragraph %, sa,ing that the 'countr,*s $ell;practiced
.nancial procedures and annual %udgetar, process %eing follo$ed $ill a#oid
such 'confusions and complexities*- "ne can onl, su%mit that a cursor,
reading of the Auditor !eneral*s report on an a#erage de#elopment pro2ect
or departmental accounts $ill not support this line of thin9ingB
3icro .nancing
4aragraph G refers to 'micro .nancing* in three places- This seems a
$elcome recognition of the $or9 micro.nance pla,s in economic
de#elopment and po#ert, alle#iation- (ut unfortunatel,, it has %een
deli%erate polic, of the !o#ernment to refrain from legislating to close the
legal lacuna $hich applies to micro.nance programs run %, institutions
$hich are not %an9s, .nance companies and cooperati#es- This has gi#en
an opportunit, for criminal elements to operate #arious 4onHi or 4,ramid
schemes, $hich ro%s the gulli%le and unprotected pu%lic*s mone,-
1ith interest rates %eing 9ept lo$, small in#estors are see9ing sources of
higher interest return, and promoters of 4,ramid scheme are ha#ing a .eld
da, in 8an9a 2ust no$- All %ecause the la$ prohi%iting the ta9ing of deposits
%, institutions, $hich are prohi%ited from doing so explicitl,, is not
implemented strictl, and the $ord '.nance* is %eing permitted to %e used
contrar, to the pro#isions of the Finance (usiness Act %, #irtue of a paper
notice, $hich purports to permit this until the 3icro Finance 8a$ is enactedB
A reference is made to the nation*s strong tradition dating %ac9 decades in
micro.nance and small group sa#ings and lending & %ut this histor, is %eing
%etra,ed %, permitting a legal lacuna to exist and permitting unscrupulous
elements to exploit that lacuna to cheat in#estors of their mone, using
4onHi or 4,ramid schemes- The ERD claims that this is %eing done $ith
funds from foreign agencies, %ut as far as is 9no$n in the pu%lic domain,
none of the 4onHi schemes or 4,ramid schemes $hich ha#e %een dealt $ith
under the la$, had access to an, foreign donor funds- This is a %asic
untruthB
4aragraph I goes onto deal $ith this deposit ta9ing issue;and ad#ises
'!o#ernment agencies not to sought 6sic7 donor assistance for* such
acti#ities $hich local funds from the 5onsolidated Fund are a#aila%le, unless
the National 4lanning Department and the ERD has gi#en clearance-
(e,ond ERD mandate
4aragraph J pro#ides ad#ice $hich is clearl, %e,ond the mandate of the
ERD- The position ta9en in that paragraph, is that 'an, pri#ate sector
agenc,?N!" or indi#idual %eing a recipient of foreign aid*- This reference
must %e to "DA from foreign go#ernments, 0F0 or 0N!", surel, it cannot
appl, to indi#idual remittancesA
The rest of the paragraph recites all the la$s $hich the ERD purports to
claim $hich applies to foreign funds coming into the countr,- This is the la$
of the land as it exists- 1hat mandate has the ERD to recite or e#en 'Alert*
the general pu%lic a%out itA 5learl, the legal limits of the mandate of the
ERD are completel, %eing exceeded in this paragraphA
The last sentence reads/ DAccordingl, recipients of foreign aids 6sic7 should
disclose necessar, information) 0s the reference to E0: A0DBA 0t cannot %e
as the sentence goes on to causing the disclosure of 'details of funds
recei#ed, purpose, expenditure report, etc-*
"ne is reminded of the crac9 the ,rian people had $hen 4resident EafeH
Assad $as succeeded %, his son (ashir/ '1hat is the similarit, %et$een the
4residenc, of ,ria and E0: A0DA Ans$er & the, are %oth sexuall,
transmittedB*
4aragraph K 'ad#ises* the general pu%lic 'to refrain from participating in
such programs* $ithout prior consultation $ith 'grama niladharis, di#isional
secretaries, district secretaries and chef 6sic7 secretaries for assess 6sic7
such acti#ities are legitimate*-
4aragraph L restates the o%#ious on "DA, foreign loans and grants ha#e to
%e routed through the 5onsolidated Fund- (ut the $ee9end ne$spapers
headlined a stor, that a ca%inet minister, no less, had communicated $ith
the !o#ernment of audi Ara%ia and re<uested funds in #iolation of the
ERD*s pious '(e Alerts*B
o, at the end of the da,, this '(e Alert* notice of the ERD goes $ell %e,ond
its legal mandate, stic9ing the department*s nose into areas concerning
other !o#ernment agencies- The ERD has no authorit, $hatsoe#er to
interfere $ith pri#ate remittances, $hich are allo$ed %, la$ and expended,
if for example to .nance the construction of a d$elling, complies $ith all
the la$s and regulations relating to that exercise-
!i#ing rise to needless fear
This notice 2ust puts needless fear into the thousands of 8an9ans $or9ing
a%road $ho $ish to remit funds to their relati#es and friends to impro#e
their li#ing conditions in these di+cult times- This fear $ill a@ect the
countr,*s foreign exchange reser#es- 0t is strongl, recommended that the
ERD con.nes itself to its legal functions, instead of tr,ing to expand its
mandate %e,ond its legal remit and hold consultations $ith non;existing
ministries, as indicated on its o$n $e%siteB
Also $hen drafting and?or translating notices to the pu%lic, as this '(e Alert*
notice claims to %e, it $ould %e ad#isa%le to ha#e a competent person
prepare the draft, instead of ha#ing innumera%le 'unintended
conse<uences* %, do$nright incorrect use of $ords and a%use of the
languageB (ut then a senior (ritish 8a$ 8ord, on retiring after C0 ,ears of
ser#ice on the (ench, declared at his fare$ell function that all his
experience has con#inced him of one thing and one thing alone, the onl,
la$ that is fundamental, uni#ersal and applies all the time is the 8a$ of
>nintended 5onse<uencesB
0ll;ad#ised, mis;drafted notices such the one $e are considering $ill ha#e a
negati#e e@ect on ordinar, la$ a%iding citiHens, $or9ing a%road, to remit
funds from to their relati#es in 8an9a to li#e o@ or de#elop assets, etc-
Rumours are ali#e, alread,, on the alleged ris9s to Resident and Non
Resident Foreign 5urrenc, accounts- Although there ha#e %een o+cial
denials of an, such possi%ilit,, there is a real credi%ilit, issue here-
"ne is reminded of that famous episode from the (ritish T: comed, 'Mes,
4rime 3inister* $here the 5a%inet ecretar,, ir Eumphre, Apple%,,
cautions the 4rime 3inister, Rt- Eon- Nim Eac9er 34, $ho orders him to
issue an o+cial denial to <uash some rumour spreading among the pu%lic
on a go#ernment polic,, that the '(ritish 4u%lic, in their $isdom, through
long practical experience, ha#e learnt to accept an,thing as the a%solute
truth, onl, $hen it is repeatedl,, o+ciall, denied %, the go#ernmentB* The
43*s 4rincipal 4ri#ate ecretar,, (ernard 1oolle,, is sho$n chortling in the
%ac9groundB
4athetic le#el of incompetence
The inhala ':imalasili$ath$anna* original '(e Alert* reads <uite di@erentl,
to the English '(e Alert* notice $hich is %eing discussed- 1hat the Tamil
translation sa,s is not 9no$n- "ne can fairl, presume, gi#en the current
trac9 record, that it must %e going on another 'frolic of its o$n,* causing
further confusion and confounding the pu%lic, among others it is supposed
to 'Alert*B To $hat a pathetic le#el of incompetence has pu%lic
administration in this 'Emerging 1onder of Asia* fallenA
The 8a$,ers 5ollecti#e in ri 8an9a has also criti<ued this '(e Alert* notice,
calling it 'misleading*- The, descri%e it as 'another intimidator, tactic of the
!o#ernment manipulated outside the legal frame$or9 to create suspicion in
the minds of the general pu%lic on the pro;democratic position ta9en %, the
N!"s as $ell as their contri%ution to uplift socio economic status of the
masses*-
6The $riter is a la$,er, $ho has o#er C0 ,ears of experience as a 5E" in
%oth tate and pri#ate sectors- Ee retired from the o+ce of ecretar,,
3inistr, of Finance and currentl, is the 3anaging Director of the ri 8an9a
(usiness De#elopment 5entre-7
Posted by Thavam