Last week’s article linked the need for structural change in T&T’s economy to digitalisation. It also outlined the centrality of the Government’s institutional framework in providing the permissions and licences, which comprise the operating system that makes a society function. It also noted that the operational efficiency of a society depends on how well this institutional framework functions. This approach argues that all of “government” must operate more efficiently to facilitate the emergence of this structural change.
This argument has a sound methodological basis. The 2018 IDB Study “BUILDING CAPACITY IN THE CARIBBEAN: The State of the Civil Service in Trinidad and Tobago” approaches this point from an institutional perspective. It starts from the presumption that the efficacy of public policy and the services provided by the State is closely linked to the quality of its Civil Service. To paraphrase, no policy will be effective if the Civil Service delivery system is not equal to the task.
The study argues that the way that the Civil Service is managed, its human resource planning, management, selection, professional development and incentivisation are “critical conditioning factors when it comes to attracting, retaining and motivating suitable staff” to effect these tasks or policies. The study assessed 38 critical points and scored each area out of 100 to arrive at an aggregate score for the T&T Civil Service as a whole. A score between 0-39 was considered as low, 40-59 as medium and 60 and above was considered high. The report concluded that the average grade for T&T was 42, just three points above the low grade indicating that improvement is required.
But the score of 42 is an average of the highs and lows. Of the seven quality indices listed, five indices were below 40 with two scoring 53 and 80 points respectively. Of the eight HR subsystems evaluated, six scored 40 and below, two of which scored 20. Only two areas scored above 40 one at 47 and the other at 53. The average of 42 is therefore very flattering and absolutely misleading as only four of the 15 grades were acceptable.
The report noted that the least “mature” (meaning weakest) indices were Efficiency and Structural consistency. The Efficiency Index evaluates how staff are deployed relative to capital expenditure. The Structural Consistency index refers to how well the Civil Service was integrated. Both areas scored 28 out of 100. The HR subsystems of Work Organisation and Development Management are the least mature (weakest) areas, scoring 20 out of 100.
The report only focuses on the people management aspect. To be effective, organisations must be managed from three perspectives–people, processes, and systems as in the Balanced Scorecard approach. For an organisation to be efficient, the three areas must be in alignment. The IDB study makes important recommendations that could improve “people management” in the Civil Service. But even if the recommendations are adopted, they will have little impact if the systems and processes are not also reviewed and harmonised.
Digitalisation is critical to innovating and improving the delivery and quality of the “government’s operating system,” to facilitate structural transformation. But digitalisation will only work if the systems which underpin the deployment of the operating framework are improved. Building on a weak or unstable base could lead to unpredictably bad outcomes.
A classic case is the Ministry of Legal Affairs (MLA) which introduced online filings during the COVID pandemic lockdowns. The system was, and still is, gridlocked–requiring multiple filing amnesties. Conflicting directions are given by different staff to the public resulting in multiple in-person visits to clarify the procedure. The recent impositions only exacerbate an already overheated operation. Filing a simple annual return should not require more than the costly appointment of a professional firm to effect the filing.
Additionally, all directors (small family-run businesses also) are required to have separate email accounts, as well as separate online filing accounts–and the process for both applying and receiving approval for the latter is as gridlocked and inefficient as the system itself. What is worse is the penalties for late filing are onerous. And what of the little people who have no access to email and need birth certificates et al?
The FIU know-your-customer (KYC) guidelines and definition of politically exposed people are also areas of overreach. The Central Bank Governor’s recent comments suggest that he understands this. But the CBTT inspectorate continues to direct financial services firms (insurance companies, brokers, finance companies etc) to require directors of companies renewing insurance policies or buying company vehicles to give personal details. This creates an incredible paper mound that goes into unactioned files at FIU/CBTT serving no useful purpose as the information is already captured by the MLA registry system.
Voluminous estimates of suspicious activities are reported in the media. But where are the successful (or any) prosecutions for money laundering? The deployment of the KYC guidelines reflects the poor work organisation and structurally inconsistent approaches identified in the IDB study. They impose pervasive but ineffective paper-based requirements that only cause anger and angst among the citizenry. In major financial centres, financial institutions with similar KYC guidelines don’t get anywhere close to the local demands.
Digitalisation requires a lean and coordinated systems approach.
Mariano Browne is the Chief Executive Officer of the Arthur Lok Jack Global School of Business.