Politics a “no no” in SOEs reforms
Sri Lanka’s commitment to state owned enterprises (SOEs) reforms is crucial to the country’s future with no room for “complacency” focusing on transparency and a disciplined approach and no room for political thuggery under institutions run by experts.
These matters were brought to the fore at this week’s Asian Development Bank’s (ADB) Serendipity Knowledge Programme on ‘SOE Reform: Challenges and Opportunities for Sri Lanka’ where a panel of experts highlighted the case studies from other countries and the impact of these changes on the country’s future.
Treasury Secretary Mahinda Siriwardena opening the discussion highlighted that the path to SOE reforms does not allow for any “complacency” and no room for margin of error else it could lead to devastating consequences.
Mismanagement, corruption due to ownership and undue political influence have contributed to significant losses in the SOEs in the past burdening the citizenry.
Key factors that need to be addressed in overcoming the SOEs problems are cost reflective pricing; balance sheet restructuring; introduction of competition in key sectors; and divestment of non-strategic assets; and governance and legislation.
Keynote speaker at the event former President of Stattum and Director at the Swedish Ministry of Industry Dag Detter highlighted the challenges they faced in trying to establish reforms in Sweden and their experiences in coming close to political thuggery which he vehemently criticised as being the main deterrent in moving ahead with reforms.
He pointed out that the total value of public assets in Sri Lanka amounts to US$240 billion and managing them properly is crucial to obtaining their real value. Data needs to be made available in a bid to ensure these institutions are managed well.
Sri Lanka’s SOE Restructuring Unit Chairperson Suresh Shah noted that it was proposed to appoint directors to the Holding Company and the SOEs through a system established independently in this regard.
SOEs are not to rely on state banks for funding but to become profitable ventures so as to ensure they fund their own future operations.
Of the 130 SOEs about 30 can be depleted, some can be under government control; some to be engaged in a Public Private Partnership; about 80 to be out of government control. They are currently working on a “narrow time frame” it was noted.
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