By Nishel Fernando
The present regime’s absence of effective communication skills to engage all relevant stakeholders was pointed out as the main impediment for state-owned enterprise (SOE) reforms in Sri Lanka, by an opposition lawmaker, at a recent forum, although a government minister rejected the claim and stressed that the support extended by the Opposition is key to successful SOE reforms.
“To build a national consensus on SOEs, the government must possess skills of communication. In the past, the leaders had taken responsibility in explaining to the public and stakeholders and they had carried the country with them,” current MP and former minister Dr. Sarath Amunugama said.
Dr. Amunugama was sharing his thoughts and past experiences on SOE reforms during a session at the Sri Lanka Economic Summit, organised by the Ceylon Chamber of Commerce, last week.
He noted that the SLFP government in late 1990s and early 2000s was able to carry out SOE reforms successfully as it had the confidence of stakeholders and the public, engaging them in the reform process.
“The people who are involved in SOEs must have confidence in the party that is negotiating with them. We found that as the SLFP, we had a head-start because there was a feeling that the SLFP is not going to sell us down the river.
The stance, intentions of the government must be conveyed to the various parties, which are involved in change in management or divestment of SOEs,” he noted.
The Finance Ministry’s Public-Private Partnership Unit Chairman Thilan Wijesinghe, who was involved in SOE reforms as BOI Chairman in that period, also admitted that communication and multiple level stakeholder negotiations were crucial factors
for SOE reforms.
“I believe that is one of the reasons why there weren’t strikes. We conducted multiple level stakeholder negotiations from the trade union levels to ministerial levels. Analyses were done to justify the PPP or privatisation. When the transactions were executed, it was done at a competitive level,” he said.
Wijesinghe highlighted that he was able to lead 20 successful PPPs and privatisations in that period without resulting in any strikes.
However, Finance State Minister Eran Wickramaratne argued that the support extended by the Opposition was a crucial factor for the success in the SOE reforms and charged that the present Opposition has been jeopardising the SOE reform efforts of the current government.
He stressed that the Opposition has a vital role to play in building consensus for SOE reforms.
JB Securities Limited CEO Murtaza Jafferjee estimated that SOEs carry 5-6 percent of additional liabilities of Sri Lanka’s overall debt, which are off the country’s balance sheets.
Wijesinghe opined that the Finance Ministry must be empowered to address the current issues in SOEs to hold them more accountable.
“The Finance Ministry needs to appoint an advisory board for each loss-making SOE board and the advisory boards must be controlled by the Finance Ministry. Key board decisions involving fiscal matters must be cleared by the advisory boards. They must be manned by the Secretary to the Finance Ministry or a Deputy Secretary to the Treasury,” he said.
He also proposed that Sri Lanka must consider management contracts for SOEs, if divestment is not an option.
“It is not about whether privatisation is right or wrong. It’s about having right people executing those transactions following right processes, which are transparent and accountable without the interference of politicians.
I am very much confident that SOEs can be reformed and we can reach a higher plane of GDP growth, which sadly has been at lower plane for the last seven years,” he said.