Call to close more loss-making Sri Lanka state enterprises

ECONOMYNEXT – The Sri Lankan government decision to close the loss-making, state-owned handloom enterprise Salu Sala has been welcomed by Advocata Institute, a private sector think-tank, which also urged that other loss-making non-strategic state firms be shut down.

“Advocata Institute commends President Maithripala Sirisena’s directive to shut down Salu Sala. While we commend this decision, we are also anticipating the official gazette enacting this statement,” a statement said.

It said Advocata has been unable to track the financials of Lanka SaluSala since its 30 million rupee loss in 2009/10 as there has been no annual reports or performance reports published and available to the public.

“Advocata encourages the government to look at other ‘white elephant’ State Owned Enterprises (SOEs), and divest and exit industries that serves no strategic purpose. Out of 527 SOEs identified by Advocata’s 2018 State of State Enterprises report, only 54 are classified as being ‘strategic’ by the government.

Many of  Sri Lanka’s SOEs have no commercial purpose, are riddled with corruption and mismanagement and, in the core justification of existence, not attractive to private investors looking for profit making ventures, the statement said.

“Advocata urges the government to exit enterprises of  this nature and release the valuable resources they occupy into more productive sectors of the economy, while awarding fair compensation to public sector employees of these enterprises.”

Non Strategic SOEs like Sri Lankan Airlines, Lanka Sathosa and Agriculture and Agrarian Insurance Corporation are in need of immediate reform., it said.

It also urged the government to conduct a survey of all state owned enterprises in order to establish a comprehensive system of financial monitoring.

(COLOMBO, 18 June 18, 2019)