COLOMBO (EconomyNext) – Privatization has been made into a banned word under Sri Lanka’s current administration, Finance Minister Ravi Karunanayake said.
"Under the administration of President Maithripala Sirisena, Prime Minister Ranil Wickremasinghe, we have made privatization into a banned word," Karunanayake told a meeting of depositors of the failed Pramuka Bank on May 18, who are to repaid ahead of schedule.
"Instead of privatization, state agencies will be managed better than by the private sector under state control in the future."
He said at the moment a part of shares of private banks as well as state banks were with the state.
"There is a false idea being spread that these will be privatized again," Karunanayake said. "We have no desire to do things like that. We want to protect the people through better management."
The finance minister’s comments came as SriLankan Airlines, has ratcheted up over 100 billion rupees in losses after a privatization was reversed and even ministers of the former administration are singing the praises of telecom privatization. (Sri Lanka opposition praises privatization).
State enterprises also opens new doors for the elected ruling classes to engage in corruption and make losses burdening the poor.
Many state enterprises are a burden on the state or are a undermining the tax collections of the state.
Lanka Sathosa, a tax payer funded chain of state shops does not pay value added tax, undermining the entire value added tax regime of the country, which was recently expanded to include the wholesale trade.
State enterprises also provide ready-made avenues for corruption for the elected ruling class. Already several corruption probes have been launched on several state enterprises.