The culture in Sri Lanka around public sector service delivery was one of several issues discussed in a recent interview that the Public Enterprise Development Minister Kabir Hashim gave to the global research, publishing and consultancy firm Oxford Business Group (OBG).

During the interview, Hashim also outlined the mandate of Sri Lanka’s new Public Enterprise Development ministry, explaining that it would be restructuring, rather than running the country’s large portfolio of state-owned enterprises (SOEs). The ministry was set up following parliamentary elections in late 2015.
“The main objective is to reduce the burden SOEs place on the Treasury as fast as possible,” he said. “We have a large number that are major liabilities and cause a drain on the budget every year. We feel that most of that can be changed.”

In the past, SOEs have been hijacked for political gain, resulting in a lack of fiscal discipline, Hashim acknowledged.

“There has, in the past, been intervention from government, the ministry and sometimes the minister, leaving little room for technocrats to manage these enterprises,” he told OBG. “Even though the ministry has only recently been established, we are already trying to encourage these enterprises to make changes and do things differently.”

The full interview with Hashim will appear in ‘The Report: Sri Lanka 2016’, OBG’s first report on the economy. The report will include a detailed, sector-by-sector analysis for investors, alongside interviews with other leading figures, including Prime Minister Ranil Wickremesinghe, the Minister of Finance Ravi Karunanayake and the Governor of the Central Bank Arjuna Mahendran. 

Hashim acknowledged that key social challenges had, at times, stalled reform efforts, pointing, in particular, to the public’s dependence on the government for employment and the country’s pension scheme. 

“Only under the recent budget have we made the first moves towards a contributory pension scheme for both public and private sectors,” he said. “With the pension now available in both [sectors], we feel people will start naturally gravitating towards the private sector. Since it is unsustainable for the public sector to keep absorbing people, this is an essential step forward.”

On the subject of employment, the minister said he was optimistic that public-private partnerships (PPPs), increased foreign direct investment (FDI) and the emergence of more high-value industries linked to technology in the economy would lead to job growth. “The one million jobs that the Prime Minister talks about will come from both sides of the equation,” he told OBG.