Sri Lanka aims to raise up to US $ 3bn from SoE sell-downs to prop up reserves

• Move could help people loosen from grip of massive inefficiencies in state sector
• Govt. aims to raise US $ 2-3bn from SOE sales to prop up external reserves
• Prez. says it is only short-term way to get a few billion dollars

Sri Lanka is looking for a quick boost to its fledgling foreign currency reserves by selling some of the state-owned enterprises (SoEs) fully or partly, as the government had embarked on a structural reform agenda to relieve the country’s budget. 

The move could help the people loosen from the grip of the massive inefficiencies engulfed the state sector for generations. 

President Ranil Wickremesinghe, in his capacity as the Finance Minister, said the government is aiming to raise between US $ 2.0 and US $ 3.0 billion from SoE sales to prop up the external reserves, which is barely sufficient even to pay for its monthly imports at present. 

“This is the only short-term way we can get a few billions (of dollars) for our reserves, Wickremesinghe said while announcing the policy package to resuscitate the 
sagging economy.

Since taking over, Wickremesinghe has embarked on some bold yet much-needed reforms from raising taxes to introducing new taxes to removing tax exemptions to rationalising state expenditure to reforming to state sector institutional network to most recently the overhauling of the election system, which was accused of fostering corruption and waste at every level of the government.  

Many businesses, including the exporters, balked at raising the corporate tax rate to 30 percent from the concessional rates they enjoyed for years while certain sections of the opposition accused him of operating at the behest of the International Monetary Fund (IMF). 

However, there is a consensus view building up on the reform agenda the president has embarked on from both sides of the aisle, as Sri Lanka doesn’t seem to have any other options than seeking the IMF support to emerge out of the economic crisis, partly caused by the exogenous factors and partly came from the self-inflicted policy blunders.  Except for a negligible few espousing socialist ideology, there is a broader agreement building up among the people in Sri Lanka, devoid of their political affiliations, to bust up the wasteful SoEs, which are also responsible for the current economic predicament facing the country. 

They call for a sharply small government, which only engages in defence, health and education, with the rest being transferred to the private sector.