Public at forefront in preventing SOE reforms: CB Governor

• Stresses that change of perception required for durable economic and SOE reforms 
• Says loss-making SOEs not national assets but liabilities to the country’s taxpayers
• Budget 2023 proposed to privatise multiple SoEs including some better-run entities 

Although the public now appears to have understood the need for tough economic reforms for a certain degree, particularly with regard to State-owned enterprises (SOEs), it was they who opposed such moves every time accusing successive governments of selling family silver, opined Central Bank Governor Dr. Nandalal Weerasinghe.  

Speaking about the SoEs, which have clearly become a bane for taxpayers due to their corruption, inefficiency and accumulated losses that have reached a level where the Treasury no longer can stand such losses, Dr. Weerasinghe said it was the public who took to the streets every time a government tried to either sell or restructure these entities.     
The Budget 2023, which has now been passed by parliament, proposed to privatise multiple SoEs including some of the better-run enterprises such as Colombo Hilton, Water’s Edge, Sri Lanka Insurance and Sri Lanka Telecom PLC.

While the predominant argument behind divesting these entities has been to raise a quick billions of dollars to ramp up foreign exchange reserves and thereby relieve some the acute economic hardships on businesses and people, the current government led by the President Ranil Wickremesinghe is also of the view that the government should not engage in business.  
But, the announcement created huge uproar with the government of being accused of trying to sell national assets as some of these entities add positively to the national treasury. 

“The government has for several years been trying to sell even Hilton and some of the hotels and other businesses they own and still failed,” Dr. Weerasinghe said speaking at a recent post budget forum.  

“If you look at the proposals to restructure SoEs and even to sell a land to a foreigner, what do you see? What is the public asking? They say the government is selling national assets. In fact, what the government is trying to sell are the national liabilities,” he quipped referring to the massive losses accumulated by some of the key SoEs.
While there is a strong public perception in Sri Lanka that State assets must be held by the government regardless of them making profits or losses, the political left, mainly led by Janatha Vimukthi Peramuna, rallies people against any form of SoE restructuring.  

“If you look at some of the largest SoEs, all are liabilities to the taxpayer, not assets. But still the broader perception is that the taxpayer should keep that liability without getting rid of the liability. Who is asking this? It’s all including the people in the businesses and the general public,” Dr. Weerasinghe said.
“If you can’t change that perception, then you can’t have the system change that everybody is asking for. The crisis has created better understanding in people about the need for these reforms. We don’t see much opposition now but still you sometimes see an outcry whenever the government tries to restructure SoEs. When the government tries to attract investments into these areas, which creates opportunities to the private sector to do business, it is looked upon as selling government assets. In fact the public don’t understand most of these are tax payers’ liabilities”, he stressed.