Sri Lanka told to rethink terminology for public enterprise to improve performance

• Top Swedish investment advisor Dag Detter says SL should disassociate the word ‘State’ with public enterprises
• ADB Country Director Takafum Kadono says public commercial assets must “look, feel, and smell” like the private sector

• By Shabiya Ali Ahlam

Sri Lanka should stop associating the word ‘State’ with public enterprises, as it provides the incentive for these institutions to underperform and remain in a comfort zone, stated Dag Detter, a prominent Swedish investment advisor and the Managing Partner and Founder of Detter & Co.
“As long as you call them State-owned enterprises (SOEs) they are going to be entitled to perform less well. The way to get them (SOEs) to perform is to get everybody around them to understand that these entities are commercial and that they can be owned by the private sector or the public sector,” he said.

Detter delivered his insights during his address at the Serendipity Knowledge Programme of the Asian Development Bank (ADB) in Colombo, yesterday. The programme centered on exploring the challenges and opportunities for Sri Lanka in its SOE reform agenda. As the former President of Stattum, the Swedish government holding company and Director at the Ministry of Industry responsible for government-owned enterprises, Detter led the restructuring of the Swedish government’s portfolio of public assets during 1998 – 2001.

“When we start treating them equally, that is when we will also start seeing that they will produce a yield. This would mean that the purpose of their existence is to increase value. This is the kind of language needed,” he said.

He went on to say that using the term ‘privatization’ is an “absolutely killer word” in every culture.The way to succeed in creating a viable and sustainable public commercial portfolio is to have a vision of what you want to do and not the negative effects of everything, Detter remarked. 
“We are too obsessed in this whole debate with the negative effects of this. There is not one politician that has been re-elected on the back of privatisations, SOEs, and these kinds of narratives. 

“We don’t talk about all the pain that comes with it. We talk about the benefits of it. That’s the vision you have to sell. You don’t sell the pain and marry the political message with whatever technicalities, that is the secret of success,” he he stated, drawing from his experience in restructuring Sweden’s portfolio.
Meanwhile, ADB Sri Lanka Resident Mission Country Director Takafum Kadono said public commercial assets must “look, feel, and smell” like the private sector, and if all is done well the entities can generate substantial resources for the government to address other priorities.
Further, he asserted the need to have professional oversight, not only at the holding power ownership level, but also with the board members, and management.