Time for hard decisions

According to a media report quoting a website reporting on Sri Lanka's State finances, 52 State enterprises had suffered losses totaling a staggering Rs.860 billion in the first quarter alone in 2022 compared to the Rs.86 billion total losses for the entire year in 2021. The Ceylon Petroleum Corporation (CPC) is the biggest culprit. The CPC had incurred losses to the tune of 628 billion in the first quarter of this year representing 73 percent of the total loss of the 52 loss-making State bodies. The National Carrier comes in a close second with its share of the loss in the first quarter of this year alone standing at Rs. 248 billion while the loss suffered in the whole of 2021 amounted to Rs. 171 billion. The inflated losses this year have been attributed to the plunge taken by the rupee against the dollar.

However, to anyone familiar with the functioning of these institutions, their loss making history goes down the decades since the time State institutions became politicized, leading to massive corruption, mismanagement and financial profligacy. Needless to say, a sizable portion of the losses could be directly blamed on the massive over-staffing of State bodies with supporters of ruling party politicians, which represented unproductive labour. All Governments must share the blame for this state of affairs. The situation became worse under the Yahaplanaya. While, prior to that, only supporters of ruling party politicians were given jobs, here we had a situation where both main political parties ruled in harness, with State enterprises being liberally stuffed with the golayas of both sides. An incident at the CPC during the 52 day illegal Government bore this out in stark fashion when a security officer of the ousted Petroleum Minister Arjuna Ranatunga opened fire to protect the minister from a rampaging mob. The next moment swarms of workers like bees from a disturbed hive emerged out of the woodwork to join in the melee. This just went on to demonstrate how scarce financial resources of the State were being squandered to fill Government Departments and Corporations with political hands, with all Governments taking turns to do the honours. The result is now all there for all to savour. The Government and the public are now stuck with white elephants which are bleeding the economy.

This status quo needs to be changed and changed drastically. The country is no longer in a position to bear such gargantuan losses incurred by its State Organisations through political expediency and crass mismanagement. All loss making State enterprises should be divested to make them viable institutions. One of President Ranil Wickremesinghe's initial decisions when he was appointed Prime Minister was to privatize the National Carrier. Now that he is the Head of State, no less, this decision should be taken to its logical conclusion. The record of the National Carrier needs no repetition. Suffice to say that it was run to the ground and turned into a financial black-hole with the appointment of family members of the then ruling clan with no inkling on the subject of aviation and clueless as to financial management, at the helm of affairs.

A similar course should be followed with all loss making State ventures. Trade Unions should not be allowed to call the shots. The country is placed in its most decisive phase of its post-Independence history today and our survival as a nation will depend on the type of decisions made and how our leaders handle the economic crisis. The public cannot be made to go on subsidizing loss making State ventures indefinitely. It is time for hard decisions to be made keeping in mind the nation's future. If the only option available is privatization, so be it. The country's economic future should take precedence over Trade Unions’ demands and their sentimental attachment to State sector organisations. Even Socialist countries such as China and Russia have not allowed their political ideologies to stand in the way of promoting private enterprise, knowing this is the only way forward. In fact it was the roadblocks placed by the SLFP partners in the Yahapalanaya that prevented the Neo Liberal and market-oriented UNP from taking forward its sound programmes for building the economy. Had the bilateral trade agreements with countries such as the US, Japan and Singapore allowed to be inked, we would certainly not be in the economic mess we are in today. At the time, the SLFP feared it would lose its vote base by being party to policies that were against what the blues stood for. However, this is not a time to consider ideologies. All available options should be tried out to get the country out of the present mire. The Opposition too has a huge role to play in this connection. Ideally it should accept the invitation of President Wickremesinghe to join an All Party arrangement, for the sake of the country. Political brinkmanship is the last thing the country needs today.