Selling The Nation’s Public Assets

By Sonali Wijeratne –APRIL 22, 2022

Sonali Wijeratne

The Government which has virtually brought the Nation to its knees due to its dire mismanagement of the Economy and Monetary Policy is now proposing the divestiture of non-strategic public assets of Sri Lanka! If we as a Nation must indeed sell the family silver to keep our heads above water, the million dollar question is: how competent and honest is the present Government to handle such divestiture of National Assets? It is the method of such divestment, the negotiation of conditions attached to such divestment and whether there is a detailed plan for implementation that should bother the beleagured people of this country already burdened with political cronyism, nepotism and mismanagement at its worst.

No doubt, the Economic Advisors and Councils would have touted the usual text book arguments for adopting such privatization measures especially at this critical juncture of the foreign exchange crisis, deficits in the Current Account of the Balance of Payments, default on debt payments, and crippling Budget Deficit. These range from the estimation of economic transformation, technical and capital transfer, human resource capacity development of Research & Development. It is also a fact that the loss making State Owned Enterprises (SOEs) which are a reservoir for political appointments, inefficiency and corruption would receive a boost through such divestiture while also reducing the colossal expenditure of the Government on maintaining such SOEs. Policy for divestiture to bring in the much needed foreign exchange to service our debt service payments is problematic, since the present economic environment for investor confidence may not entirely be conducive!

The People of Sri Lanka have been hitherto kept in the dark as to the methods used by the Government for the proposed divestiture. It is vital that we the owners of these Public Assets are made aware as to the nature of competitive tender process, or whether there is a bidding process conducted on a special Board of the Colombo Stock Exchange amongst short listed parties, or Initial Public Offers (IPOs) that make members of the public part owners of the enterprises and generate a process of “peoplisation” of public assets.

When the Nation is at the brink of an abyss of economic failure, in its desperation to survive, are we going in for a quick fix of the Privatization of Corruption? We are sadly lacking in much of the prerequisites for successful privatization as sound regulatory environment, fully transparent procurement process, anti-corruption laws, Competition Law and framework and stakeholder consultation. If much of the proceeds of our massive unsustainable external debt is said to have been focused on non-tradable and miscellaneous expenditures, then it is important for us to know which ear marked accounts the proceeds of these divestment will target.

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