MR asks Ranil to suspend privatization projects – The Island

SLPP leader Mahinda Rajapaksa, MP, has asked President Ranil Wickremesinghe to suspend ongoing privatization projects until the presidential elections scheduled for September-October this year are completed.

Former President Rajapaksa said in a media statement: “The current government is a caretaker government designed to govern the country for the remainder of the term of former President Gotabaya Rajapaksa.” Even the privatization lobby should be aware that the hasty divestment of state assets will not bring the best result for the country at a time like this. Furthermore, the next presidential election is just a few months away.

Therefore, to mitigate widespread discontent over the government’s divestment efforts, I would like to suggest that any moves to sell state-owned assets or companies be postponed until a new government is formed after the next presidential election. The new government will then be able to deal with state-owned properties and companies in accordance with the mandate it received in the election.”

Full text of the statement:

“The government’s plans to sell certain state assets and state-owned companies have caused discontent among trade unions, political parties and the general public. The current divestment drive is ostensibly aimed at minimizing government spending. Expenditure on loss-making state-owned enterprises and the fulfillment of certain IMF conditions in this regard. I ruled the country for more than nine years, from November 2005 to January 2015, without ever selling a single state-owned company. In fact, my government has reacquired some state-owned companies such as Insurance Corporation and Lanka Hospitals that were sold by previous governments and these companies continue to generate profits for the state to this day.

My administration took a pragmatic approach to state-owned assets and companies. If a state-owned company was making profits and serving the public well, we saw no reason to privatize it. Sometimes a government may make a strategic decision to control the prices of certain goods or services produced by state-owned enterprises for the general benefit of the economy or to support low-income earners. A good example of this is the energy sector. There is no government in the world that does not subsidize certain dedicated economic activities.

Although some state-owned enterprises incurred losses during my term as president due to a government decision to regulate prices, our economic management led to an uninterrupted nine-year economic boom. We had no difficulty paying off our debts or covering the cost of the subsidies we maintained, and when I was president no one even talked about privatization. Since the divestment of certain sectors can have far-reaching consequences for the country, especially when foreign parties are involved, this issue must be approached with caution.

As decided at the SLPP May rally, any restructuring of state-owned enterprises should be carried out with the greatest possible transparency, according to a national plan, in accordance with national security and in consultation with workers.

However, I would like to emphasize that the trade union sector, for its part, should take a more nuanced approach to private sector participation in SOEs. According to the dictionary definition of privatization, any involvement of the private sector in the ownership structure or control of a state-owned asset or company can be referred to as privatization. However, unions should not oppose any attempt to obtain foreign or private investment in a state-owned company. A pragmatic and non-dogmatic approach is required in such matters.

If there are unused state-owned real estate or underperforming state-owned enterprises, it makes sense to attract private sector participation to turn around these enterprises. If a profitable state-owned company needs further investment to add a new feature that cannot be funded by the government, it makes sense to award a share of that company to a private investor in exchange for the investment. If an investor is willing to build a new company from scratch, it makes sense to grant the investor shares in that company, creating a new state asset.

Some political parties take an ideology-driven, dogmatic approach to privatization and seek to privatize everything that can be privatized. Many unions also take a similarly dogmatic stance and tend to reject any involvement of the private sector in state-owned companies. Both extremes are harmful to the country. Trade unions should consider proposals to obtain private or foreign participation in a state-owned company on a case-by-case basis and consider the overall benefit to the country of such cooperation.

The only real way to protect national assets and strategically important state-owned enterprises is a government that takes a pragmatic and non-dogmatic approach to such matters. Therefore, it is important to note that when I ruled the country for more than nine years, the economy was flourishing and there was not even a discussion on the issue of privatization.”