{"id":111042,"date":"2021-01-26T18:10:58","date_gmt":"2021-01-27T01:10:58","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=111042"},"modified":"2021-01-26T18:10:58","modified_gmt":"2021-01-27T01:10:58","slug":"why-sri-lanka-needs-privatization-of-public-enterprises","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2021\/01\/26\/why-sri-lanka-needs-privatization-of-public-enterprises\/","title":{"rendered":"WHY SRI LANKA NEEDS PRIVATIZATION OF PUBLIC ENTERPRISES?"},"content":{"rendered":"

BY EDWARD THEOPHILUS<\/strong><\/em><\/span><\/h2>\n\n\n

The\nprivatization of public enterprises had been a significant policy initiative in\na liberal economic system, and if it considers the era after the first world\nwar, it could be seen that many countries in the world have espoused the\nprivatization of public enterprises for various reasons and purposes, and many\ngovernments used various techniques for privatizing the public-owned\nenterprises. Investment in public enterprises began when the private sector has\nno sufficient capital to invest in such business or did not interest in\ninvesting in such business and services.<\/p>\n\n\n\n

People\nin Sri Lanka either misunderstand the policy of privatization or misinterpreted\nthe policy by left politics. The privatization of public enterprises means\nchanging the ownership of enterprises that need because of various reasons, and\nalthough it might have chances to destroy the organizations if the private\nsector weak to adopt efficient and effective management, it does not mean they\nwill destroy. <\/p>\n\n\n\n

In\ntraditional society, no restrictions were imposed by the government for\neconomic activities except that activities aimed to promote immoral and anti-social\nanimations, against the national security and counter the national interest\npurposes. The traditional society was more liberal, and entrepreneurs had\ngreater freedom to start a business and maintain business if consumers demanded\nproducts and services. In a free society in history, doing business was easier\nand the price mechanism helped to determine demand, supply, and equilibrium.\nThese ideas were incorrectly interpreted by Marxist politicians to attract the\npower of people to them. The collapse of communism in the early 1990s was the\nbest example for expressing implausible views that would not last forever and\never.<\/p>\n\n\n\n

Public\nenterprises became a grave burden to governments during the cold war, and after\nthe cold war, developed countries attempted to get away from the burden of\npublic enterprises by privatizing them. Many governments had various aims of\nchanging the ownership and converting public enterprises to better management\nthan wasting government funds to the management of such organizations.\nDeveloped countries used privatization of public enterprises to gain successful\nsolutions to problems such as retiring public debt, fiscal issues, the balance\nof payment adjustments, and many others. In the late 1980s, public enterprise\nmanagement in Australia crippled the economy with many problems, and the\ngovernment took leadership to get out of problems, despite the protests of\ntrade unions and some groups of people. The strategy used in Australia was\ncomparatively different from the way used in Sri Lanka, and it was successful\nand popular among voters. The government has been monitoring the concerning\nissues in privatized public enterprises and passed regulations to counter\npossible disadvantaged developments.  <\/p>\n\n\n\n

Sri\nLanka\u2019s parliament passed legislation to monitor privatized enterprises and\ntake back them, however, politics and corruption involved in the monitoring\nprocess. Politicians\u2019 as well as politically supported bureaucrats involved in\ncorrupt activities, and the concept of privatizing public enterprises became\ncorrupt activities and misunderstanding of people.   <\/p>\n\n\n\n

The\nnature of Sri Lanka\u2019s privatization has been in misunderstood and untypical style,\nand policymakers introduced the experience of foreign countries as they were\nwithout adapting the foreign experience appropriately. One example is foreign\ngovernments did micro-reforms in public enterprises, converted them to public\ncompanies, and listed such organizations in the stock market with a reasonable\nprice for a share and a percentage of shares allowed to institutional investors\nand individual investors. For example, Commonwealth Bank and Telecom in\nAustralia are privatized in that way. The story in Sri Lanka reflected that the\ngovernment did not allow Sri Lankans to invest in such organizations and\nallowed foreign investors to play with public enterprises. The incident\nrelating to the <\/p>\n\n\n\n

Higurana\nsugar factory was the best example to point out how corruption and bribery\ninvolved in the privatization of public enterprises. They were corrupt deals in\nSri Lanka that have been rejected by people. Overseas, government enterprises\ntook over or merged by experienced private investors that were called merging\npublic enterprises for the development of synergy.<\/p>\n\n\n\n

When\nallowing single buyers, there may be many malpractices, as Sri Lanka\nexperienced in the 1980s and 1990s and the government introduced a new law to\ntake back privatized enterprises. People have seen these experiences and they\nobject to privatization, however, if private firms attract the supports of\npeople, the public doesn\u2019t want to oppose the privatization process.  <\/p>\n\n\n\n

The\nprivatization policy in Australia successfully worked to get out of grave\nproblems and to achieve sustainable growth with the improvement of\nmacroeconomic variables. Sri Lanka has many economic and social problems that\nshould be approached by modernised strategies without giving a heavy burden to\nthe government. In Australia, privatized public enterprises contributed a\nmassive sum of tax revenue to the government, and such tax revenue is used to\nprovide benefits to disabled people, single parents, pensioners, and many\nothers. However, privatization in Sri Lanka has not benefited the public, and\nit created a bad problem for people and to question and opposed by people. This\nsituation created      <\/p>\n\n\n\n

The\npurposes of privatizing public enterprises could be well identified as\nfollowing points.<\/p>\n\n\n\n

  • Sharing the burden of\neconomic activities with people and converting the role of government to\nregulating the operational activities than management of firms.<\/li>
  • Providing opportunities\nto those who wish to invest capital in a business and allow the knowledge,\nskills, and experience of people to invest them in the management of public\nenterprises.<\/li>
  • Saving government\nspending for enterprises management using such an <\/li>
  • An enormous sum of money\nfor infrastructure development and education and training.<\/li>
  • Generating efficiency\n(like electricity, when needs it can gain switch on and when no need the\nservice can switch off) and flexibility (when a strong wind comes trees bend\nand the wind goes away trees go back to the previous position) in public\nenterprises provide good services to the country.<\/li><\/ul>\n\n\n\n

    Privatization\nof public enterprises has been involved with international politics, many\ncommunity groups such as religious clergy and people who are interested in\ngaining popularity, and international issues that are not related to Sri Lanka\n(Indo \u2013 China issues) have associated with and the complexity in the process\nseem to outweigh the benefits possible to gained by Sri Lanka. It has become an\ninternational issue, despite this situation Sri Lanka can gain enormous\nbenefits by changing current fiscal spending for the benefits of lower-income\nearners and creating a strong financial base for Sri Lanka.<\/p>\n\n\n\n

    It\nis regret to note that the government is attempting to drink medicines without\nfeelings to thought and should educate the public on the matter of\nprivatization and its advantages and disadvantages.   <\/p>\n","protected":false},"excerpt":{"rendered":"

    BY EDWARD THEOPHILUS The privatization of public enterprises had been a significant policy initiative in a liberal economic system, and if it considers the era after the first world war, it could be seen that many countries in the world have espoused the privatization of public enterprises for various reasons and purposes, and many governments […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[124],"tags":[],"class_list":["post-111042","post","type-post","status-publish","format-standard","hentry","category-edward-theophilus"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/111042","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=111042"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/111042\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=111042"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=111042"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=111042"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}