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Serving Sri Lanka

This web log is a news and views blog. The primary aim is to provide an avenue for the expression and collection of ideas on sustainable, fair, and just, grassroot level development. Some of the topics that the blog will specifically address are: poverty reduction, rural development, educational issues, social empowerment, post-Tsunami relief and reconstruction, livelihood development, environmental conservation and bio-diversity. 

Sunday, November 20, 2005

Economic Reform, Restructuring and Privatization -A Pro-Poor Growth Strategy

Daily Mirror: 16/11/2005"

“Any responsible Government, which has a Vision for the Nation-which I often describe as a Vision of - Political Stability, Economic Strength and Social Responsiveness - will adopt, Reform, Restructuring & Selective Privatization or let me call it Selective Divestment of State Owned Enterprises, (SOE) as a strategy to restructure and reposition the Nation’s Balance Sheet. A Government or Political Candidate who publicly pledges to adopt a Policy of “No Privatisation” is participating in rhetoric rather than engaging the minds of a voter community in what is reality.

This can either be the result of inability to understand the formidable challenge before us as a Nation, the implications thereof, or absence of courage to grapple with the challenge. It could of course, also be a strategically placed pledge, to win the votes of a less than aware voter community. That would be sad indeed and that we must resist as Stakeholders of the Nation-whether in the Professions, in Business or in Civil society. I say so since that pledge, will hold out hope – temporary hope – to the workers of a loss making, under-performing, subsidized SOE, and will give them a false sense of security. Living up to the pledge after elections will result in the need to perpetuate mediocrity in non-performing and underperforming SOE’s, and the need to finance subsidies, rather than the socially responsive stance of “building strength and sustainability” within the SOE and “medium to long term job security” for the worker. It would be a subsidy for a minority at the expense of public investment in urban and rural infrastructure - basic needs - for the larger majority.

In an overall sense the Nation will be held to ransom. Growth with Equity will not be achieved. The statistic of 10%, 8%, or 6% which I regard only as a target - while some indulge in the luxury of arguing about, ad nauseam- will be of academic value. That will be like trying to sprint while someone else is pinning you to the ground.

But, as one who has had hands–on experience, in advising and consulting to many indigenous, small, medium and large enterprises, over a 15 year period, on Privatization of entities such as Puttalam Cement, Veytex, MILCO, Lanka Canneries, Leather Products Corporation, Tea Small Holder Factories, Steel Corporation, Sevanagala Sugar Industries, Hambantota Salt, Puttalam Salt etc, - just to name a few, I have a clear understanding of the merits and demerits of the rationale for, timing, formula, sequence , and medium ( whether through an IPO or a Strategic sale or other) adopted by several regimes.

I have, also, as in the case of a Multi-Lateral Bank funded recent project in the agricultural sector, where the GOSL was the recipient of the advice, evaluated the, risks and safeguards- as I called it - from the perspective of all stakeholders- Govt and Private in particular. Co-incidentally it was during the latter assignment, that I took a stand, against the written recommendations of the Donor, to retain a local institution, rather than “a foreign institution”, to provide expertise for executing a certain project. My recommendation was accepted after much debate and exchange of correspondence over several months, and is now contracted for. Here, I fought for what was right based on available local expertise.

My fight was not based on rhetoric to engage “indigenous expertise”. The indigenous entity, would not have become that much richer or poorer, and owes me no obligation. I was just being a consultant, with the nation and the survival of the sector at heart, while living up to the expectations of my profession.

I would have persisted in the same manner, even in Tajikistan! This comment is particularly for those who now present theories on the virtues of indigenous talent, entrepreneurship and small business - a theme of many of my writings, public pronouncements and recommendations for years, which resulted in tax and investment incentives therefor and which many benefit from to date. It was not stylish and vote-getting to talk about then but I spoke on this and achieved the incentives for SME’s since I thought it was simply the right thing.

With regard to reform or restructuring, whole or partial divestment, a socially responsive Government, will have to manage the challenge of ensuring that the displaced worker if any, is financially cared for and found alternate employment-either through re-training, and re-employment or otherwise. There are many models we can follow in connection with finance, structures and strategies for these.

As a product of a small village in the Deep South, let me envision for a moment the life of a less than privileged resident there, one among many I regularly converse with. I would expect a Government which provides me with a road that is tarred, a bus that travels on it, a low cost house to live in, access to safe drinking water on tap, electricity for my son who is about to sit the Ordinary Level Examination, to study with the aid of, a telephone, a doctor and a dispensary at hand, a hospital close by, a school to go to, a temple to worship at.

I do not wish to see a Government that makes cement, paint and bricks, shirts, trousers and shoes, salt, sugar or steel. I will expect a Government that provides an environment that generates enterprise, small or medium that provides these at competitive and affordable cost. I will expect a Government that has the courage to step in and stricture any private provider, who is monopolistic and socially irresponsible and who is in conflict with the Consumer Affairs Protection Act. I wish to see a Government that will bridge the income and wealth disparity, the regional disparities that I have spoken publicly on, in print and electronic media, by helping me make my lot better rather than reduce the net worth of those who have, simply to make the gap narrower. I need a Government that bridges the “Opportunity Gap” between that of my son and that of the son of the owner of the land that I till.

This and much more I would like to say. But today, I will close with these words only; as I launch “The Thought Leadership Forum” which will regularly share “Independent National Perspectives” on matters of public interest, through both English & Sinhala, print and electronic media. I dedicate this and all future thoughts and experiences of mine to the memory of my late father-Attorney at Law, E.G.Wijesinha of Getamanna, in the Hambantotata District. I wish both candidates, who I know, the best of health and security as they engage in their quest for Leadership. On my part, I will continue to think and share thoughts and experiences, to bridge gaps between perception and reality, as well as to enhance awareness, in my own quest for what is best, for my motherland.”

The writer is a Chartered Accountant and former President of the Institute of Chartered Accountants of Sri Lanka and Confederation of Asian Pacific Accountants.


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