The governments MUST restructure the bleeding State Owned Enterprises (SOE) said President National Chamber of Commerce Sri Lanka, (NCCSL) Nandika Buddhipala.
Speaking to ‘Daily News Business’ during the sidelines of the 18th annual “National Business Excellence Awards 2022” (NBEA), launch conducted by the NCCSL last week he said that restructuring of SOE’s has been in the top agenda for several years but none of the governments had been serious about implementing them.
The current government too has identified that the country cannot go on doling out handouts to nurse the ailing SOE at the expense of the taxpayer. He said that several politicians over stepped this issue to gain popularity but by doing so the government overheads increased every year. “Sri Lanka has 527 SOEs and the labour costs of them are around 70% higher than those of private firms. SOEs have increased their burden on the country’s budget, with SOE debt climbing to 9% of GDP in 2020, up from 6.5% of GDP in 2012.”
Some of the SOE’s are overstaffed and when restricting them this would be very challenging for the government. He however said that the present government is serious in engaging in restructuring and this has to be encouraged since it’s the way forward.”
Sri Lanka has more than 1.5 million public sector employees having a public servant for every 14 citizens. He recalled that Bangladesh has several economic similarities to Sri Lanka, but over 80% of business is controlled by the private sector. India has started reducing their stakes in SOEs. (e.g. Air India) “This should be the model for Sri Lanka as well since less involvement of the government in businesses would be better for the county.”
Meanwhile, speaking about the awards ceremony he said that after recognizing the current evolving trends and situation in the country such as agile nature of strategies to address disruptive nature of the business environment, pandemic and other socio-political and economic issues, considered the weightage adjustment to give a high emphasis to recovery efforts of the organizations.
“The emerging trends such as adoption of the Sustainable Development Goals (SDGs), emphasis on reduction of carbon emission, transforming nature of workplace, increasing tendency of capital is getting attracted to trusted, ethical, environmentally friendly, socially responsible and with sound governance structure (ESG) and the purpose of the institutions more align towards creating long term sustainability and creating value for all in the society and not restricting to selected few are among some of the aspects incorporate into the structure of the application leading NBEA.”
The NBEA will be conducted in May 2023 and 92 awards will be presented. Associated Newspapers of Ceylon Limited (Lake House) is once again the Print Media partner of the event.
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