Reviving the public sector

Privatization is no panacea. This is the considered view of the Government and a policy position firmly established on the Mahinda Chinthana principles.

It was only a few days back that Enterprise Development and Investment Promotion Minister Dr. Sarath Amunugama made stunning revelations about the massive fund wastage incurred by some State sector institutions.

To emphasize his point he drew attention to the expenditure incurred by the Ceylon Petroleum Corporation per day. Such daily expenditure could be used to construct a general hospital, he said; so vast is the wasteful consumption of funds.

The Minister’s disclosures are food for thought for those upholding the role of the State sector. We do not intend to contest the view that the State sector has a vital role to play in the life of the polity. In fact this role could never be undervalued-the current privatization and economic liberalization wave notwithstanding.

There is no disputing that the market mechanism cannot be depended on to be fair by all-particularly lower income groups who lead a hand-to-mouth existence. This is one of the main reasons why public sector institutions providing essential goods and services to the community have to be sustained.

However, these organizations have to be run on a cost-effective basis. If they are mismanaged and allowed to degenerate to the level of white elephants-as some are at present-the pro-privatization lobby would seem to be justified. Selling them off to the private sector would seem to be a viable and attractive option.

Therefore if these organizations are to be persisted with they ought to be better managed and run economically. We are glad that the State has given this issue some thought and entrusted the Strategic Enterprise Management Authority (SEMA) with the task of restructuring these organizations and making their operations cost-effective.

The challenges before SEMA are not insurmountable. We have the case of the State banks which are today greatly transformed, efficient and customer-friendly. However, these banks have not lost their essential identity as public sector organizations which exist for the benefit of the public.

Those ailing public sector organizations could be subjected to the same re-engineering or restructuring process. What is required is some creative thinking and bold decision-making.

However, all in all, our public bodies should be protected from political interference and meddling. For instance, they should not be considered and treated as employment providers for political henchmen. This has led many such bodies to ruin and disintegration.

If over-staffing could be avoided and these organizations run on sound management principles, they could be transformed into public bodies in the real sense of the word.