Dilshani Ranawaka

The burden of unprecedented costs

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In this weekly column on The Sunday Morning Business titled “The Coordination Problem”, the scholars and fellows associated with Advocata attempt to explore issues around economics, public policy, the institutions that govern them and their impact on our lives and society.

Originally appeared on The Morning


Why should we have a limited government? – Part I

By Dilshani Ranawaka

“The government that governs best, governs least” – Thomas Jefferson

A state has three core tasks within a society: Protecting the life, liberty, and property of the people. As societies evolved, these core tasks were overlooked when more emphasis was given to managing economies. Should the state intervene in economic affairs? Would that be more beneficial to the economy and society?

For the following four weeks, “The coordination problem” will discuss why large governments cause more harm than good when they engage in tasks beyond ensuring freedom and security of the citizens and the rule of law.

The series titled “Why should we have a limited government?” will justify why large governments are a bane to the economy through arguments on costs, problems of coordination, and corruption. The series will then conclude with a fourth piece on what an ideal state looks like.

It is intuitive that larger governments incur larger costs. This takes place through two avenues: recurrent expenditures and management expenditures. The present Government has lost count of the number of enterprises the State owns, as revealed by the Advocata Institute’s recently published report “The State of State Enterprises in Sri Lanka – 2019”.

As of 2017, 1,389,767 of the labour force in Sri Lanka are employed in the public service. This is around 14.5% of the labour force. The enormity of these numbers is clear when compared with developed countries. For instance, Canada, which has a population of 37.6 million, has a public sector of 262,696, according to the official Government of Canada website, making it clear that a government does not need to be expansive even in the instance of a large population.

To make things even worse, the Government introduces salary increments either at the onset of an election or during a new budget proposal, instead of having increments dependent on performance.

With the recently proposed increment of Rs. 10,000 for the public sector, the expenditure for wages adds up to Rs. 768 billion for the year. This is around 25% of the government’s expenditure, as per the Budget in 2019. This exceeds the amount allocated for public investment (Rs. 756 billion) for the year 2019, which is around 24% of the budgeted expenditure for this year.

These complicated numbers bring questions to mind: Is providing jobs a role of a government? What is the opportunity cost? What are the indirect consequences? What is the concealed political gain from this process?

A state’s role goes beyond providing job opportunities. Some of the crucial elements a state should look into are national defence and maintaining law and order. The Easter attacks and ensuing events highlighted that the Government should be focusing more on its core functions before moving beyond.

Furthermore, when looking retrospectively at political campaigns, politicians target the votes of government officers mainly through the introduction of wage increments. While increments are positive incentives for productivity, politicians use them for popularity. In such cases, two factors increase the costs for the government. Since larger governments require more state officers for administration purposes, the costs incurred just for administration purposes increase. When politicians promising higher increments become popular, the cost burden for the government piles up.

Every decision made in the economy has an opportunity cost. A state could allocate resources either for consumption or for investments. Investments generate direct income in the long run while consumption creates effective demand which indirectly generates income. Given this backdrop, it is important to answer why unregulated and irresponsible expenditure by a state is catastrophic.

Let us explain through a simple example. If a household spends on consumption which does not generate income, the household has to resort to loans. A similar argument can be transposed towards a state. If a state spends on consumption (in this case the cost for expansion of the government), they have to utilise other methods such as loans or taxes which are reflected back on the taxpayers of the country. These wage expenditures incurred by the government are utilised for consumption most of the time. Alternatively, if politicians stop promising salary increments and reduce the size of the government, these wages could be utilised for public investments – a critical requirement for economic growth and long-term income generation.

Cost Burden

Leaving vital services aside, what do state officers incur to the government? Losses or revenues? Would an additional state officer cover the cost of their wages and generate revenue through their productivity? Would it increase the efficiency of the department? These questions should be standard criteria before unnecessarily expanding particular state departments. The experience one has at most government institutions speaks for the inefficiency that plagues these institutions.

What is the underlying cause of incompetence of the State in Sri Lanka? If the government is supposed to facilitate services, why do they operate their entities in a manner they generate losses? Why do we constantly see power cuts through the Ceylon Electricity Board (CEB) if larger governments are meant to provide better services? Could we keep our trust on the State, given the way they function with our money?

Do larger governments function better? The evidence seems to indicate otherwise.

How many committees does it take to fix an airline?

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In this weekly column on The Sunday Morning Business titled “The Coordination Problem”, the scholars and fellows associated with Advocata attempt to explore issues around economics, public policy, the institutions that govern them and their impact on our lives and society.

Originally appeared on The Morning


By Dilshani Ranawaka

On 1 March, the International Monetary Fund (IMF) approved $ 164.1 million under the Extended Fund Facility after successfully completing the fifth review for the country. According to the IMF, restructuring and enhancing the governance of SriLankan Airlines and other state-owned enterprises (SOEs) and the implementation of price formula are key issues that should be addressed.

SriLankan Airlines has a new CCO and CFO as a result of the numerous numbers of commissions formed to assess and come up with a restructuring process. Presently, the losses alone had accumulated up to Rs. 40 billion in a time frame of 2016-2018.

The solution is pretty straightforward – find the root cause and then come up with recommendations. However, restructuring in the case of SriLankan Airlines appears to be a rather daunting process for the Government, with endless committees and subcommittees working on a strategy. The Government started off by appointing Cabinet members and state officials in the first commission. It took them three years to realise that it is crucial to appoint experts to look into this matter. Even after appointing four committees plus consulting the best in the aviation industry, Nyras, what they have achieved so far is the appointment of a new board and a new management along with the CCO and CFO. Given the climbing amount of debt from operating the airline and also knowing the intensity of the losses, why have they taken such a long time to plan a way out of this?

The first such committee was formed back in May 2017, focusing on privatising the airline. The council was headed by Prime Minister Ranil Wickremesinghe and consisted of officials from the Cabinet and other state officials. Following up on the process, it was reported that the Prime Minister was to take the decision on restructuring the airline in July 2017.

“By 31 July, we have to give an internal restructuring plan to the Prime Minister, basically looking at what we have to do internally with SriLankan – irrespective of whether we are getting a partner or not, we need to move forward,” a statement given by then Minister of Public Enterprise Development Kabir Hashim.

However, implementation did not materialise, and on 8 December 2017, the President appointed another special ministerial committee and a committee of officials to assist them to decide the fate of SriLankan Airlines with a deadline of two weeks, with a report due to be submitted on 20 December 2017. The actions regarding the airline were to be implemented on or before 31 July 2018. Why does the Government take such a long time – almost half a year – to implement these recommendations? The role of any government in an economy is to adjust market failures, not to cause more.

By 2018, Nyras, one of the leading aviation consultancy firms, was hired after the initial round of recommendations, and it presented a comprehensive report. However, the consultancy group has now filed a lawsuit against the Government because of delayed consultancy payments. While these measures were taken and international consultants were hired, SriLankan Airlines was still piling up losses at an exponential rate.

By 7 January 2019, the President formed yet another commission to conduct a comprehensive study – review the present vision and mission objectives, strategies, corporate plan, and action plan of the airline – and come up with recommendations for restructuring, which does not consist of any member of the previous committees formed by the President. Does this mean that the previous four committees appointed (two committees in 2017, one in 2018, and another in 2019) are redundant?

Exercising our rights as citizens, we need to push for fast reforms as this is a black hole sucking out tax-payer money. It has taken five committees, including consultancy from Nyras, to address various issues of SriLankan Airlines for the past three and a half years. With these five committees, what the Government has achieved so far is inducting the board of the airlines.

What we can take from this is:

  1. The commissions have submitted recommendations that wouldn’t work

    or

  2. The Government is incapable of implementing these recommendations

    or

  3. The Government is being willfully negligent by not taking action and implementing recommendations.

Given past experiences, these failures indicate a combination of the second and third conclusions.

SriLankan Airlines, which is operated under Emirates – a renowned carrier of United Arab of Emirates, enjoyed Rs. 4.4 billion in 2008 only except for three years during the time period of 2000-2008. The next 10 years, once the airline was taken over by the Government, suffered heavy losses due to the decline in performance and poor governance. The national airline had been climbing down in terms of performance as well as losses.

How many committees would it take for the Government to really execute any of these plans? When the good governance regime started their office in mid-2015, the losses of SriLankan Airlines were Rs. 16.4 million. The losses of the airline had more than doubled up to a cumulative loss of Rs. 40 billion for the time period between 2016 and 2018. It took Rs. 40 billion and three years’ worth of planning to appoint two vital roles, the Chief Commercial Officer and the Chief Financial Officer, to the airline. How enormous should the losses be for the governance to implement restructuring procedures? What would be at stake by then? This is indefinitely an answer Sri Lankans would not like to find out.

An income for all – Yay or Nay?

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In this weekly column on The Sunday Morning Business titled “The Coordination Problem”, the scholars and fellows associated with Advocata attempt to explore issues around economics, public policy, the institutions that govern them and their impact on our lives and society.

Originally appeared on The Morning


By Dilshani N Ranawaka

“The time for change has come. I will launch the final assault on poverty”  says Rahul Gandhi, a political candidate competing against Prime Minister Narendra Modi in the ongoing Indian elections. Poverty in India is high, with nearly 354 million people classified as ‘poor’. The final assault suggested, is a monthly income for the 20% of people with the lowest income in the country. This monthly income would amount to 6,000 INR which is around 15,000 in Sri Lankan rupees per month.

This “final assault” has roots in the concept of a Universal Basic Income (UBI), an income which is not restricted only to the poor. In 2017 UBI was experimented in Finland through a limited pilot study. Their goal was to understand if there was an impact on lives when UBI is implemented. These findings indicate that levels of life satisfaction increased from 6.7 to 7.3.

Keeping in mind that this was only a pilot, the increase in life satisfaction have been linked to the demographic profile of Finland, and its economic stability. Given the ageing population in Finland, the retirement age has been extended to 65-68 years of age. As working extensively for long hours influences the aged in a negative way, relieving them from work worries and anxieties improves their standard of living. However, the Scandinavian country can afford to be generous to its citizens because of a solid structure of taxation and achieving a GDP per capita of USD 47,558 as for 2017. Based on these factors, either a guaranteed or a basic income had a level of success when piloted.

More on the Western hemisphere, Brazil has gained attention for their “conditional” basic income guarantee, an income granted as a positive reinforcement for actions the government deems a priority such as sending children to school.

Now that India - in this part of the world - wants to adopt a similar concept, it is interesting to explore if our existing welfare state should implement a similar strategy?

Samurdhi - our current social welfare scheme

In Sri Lanka, two of the main welfare schemes, Samurdhi and the fertilizer subsidy (pohora sahanadhara) accounts for 0.5% of the GDP as of 2017 (CBSL, 2017). Samurdhi gives a maximum amount of Rs. 3500 for a household with 3 or more family members. Samurdhi, initiated in 1994, is continued to date with the welfare benefit is offered for households with a monthly income less than Rs.4000 - the official poverty line for the country.  

The targeting process for selecting Samurdhi beneficiaries has been hijacked by politicians - it has now been reduced to a vote buying scheme. This is supported by the World Bank, which states that 50% of Samurdhi beneficiaries are non-poor. If targeting was focused on individuals with the greatest need, intuitively, there should be more Samurdhi beneficiaries in districts with high levels of poverty. The graph below represents the number of individuals who fall below the national poverty line and as such are classified as ‘poor’, highlighting the number of Samurdhi beneficiaries per district. It is clear that the poorest districts, aren’t always the ones with the most number of beneficiaries.

Samurdhi chart revised with units.jpg

Given this backdrop, will it be a feasible option to substitute Samurdhi with a basic income guarantee in Sri Lanka?

The Advocata Institute recently sponsored a discussion on the topic of ‘universal basic income’ through the Nightwatchman Society. At this event, Professor Rohan Samarajiva presented 3 arguments questioning the efficiency of such a scheme in the context of Sri Lanka:

  1. Do we have the fiscal capacity?

  2. Will this be another political instrument?

  3. What should be the process of identifying the beneficiaries?

Do we have the fiscal capacity?

As of 2016, our budget deficit is a staggering Rs. 683 million. Sri Lanka does not have the fiscal capacity to provide a stipend for 5.1 million households. If we follow Rahul Gandhi’s scheme, and implement Rs. 15,000 cash transfers per month for 20% of households it would cost us Rs. 180 billion per year. As this is not feasible at all, winding down to 5% of the poorest will account to Rs. 45 billion per annum. To put this expense in context, a cash transfer for 5% of the poorest households would be equivalent to 0.5% of the GDP, 2.7% of the government revenue and 1.9% of the government expenditure.

Adding another welfare program given this backdrop would clearly burden government spending and our tax payer commitments in the years to come. To add to the mess of these existing issues are the weak methods of revenue collection we have in the country. Given the arguments presented as to why our fiscal position cannot accommodate UBI, should we even discuss the implementation of such a policy in this country?

Will this be another political instrument?

The welfarism that has taken a front seat in political arenas since independence, has meant that citizens lean towards increases in subsidies and other government handouts. Subsidies are still an effective political tool that catch voters’ attention. Do past experiences work in favour of the basic income guarantee? Could we afford to rely on weak governance as a trade-off for positive subsidies? Would this be another instrument used by scheming politicians only for the sake of popularity?

It is with no doubt that the Samurdhi welfare scheme has contributed towards eradicating poverty. However, given the fact that there lacks an assessment process to monitor progress and abusing Samurdhi by using it as a tool to increase political support and grow voter bases gives a signal that Samurdhi either needs to be restructured or perhaps replaced. Lessons learnt from the past offer valuable insights to the future. Given the politicised nature of Samurdhi, and the fact that the welfare benefit is not actually reaching those who are eligible for it, one has to question the efficacy of such schemes. Serious restructuring of our current welfare scheme is long overdue, and the utility created by such schemes needs to be interrogated before moving forward.

Monster monopolies

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In this weekly column on The Sunday Morning Business titled “The Coordination Problem”, the scholars and fellows associated with Advocata attempt to explore issues around economics, public policy, the institutions that govern them and their impact on our lives and society.

Originally appeared on The Morning


By Dilshani N Ranawaka

Rukshani, is a small business owner running her own grocery store. Her peak hours of business are when everyone gets back home from their jobs around 7-8pm after working in Colombo. Unfortunately, she has been struggling to make ends meet as of late, due to power cuts that are also scheduled in her area around the same time as her peak hours. With just candles lit during these hours, refrigerators and coolers switched off, it adds an additional cost for her to operate her business.

Thilina, who works in Colombo faces a challenge of getting back home as the workers of the Railway Authority have decided to go on strike asking for a pay raise. Even though trains are over-crowded, they are unfortunately the fastest way of commuting back and forth. Alternatively, Thilina has to resort to the next best solution in his capacity; buses, which incurs an additional cost to reach home.

How is that Rukshani and Thilina have no say over the situation? Why does Rukshani have to suffer losses during the peak hours of her business and why should Thilina have to look for alternative transportation for something they are capable of paying, but somehow is beyond their control?

Trains and electricity are two vital services for the day to day functioning of the country. Why do these authorities continue to function when they are failing to provide reliable and efficient services to their customers who pay for these services? They have a monopoly over this service, hence they exploit it.

As of 2017, Sri Lanka Railway (SLR) sums up for Rs. 7.5 billion in losses. The Central Electricity Board (CEB) projects of Rs. 89 billion in losses for 2019. An island-wide poll by Sparkwinn Research, commissioned by Advocata Institute indicates that 81% of the sampled population are not satisfied with the performance of the State Owned Enterprises (SOEs). As the numbers have spoken, people are clearly not in favour of having these underperforming SOEs.

Poll on SOE satisfaction

Would a private institute still run under these terrible, burdening losses?

The issue mainly starts with the monopolistic control over services complemented with organized trade unions within these public institutions. The fact that these services do not have competition, offers a fundamental background for wage increases and other demands that usually result in strikes which influences the entire population.

The initiation of these services dates back to the years when the private sector had inadequate resources to facilitate these services. In such conditions, the government established these entities for the benefit of the population. However, due to the monopolistic nature of these establishments, workers were able to unionize forcing the government to lose control over these institutions.

To add on to the burden of failures, is the fact that all these are controlled and heavily subsidized by the government. The lack of incentives to improve their efficiency and productivity are therefore felt heavily by the government.

There are common practices of addressing the issues on monopolies of the economy. Incentivizing merger policies, regulating and controlling the quality of these monopolies and price caps are some of the methods developed countries use to provide better services.

The “P” word; “privatization” is a taboo in Sri Lanka, although it is commonly agreed that the process of privatization paves the way towards an answer to address these issues that burden the entire economy.

“Privatization” in Sri Lanka is identified as “transferring an institute from public ownership towards private ownership”. This is only one such form of privatisation and is known as a “complete privatization”.  However, there exists various forms of privatizations such as transferring assets, Public-Private Partnerships and franchising.

Path towards privatization

The process of privatization should be methodological. Montreal Review (an independent online magazine) identifies few principals that would lead to an efficient privatization process.

  1. The purpose of privatisation

  2. The need to review different methods of privatisation

  3. The extent of the privatisation

  4. Recognising constraints

  5. Finding a buyer

  6. Implementing an investor friendly environment to attract investors

How the United Kingdom excelled in their privatization process of trains and telecom are case studies which could be replicated in Sri Lanka. The United States government remained in control of quality control and maintaining standards while the operations were handled by private sectors. On the other hand, the United States had successfully privatised industries with natural monopolies such as water and electricity supply by the privatization of operations with the government remaining in control of providing the role of maintaining standards while removing excess burden on the budgets.

However, given the extensive amount of State Owned Enterprises (SOEs), an initial step towards privatization could be to list down possible institutions or even better, towards creating an index which could be a measurement towards qualifying for privatization process.

Can we breakdown these natural monopolies? Are monopolies simply an excuse that gives the governors the luxury of political lobbying? Something to think about.

“The very term “public consumption products” is an absurd one. Every good is useful “to the public”, and almost every good may be considered “necessary”. Any designation of a few industries as “public utilities or services” is completely arbitrary and unjustified”  - Murray Rothbard, a prestigious American Economist.


A bellyful of taxes!

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In this weekly column on The Sunday Morning Business titled “The Coordination Problem”, the scholars and fellows associated with Advocata attempt to explore issues around economics, public policy, the institutions that govern them and their impact on our lives and society.

Originally appeared on The Morning


By Dilshani N Ranawaka

With Avurudu week just coming to an end, you have probably realised that the total for your food bill is quite exorbitant. You may have attributed this to the festive season, and the fact that food really is quite expensive in Sri Lanka. However, have you questioned why this is the case? Why do we pay so much for something as essential as food?

Did you know that for every meal your family buys, you are paying the price of a second meal (for an individual) back to the government? You might not be aware but most of the daily consumed food items that you buy for your family are exorbitantly taxed! How informed are we of the indirect taxes we are paying with every purchase we make?

Let’s take a look at the grocery list for a balanced meal of four in a family (Quantities recommended by the Food and Agriculture Organization (FAO).

Balanced Meal tax figures

When one delves into these statistics, it is interesting to see that we pay around Rs.150+ to the government in the form of taxes, just on this small basket of grocery items. That's the equivalent to one rice packet you could have bought for lunch!  

Taxes are imposed for two main reasons; they are the main source of government revenue, and they can protect local producers from import competition.

In the case of Sri Lanka, 80% of government revenue is collected through indirect taxes. Indirect taxes are imposed on goods and services as opposed to taxes levied on income.

One argument to justify such heavy taxes on consumer items is attributed to the government’s objective of protecting and strengthening local producers. When a tariff is imposed on imports, the price of imports increases, giving local producers the opportunity to compete against what would otherwise be a much cheaper alternative. For example, green beans per kg is taxed 101% on the border of the country (CIF price). This means that if you buy imported green beans, you have to pay double the price of the true value of the good.

This is appealing to local producers as they can offer comparatively lower prices for the same good. Even though these policies can be seen as helpful to local producers, it truly does not help in the long-run.

Consumer loses out

When tariffs are imposed in order to help local producers compete against cheaper imports, the government effectively removes all market incentives for local producers to stay efficient and productive. The tariffs on imported goods guarantees that their main competition is priced higher than that of the local good.

The result is that you and I, the local consumers lose out on two counts. First, if we wish to buy local products, there is no reason for local producers to provide us with a high-quality, appealing good. Secondly, if we are dissatisfied with the local product and wish to buy an imported alternative, we have to pay a much higher price as this good is subjected to high rates of tariff.

This loss to the consumer is compounded by the fact that the high price of imports creates a large gap between the final price of the imported good and at-cost price of the local good. This gap can be transformed into a profit margin for local producers as they can increase the price of their good without improving quality thanks to the high tariff imposed on the imported alternative.

Should we continue to protect?

Our producers get accustomed to inefficient production due to a lack of incentives. In this case should the government protect local producers further? If so, are we carefully considering the trade-offs; the costs incurred for the consumers?

Protectionism is a heated topic in the country. Ever since the Sri Lankan economy opened up in 1977, various campaigns were implemented in order to protect local industries. Moving on to 40 years after opening up the economy, the first ever to do so in the South Asian region, we still lag behind.

Alternatively, what the government could tap into are technological investments with other countries, which would help in exchange of technology and innovation for low-yield, less efficient, protected industries in the country. This involves in opening up the economy for foreign investment and creating an investor friendly environment - relaxing most of the heavily taxed and regulated policies by the government.

Given that this regime of protectionism has failed, are we still going to ask the government to shield our producers from foreign competition?

Behind the invisibility cloak: Sri Lanka’s hidden state-owned enterprises

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In this weekly column on The Sunday Morning Business titled “The Coordination Problem”, the scholars and fellows associated with Advocata attempt to explore issues around economics, public policy, the institutions that govern them and their impact on our lives and society.

Originally appeared on The Morning


By Dilshani N. Ranawaka

Is the Government aware it has gazetted 527 SOEs?

Unveiling an invisibility cloak of the state was the first task I did as a fresh graduate. Behind 55 strategic State-Owned Enterprises (SOEs) identified by the Ministry of Finance (MoF) lies another 450+ SOEs making their contribution to the “Coordination Problem”.

SOEs in Sri Lanka

Even at face value, it seems unlikely that a small country like Sri Lanka needs the government to run a pool of SOEs as large as this. Interestingly, the MoF doesn’t have a count of all its SOEs, with the Annual Report only mentioning that there are 400+ SOEs. However, there are at least 527 SOEs, subsidiaries and sub-subsidiaries gazetted. To be specific, the 527 SOEs can be broken down to 424 principals, 84 subsidiaries and 19 sub-subsidiaries.

Of the 400+ SOEs that the government is aware of, the Department of Public Enterprises tracks the profits and losses of only 55 SOEs, which they have identified as ‘strategic’.

This raises two questions.

  1. Why doesn’t the government know the number of enterprises it runs? Anyone running a business should at the very least know the number of organisations it is in charge of.

  2. Why does the MoF only track 55 SOEs? What are the losses that come from the remaining 450?

Let’s take the Ministry of Power and Energy and Business Development for example. The ministry’s losses add up to a cumulative net-loss of Rs. 363,945Mn during the past 11 years. The ministry governs 4 principal SOEs, 6 subsidiary SOEs and 12 sub-subsidiary SOEs adding upto a total of 22 bodies.

When one further explores these subsidiaries, it is quite logical to ponder the rationale for these categorizations. For instance; the Ceylon Electricity Board has two subsidiaries under it. The first subsidiary Lanka Electricity Company (LECO) has three sub-subsidiaries LTL Transformers, LTL Energy, and LTL Galvanizers. The second subsidiary LTL Holdings (Pvt.) has another sub-subsidiary LTL Energy (Pvt.). Is it any wonder that we have erratic power supply? A convenient way to track all these entities would be to establish all of them under one subsidiary; LTL Holdings.

It is time we question the logic of establishing so many SOEs, given that their profits and losses are not tracked, and a majority do not even publish annual reports. When the losses incurred by these entities are added to the equation, it is clear that there is large-scale mismanagement taking place.

The multiple layers of incorporation (principal, subsidiary and subsidiary bodies) enhances the divisibility of responsibilities. Furthermore, the problem with having too many entities makes it hard for them to be monitored. Since SOEs are governed by the state, the debt burden is weighed heavily on the government and then transferred to the taxpayer.

Moving beyond the profits and losses of these enterprises, an equally shocking fact is that out of the 527 SOEs that have been gazetted to date, information of their purpose (classification as commercial and non-commercial entities) of 284 SOEs is not freely available, and cannot be found from government sources.

Can these 527 enterprises be utilized or do a majority need to be shut down because of their losses? The government cannot afford to keep bailing out its mismanaged enterprises - the fiscal space simply does not exist.

The first step to addressing the problem of SOEs, is to figure out the number of entities the state governs. A bi-annual census of SOE conducted by the Department of Census and Statistics, with detailed reports (a current requirement fulfilled only by 55 SOEs) on every SOE is a must.  It is only from here, when the government has an idea of the extent of the problem that we can move into questions of improving accountability and introducing better governance structures.

The question remains, when the government is unaware of the number of entities it is responsible for, why should citizens pay for their loss making, inefficient, institutional excess?  

Sri Lanka has a total of 527 State Owned Enterprises out of which regular information is available for only 55. The inefficiencies and mismanagement which riddle our SOEs are explored in the Advocata Institute's new report  “State of State Enterprises in Sri Lanka- 2019". To read more on SOEs and download full report visit www.advocata.org.


Dilshani Ranawaka is a Research Executive at the Advocata Institute whose main research areas are public finance, behavioural economics and labour economics. She can be contacted at dilshani@advocata.org or @dilshani_n on Twitter.