As a group, these SOEs have suffered large losses that have contributed to the present macroeconomic problems facing the country. The state has to make good on these losses, increasing public deficits that have to be financed by borrowing from the Central Bank, has exacerbated this issue further, which has brought high inflationary pressures into the economy. Losses of these enterprises contribute to macroeconomic instability given the perilous state of our overall finances. The Ceylon Petroleum Corporation, Ceylon Electricity Board and SriLankan Airlines need immediate reform or sale to a private party to arrest the growing magnitude of this problem. Previous attempts to address this problem have attracted controversy. Our general population is not prepared to allow disposal of enterprises despite their record of making large losses year after year. Apart from the macroeconomic problem, the country has a large productivity and efficiency problem that requires more resources to keep growing even at the same rate given that productivity and efficiency issues have not been addressed adequately.
Advocata's 2022 Report "State of State Owned Enterprises 2022 " is a deep dive on the impact of State Owned Enterprises, on Sri Lanka's economy.
