A fine combination
The private sector is often hailed as the engine of growth and with
good reason. It is dynamic, result and profit oriented, efficient,
disciplined and determined to reach greater heights.
Thus private companies have a positive image among the public as
Alas, this same perception does not exist as far as State sector
organisations are concerned. They are often seen and portrayed as being
lethargic, inefficient, loss making and stagnant. Many of them are also
overstaffed, which adds to their financial burden. The Ceylon Petroleum
Corporation (CPC), the Ceylon Electricity Board, Railways and Central
Transport Board are often cited as such enterprises, among others. It
will not be easy to turn them around without resorting to drastic
Privatisation was once used as a panacea for all ills of the State
sector. Many State institutions were privatized, including some of the
profitable ones, without ever considering whether they could be reformed
by other means. They were sold for a song to dubious companies and
individuals. Granted, there are a few instances where privatisation
worked and the companies in question have transformed themselves
dramatically, shedding their negative image. But this did not happen in
The present Government has taken a policy decision not to privatise
any State-owned enterprise. It has vowed to examine and implement other
ways and means of making them more efficient and profitable. In fact, no
State enterprises have been privatized since 2005 despite some of the
financial challenges faced by the State in the context of the global
economic downturn and other factors.
This policy has been hailed by various segments of society, from
trade unions to economists.
The Government has instead focused on reforms to the management
structure of these State ventures to make them self-reliant and
It is well-known that many Government owned business ventures turn to
the Treasury whenever they face financial problems. But this cannot be a
long-term solution. They have to be financially independent, for which
they have to be managed well in turn. Good management is the key to the
growth and success of any organisation. This is the formula for the
success of the private sector.
Why not infuse that formula to the staid organisations of the State
sector ? This is exactly what the Government seems to be doing, with its
latest, highly commendable move of appointing well-known private sector
business leaders to key positions (usually Chairman/director) in State
Among these appointments are: Harry Jayawardana (CPC), Susantha
Ratnayake (Sri Lanka Tea Board), Nimal Welgama (Sri Lanka Telecom),
Jayampathy Bandaranayake (Board of Investment). Several more such
appointments are to be made in the coming days in various fields.
The organisations they will head are crucial for the country's
development. For example, both the BoI and the EDB perform vital tasks
in the field of economic development.
Mobilizing savings is no less important. Tea is also a prime mover of
the economy. The appointment of top business leaders to head these
ventures shows the Government's commitment to developing the economy.
These are all top names in the business sphere and all are known for
their business acumen. They bring with a wealth of experience and
insight into the workings of a business organisation.
Some of them are also known for transforming underperforming business
ventures into top-notch ventures. The respective organisations headed by
these individuals will benefit immensely from having them at the helm.
They are just what the doctor ordered for some of the ailing State
organisations. We hope that they will be able to steer the loss-making
State ventures into the black this year.
They will have to take unpopular decisions in this process, but such
action could be needed to save these enterprises and their workers.
But effecting management changes alone will not suffice to reform
them. The attitudes of State sector employees too have to change.
They have had a cosseted existence for far too long and it is time
that they wake up to the realities of the modern corporate world.
By having renowned business leaders at the helm, the employees will
get an idea about how organisations should adapt to changing times and
The customer has to come first. That idea is sadly lacking among the
majority of State sector employees. Serving the public should not be
thought of as a hassle, but rather as a privilege.
The business leaders should strive to inculcate this line of thinking
in the workforce. They will no doubt introduce many other
result-oriented practices which are commonplace in the private sector
but alien to the State sector.
It will be interesting to see how they would deal with trade unions.
Unfortunately, politically motivated trade union activity has often been
a hindrance to the growth of many State owned business ventures.
They often resort to strikes without exploring other avenues of
winning workers' demands. It is our hope that the business leaders
appointed to head the State organisations would have a productive
dialogue with the unions to ensure industrial peace, vital for a higher
level of productivity.
Depending on the success of this move, the Government should extend
it to other unprofitable State ventures. Public-private partnerships are
often hailed as the best approach to develop an emerging economy.
This is a good start and a harbinger for greater cooperation between
the two sectors.