Apr 18, 2010 (LBO) – Sri Lanka’s state has shut out competitive bids from private insurers for state entities, drawing a warning that the move would increase the cost of state enterprises and raise burden of government to the ordinary man.
Sri Lanka’s insurance sector, banking, telecoms, shipping, aviation and education were stifled for decades due to a state monopolies and mismanagement and the country’s growth lagged region raising poverty and unemployment.
State monopolies which curbed the economic freedoms of people came mostly after rulers ‘nationalized’ private property of citizens in a socialist led policy period.
Sri Lanka does not have a monopolies and mergers commission to effectively combat anti-competitive behaviour and politicians on both sides of the divide are big spenders of peoples’ money.
The Sunday Times newspaper said Sri Lanka Insurance Association, an industry body, has protested to the Insurance Board of Sri Lanka, the regulator, over a Treasury order which ended competition for government insurance deals.
“¦Government institutions will also lose substantially due to the absence of a competitive market which would determine the right price for their insurance purchases,” the newspape