Fixing Sri Lanka state enterprises ‘urgent priority’: Central Bank

Apr 20, 2010 (LBO) – Sri Lanka’s state enterprises should be fixed as an “urgent policy priority” with a “strong reform programme” the island’s central bank said as seven state entities lost nearly 50 billion rupees in 2009 which is equal to one percent of gross domestic product. Losses in state enterprises and borrowing from banks had adverse monetary (hurt inflation control efforts) and fiscal (put more pressure on the budget deficit requiring more taxes from the people) implications, the Central Bank said in its annual report.

..[The] introduction of an effective, strong reform programme to make them commercially viable and profitable institutions and enable them to make a greater contribution to the economy is required as an urgent policy priority,” the Central Bank said

State Darlings

Many of the enterprises are pet institutions of politicians who stuff them with their henchmen while trade unions backed by the Marxist-Nationalist Janatha Vimukthi Peramuna have resisted attempts to reform them or shed excess staff for years.

Just seven state entities had lost 49.3 billion rupees which is equal to 1.02 percent of gross domestic product.

The losses are mostly opera