SOEs’ tasks need to be unbundled - Restructuring Unit head | Sunday Observer

SOEs’ tasks need to be unbundled - Restructuring Unit head

22 January, 2023
Head of State-Owned Enterprise Restructuring Suresh Shah, Policy Advisor Economics and Finance (FNF), Justus Lenz, moderator Shamindra Kulamannage and Joint Managing Director of JAAR Corporate Solutions (Germany), Andreas Hergenrother at the event.  Pic:  Claude Gunasekera
Head of State-Owned Enterprise Restructuring Suresh Shah, Policy Advisor Economics and Finance (FNF), Justus Lenz, moderator Shamindra Kulamannage and Joint Managing Director of JAAR Corporate Solutions (Germany), Andreas Hergenrother at the event. Pic: Claude Gunasekera

Most of the State-Owned Enterprises (SOE) are doing what the private sector should be doing and these tasks should be unbundled, said Head of State-Owned Enterprise Restructuring, Suresh Shah.

He was speaking at a corporate discussion on Social Market Economy as a potential driver for economic growth and wealth in Sri Lanka, at the Taj Samudra, Colombo last week. It was organised by the Friedrich Naumann Foundation for Freedom (FNF), an organisation funded by the German parliament.

He said that the best example for this is the Sri Lanka Ports Authority while being a regulator is also engaging in the maritime businesses. “This mismatch should be unbundled,” he said.

Shah said that loss-making SOEs were a huge burden on the state and due to the economic downturn it has made matters worse for the government.

“What we are looking at is not selling them but restructuring them with the private sector and also in some cases seeking collaboration to further develop them. Our final aim is to make them profitable which in turn will help the public and the economy,” he said.

“Developing an economy is not an easy task as business is very competitive today. It doesn’t matter whether we build up a social market economy, capitalist economy or liberal market economy.

But whatever model we implement, it has to completely eliminate incompetency, irresponsibility and corruption of the politicians and the authorities while strongly adopting good governance to achieve the goals of development,” Shah said.

He said that it is mandatory to evaluate the performance of SOEs and decide on either restructuring or discontinuation or privatising such ventures.

Head of Operations in Sri Lanka of Friedrich Naumann Foundation for Freedom (FNF) Wolfgang Heinze said that the Social market economy is a widely recognised economic and social model and it stands for the combination of economic efficiency with social balance and is, therefore, considered a model for success. “The Social market economy is also an economic order based on the liberal idea that governments and markets have essential roles to play in a modern, open society where everyone is free to compete without state intervention,” he said.

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