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| Sunday, 24 November 2002 |
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'Let people decide merit of privatisation on hard facts' Press Release of SLAAS on Privatization Campaign in the Media The attention of the Sri Lanka Association for the Advancement of Science has been drawn to the recent media campaign launched by an anonymous advertiser in both print and electronic media promoting the privatisation of public enterprises. This has apparently been done with the objective of convincing the public on the merits of privatization. From the regularity and the size of these advertisements, funds do not appear to be a constraint for carrying out this campaign. They carry the message that privatisation is the only saviour for the country, particularly to freeing itself from the heavy burden of debt amounting to some Rs. 377 billion. They also quote how well other countries are doing after privatising their public enterprises. We the scientists would like to believe all what is said in these advertisements. However, we cannot forget the fact that many state enterprises that were privatised in Sri Lanka during the past few years, particularly during the regime of the PA Government were performing poorly. They were taken away from state control, and handed over to private control, whether one calls it privatization or a change of management. These included the country's major industrial enterprises such as cement, steel, tyre, ceramics, textiles and hardware among others. We wish to iterate that, without wasting much public funds on this media campaign, the advertiser could do better only if he makes public the extent to which the country has benefited by these previous attempts of privatization. The public would like to know, the total number of state enterprises privatised in Sri Lanka so far and what fraction is operating at a profit now, the fraction closed down and the fraction running at a loss. The public should also be told, in respect of each enterprise privatised, the capital brought into the country as a result of privatization, the extent to which the assets were enhanced or depleted, their performance after privatization, extent to which the income levels of employees enhanced and their welfare improved, how much funds were diverted for research and development to improve the product quality and to bring in new products, the extent of new technologies transferred, and the extent of opportunities made available for young graduates to obtain training and employment. Let not the superlative language of a copywriter or the imagination of a TV script-writer determine whether the country should privatise its state enterprises or not. Let the facts speak. Let the people decide what is good based on hard facts, not words. The Government should first carry out an objective assessment of the privatisation schemes undertaken in the past before venturing into new schemes. If such an assessment indicates that most schemes so far undertaken have been failures, what good it would bring to the country by continuing this exercise. On the other hand, if the overall success rate has been good, we certainly would support the government's plans for privatisation. Our Association is concerned about the current lack of opportunities available for the scientists to work in a congenial environment to develop the science and technology base in the country. Sri Lanka's private sector hardly offers any opportunities for absorbing scientists to undertake product development or acquisition and adaptation of new technologies. It is well known that compared to many countries in the region, Sri Lanka's science and technology base is very much at a low level, and this is one reason why the country is what it is today. Would privatization help to improve this situation? Will the new owners of the enterprises invest adequately in research and development programmes? The answer is obviously no. No country can develop its economy by depending totally on foreign technology and expertise. One can verify this by looking at the newly industrialised countries in Asia. Many of these countries had economies far behind that Sri Lanka had in fifties. They achieved what they are today because their governments invested generously in science and technology and adopted policies that helped building a strong private sector, and not through privatisation. It is futile to expect privatisation alone to bring economic prosperity to the country. We the scientists urge the Government to first assess (a) the performance of the enterprises already privatised, (b) the desirability of privatising public ventures in Sri Lanka's context taking into accounts its social, economic and cultural background, (c) the capacity of the private sector in Sri Lanka to takeover major enterprises and (d) the negotiation capacity of Sri Lankan decision-makers to negotiate privatization transactions on terms favourable to the country, and then decide whether Sri Lanka should embark into privatising its public enterprises or not. At the same time, we urge the Government to restructure the management system in state enterprises enabling them to operate on a focused business plan rather on directives issued by the Ministries and the Treasury, under the guidance of dedicated and competent management boards chaired by professionals with accepted track records. |
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