Consumer first

Privatisation has often been hailed as a panacea for all ills. The dictum was that all State entities should be privatised, regardless of whether they were making losses or profits. Indeed, the whole world was caught up in a 'privatisation frenzy' some time back. Sri Lanka was no exception.

Sri Lanka was one of the first countries in the region to liberalise its economy, in 1977. Even India did not liberalise its economy until the early 1990s. The privatisation of State enterprises was followed as a matter of policy by all Governments that followed, until the present Government stopped the practice.

Privatisation in Sri Lanka had no rhyme or reason, so to speak. A considerable number of State assets were privatised en masse. Most were sold for a song, far below even the State Assessor's quotation. The process usually lacked any transparency or accountability. The public came to know of many privatisations only after the deed was done.

Worse, many profitable State ventures were sold to dubious companies and individuals with 'connections' to the ruling classes. Some State enterprises were partly privatised under the guise of 'joint ventures' or 'strategic partnerships'. SriLankan Airlines is a good example for the latter. Another negative point was that in the case of privatized entities controlled by foreign companies, most of the profits were repatriated resulting in a loss of foreign exchange for the country.

The worst aspect of privatisation was that certain privatised entities had a monopoly status, at least until another competitor came along. The domestic LP Gas business is a prime example. Shell enjoyed a virtual monopoly until Laufghs came to the scene. This meant that consumers had to buy gas cylinders from just one company at whatever price they quoted. The establishment of the Consumer Protection Authority gave some relief to the hapless consumers.

Now the authorities have realized the need to re-vest these privatised entities in the people for their betterment. Some have been won back as a result of litigation and court verdicts. The Sri Lanka Insurance Corporation is a case in point. In the case of others, the Government has either bought back the privatised shares or is trying to.

SriLankan Airlines is now a fully Government-owned institution after the Government bought back the shares held by Emirates. The Government has bought back the entire 43.6 per cent stake it sold to Dubai's Emirates Airlines 10 years ago. Emirates had bought its stake for 70 million dollars in 1998 in line with the privatisation of the airline, which was then known as Air Lankaaid.

Consumers around the island will also welcome the move to buy back the share held by Shell. Cabinet Spokesman and Media Minister Keheliya Rambukwella addressing the weekly Cabinet press briefing in Colombo has said that the government would make a swift bid to purchase the controlling 51 per cent stake owned by Shell Gas Lanka, the leading LPG supplier in the country. The Government already owns the other 49 per cent.

Shell Gas Lanka was earlier known as Colombo Gas Company and owned by the State, until it was privatised in the nineties. The decision is in keeping with the Government's policy of non-privatisation, which is now being taken one step further through the purchase of property that once belonged to the State.

It is commendable that the Government has allayed investors' fears by declaring firmly that the government's latest move is not indicative of a trend towards nationalisation. However, the government will bid for any former state entities that become available, as in the case of Shell Gas Lanka.

One must acknowledge that there were positive aspects of privatisation as well. It is no secret that many formerly lethargic State institutions became dynamic and innovative under private management. The secret was the infusion of new attitudes to the same old staff. 'Customer First' was the motto of these privatised companies.

The Challenge for the State is to continue these practices and attitudes at the newly re-vested institutions. They should retain the same dynamism and commitment to service without falling prey to the age old problems confronting most Government departments - lethargy and inefficiency. Private sector work ethics can work wonders at State institutions provided the staff does not lapse into their previous mentality. A 'can-do' attitude is a must.

The Government is trying to do just that by reforming the State sector. Effective management is the key. There are many State institutions which have won the hearts and minds of the public by rendering a yeoman service. They perform on par with companies in the private sector. There is no magic formula - everyone at these institutions, from top to bottom, is committed to work efficiently to serve the public. The same formula should spread to all Government employees and institutions. The public should come first in whatever work they do.

The Government has taken a step in the right direction by appointing several famous names from the private sector to head Government institutions. They will hopefully be able to infuse many private sector practices and work ethics to the State institutions they will be heading.

It was recently pointed out that State institutions should be more technology-oriented. This is another instance where they can take a cue from the private sector, which is always up-to-date with the latest technology to serve their customers. This minimises delays and accelerates the workflow. There will be no need for members of the public to go from pillar to post to get their work done. More Government institutions should have an online presence, so that it won't even be necessary to visit them in person to get work done.

A healthy competition between the public and private sector is beneficial to the economy and the public. Where possible, there should be partnerships between these two sectors. For example, universities can work with private sector on advanced research. The synergies of both sectors must be harnessed fully for the economic development of the Nation and for social uplift.