Desperate attempts to prevent privatisation of SLT

As usual attempts of sabotage are underway to block the Government’s privatisation program. Last week, an organisation called the National Resources Protection Movement staged a protest against the divestiture of SOEs and in particular voiced their opposition against the sale of Sri Lanka Telecom (SLT), citing national security concerns.

The school of thought that the privatisation of SLT would endanger the national security of the country was first expounded by the Parliamentary Sectoral Oversight Committee on National Security headed by the SLPP MP Sarath Weerasekara.

Last June, Weerasekara told Parliament that divestment of the Government’s stake in SLT could expose the country’s strategic communication infrastructure and sensitive information to private companies, thereby posing a threat to national security. The Colombo District MP is in fact reputed for standing against progressive policies. He expressed his displeasure about the issuance of permanent deeds to farmers during the 2024 Budget while one might also recall that he severely condemned the national anthem being sung in Tamil. The argument of the controversial legislator against SLT privatisation holds no ground as satellite links and international cables connecting the country are built and managed by foreign firms in which many connected countries are shareholders. SLT is also a shareholder in some global cable companies.

Unfortunately, even the prelate monks have joined this bandwagon of opposing the privatisation of the Government-owned telecommunication firm on the basis of safeguarding national security. It would be best if religious leaders refrain from giving lectures in economic policy to the rulers due to their lack of credentials on the subject matter and leave that task to the experts and professionals.

The partial privatisation of SLT in the mid-1990s is considered as one of the most successful economic reform initiatives in the country. When SLT was under the ownership of the State, people had to wait years to obtain a telephone connection, and the telecommunication industry in the island too was progressing at a lackadaisical pace. However, the breakup of the State monopoly and the consequent entry of the private, foreign firms to the industry profoundly changed the dynamics of the sector, with consumers reaping the benefits of competition. It was ironic that when a 35% stake in SLT was sold together with its complete management control to the Japanese firm Nippon Telegraph and Telephone Corporation (NTT) in 1997 during the height of the war against the LTTE, no one raised concerns about national security.

The telecommunication industries in most of the powerful countries in the world, which have more significant national security concerns than Sri Lanka, are entirely represented by the private companies.

NPP Leader Anura Kumara Dissanayake at a forum with bankers had said that the SLT should be owned by the Government for people’s benefit. Ironically, people in Sri Lanka began to realise the benefits of telecommunication when the SLT came under the control of NTT with the simultaneous arrival of private telecom operators in late 90s, hence, the assertion of the Presidential aspirant is incompatible with empirical evidence.

Some groups are against the divestment of SLT, as it is a profit-making entity. But one must bear in mind that only a minor proportion of the profit is transferred to the Treasury in the form of dividends. Over the last decade or so, the Government has earned only Rs. 950 million per year as dividends from the State-owned telecom operator, and that is not a very substantial amount. The divestment of enterprises owned by the Government would attract foreign direct investments into the economy apart from increasing the country’s foreign reserves. Proceeds from privatisation would aid the Treasury to retire the Government debt without having to cut down public expenditure or imposing additional taxes on the general public.

The State running commercial enterprises is a medieval concept, but unfortunately the illiterate Lankans are still hanging on to the outdated notion despite undergoing numerous economic hardships.