A letter of appreciation to Special Assignments Minister Sarath Amunugama

By T. Rusiripala

An article in the Daily FT, referring to your focus on loss-making SOEs, stressing the need for the utilisation of assets effectively, has compelled me to greatly acknowledge the concerns. 

A significant section of society yearning for sensible governance in this country wishes practical and realistic attention to the SOEs instead of the rhetoric, big talk and balderdash that we are unfortunately often subjected to. Your approach belatedly though is welcome.

I wish to invite your attention to another area of focus of the proposed searchlight. It is not only the loss-making SOEs that should be the subject of this extremely important examination. Even other SOEs which manage and control public assets of huge value should come under this program. 

Sometimes they do not receive as much attention as the ones that show book losses. It will not be difficult for the Minister, a one-time senior public servant, to understand how the statistical maneuvers could help in the window dressing exercises to show a rosy picture when the actual state of affairs is rotting! The profit-making therefore is no criteria for the elimination of such SOEs controlling large asset portfolios from further scrutiny of the type proposed by the Minister.

While there are several such, in order to shorten the explanation I wish to bring out the state-owned banks as a case in point. No doubt their published accounts and reports speak of, from recent times, not billions but trillions. They also control assets of large volumes and values. But your concern of the aspect of the wastage of assets and wasteful expenditure leading to a draining of large sums of monies unnoticed would contribute to add to the income side of the State if prevented effectively. 

These institutions apparently use the autonomy granted to them for effective commercial operations under competitive environments and use it as a ruse to freely decide on the expenses. Whether some of these are warranted, reasonable or fair in the context of handling public funds is a matter that can only be confirmed through an independent overview. 

Some of the expenses involve amounts ranging up toward billions and involve foreign exchange for imports, etc. Sometimes the areas are too delicate and wishful in the context of the economy of the country to be left to the decision-makers acting extremely liberally with hardly displayed national interests. While it is desirable to permit autonomy for the business and commercial operations it is prudent to have some monitoring effected through the golden shareholder at least to ensure a degree of austerity and prevent waste and sometimes corruption. 

It will be seen that our State banks are showing trillions not mainly due to any effective management skills as in the comparable private sector but due to the mere availability of a vast field open and confined to them in public sector operations. A careful analysis of their balance sheets will reveal the percentages of profits they earn by their own commercial operations as against the large portion automatically generated from the Government business thrust upon them! 

In such a situation it would be in the public interest to ascertain whether the yield from exorbitant investments in certain fields is justified or a mere wasteful exercise. Once again a sincere tribute to you Mr. Minister, for your initiative!