Sri Lankan government moves to privatise major state corporations

 

Sri Lankan government moves to privatise major state corporations

By
Saman Gunadasa

27 March 2017

The Sri Lankan government is rapidly implementing demands made by an International Monetary Fund (IMF) team in Colombo early this month. During the visit the Sirisena-Wickremesinghe government said it would sell the state-owned Hyatt, Grand Oriental, Waters Edge and Hilton hotels and Lanka Hospitals, and listed them on the stock exchange in an attempt to raise $US1 billion.

On March 15, the government declared that key state-owned enterprises—the Ceylon Electricity Board (CEB), Ceylon Petroleum Corporation (CPC), National Water Supply and Drainage Board (NWSDB), Airport and Aviation Services (AASL) and Sri Lanka Ports Authority (PA)—would operate on a commercial basis. The decision, a first step toward privatisation, will see job cuts and major attacks on working conditions. Workers at the state-owned enterprises have consistently opposed privatisation.

Last week, Central Bank of Sri Lanka governor Indrajith Coomaraswamy announced that monetary policy was being tightened with 25-basis point increases in lending and deposit rates, climbing to 8.75 percent and 7.25 percent respectively. The decision is in line with IMF recommendations.

The IMF team also called on Colombo to speed up “economic reforms” in order to reduce the fiscal deficit and avert a debt repayment crisis. The government has publicly acknowledged that it needs $US3.4 billion this year to pay foreign debt instalments and interest. The IMF is notorious for its privatisation demands, recently imposing its dictates on governments in Greece, Romania, Egypt, India, Pakistan and Bangladesh.

An IMF team press release on March 7 said “finalising and publishing Statements of Corporate Intents for large SOEs…

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