Removing the burden of SOEs from people’s shoulders

President Gotabaya Rajapaksa addressing the newly appointed Ministers of his Cabinet, after handing over their appointment letters on Friday 23, announced –  (i) his intention to appoint a committee to evaluate the suitability of persons to be appointed as Chairpersons and members of Board of Directors of the State Owned Enterprises (SOEs).

He emphasized the importance of appointing suitable, qualified professionals to those positions, enabling them to be managed efficiently and profitably. The President requested Ministers to forward their nominees to this board for consideration. He also emphasized; (ii) the need to appointing un-skilled, unemployed persons in low income families to  vacant un-skilled positions in State Institution residing in the area where the vacancies exist, on electoral basis. 

The remark made by the President was important. The President further said, filling un-skilled positions in State Institutions coming under each Ministry with persons in the minister’s electorate was not a satisfactory method. He requested the Ministers to communicate information of all existing vacancies in the institutions coming under the purview of each ministry to the Presidential Secretariat.

The Presidential Secretariat coordinating with the MPs of the area will select suitable persons from low income families residing in the area where vacancies exist, to fill those vacancies. it serves as a method of poverty elevation in low-income families. 

The practice hitherto adopted; appointing Ministers’ relations, friends and cronies to the positions of Chairpersons and as members of Board of Directors of SOEs with no concern for their suitability, qualifications and experience and stuffing those institutions with persons in those Minister’ electorates who put up billboards and pasted posters for the Minister without any suitability; was the main cause for those institutions’ dismal performance and the key constraint to improving them as profitable commercial entities. This was known to all previous Presidents, Prime Ministers and Ministers. But no one dared to change it.  

As reported in the media, a four member selection committee has been appointed to undertake the selection process. The Secretary to the President has published a notice inviting expressions of interest from experienced professionals both local and those living abroad who are interested to be considered for appointment as chairpersons and board members of various State Owned Institutions and other regulatory and promotional agencies. 

Adopting standard criteria in these appointments against pure discretion of individual Ministers is a step taken in right direction. The calibre of the people holding top positions in these organizations definitely has an influence in their performance. It will not only improve the performance in the State Owned Enterprises, but also improve the transparency of the appointments. While this is a step in right direction, change at the top alone would not be able to change this loss making State Owned Enterprises to perform better. It is hoped the President will take the other steps needed to make the SOEs efficient and profitable enterprises and take the burden off the people’ shoulders of sustaining them.

Nevertheless, good intentions alone are not enough, more and better ideas will evolve into more and better policies and programmes; people expect the government to deliver. Successful Implementation of these policies is the responsibility of all; the politicians and those who shoulder the responsibility to deliver.

 People are the stakeholders in this, and bear a huge cost to maintain this loss making State Owned Enterprises, sustained by their tax money. The state of affairs of these institutions cause sharp decline in the level of trust the people have in the government.

The massive losses in the National Airlines, other enterprises providing public utilities, selling commodities and engaging in trade and commercial activities, are putting a heavy burden on the budget. Wastage, corruption and frauds reported in them need to be eradicated.

Over the last fifty years, short sighted policies for political gain implemented by successive governments, more and more Corporations, Boards, Authorities, Banks and many other State Owned Enterprises, one after another were added, employing more and more people in them with scant regard to norms of staffing needs, while expanding them and making them responsible for a wide range of activities. When taken together it created machinery that can no longer operate efficiently and profitably.

Sooner than later, nothing of the government revenue would be left to provide services essential to the people after making good the losses incurred by the GOEs, which is now a big whale that can’t swim.

The perennial expectation of the politicians that the State Owned Enterprises are a source of jobs to be distributed at their will makes it harder to get the politicians’ will and commitment to change them; the resistance may also could come from the employees of those institutions and Trade Union leaders as it was an opportunity lost for them to slip in their kith and kin in to these institutions with the blessing of their political masters. 

The euphoria felt with the change of government needs to be maintained to get better results of the changes made. There is no doubt about the President’s  intention to change this rotten political culture. However, the rot set in and continued for the last so many decades with the blessings of successive governments and political leaders has taken root deeply. Plucking it off the ground is not easy. Changing them may be even harder than changing the government. 
    
In this context, the government needs to determine its priorities and get it right. The Priorities Exercise, as it was known, soon bloated far beyond expectations, eating up months and thousands of man hours, committees and reports; swelling in the end into heaps of reports and files filling the cupboards. The big picture remains obscure. Establishing Task Forces, Commissions, committees, Advisory Councils in all directions would only set off to the same old ending after consuming time and eating into the tax money of the people.

Development and implementing of policies draw upon resources which remain in chronically short supply in any government: Analytical capacity, legislative drafting, financial resources, ministerial time, cabinet time, parliamentary time, competent programme management and always, “Consultation" simply aggravates such constraints.

On the other hand, the government cannot remove the onus on the bureaucracy, however hard it is to move forward with it. Of course, it is an enduring challenge to deliver, in a public sector deeply rooted in inefficiency and highly resistant to change in institutional inertia and in a democracy. Democratic constitutions rightly focus upon legitimacy rather than efficiency. It is never easy to revolutionize this setting.

However, the people are not prepared to deflect, forget or ease off, even with the passage of time, the politicians wished otherwise. The people expect the government to fulfill their expectations as promised. The expectations of the people are high, wanting things to happen at a faster pace, wanting the government to deliver expeditiously. The challenge of the government is to deliver on its promises. 

Raja Wickramasinghe
Canada