After privatisation, who is going to feed the ‘gutter people’?

By N Sathiya Moorthy

Like leaders of nations that want to encourage privatisation of existing public sector enterprises, President Ranil Wickremesinghe too has said that the State need not do business. Instead, the job of the government is to provide services such as education and health, and maintain law and order, he said in a discussion at the President’s Secretariat not very long ago.

Wickremesinghe declared that the nation’s resources were being wasted on the likes of Ceylon Electricity Board (CEB), Ceylon Petroleum Corporation (CPC) and Sri Lankan Airlines. In the same vein, he listed seven state-owned enterprises (SOEs) would face disinvestment/ restructuring.

The list, according to a statement from the President’s Media Division (PMD), comprises Sri Lankan Airlines (including Sri Lankan Catering), Sri Lanka Telecom, Sri Lanka Insurance Corporation), Canwill Holdings (Grand Hyatt Hotel), Hotel Developers Lanka (Hilton Hotel Colombo), Litro Gas Lanka and associate companies.

“Not all of them are loss making. But we do have to repay debt. You can’t keep these and pay back loans,” the President clarified. “If we can’t pay off our loans, we might have to sell something in the house and pay it,” he clarified. It is here he responded to a question on privatising profit-making SOEs, to counter-question: “Why is the state engaged in business? That’s not our mandate. The state has no business engaging in business.”

The President who is also his Finance Minister, went on to ask: “In which country is there a law that these businesses should be under state control?”  He himself responded, referring to the large, immediate neighbour:  “India is selling their airports, profit making ones. India has come to that stage. We have to go there too.”

Loses, causes, remedies

It is here that the government needs to draw a distinction between privatisation and globalisation, and decide which of does the nation want. In India, for instance, the government introduced privatisation and globalisation together, when panicked by the dollar-shortage and opened up the socialist economy in the early nineties.

At the time, the nation’s private sector sought more elbow room. Possibly because it was expected by foreign backers of the economic reforms, India went in for calibrated globalisation alongside graded privatisation. In the end, it has become a joint sector between Indian and overseas private sector.

In context, the government also has to ask itself from where jobs for the nation’s millions would come. Already, each and every one of China-funded projects ensured that not a Sri Lankan got even a daily-wage job by mistake. The President should recall Indian reports of the past year and more that talk about the highest unemployment rates in 40 years. India is yet to come out with a comprehensive report on the job losses, causes and remedies.

In the IT era which has evolved already into AI era, the private sector is not going to give away jobs. But Sri Lankans of all ages, now and in the future, need jobs, all-round, in every sector. It is here robots and AI are taking away jobs all over the world, starting with Japan, and now India, too. First, robots replaced factory-floor labour, now AI is doing it to the rest of ‘em all, IT professionals, technocrats and accountants.

Can Sri Lanka follow in those foot-steps? Can the government encourage or accept the private sector’s denial of jobs to the locals, especially during this transition time imposed by the economic crisis? Or, can it, or should it delay the privatisation of the kind, if it still thinks it cannot be avoided? In a way, privatisation of the Ranil kind is equivalent to ‘organic farming’ of the Gota type, at least at this stage. Being launched without preparing the ground and to address the groundswell of public reservation, criticism and rank opposition?

Single largest employer

Like other small developing democracies, whether they are islands or not, Sri Lanka needs to acknowledge that the State is the single largest employer in the organised sector. It was the product of a deliberate policy, to provide upward social mobility for those that the state was helping to climb out of the socio-economic rut.

Whether headed by capitalist as the parent UNP or socialist as the breakaway SLFP, post-Independence governments were sworn to social uplift. When this floundered, or at least fell beyond expectations, aspirations and unsaid promises caused the two ‘JVP insurgencies’.

The state injected a deliberate dose of deprivation on the job front through the ‘Sinhala Only’ policy and the resultant sense of ethnic deprivation with a linguistic-cultural elements added to it, took the shape of ‘Tamil youth militancy’, leading all the way up to LTTE terrorism. None of it was intended at Independence.

The Aragalaya protests last year was also about deprivation. It was originally confined to the urban areas. But President Gota Rajapaksa’s foolhardy idea of ‘organic farming’ without grassroots-level preparation of any kind, meant that the protests spread and spread faster than even the organisers might have expected. Was such unexpectedness a contributing factor for the unpreparedness for taking the protests to the next level, namely, militancy?

All of it could mean that the rich-poor divide in the coming years and decades may be worse than already. That is already happening in India, and the government-spending on the social sector has increased, not decreased — for health and education, and food security, not to miss out on a roof over the head.

Where does the government, as an institution and not just the incumbent, expect the money to come from? Unless it taxes corporates, local and overseas, the same way as it has taxed individuals just now, it will have to borrow more… Or, it will have to push those people back to the gutters and ghettos, from where the state had lifted them since Independence – and leave them sick and hungry all over again…

A ready recipe this for the collapse not just of the Sri Lankan State but possibly the nation, per se, though not here and now…

(The writer is a policy analyst & political commentator, based in Chennai, India. Email: sathiyam54@nsathiy