A Deep Dive into the Market Competitiveness of Ceylon Tea

Advocata Institute hosted an event titled ‘A Deep Dive into the Market Competitiveness of Ceylon Tea’ to launch the report on "Market Competitiveness of the Tea Industry of Sri Lanka" authored by Sudaraka Ariyaratne (Research Consultant, Advocata Institute) The conference consisted of a panel discussion on Land & Labour Reforms : Efficiency Through Liberalisation and Quality Control & Premiumisation : Unlocking the True Potential of Ceylon Tea

Session on 'Land & Labour Reforms : Efficiency Through Liberalisation

The session commenced with a presentation by Sudaraka Ariyaratne, followed by a panel discussion with Hon. Jeevan Thondaman (Cabinet Minister, Water Supply & Estate Infrastructure Development), Dr Roshan Rajadurai (Managing Director, Hayleys Plantation Sector), Dr Romesh Bandaranaike (Former Director, Plantation Management Monitoring Division), moderated by Murtaza Jafferjee (Chair, Advocata Institute)

Session on 'Quality Control & Premiumisation : Unlocking the True Potential of Ceylon Tea’

The session continued on with another presentation by Sudaraka Ariyaratne, followed by a panel discussion with Niraj de Mel (Chairperson, Sri Lanka Tea Board), Dilhan C. Fernando (Chief Executive Officer, Ceylon Tea Services PLC), Dasarath Dassanayake (Former Head, Manufacture High Grown, John Keells PLC Consultant) moderated by Rehana Thowfeek (Research Consultant, Advocata Institute)

The presentation on Land and Labour Reforms: Efficiency Through Liberalisation by Sudaraka Ariyaratne can be accessed here

The presentation on Quality Control and Premiumisation: Unlocking the True Potential of Ceylon Tea by Sudaraka Ariyaratne can be accessed here

Both discussions will be available on our YouTube channel shortly.

ආර්ථික නිදහස් සමුළුව 2024 : ධනවත් රටක් හදන ආර්ථික නිදහස

ආර්ථික නිදහස් සමුළුව 2024 : ධනවත් රටක් හදන ආර්ථික නිදහස

ප්‍රධාන දේශනය - ආචාර්ය හර්ෂ ද සිල්වා (පාර්ලිමෙන්තු මන්ත්‍රී, සභාපති රජයේ මුදල් පිළිබඳ කාරක සභාව) අදහස් ඉදිරිපත් කිරීම - තාරක බාලසූරිය (රාජ්‍ය අමාත්‍ය,විදේශ කටයුතු) අදහස් ඉදිරිපත් කිරීම- මහාචාර්ය සිරිමල් අබේරත්න ( උපදේශක, Advocata Institute ) ආර්ථික නිදහස පිළිබද ඉදිරිපත් කිරීම - ධනනාත් ප්‍රනාන්දු (ප්‍රධාන විධායක නිළධාරී, Advocata Institute) මෙහෙයවීම- හසලක තුෂාර (Content Creator)

The Advocata Institute hosted an event on ' ධනවත් රටක් හදන ආර්ථික නිදහස) on Monday 29th, at Jasmine Hall, BMICH. The keynote speech was given by Dr. Harsha de Silva (Member of Parliament & Chairman, Committee on Public Finance). The panel for the discussion included Dr Harsha de Silva, Tharaka Balasuriya (State Minister, Foreign Affairs), Prof. Sirimal Abeyratne (Advisor, Advocata Institute), and the moderator was Hasalaka Thushara (Content Creator)

A presentation was 'Economic Freedom' - Dhananath Fernando (Chief Executive Officer)

Access the presentation by Dhananath Fernando here

The full video can be accessed here

Advocata Economic Freedom Summit 24: Economic freedom & its pathway to prosperity

The Advocata Economic Freedom Summit 2024 brings together leading thinkers and doers to deliberate on the state of economic freedom in Sri Lanka. In two separate events, in two different locations they discussed, debated and contemplated on ideas on how to improve levels of economic freedom in Sri Lanka and to provide audit of Sri Lanka's ratings on the acclaimed Economic Freedom of the World Index.

The Advocata Institute's Economic Freedom Summit 2024, commenced on January 29th at Marriott Courtyard, with a breakfast forum on 'Economic Freedom & its Pathway to Prosperity'

The keynote speaker for this session was Thilan Wijesinghe (Chairman & CEO, TWCorp (Pvt) Ltd)

The speakers for the session included Fred McMahon (Resident Fellow, Fraser Institute), Dr. Tom G. Palmer (Executive Vice President, International Programs, Atlas Network), Dr.Harsha de Silva (Member of Parliament & Chairman, Committee on Public Finance), Daniel Alphonsus (Director, Advocata Institute) and Thilan Wijesinghe.

The session was moderated by Prof. Rohan Samarajiva (Board of Advisor, Advocata Institute)
The full video can be accessed here

The presentation by Key note speaker Thilan Wijesinghe can be accessed here.

Access the presentation by Fred McMahon here

Following the Morning session, a discussion on 'ධනවත් රටක් හදන ආර්ථික නිදහස' took place at BMICH. Watch the full panel discussion here and access the presentations from this session here

Market Competitiveness of the Tea Industry of Sri Lanka

Advocata Institute launches its latest report titled “Market Competitiveness of the Tea Industry of Sri Lanka” The report is written by Sudaraka Ariyaratne, Research Consultant at Advocata Institute.

The report begins with an introductory chapter that details the historical evolution of the island’s tea industry. The report finds that the present standing of the industry in the context of the international market is not too grim, but argues that issues related to the labour market, capital investment, value addition, and quality control limit the industry’s competitiveness in the global stage. The rest of the report takes the form of four discussion papers, each on the four areas of concern listed above, that present an economic theory-based lens to approach these issues, and discuss potential solutions.

You can access the report on ‘Market Competitiveness of the Tea Industry of Sri Lanka’ here

Housing For All: The Role of Competition Policy In Construction

The Advocata Institute hosted a conference on December 13th at the Lavender Hall, BMICH on the topic Housing For All: The Role of Competition Policy In Construction. The conference facilitated two separate discussion sessions on Trade and Competition Policy: Impact on Affordable Housing in Sri Lanka and Regional Housing Crisis: The Role of Competition in Construction Markets, with panelists who are experts in the relative conversations. This event was in partnership with the Templeton World Charity Foundation.

The agenda for the sessions can be found here

Access the presentation by Dr Roshan Perera here

Policy Briefs:

Access the policy brief on Unshackling Markets: The Case Against Import Controls and Price Controls in Sri Lanka by Advocata Institute

Access the policy brief on Impact of Anti- Competitive Practices in the Construction Industry on Housing for the Urban Poor in India

Access the policy brief on Impact of Anti-competitive Practices in the Construction Industry on Housing for the Urban Poor in Pakistan

Access the policy brief Impact of Anti-competitive Practices in the Construction Industry on Housing for the Urban Poor in Bangladesh

Women's Policy Action Network : Gender Discriminatory Land Inheritance Policy Brief

The Womens Policy Action Network launched their policy brief on 'Gender Discriminatory Land Inheritance' at a roundtable discussion. The discussions resulted in the identification of laws that are discriminatory directly and in its applications. Further laws that had the potential to be discriminatory were also identified.

You can access the policy brief on Gender Discriminatory Land Inheritance here

Media Coverage on IMF & The Urgency of State-Owned Enterprise Reforms

Sri Lanka SOE accumulated losses equal 18 times PAYE taxes: Advocata

Sri Lanka’s state owned enterprises ratcheted up losses amounting to 18 times the annual pay as you earn taxes collected from wage earners, since privatisation was halted, a think tank has said.

When state enterprises ran losses they were covered by loans taken from domestic banks as well as from capital markets.

“From 2005 to 2021, roughtly over 15 years, state enterprises have accumulated losses of 1.8 trillion rupees,” said Dhananath Fernando, Chief Executive of Advocata Institute told reporters in Colombo.
Read the full article here

ITN News Live IMF & The Urgency for State-Owned Enterprise Reforms

The video can be found here from the ITN Live News segment (2023-10-10| 06.30 PM)

Sri Lanka should speed up SOE sales before momentum dies: think tank

Sri Lanka should speed up the divestment of state enterprises to reduce the burden on the people, before the momentum for reform out, Advocata Institute, a Colombo-based think tank said.

Key reforms have to be done in the first year of government, Rohan Samarajiva, an Advisor to Advocata Institute told reporters.

“2024 by all estimates will be an election year,” Samarajiva, who had been involved in government reforms earlier said.

“I would generally argue that is not the opportune time for this kind of reforms.”

Read the full article here

Failed SOEs account to Rs. 1.5 Tn accumulated losses

Debt owed by public corporations up to 2021 amounts to Rs 1.8 Tn:

The failures of State Owned Enterprises (SOE) are creating a huge financial burden to the country; their losses have resulted in a staggering Rs. 1.5 trillion accumulated losses from 2006 to 2021.

In addition debt owed by public corporations up to 2021 was Rs 1.8 trillion which is a 9.4% of public debt, said Research Analyst Advocata Institute Rehana Thohwfeek at a special event yesterday on SOE’s. She explained that the country expected to generate around Rs. 100 billion from PAYE Tax and if one compares the losses of SOE’s and their debt it paints a very sad story.

She also said by providing subsidies by State institutions like Petroleum Corporations for Kerosene due to political and union pressures the CPA lost rupees billions.

Though SOE’s are marketed as national assets they are actually a vehicle for corruption,” accused Chief Executive Officer of Advocata, Dhananath Fernando.

Read the full article here

SOE restructuring delays seen as discouraging prospective investors

The restructuring of State Owned of Enterprises (SOE) is being delayed day- by –day, resulting in an uncertain situation where prospective investors will also tend to think twice before investing in Sri Lanka, Advisor, Advocata Institute Prof Rohan Samarajiva said.

“Although certain trade unions say that Sri Lankan Airlines, CPC, CEB, Water Supply and Drainage Board and other state owned enterprises are making profits, there are various issues in their accounting system. They are actually incurring losses because some of their debts and the relevant interests are borne by the Treasury, Prof. Samarajiva said at a forum organized by Advocate Institute on the topic, ‘IMF and the Urgency for State – Owned Enterprises Reforms’. The event was held at BMICH on Tuesday.

Read the full article here

The Urgency for Restructuring State-Owned Enterprises in Sri Lanka

The restructuring of State-Owned Enterprises (SOEs) in Sri Lanka has been facing significant delays, leading to an uncertain environment that may deter potential investors. According to Prof Rohan Samarajiva, Advisor at the Advocata Institute, although some trade unions argue that certain SOEs are profitable, there are issues with their accounting system. Many of these enterprises are actually incurring losses because their debts and interests are being bornethe Treasury.

The interim budget in August 2022 had specifically mentioned the restructuring of various SOEs, including Sri Lankan Airlines, Ceylon Petroleum Corporation (CPC), Ceylon Electricity Board (CEB), and Hilton Hotel, among others. However, despite 14 months passing, no progress has been made in restructuring these entities.

Read the full article here

IMF & The Urgency of State-Owned Enterprise Reforms

In the wake of Sri Lanka's economic challenges, it is undeniable that State Owned Enterprises (SOEs) have had a substantial impact on the country's fiscal health. They squander resources, land, labour, and add to the debt burden. They monopolize markets limiting competitiveness and contribute to the inefficiency in the economy. At this economic juncture, the necessity for SOE reforms is not just a matter of economic prudence; it is a matter of national importance. Without swift and comprehensive SOE reforms, we risk prolonging our current economic downturn.

The Advocata Institute hosted a press briefing on IMF & The Urgency of State-Owned Enterprises Reforms, to create further awareness and public debate on the urgency of implementing reforms to State Owned Enterprises (SOE’s). This Press Brief was held at BMICH, Tulip Hall on October 10.

The Event commenced with a 15 minute presentation by Rehana Thowfeek, Research Associate at the Advocata Institute analysing the issues surrounding SOE’s and their link to broader macroeconomic issues. Following this, there will be introductory remarks by the main speakers for the evening:

• Professor Rohan Samarajiva - Advisor, Advocata Institute.

• Mr. Dhananath Fernando - Chief Executive Officer, Advocata Institute.

• Mr. Ravi Rathnasabapathy - Independent Consultant

The Presentation by Rehana Thowfeek can be found here

The Full video of the briefing can be found here

Women's Policy Action Network: Empowering Women :A Future-Ready Workforce

The Women's Policy Action Network hosted a conference on August 29th at the Lavender Hall, BMICH on the topic Empowering Women : A Future-Ready Workforce. The conference facilitated two separate discussion sessions on improving Social infrastructure and digital infrastructure, with panelists who are experts in the relative conversations. This discussion was supported by the Kingdom of the Netherlands and facilitated by the Advocata Institute.

You can access the presentation to the sessions on:

Social Infrastructure for Gender Equality & Empowerment

Unlocking women’s potential in the digital economy

The full video of the Women’s Policy Action Network conference can be found here.

The ‘Social Infrastrastructure for Gender Equality & Empowerment' policy brief can be accessed here

The ‘Unlocking Women’s potential in the Digital Economy’ policy brief can be accessed here

Launch of Women's Policy Action Network 'Reforms to Empower Women During an Economic Crisis'

The Advocata Institute launched the Women's Policy Action Network on Thursday, the 30th of March, 2023 at the Lavender Hall in BMICH at 6.30PM. The Women's Policy Action Network aims to bring about policy reform through advocacy for the economic empowerment of women. It will be a network run by individuals who are committed to women's empowerment. Harnessing advocacy, collating research, and identifying key problem areas that will impact the lives of women are a few of the targets to be achieved. The group will comprise representatives from Civil Society Organizations, policymakers, and women leaders to generate strong conversations advocating for women.

In light of the disproportionate impact of both the pandemic and the economic crisis on women , enhancing women’s participation in the workforce is even more critical. Therefore, the launch of WPAN was followed with a panel discussion on the thematic area of “Reforms to Empower Women During an Economic Crisis”. 

The keynote speaker was Ms.Shiromal Cooray, the Chairman and Managing Director of Jetwing Travels. Remarks were given by the Deputy Ambassador of the Kingdom of the Netherlands, Anouk Baron. The panel discussion was moderated by Dr. Roshan Perera, Senior Research Fellow, Advocata Institute.

The panel included, Shan Yahampath (Advisor to the Labour Ministry and the Foreign Employment), Sampath Thrimawithana (Director at Virtusa), Anarkali Moonesinghe (Former CEO, CIMB Investment Bank Sri Lanka) and Sumini Siyambalapitiya (Senior Research Analyst, Verite Research)

This WPAN launch was supported by the Kingdom of Netherlands and facilitated by the Advocata Institute

You can access the policy brief here

The full video of the launch of the Women’s Policy Action Network can be found here.

අපේ ඉරණම තීරණය කරන අයවැය with Prof. Abeyratne, Prof. Samarajiva & Pasan Wijayawardhana

With the current economic crisis, the 2023 budget is critical to setting the fiscal direction of the country. How will the government tackle reducing the budget deficit, what tax and expenditure reforms will be brought in, and how will they commit to tackling the rising socio-economic issues such as poverty and malnutrition

Advocata hosted an online post-budget 2023 discussion, with Prof Rohan Samarajiva (Founding Chair, LIRNEasia | Advisor, Advocata Institute), Prof. Sirimal Abeyratne (Professor in Economics | Department of Economics, University of Colombo), moderated by Pasan Wijayawardhana (Economic Research Analyst, Advocata Institute) on Thursday, November 17th at 6.00PM

Short presentations on government expenditure and revenue trends was also done by Udahiruni Atapattu (Research Analyst, Advocata Institute) and Thashikala Mendis (Data Analyst, Advocata Institute).

Watch the full video on our YouTube channel

You can access the presentation from the discussion by Thashikala Mendis and Udahiruni Atapattu below

Taxation, Stability and Growth by Thashikala Mendis

Government Expenditure Trends by Udahiruni Atapattu

Media Coverage on #ReformNow Conference: Let's Reset Sri Lanka

Let us focus on global changes immediately - President

We can’t use the old economic model further:

We can no longer use the old economic model and we must pay attention to global changes by thinking innovatively, said President Ranil Wickremesinghe yesterday. He was delivering the keynote address at the professional forum to launch the Advocata Institute’s research report on Sri Lanka’s economic reforms held at the Bandaranaike International Conference Hall in Colombo yesterday (05).

The conference organised by the Advocata Institute under the theme “LET’S RESET SRI LANKA” is held on August 5 and 6 at the Lotus Hall of the Bandaranaike International Conference Hall.

Read the full article here

President reiterates, difficult times ahead

President Ranil Wickremesinghe says Sri Lanka has '6 difficult months ahead' as the island nation attempts to stabilize the economy through agreements with the IMF.

Speaking at a forum organized by the Advocata Institute in Colombo today (05), President Wickremesinghe said that the 'way out' for the country is through the agreements reached with the IMF.

"Although people talk of alternative measures, they have not worked out," the President said, emphasizing that first and foremost, Sri Lanka has to enter into the standby agreement, with the staff level agreement with IMF.

Read the full article here

Sri Lanka President hints on possible wealth tax for economic, social stability

Amid widening gap between the rich and the poor in Sri Lanka, the island nation will have to go for higher taxation including on wealth, President Ranil Wickremesinghe said on Friday while delivering a keynote speech at an economic forum.

The crisis-hit country is struggling with lower state revenue and higher government expenditure with 86 cents of each rupee of tax revenue spent on state sector wages and pensions.

Read the full article here

Sri Lanka President hints on possible wealth tax for economic, social stability

Amid widening gap between the rich and the poor in Sri Lanka, the island nation will have to go for higher taxation including on wealth, President Ranil Wickremesinghe said on Friday while delivering a keynote speech at an economic forum.

The crisis-hit country is struggling with lower state revenue and higher government expenditure with 86 cents of each rupee of tax revenue spent on state sector wages and pensions.

Read the full article here

SL must focus on higher revenue mobilisation to overcome crisis

Sri Lanka still has scope to overcome the macroeconomic instability if the Government could focus on revenue mobilisation through inclusive tax reforms based on scientific analysis, Advocata Institute Senior Research Fellow Dr. Roshan Perera opined.

Speaking at the ‘Let’s reset Sri Lanka’ forum organised by the Advocata Institute recently, she underscored that the root cause of the existing macroeconomic instability was due to lack of fiscal discipline.

Read the full article here

The old economic model is no longer viable, IMF proposals must be implemented - President

President Ranil Wickremesinghe says the old economic model can no longer be implemented adding that innovative thinking is required while paying attention to global changes.

Delivering the guest speech at a conference today (05) Mr. Wickramasinghe said proposals of the International Monetary Fund (IMF) must be implemented to recover from the economic crisis the country is facing, regardless of whether they are good or bad, and regardless of who likes them or not.

Read the full article here

‘National carrier matters, but profitability matters more’

Delaying the privatisation of SriLankan Airlines will not help, however the steps towards privatisation of the national carrier should be taken in consultation with international experts who understand the aviation industry, Thilan Wijesinghe, Chairman and CEO of TWCorp (Pvt) Ltd., said at ‘Let’s Reset Sri Lanka –Reform Now’ conference hosted by Advocate Institute, recently.Thilan who is knowledgeable about many aspects of SriLankan Airlines’ operational outlook said so responding to a query on how debt-laden SriLankan Airlines can attract potential buyers to push a privatisation process forward.

Read the full article here

IMF, a starting point in path to recovery - President

Advocata Institute hosted its economic reform conference, #ReformNow last week. The two day event discussed the economic reforms needed to recover from the current crisis and promote growth.

The event brought together policymakers, l internationally recognised thought-leaders, the business community, civil society and citizens of Sri Lanka to facilitate this much needed discussion. The sessions focused on themes such as reforming taxation, state-owned enterprises, social safety nets , trade policy and land policy.

Read the full article here

‘Only 15 out of 40 employment laws in regular use’

Sri Lanka has over 40 laws that relate to employment, of which only about 15 are in regular use.

Most are dated before independence or shortly thereafter and many are outdated, Shyamali Ranarajah- Attorney at law (Pictured) said.

Sri Lanka’s labour reforms must be led by the highest level of government whilst stakeholders must have a seat at the discussions for labour reforms.

Moreover, Ranarajah said dispute resolution mechanisms must be made efficient, productive and must not become a barrier or a hindrance to growth and employment creation, she opined.

Read the full article here

South Asia can have integration in dancing & cooking, but not trade, quips Prez RW

Strengthening trade relations with the world is essential for countries to fulfil their economic aspirations, however, efforts will have to be made by individual countries to strengthen ties as within the South Asian region and trade integration will not happen, said President Ranil Wickremesinghe. “There will have to be bilateral agreements with whoever we want. There is too much politics involved for there to be a regional trade agreement in South Asia,” the President told a fully-packed audience at the ‘Reform Now’ conference hosted by Colombo-based economic thinktank Advocata Institute.

“So we can keep that aside. We can have integration in dancing, we can have integration in cooking. but certainly, we are not going to have integration as far as the economy is concerned,” Wickremesinghe quipped.

Read the full article here

CSE seen as being controlled by a few people; ‘not a proper platform to list SOEs’

The CSE is not a proper platform to list state owned enterprises because it’s being controlled and dominated by a few people or small groups of them. It cannot be a match for leading stock markets like the London Stock Market because it doesn’t reflect a broader perspective, President Ranil Wickremesinghe said.

“Either you must change or bring into being a new organization to broad base the stakeholder participation level without allowing a small set of people to control it, Wickremesinghe told an economic forum which was organized by the Advocata Institute and held at the BMICH yesterday.

Read the full article here

‘Negotiations with China needed as well to evolve sustainable debt restructuring proposal’

Sri Lanka’s debt advisors are currently looking at local debt, as a restructuring plan to negotiate with our creditors is being developed as part of efforts to make debt sustainable in order to obtain support from the IMF. The latter has specifically told us to bring a sustainable debt restructuring proposal through negotiations with China as well, President Ranil Wickremesinghe said.

Read the full article here

#ReformNow Conference: Let's Reset Sri Lanka

Sri Lanka is in the midst of its worst economic crisis since independence. Advocata Institute organised Sri Lanka’s first ever reset economic conference prioritizing economic recovery and growth. You can now watch these conferences once again on the Advocata Youtube channel and Advocata+ Youtube Channel.

Sessions of the conference were live-streamed on 05th and 06th August 2022 on the Advocata Institute Facebook page!

During the conference Advocata Institute launched it latest report and a policy product tracking the performance of State Owned Enterprises

To access the the platform and report visit https://soe.lk/

This report can be accessed below.

The State of State Owned Enterprises in Sri Lanka

Watch the full sessions on our YouTube channel

You can access the presentation from our sessions below:

Debt Crisis, Structural Adjustment and Trade Policy by Prof Prema-chandra Athukorale

Centralizing the State's Ownership Function by Daniel Alphonsus

State of State-Owned Enterprises by Ravi Rathnasabapathy

Air India Privatisation Story – takeaways for Sri Lanka by Thilan Wijesinghe

Taxation, Stability and Growth by Dr. Roshan Perera

Taxation, Stability and Growth by Prof. Mick Moore

Resetting Samurdhi -Social Safety Nets by Dr Stephen Kidd

Resetting Samurdhi - Social Safety Nets by Ms Gayani Hurulle

Context setting - Labour market Presentation by Udahirini

Labour market reforms for more inclusive growth by Ms Shyamali Ranaraja

Unlocking Land for development – Current Land Utilisation by Migara Rodrigo

Unlocking urban potential by Mr Nayana Mawilmada

Agricultural land by Dr Roshan Rajadurai

The Case For Private Industrial Zones – Lessons From The Dominican Republic by Mr Juan Jimenez

#ReformNow # Let’sResetSriLanka

Day 01 - August 05th

Day 02 - August 06th

Time to bring SOE privatisation to the policy table

Originally appeared on Daily FT, Ada derana Biz , Sunday Observer and The Sunday Island

Privatisation is the need of the hour.

• Sri Lanka is already in one of the worst economic crises in its history. Experts warn that deep economic reforms are essential. 

• Reforming SOE's can  curb further losses,  which add to the fiscal deficit. 

• The  Cumulative losses of the 55 SOEs from 2006-2020 is a staggering 1.2 trillion.  

• Disposing of State Owned Enterprises which are a burden on the public finances, is the crucial need of the hour. 

• Immediate privatisation of  large  State Owned Enterprises,  will  build international investor confidence. 

“Big, ponderous, Government enterprises are not responsive to our needs. And because they’re not responsive, you will go home today and you will have a blackout of one hour, because they’re load shedding during peak hours,” said Prof. Rohan Samarajiva, a veteran policy expert and an advisor of the Advocata Institute.

He made these comments at Advocata’s press briefing, organised to highlight the urgency of carrying out reforms to State Owned Enterprises (SOE). “The basic issue is that we, in this country, are suffering from a twin deficit. We need to get started on addressing the core problem,” further stressed Prof. Rohan Samarajiva.

According to Prof. Samarajiva, privatising a globally visible, yet loss-making SOE, such as SriLankan Airlines is the best solution to create confidence among investors that Sri Lanka is serious about reforms.

Sri Lanka’s SOEs are a serious burden on public finances. With the economic crisis reaching a tipping point, it is becoming increasingly impossible to keep these loss-making enterprises afloat. The continuation to do so, at the expense of the taxpayer, can have serious consequences to the economic trajectory of the nation.

Advocata Institute’s research team has identified that the cumulative losses of the 55 SOEs from 2006-2020 is a staggering Rs. 1.2 trillion. The combined loss per day of the Ceylon Petroleum Corporation, the Ceylon Electricity Board, SriLankan Airlines, Sathosa and the National Water Supply and Drainage Board is approximately Rs. 384,479,189, according to data for the year 2019.

This is at the backdrop where the country is wading through a serious debt crisis with questions surrounding the ability to meet forthcoming debt obligations. The briefing brought together a panel of industry experts who raised alarm bells on why Sri Lanka cannot afford to be complacent about SOE reforms anymore.

Prof. Rohan Samarajiva further explained the seriousness of this issue along with how privatisation can achieve positive outcomes for the country. “In 1997, Sri Lanka Telecom was making losses and providing bad services. Today, after privatisation, it is providing us with good services and employment and double of what they were earning. It is also providing the Government with a dividend which generated billions to the Government.” He highlighted that the country has no other alternative to prevent the haemorrhaging losses of SOE apart from privatisation.

“Privatisation is not a one-size-fits-all model. It is different in different countries and sectors, as seen in the telecommunication industry in Sri Lanka. With a good regulator we can have competition, leading to greater efficiency and making technology accessible to the common public,” commented Advisor to the Advocata Institute Anarkali Moonesinghe.

She further elaborated that possible avenues for privatisation that can be considered include the listing of SOEs in the stock exchange. According to Moonesinghe: “Our stock market could use large capital companies that are owned by the Government today.

“It not only gives people ownership but also broadens ownership by giving the average person an opportunity to become a direct stakeholder to these enterprises. This can be a better option than attaching the person through taxpayer money or having your EPF/ETF being taken into these enterprises,” thereby describing the merits of listing.

Advocata Academic Chair Dr. Sarath Rajaptirana said that the present crisis makes two choices available to the country, which is “reform or perish”. He highlighted the urgency of implementing structural reforms.

He further commented that the key issue with SOEs lies in productivity. “For over 30 years, Sri Lanka’s total factor productivity was less than 1%. This is in severe contrast to countries such as South Korea and Vietnam, where a jump in productivity is experienced today which we were never able to maintain. If you want permanent change in the GDP rate, you need to have productivity increase,” said Dr. Rajaptirana.

The recording of the media event can be found at advocata.org.

Media coverage on "Urgency of State Owned Enterprise Reforms"

Why does Sri Lanka need a national airline when india doesnt have one? Prof. Rohan Samarajiva

Amidst a whopping amount of losses national carrier SriLankan Airlines has been making for years, LIRNEasia Founding Chair and Advocata Institute Advisor Prof. Rohan Samarajiva questioned why Sri Lanka would need a national carrier when India, the neighbour, does not have one. 

During a press briefing organised by Advocata Institute on “The Urgency of State Owned Enterprise Reforms”, Prof. Samarajiva stated that SriLankan Airlines should be privatised to not only save public money, but to also improve the credibility of the country by showing the country’s creditors that Sri Lanka is genuinely committed to meeting its debt payments. 

Prof. Samarajiva pointed to the fact that Sri Lankan is hemorrhaging around Rs. 47 billion in losses per annum and questioned the rationality of using public funds collected through commodity taxes from a person who has never even gone near the airport. 

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Broad SOE reforms urged for SL to regain confidence of external creditors

With the government’s current approach appearing to be failing in its ability to meet upcoming external debt servicing commitments, the Colombo-based policy think tank Advocata Institute urged the government to roll out a broad reform package targeting ‘strategically important’ State-Owned Enterprises (SOEs) as a way to regain confidence of the country’s external creditors, illustrating the determination to resolve the prolonged structural issues in the economy.

According to data presented by Advocata, the cumulative losses incurred by key SOEs were estimated at Rs.1.2 trillion during 2006-2020, while the total SOE debt reached to 9 percent of GDP in 2020. The top five SOEs alone incurred an estimated Rs.384.48 million loss per day burdening both State coffers and ultimately the taxpayer.

“Sri Lanka lacks credibility in its approach to the creditor. In the current context, it’s not possible for us to increase revenue. Therefore, what we have to focus is on cutting expenses. This will send a strong message of responsibility and of commitment to anyone who has given us loans and they will say, ‘this is the country we should negotiate with, because they are serious about their economic problems’,” LIRNEasia Founding Chair and Advocata Institute Advisor Prof. Rohan Samarajiva said.

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State-Owned Enterprise losses mount to staggering Rs 1.2 trillion

The 55 “Strategically Important” listed State-Owned Enterprises (SOE) snowballing losses from 2006 to 2020 is a staggering Rs. 1.2 trillion. Out of the 527 state-owned enterprises the Treasury has classified 55 as “Strategically Important” it was revealed at an Advocata Institute that organised an event on “The Urgency of State-Owned Enterprise Reforms” last week.

Sri Lanka’s State-Owned Enterprises have placed a significant burden on public finances. They are also a major source of inefficiency in the economy. “Therefore the present economic crisis, along with Sri Lanka’s current debt crisis, makes reforms on SOE’s a national priority to emerge from present economic challenges,” it was opined at the event.

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Advocata's event on the Urgency | News 1st: Prime Time English News | (09/12/2021)

Advocata's event on the need for the “Urgency of State Owned Enterprise Reforms” featured on Newsfirst Prime Time English News

"Urgency of State Owned Enterprise Reforms"

The Advocata Institute hosted a press brief on the '"Urgency of State Owned Enterprise Reforms" with Advocata’s Academic Chair Dr. Sarath Rajapatirana, Advocata’s Advisors Professor Rohan Samarajiva and Ms. Anarkali Moonesinghe on December 09th at 2.00PM.

The event commenced with a 10-min presentation, analysing the performance of key State Owned Enterprises. Followed by statements made by Dr. Sarath Rajapatirana, Professor Rohan Samarajiva and Anarkali Moonesinghe on the need for SOE reforms, before opening the floor for a question and answer session with journalists and media.

The event was moderated by K D Vimanga and Sathya Karunarathne.

The presentation by KD Vimanga on "Urgency of State Owned Enterprise Reforms" can be accessed below.

Urgency of State Owned Enterprise Reforms Presentation

Watch the discussion on Advocata Institutes YouTube channel. 

Media coverage on " A National Consensus for the Economy"

Privatise SriLankan - Prof. Samarajiwa

The Government should privatise national carrier SriLankan Airlines and save millions of rupees that is being daily wasted to keep the airline, said founding Chair of LIRNEasia, Prof. Rohan Samarajiwa at the Advocata Institute organized building political consensus for economic reforms event at BMICH on Wednesday.

He said that if the Indian government can privatise their national carrier Air India, the Sri Lanka government too could do it. He however said that like what the Indian government did the Sri Lankan government too would have to shoulder their burden of settling all the debt owed by the airline when it was privatised. “However even after doing this the Sri Lanka government would be able to save millions of rupees that is allocated to ‘up keep’ the airline.

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‘IMF bailout viable option for mounting debt repayment’

Whichever government is in power they would have to face the current dollar crunch, escalating global commodity prices, pandemic and most of the other current issues and one way out of this is to look for a IMF funding Chair of LIRNEasia, Prof. Rohan Samarajiwa at The Advocata Institute organized building political consensus for economic reforms event at BMICH on Wednesday.

He said that no institution has given loans to Sri Lanka by force but now the debt repayment is mounting and one viable option would be to look at the IMF for a bailout. He also said that the budget did have salient features and though not adequate to cut down the fuel allowance of the parliamentarians by 5 liters is a step taken in the right direction giving a positive message that polities too are taking some cost cutting measures. But the one off tax imposed on corporate is not a welcome move.”

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Prof. Samarajiva proposes Sri Lankan divest shares

LIRNEasia Founding Chair and Advocata Institute Advisor Prof. Rohan Samarajiva, during a recent event, suggested that the Government divest SriLankan Airlines on the same lines as Air India.

“The objective is to protect the taxpayers of this country from having to continually cover the losses of this technically bankrupt state-owned company,” he said, highlighting the importance of immediate measures to improve public finances.

The national carrier makes a daily loss of Rs. 129.03 million. In the last four years of operation, it has cost the economy Rs. 137 billion in the form of accumulated losses.

Prof. Samarajiva also stressed the importance of building a national consensus to implement immediate reforms to tackle a wide range of issues ranging from unsustainable debt to shortages of essential items in the country.

“We are no longer talking about a crisis that is about to engulf us. We are now in its midst, though not its depths. The hope that the 2022 Budget would give the right signals has evaporated,” he added.

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National consensus mooted to overcome potential sovereign default

A national consensus backed by a common minimum programme, which should be implemented by an independent team of experts, is mooted for Sri Lanka to overcome a potential sovereign default next year.

“As the Central Bank (CB) will be a focal point in this process, we need to transform the CB into a real independent and responsible entity, which can work with a national government. It should give priority to technical advices in its decision-making and it should not be an entity, which experiments different theories such as Modern Economic theory,” LIRNEasia Founding Chair Prof. Rohan Samarajiva told a forum organised by Colombo-based think tank Advocata Institute, under the theme ‘A National Consensus for Economy?’, in Colombo, on Wednesday.

In taking part in the panel discussion, ruling-collation MPs Prof. Ranjith Bandara and Dr. Suren Raghavan as well as opposition MPs Dr. Harsha de Silva, Patali Champika Ranawaka and Vijitha Herath, identified the need of a national consensus to overcome the looming crisis.

Ranawaka estimated Sri Lanka’s external debt repayment obligations at a minimum of US $ 3 billion, which include International Sovereign Bonds (ISB) and Sri Lanka Development Bonds (SLDB) for the next eight months, with only US $ 1.5 billion usable foreign exchange reserves in hand.

Sri Lanka has a US $ 500 million maturing ISB in January, next year and another US $ 1 billion maturing ISB in July next year.

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Call for consensus on structural reforms to get out of economic crisis

“We are no longer talking about a crisis that is about to engulf us. We are now in its midst, though not its depths. The hope that the 2022 Budget would give the right signals has evaporated,” Prof. Rohan Samarajiva, a leading policy analyst and an advisor of the Advocata Institute, said.

He made these comments at Advocata’s latest event, ‘A National Consensus for Economic Reforms or Arthikayata jathika sammuthiyak?’. Prof. Samarajiva provided a breakdown of severe economic and social challenges facing the country. His keynote speech stressed on the importance of building a national consensus to implement immediate reforms to tackle a wide range of issues ranging from unsustainable debt to shortages of essential items in the country.

The present macroeconomic instability lies in the failure of the state to implement deep structural reforms to the economy for nearly twenty years. The COVID-19 pandemic has exposed Sri Lanka’s fundamental weaknesses that have plagued the economy for a long period of time.

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Defaulting debt repayment can have severe repercussions

Sri Lanka has been running deficits over the decades following the post- independence period when the fiscal deficit was over 10 percent of the GDP.

In 2020 it exceeded 10 percent of the GDP and is likely to deteriorate in 2021. “If the government continues to consume more than it earns or when the domestic private savings are not sufficient to finance the economy it can reflect in our current account deficit. In the absence of domestic saving, the country has to depend on foreign savings to bridge the current deficit,” said Dr. Roshan Perera, Senior Research Fellow of the Advocata Institute at the launch of a publication on “Framework of Sri Lanka’s Economic Recovery at a webinar held this week.

She said in the absence of FDIs coming into the country Sri Lanka had to borrow from abroad. In the 2000 period funds came mostly from bilateral and multilateral sources and concessional financing. But these funds ceased when the country’s rating was elevated to a middle- income country status. When Sri Lanka embarked on infrastructure projects in later years, it had to borrow from private lending agencies and international sovereign bonds with shorter grace periods with higher interest rates. This had an impact on debt service payment which has ballooned over the years. With low foreign inflows coupled with the COVID-19 pandemic, debt servicing has been a challenge, she added.

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Sri Lanka urgently needs ‘National Consensus’ on deepening economic crisis, policy analysts and politicians say

We are no longer talking about a crisis that is about to engulf us. We are now in its midst, though not its depths. The hope that the 2022 Budget would give the right signals, has evaporated, Prof. Rohan Samarajiva, a leading policy analyst and an advisor of the Advocata Institute said, last week.

He made these comments at Advocata’s latest event , “A National Consensus for Economic Reforms or “ආර්ථිකයට ජාතික සම්මුතියක්?”.

Professor Samarajiva provided a breakdown of severe economic and social challenges facing the country. His keynote speech stressed on the importance of building a national consensus to implement immediate reforms to tackle a wide range of issues ranging from unsustainable debt to shortages of essential items in the country.

The present macroeconomic instability lies in the failure of the state to implement deep structural reforms to the economy for nearly twenty years. The COVID-19 pandemic has exposed Sri Lanka’s fundamental weaknesses that have plagued the economy for a long period of time. The event brought together politicians representing the main political parties to discuss the importance of a united course of action, to drive Sri Lanka’s economy towards a path of growth.

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Advocata's event on the need for a broader consensus for economic restructuring | News 1st: Lunch Time English News | (25/11/2021)

Advocata's event on the need for a broader consensus for economic restructuring featured on Newsfirst Lunch Time English News

Advocata's event on the need for a broader consensus for economic restructuring | News 1st: Lunch Time Sinhala News | (25-11-2021) දහවල් ප්‍රධාන ප්‍රවෘත්ති

Advocata's event on the need for a broader consensus for economic restructuring featured on Newsfirst Lunch Time Sinhala News