Business
It’s high time Sri Lanka brought SOE privatisation to the policy table: Advocata
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 was 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.
“Some big 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 are load shedding during peak hours ,” says Prof. Rohan Samarajiva, a veteran policy expert and an advisor of the Advocata Institute.
He made these comments at Advocata’s recent 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 professor Rohan Samarajiva.
According to Prof. Samarajiva privatising a globally visible, yet loss making SOEs 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 1.2 trillion. The combined loss per day of the Ceylon Petroleum Corporation, The Ceylon Electricity Board , Sri Lanka Airlines, Sathosa and the National Water Supply and Drainage Board is about LKR 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 our 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 State Owned Enterprise 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 hemorrhaging losses of State Owned Enterprises 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 Ms. Anarkali Moonesinghe, Advisor to the Advocata Institute.
She further elaborated that possible avenues for privatisation that can be considered include listing of State Owned Enterprises in the stock exchange. According to Ms. 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.
Dr. Sarath Rajaptirana, Advocata’s Academic Chair, said that the present crisis makes two choices available to us, which is “reform or perish ”. He highlighted the urgency of implementing structural reforms. He further commented that the key issue with State Owned Enterprises 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.
Janashakthi Life, one of the fastest growing Life insurers in Sri Lanka has recorded a massive LKR 5.7 Billion Profit Before Tax for the period under review. This is the second consecutive year the company has surpassed the LKR 5 billion mark in PBT.
Reflecting on the company’s achievements, Ravi Liyanage, Director / CEO of Janashakthi Insurance PLC, said, “Our strong financial performance in 2024 is a testament to our strategic focus, operational excellence, and steadfast commitment to serving our policyholders. Despite market uncertainties, we have continued to grow, delivering exceptional value to our policyholders and all the stakeholders. Our exponential growth trajectory was double the size of the industry growth to reach 44% in revenue growth surpassing over LKR 6.6 Billion premium income whilst not compromising the value creation to our investors and shareholders recording over LKR 5.7 Billion PBT.
“Looking ahead, the company is well-poised to maintain its momentum as the fastest-growing insurance provider in 2025. The company has already deployed well focused strategies for market and distribution expansion in keeping with product / market as a matrix for growth. Some of the innovative products are being developed for emerging segments of the life insurance market in 2025. Further, plans are already in place to deliver best-in-class service through focused customer lifecycle management. The company is also executing robust digitalization initiatives to strengthen its position as a pioneer in digital innovation. Janashakthi Life’s total assets amount to LKR 38 billion at the close of 2024, reflecting robust growth. This underscores the financial strength and stability of the company, ensuring long-term security and sustainability for its stakeholders. Further, A key financial indicator, the Capital Adequacy Ratio of over 277%, highlights the company’s prudent financial management and reinforces confidence among all stakeholders”, added Liyanage.
Annika Senanayake, Chairperson of Janashakthi Insurance PLC, commented on the performance, “At Janashakthi Life, our resolute focus is on creating sustainable value for all stakeholders. Our performance in 2024 reflects not only our financial strength but also our deep commitment to supporting our policyholders when it matters most. The significant increase in claims paid denotes our dedication to being a reliable partner in our customers’ lives, providing them with financial security and peace of mind. As we look to the future, we are committed to invest in our human resource, technology, and product innovation to continue delivering customer-centric solutions, strengthening our market position, and driving long-term growth in Sri Lanka’s life insurance sector”.
“In 2024, we provided over LKR 4.2 billion in benefits to our policyholders through claims and maturities. The company’s prudent financial management and planning paved the way during this period to stay strong and tall irrespective of economic challenges”, Senanayake added.
The year under review saw many outstanding achievements in the company’s operations, including the highest growth in lives protected, new business premium growth of over 63%, which reflects the success of our business acquisition efforts. Additionally, we received numerous industry recognitions, such as Asia’s Best Insurance Company for Innovations at the Fifth Asia’s Best and Emerging Insurance Company Awards, the International Finance Awards, the Business Pinnacle Awards, the Business Tabloid Awards, the Global Banking Finance Awards 2024, the SLITAD People Development Awards, and the TAGS Awards, all of which highlight our commitment to employee development and industry leadership, to name just a few.
Founded in 1994 as a Life Insurance company, Janashakthi Insurance PLC (Janashakthi Life) made its mark in the industry as an innovator and household name over a span of over 30 years. Janashakthi Life has a strong presence across the island, with an expanding network of over 75 branches and a dedicated call centre that covers every corner of Sri Lanka. In line with its purpose of ‘Uplifting Lives and Empowering Dreams’, Janashakthi Life remains committed to becoming a leader in the Life Insurance industry by delivering a service beyond Insurance to its customers and stakeholders. Janashakthi Insurance PLC is a member of the JXG (Janashakthi Group), Sri Lanka’s emerging financial conglomerate that operates in the Insurance, Finance, and Investment sectors.
CSE trading was of a negative orientation and a low turnover level was recorded yesterday. A drop in the price of HNB shares contributed to this development in considerable measure.
HNB’s initial share price was Rs 314.75 but subsequently it dropped to Rs 305. HNB thus contributed 24 negative points to both indices.
The All Share Price Index went down by 67 points, while the S and P SL20 declined by 19.4 points. Turnover stood at Rs 1.66 billion with six crossings.
Those crossings were reported in Lankem Ceylon where 1 million shares crossed to the tune of Rs 85 million; its shares traded at Rs 85, Commercial Bank 500,000 shares crossed to the tune of Rs 74 million; its shares sold at Rs 148, Richard Peiris 2.6 million shares crossed for Rs 68.9 million; its shares traded at Rs 26, Agarapathana Plantations 4 million shares crossed to the tune of Rs 52.4 million; its shares traded at Rs 13.10, Hemas Holdings 200,000 shares crossed for Rs 24 million; its shares traded at Rs 120 and JKH 1 million shares crossed to the tune of Rs 20.3 million; its shares traded at Rs 20.3.
In the retail market top six companies that mainly contributed to the turnover were; Sampath Bank Rs 183 million (1.5 million shares traded), JKH Rs 172 million (8.5 million shares traded), Commercial Bank Rs 138 million (931,000 shares traded), HNB Rs 122 million (403,000 shares traded), TJ Lanka Rs 57.4 million (1.1 million shares traded) and Commercial Credit Rs 33.3 million (593,000 shares traded). During the day 52.9 million share volumes changed hands in 11112 transactions.
It is said that the banking sector counter was the main contributor to the turnover followed by the manufacturing sector, especially JKH. The plantations sector counters were also a bit active especially with Agarapathana Plantations featuring.
The rupee was quoted at Rs 296.30/40 to the US dollar in the spot market, stronger from 296.35/45 on the previous day, dealers said, while bond yields were up steeply.
A bond maturing on 15.09.2027 was quoted at 9.55/65 percent, up from 9.47/50 percent. A bond maturing on 15.03.2028 was quoted at 9.97/10.05 percent. A bond maturing on 15.12.2028 was quoted at 10.20/30 percent. A bond maturing on 15.09.2029 was quoted at 10.35/45 percent, up from 10.30/35 percent. A bond maturing on 15.12.2032 was quoted at 10.75/85 percent, down from 10.75/90 percent.
The Central Bank was quoting a rate of Rs 292.0669 for buying and Rs 300.5806 for selling for US dollar telegraphic transfers; a rate of Rs 313.3986 for buying and Rs 326.1557 for selling for Euro; Rs 376.5107 buying and Rs 390.7131 selling for the British pound and Rs 1.9269 buying and Rs 2.0037 selling for the Japanese yen.
By Hiran H.Senewiratne
Business
British Council Sri Lanka marks Commonwealth Day by hosting latest cohort of returning Commonwealth and Chevening Scholars from Sri Lanka
The British Council in Sri Lanka hosted its annual networking event to welcome home the latest batch of Sri Lanka’s Commonwealth and Chevening Scholars returning from the UK on completion of their studies.
This year’s event, organized together with the British High Commission Colombo, was also the 65th anniversary of the Commonwealth Scholarships, and took place on Commonwealth Day—the first-ever “Welcome Home” event that celebrated both Commonwealth and Chevening Scholars. The scholarships enable outstanding emerging leaders from all over the world to pursue advance studies in the UK.
HE Andrew Patrick, British High Commissioner, Orlando Edwards, Country Director of British Council Sri Lanka, and Philip Everest, Policy Lead from the Foreign, Commonwealth & Development (FCDO) Commonwealth & Marshall Scholarship Unit, together with Commonwealth and Chevening Scholarship alumni attended.
Commonwealth Day was celebrated across 56 Commonwealth member countries on 10March under this year’s theme ‘Together We Thrive’, demonstrating how working together can build a future defined by opportunity and resilience. During his Commonwealth Day Message, His Majesty The King, Head of the Commonwealth stated, “The Commonwealth’s ability to bring together people from all over the world has stood the test of time and remains as ever-important today.
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