Crisis Due To Non Implementation Of Cabinet Decisions

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By W. C.  Dheerasekera    

The present crisis of public financing and food could have been avoided had we implemented the two Cabinet decisions of the former President Mahinda Rajapaksa’s Government in 2014.

It has been reported that the 52 State-owned enterprises (SOEs) monitored by the Finance Ministry, an aggregate profit of Rs 103 billion was generated during the seven months of 2021, but was eroded by loss making entities, with a total loss of Rs 96 billion. Ninety-four per cent of this loss was contributed by three entities, namely Ceylon Petroleum Corporation, SriLankan Airlines Limited and Sri Lanka Transport Board. 

Those advocating privatisation of SOEs, have insisted that divestment of the assets of SOEs is the only way to address this public financing issue. But the Government policy as mentioned in the ‘Vistas of Prosperity’ is to introduce laws and reforms to stop privatisation of SOEs. However, action has not yet been taken by the Government to introduce laws to stop privatisation.

Had the Government implemented the Cabinet decision of 22 April 2014 on Reform and Development of Public Enterprises, this issue of privatisation could have been effectively addressed and ensured operating-efficient profit-making and rational public enterprise system in the country.

The Cabinet decision was based on the recommendations made at the Reform and Development of Public Enterprises held in 2014 and as an External Collaborator of ILO, I organised this workshop.

According to that Cabinet decision it approved to establish a National Steering Committee on Reform and Development of Public Enterprises; to prepare and implement an action programme in collaboration with People’s Republic of China for bilateral cooperation for both reform and development of operational public enterprises and revival of defunct public enterprises; to undertake an exposure visit to State-owned Assets Supervision and Administration Commission (SASAC) of China by a designated team of Senior Policy Makers; and a Study Tour to Pre-selected SOEs in China by a team of stakeholders of Public Enterprises; and to seek technical and financial assistance to implement this programme.

Had the present Government implemented that decision to the public enterprises, it could have mobilised venture capital funds from the New Development Bank and the Maritime Silk Road Fund to develop joint ventures with overseas counterpart agencies to expand their operations globally as explained in my article: ‘Development of Joint Ventures- Harnessing Development Resources’ published in Ceylon Today on 11 March 2019.

Hence, there is an urgent need to implement the Cabinet decision of 22 April 2014 to resolve the public finance crisis created by the poor performance of public enterprises. For this purpose an action plan has to be prepared by the Presidential Secretariat with the Department of Public Enterprises Similarly, Cabinet had also approved in October 2014, to establish a Steering Committee of Stakeholders of the Food Industry to monitor, review and evaluate the National Food System and initiate action to formulate National Food Plan (2015-2020) as a means for ensuring Food Security; to undertake a comprehensive development study on aquatic plants-based food industry; to facilitate the growth of National Food Industry; and to initiate a dialogue with development partners through the Department of External Resources for development of all sectors of food industry to ensure food availability and access to food.

A dialogue was made between the International Food Policy Research Institute (IFPRI) and the Senior Ministry in 2014 to solicit IFPRI’s cooperation to implement the Cabinet decision. During their visit to Sri Lanka in December 2014, it agreed to extend their development assistance to Sri Lanka to formulate the National Food Policy and the National Food Plan.

Accordingly, IFPRI organised the National Workshop on Key Challenges and Opportunities for Food Security Policies on16 -17 July 2015.

Based on the findings and the recommendations of this workshop, IFPRI held  two National Workshops: a) National Workshop on Food Value Chain Development on 6 -7 April 2016 and b) Regional Workshop on Emerging Food Safety and Quality Risks in South Asia: Challenges and Opportunities for Sri Lanka on 8 -9 May 2017.

With the change of the Government in 2015, IFPRI had to work with the Ministry of Primary Industries as there was no Ministry of Food Security in the ‘new Government’ to conduct the workshops at the time.

As an External Collaborator of IFPRI in Sri Lanka, I organised two Workshops and developed the four value chain development proposals with teams of National Experts and presented them. The four value chain development proposals were: 1) Aquatic Plants-based Food Industry 2) Tree Crops-based Food Industry 3) Tuberous Crops-based Food Industry and 4) Animal Products-based Food Industry.

 The four food value chains belong to 3A Economy- Agriculture, Aquaculture and Animal Husbandry. Hence there is coordination among the Ministry of Agriculture, Ministry of Aquaculture and the Ministry of Live Stock Development necessary for development of specified food products.

Moreover, through development of the aquatic plants-based foods, tree crops-based food products and tuberous crops-based food products, we addressed the recommendation of FAO to promote agricultural diversification, dietary diversity and production diversity as over-reliance on one staple crop-rice would cause persistent malnutrition.

Accordingly, the food value chain development proposals will ensure food and nutrition security and pave the way to produce organic food products as no chemical fertiliser is used for culturing.  

Although the Ministry of Primary Industries actively engaged in the workshops, it did not follow up with the recommendations made therein.

Hence, IFPRI made a series of recommendations to the Secretary to the President on 22 November 2017. Those recommendations were:1) Establish National Food Council at the Presidential Secretariat to coordinate activities of Line Ministries undertaking  development of food industries 2) Formulate National Food Policy with the assistance of IFPRI 3) Establish National Food Authority by restructuring National Food Promotion Board to implement regulatory and development measurers advocated in the National Food Policy 4) Develop the National Food Plan with specific targets for export whilst ensuring food security.

These recommendations were not implemented and as a consequence the implementation of the Cabinet decision of October 2014 could not be undertaken.

Also there was a felt need to form Intellectual Centres (ICs) to introduce, demonstrate and commercialise food products mentioned in the Food Value Chain Development Proposals. For this purpose action was taken to develop four Provisional Food Technology Parks with ICs to facilitate the implementation of the Cabinet decision of October 2014.

Those PFTPs and related Development Partners are mentioned below:

Food Technology Park for Aquatic Plants-based Food Industry- Public Development Partners: National Enterprise Development (NEDA), Industrial Development Authority (IDA) of the North Central Province and the Raja Rata University and Private  Development Partners: Institute of Food Science and Technology of Sri Lanka (IFSTSL) and Anuradhapura/Polonnaruwa District Chamber of Commerce and Industry.

Food Technology Park for Tree Crops-based Food Industry – Public Development Partners:   NEDA, Industrial Service Bureau (ISB) of the North Western Province and the Wayamba University and Private Development Partners: IFSTSL, Puttalam/Kurunegala District Chamber of Commerce and Industry.

Food Technology Park for Animal Products-based Food Industry- Public Development Partners: NEDA, Department of Animal Production and Health of the Northern Province and the University of Jaffna and Private Development Partners: IFSTSL, Mullaitivu Province Chamber of Commerce and Industry.

Food Technology Park for Tuberous Crops-based Food Industry – Public Development Partners: NEDA, Department of Agriculture of the Uva Province.

Food

As those PFTPs will pave the way for regional development U. H. Palihakkara Chairman Finance Commission of Sri Lanka (FC) decided to obtain stakeholders’ view through a National Workshop funded by The Asia Foundation (TAF).

Chairman FC formed a Core Group to organise the Workshop. The Core Group had three meetings. The last meeting was held on 4 September 2020. After the resignation of U. H. Palihakkara as Chairman of FC , no meeting of the Core Group had been held.

As a result, the implementation of the Cabinet decision of October 2014 has been held up and neither the Food Policy was developed nor was the National Food Plan formulated. The Covid-19 pandemic and the recent war between Ukraine and Russia have adversely affected the food supply world over. In Sri Lanka Food Security and Food Hunger Situation have deteriorated. 

Hence, early action has to be taken by the Presidential Secretariat to implement the recommendations made by IFPRI made on 22 November 2017 and to establish PFTPs with donor assistance to address the emerging food crisis.

The writer is and Industry Strategist and Development Planning Expert and Ex-Secretary, Ministry of Industries [email protected]